**UNITED
            STATES**
 **SECURITIES
            AND EXCHANGE COMMISSION**
 Washington,
            D.C. 20549
 
 **FORM
            10-Q**
 
 (X)  Quarterly
            report pursuant to Section 13 or 15(d)
 of
            the
            Securities Exchange Act of 1934
 **for
            the Quarterly Period Ended September 30, 2005**
 OR
 ( 
            )  Transition
            report pursuant to Section 13 or 15(d)
 of
            the
            Securities Exchange Act of 1934
 for
            the
            transition period from ____ to
            ____ .
 
 Commission
                    File
                      Number
                  Exact
                      Name of Registrant as Specified in its Charter;
                    State
                      of Incorporation;
                    Address
                      and Telephone Number
                  IRS
                      Employer
                    Identification
                      No.1-14756
                  **Ameren
                      Corporation**
                  43-1723446(Missouri
                      Corporation)1901
                      Chouteau AvenueSt.
                      Louis, Missouri 63103(314)
                      621-32221-2967
                  **Union
                      Electric Company**
                  43-0559760(Missouri
                      Corporation)1901
                      Chouteau AvenueSt.
                      Louis, Missouri 63103(314)
                      621-32221-3672
                  **Central
                      Illinois Public Service Company**
                  37-0211380(Illinois
                      Corporation)607
                      East Adams StreetSpringfield,
                      Illinois 62739(217)
                      523-3600333-56594
                  **Ameren
                      Energy Generating Company**
                  37-1395586(Illinois
                      Corporation)1901
                      Chouteau AvenueSt.
                      Louis, Missouri 63103(314)
                      621-32222-95569
                  **CILCORP
                      Inc.**
                  37-1169387(Illinois
                      Corporation)300
                      Liberty StreetPeoria,
                      Illinois 61602(309)
                      677-52711-2732
                  **Central
                      Illinois Light Company**
                  37-0211050(Illinois
                      Corporation)300
                      Liberty StreetPeoria,
                      Illinois 61602(309)
                      677-52711-3004
                  **Illinois
                      Power Company**
                  37-0344645(Illinois
                      Corporation)370
                      South Main StreetDecatur,
                      Illinois 62523(217)
                      424-6600
 
  
  Indicate
            by check mark whether the Registrants: (1) have filed all reports required
            to be
            filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
            the
            preceding 12 months (or for such shorter period that the Registrant was
            required
            to file such reports), and (2) have been subject to such filing require-ments
            for the past 90 days. Yes (X)  No
            (
             )
  Indicate
            by check mark whether each Registrant is an accelerated filer (as defined
            in
            Rule 12b-2 of the Securities Exchange Act of 1934).
 
 Ameren
                      Corporation
                  Yes
                  (X)
                  No
                  (  
                      )Union
                      Electric Company
                  Yes
                  (
                        )
                  No
                  (X)Central
                      Illinois Public Service Company
                  Yes
                  ( 
                       )
                  No
                  (X)Ameren
                      Energy Generating Company
                  Yes
                  (
                        )
                  No
                  (X)CILCORP
                      Inc.
                  Yes
                  (
                        )
                  No
                  (X)Central
                      Illinois Light Company
                  Yes
                  (
                        )
                  No
                  (X)Illinois
                      Power Company
                  Yes
                  (
                        )
                  No
                  (X)
 
 Indicate
            by check mark whether each Registrant is a shell company (as defined
            in Rule
            12b-2 of the Securities Exchange Act of 1934).
 
 Ameren
                      Corporation
                  Yes
                  ( 
                       )
                  No
                  (X)Union
                      Electric Company
                  Yes
                  ( 
                       )
                  No
                  (X)Central
                      Illinois Public Service Company
                  Yes
                  ( 
                       )
                  No
                  (X)Ameren
                      Energy Generating Company
                  Yes
                  (  
                      )
                  No
                  (X)CILCORP
                      Inc.
                  Yes
                  (  
                      )
                  No
                  (X)Central
                      Illinois Light Company
                  Yes
                  (  
                      )
                  No
                  (X)Illinois
                      Power Company
                  Yes
                  ( 
                       )
                  No
                  (X)
  The
            number of shares outstanding of each Registrant’s classes of common stock as of
            November 1, 2005, was as follows:
 
 Ameren
                      Corporation
                  Common
                      stock, $.01 par value per share - 204,273,646Union
                      Electric Company
                  Common
                      stock, $5 par value per share, held by Ameren
                    Corporation
                      (parent company of the Registrant) - 102,123,834Central
                      Illinois Public Service Company
                  Common
                      stock, no par value, held by Ameren
                    Corporation
                      (parent company of the Registrant) - 25,452,373Ameren
                      Energy Generating Company
                  Common
                      stock, no par value, held by Ameren Energy
                    Development
                      Company (parent company of the
                    Registrant
                      and indirect subsidiary of Ameren
                    Corporation)
                      - 2,000CILCORP
                      Inc.
                  Common
                      stock, no par value, held by Ameren
                    Corporation
                      (parent company of the Registrant) - 1,000Central
                      Illinois Light Company
                  Common
                      stock, no par value, held by CILCORP Inc.
                    (parent
                      company of the Registrant and subsidiary of
                    Ameren
                      Corporation) - 13,563,871Illinois
                      Power Company
                  Common
                      stock, no par value, held by Ameren
                    Corporation
                      (parent company of the Registrant) -
                      23,000,000
 
  
 **OMISSION
            OF CERTAIN INFORMATION**
 
 Ameren
            Energy Generating Company and CILCORP Inc. meet the conditions set forth
            in
            General Instruction H(1)(a) and (b) of Form 10-Q and are therefore filing
            this
            form with the reduced disclosure format allowed under that General
            Instruction.
 ______________________________________________________________________________________________________
 
 This
            combined Form 10-Q is separately filed by Ameren Corporation, Union Electric
            Company, Central Illinois Public Service Company, Ameren Energy Generating
            Company, CILCORP Inc., Central Illinois Light Company, and Illinois Power
            Company. Each Registrant hereto is filing on its own behalf all of the
            information contained in this quarterly report that relates to such Registrant.
            Each Registrant hereto is not filing any information that does not relate
            to
            such Registrant, and therefore makes no representation as to any such
            information.
 
 On
            September 30, 2004, Ameren Corporation completed its acquisition of Illinois
            Power Company (see Note 2 - Acquisitions to our financial statements
            under Part
            I, Item 1, of this report for further information). Commencing with the
            Annual
            Report on Form 10-K for the fiscal year ended December 31, 2004, Illinois
            Power
            Company is included in the combined filings of Ameren Corporation and
            its other
            Registrant subsidiaries.
   
  **TABLE
            OF CONTENTS**
 **Page**Glossary
                      of Terms and
                      Abbreviations...........................................................................................................................................................................................................................................
                  5Forward-looking
                      Statements............................................................................................................................................................................................................................................................
                  7**PART
                      I****Financial
                      Information**Item
                      1.Financial
                      Statements (Unaudited)**Ameren
                      Corporation**Consolidated
                      Statement of
                      Income.........................................................................................................................................................................................................................
                  8Consolidated
                      Balance
                      Sheet....................................................................................................................................................................................................................................
                  9Consolidated
                      Statement of Cash
                      Flows.................................................................................................................................................................................................................
                  10**Union
                      Electric Company**Consolidated
                      Statement of
                      Income.........................................................................................................................................................................................................................
                  11Consolidated
                      Balance
                      Sheet....................................................................................................................................................................................................................................
                  12Consolidated
                      Statement of Cash
                      Flows.................................................................................................................................................................................................................
                  13**Central
                      Illinois Public Service Company**Statement
                      of
                      Income..................................................................................................................................................................................................................................................
                  14Balance
                      Sheet.............................................................................................................................................................................................................................................................
                  15Statement
                      of Cash
                      Flows..........................................................................................................................................................................................................................................
                  16**Ameren
                      Energy Generating Company**Consolidated
                      Statement of
                      Income.........................................................................................................................................................................................................................
                  17Consolidated
                      Balance
                      Sheet....................................................................................................................................................................................................................................
                  18Consolidated
                      Statement of Cash
                      Flows.................................................................................................................................................................................................................
                  19**CILCORP
                      Inc.**Consolidated
                      Statement of
                      Income.........................................................................................................................................................................................................................
                  20Consolidated
                      Balance
                      Sheet....................................................................................................................................................................................................................................
                  21Consolidated
                      Statement of Cash
                      Flows.................................................................................................................................................................................................................
                  22**Central
                      Illinois Light Company**Consolidated
                      Statement of
                      Income.........................................................................................................................................................................................................................
                  23Consolidated
                      Balance
                      Sheet....................................................................................................................................................................................................................................
                  24Consolidated
                      Statement of Cash
                      Flows.................................................................................................................................................................................................................
                  25**Illinois
                      Power Company**Consolidated
                      Statement of
                      Income.........................................................................................................................................................................................................................
                  26Consolidated
                      Balance
                      Sheet....................................................................................................................................................................................................................................
                  27Consolidated
                      Statement of Cash
                      Flows.................................................................................................................................................................................................................
                  28Combined
                      Notes to Financial
                      Statements......................................................................................................................................................................................................................
                  29Item
                      2.Management’s
                      Discussion and Analysis of Financial Condition and Results
                      of
                      Operations..............................................................................................................................
                  53Item
                      3.Quantitative
                      and Qualitative Disclosures About Market
                      Risk...................................................................................................................................................................................
                  76Item
                      4.Controls
                      and
                      Procedures..................................................................................................................................................................................................................................................
                  79**PART
                      II****Other
                      Information**Item
                      1.Legal
                      Proceedings..............................................................................................................................................................................................................................................................
                  80Item
                      2.Unregistered
                      Sales of Equity Securities and Use of
                      Proceeds....................................................................................................................................................................................
                  80Item
                      5.Other
                      Information...............................................................................................................................................................................................................................................................
                  80Item
                      6.Exhibits................................................................................................................................................................................................................................................................................
                  81Signatures...........................................................................................................................................................................................................................................................................................
                  82
 
 This
            Form
            10-Q contains “forward-looking” statements within the meaning of Section 21E of
            the Securities Exchange Act of 1934, as amended. Forward-looking statements
            should be read with the cautionary statements and important factors included
            on
            page 7 of this Form 10-Q under the heading Forward-looking Statements.
            Forward-looking statements are all statements other than statements of
            historical fact, including those statements that are identified by the
            use of
            the words
“anticipates,”“estimates,”“expects,”“intends,”“plans,”“predicts,”“projects” and
            similar expressions.
  4
   **GLOSSARY
            OF TERMS AND ABBREVIATIONS**
 
 We
            use
            the words “our,”“we” or “us” with respect to certain information that relates to
            all Ameren Companies, as defined below. When appropriate, subsidiaries
            of Ameren
            are named specifically as their various business activities are
            discussed.
  ***AERG*** -
            AmerenEnergy Resources Generating Company, a CILCO subsidiary that operates
            a
            non-rate-regulated electric generation business in Illinois.
 ***AFS*** -
            Ameren
            Energy Fuels and Services Company, a Resources Company subsidiary that
            procures
            fuel and natural gas and manages the related risks for the Ameren
            Companies.
 ***Ameren*** -
            Ameren
            Corporation and its subsidiaries on a consolidated basis. In references
            to
            financing activities, acquisition activities, or liquidity arrangements,
            Ameren
            is defined as Ameren Corporation, the parent.
 ***Ameren
            Companies*** -
            The
            individual Registrants within the Ameren consolidated group.
 ***Ameren
            Energy*** -
            Ameren
            Energy, Inc., an Ameren Corporation subsidiary that serves as a power
            marketing
            and risk management agent for UE and Genco for transactions of primarily
            less
            than one year.
 ***Ameren
            Services*** - ****** Ameren
            Services Company, an Ameren Corporation subsidiary that provides support
            services to Ameren and its subsidiaries.
 ***Baseload
            -*** The
            minimum amount of electric power delivered or required over a given period
            of
            time at a steady rate.
 ***Capacity
            factor*** - A
            percentage measure that indicates how much of an electric power generating
            unit’s capacity was used during a specific period.
 ***CILCO*** -
            Central
            Illinois Light Company, a CILCORP subsidiary that operates a rate-regulated
            electric transmission and distribution business, a primarily non-rate-regulated
            electric generation business through AERG, and a rate-regulated natural
            gas
            transmission and distribution business, all in Illinois, as AmerenCILCO.
            CILCO
            owns all of the common stock of AERG.
 ***CILCORP*** -
            CILCORP
            Inc., an Ameren Corporation subsidiary that operates as a holding company
            for
            CILCO and various non-rate-regulated subsidiaries.
 ***CIM*** -
            CILCORP Investment Management Inc., a non-rate-regulated subsidiary of
            CILCORP
            that holds investments in several leasing transactions and owns interests
            in
            several leasing credit partnerships.
 ***CIPS*** -
            Central
            Illinois Public Service Company, an Ameren Corporation subsidiary that
            operates
            a rate-regulated electric and natural gas transmission and distribution
            business
            in Illinois as AmerenCIPS.
 ***Cooling
            degree-days -*** The
            summation of positive differences between the mean daily temperature
            and a 65-
            degree Fahrenheit base. This statistic is useful as an indicator of demand
            for
            electricity for summer space cooling for residential and commercial
            customers.
 ***CT*** -
            Combustion turbine electric generation equipment used primarily for peaking
            capacity.
 ***Development
            Company*** -
            Ameren
            Energy Development Company, a Resources Company subsidiary and Genco
            parent,
            which primarily develops and constructs generating facilities for
            Genco.
 ***DMG*** - Dynegy
            Midwest Generation, Inc., a Dynegy subsidiary.
 ***DOE*** -
            Department of Energy, a U.S. government agency.
 ***DRPlus*** -
            Ameren
            Corporation’s dividend reinvestment and direct stock purchase plan.
 ***Dynegy*** -
            Dynegy
            Inc.
 ***DYPM*** -
            Dynegy
            Power Marketing, Inc., a Dynegy subsidiary.
 ***EEI*** -
            Electric Energy, Inc., an 80%-owned Ameren Corporation subsidiary (40%
            owned by
            UE and 40% owned by Resources Company) that operates electric generation
            and
            transmission facilities in Illinois. The remaining 20% is owned by Kentucky
            Utilities Company.
 ***EPA*** -
            Environmental Protection Agency, a U.S. government agency.
 ***Equivalent
            availability factor*** - A
            measure that indicates the percentage of time an electric power generating
            unit
            was available for service during a period.
 ***ERISA*** -
            Employee Retirement Income Security Act of 1974, as amended.
 ***Exchange
            Act*** -
            Securities Exchange Act of 1934, as amended.
 ***FASB*** -
            Financial Accounting Standards Board, a rulemaking organization that
            establishes
            financial accounting and reporting standards in the United States of
            America.
 ***FERC*** -
            Federal
            Energy Regulatory Commission, a U.S. government agency.
 ***FIN*** -
            A ****** FASB
            Interpretation intended to clarify accounting pronouncements previously
            issued
            by the FASB.
 ***Fitch*** -
            Fitch
            Ratings, a credit rating agency.
 ***FSP*** -
            FASB
            Staff Position, which provides application guidance on FASB
            literature.
 ***GAAP*** -
            Generally accepted accounting principles in the United States of
            America.
 ***Genco*** -
            Ameren
            Energy Generating Company, a Development Company subsidiary that operates
            a
            non-rate-regulated electric generation business in Illinois and
            Missouri.
 ***Gigawatthour*** -
            One
            thousand megawatthours.
 ***ICC*** -
            Illinois Commerce Commission, a state agency that regulates the Illinois
            utility
            businesses and operations of CIPS, CILCO, IP and prior to May 2, 2005,
            UE.
 ***Illinois
            Customer Choice Law*** -
            Illinois Electric Service Customer Choice and Rate Relief Law of 1997,
            which
            provides for electric utility restructuring and introduces competition
            into the
            retail supply of electric energy in Illinois.
 ***Illinova*** - ****** Illinova
            Corporation, the former parent company of IP.
  5
  ***IP*** - ****** Illinois
            Power Company, which was acquired from Dynegy by, and became a subsidiary
            of,
            Ameren Corporation on September 30, 2004. IP operates a rate-regulated
            electric
            and natural gas transmission and distribution business in Illinois as
            AmerenIP.
 ***IP
            LLC*** -
            Illinois Power Securitization Limited Liability Company, which is a
            special-purpose Delaware limited liability company. Under FIN 46R,
“Consolidation of Variable-interest Entities,” IP LLC was no longer consolidated
            within IP’s financial statements as of December 31, 2003.
 ***IP
            SPT*** -
            Illinois Power Special Purpose Trust, which was created as a subsidiary
            of IP
            LLC to issue TFNs as allowed under Illinois’ deregulation legislation. Pursuant
            to FIN 46R, IP SPT is a variable-interest entity, as the equity investment
            is
            not sufficient to permit IP SPT to finance its activities without additional
            subordinated debt. As of December 31, 2003, under FIN 46R, IP SPT was
            no longer
            consolidated within IP’s financial statements.
 ***IRS*** -
            Internal Revenue Service.
 ***Jobs
            Creation Act*** - ****** The
            American Jobs Creation Act of 2004.
 ***Kilowatthour*** - ****** A
            measure
            of electricity consumption equivalent to the use of 1,000 watts of power
            over a
            period of one hour.
 ***LIBOR*** - London
            Interbank Offered Rate, the interest rate that banks charge each other
            for
            loans.
 ***Marketing
            Company*** - ****** Ameren
            Energy Marketing Company, a Resources Company subsidiary that markets
            power,
            primarily for periods over one year.
 ***Medina
            Valley*** -
            AmerenEnergy ****** Medina
            Valley Cogen (No. 4) LLC and its subsidiaries, which are all Resources
            Company
            subsidiaries, which indirectly own a 40-megawatt gas-fired electric generation
            plant.
 ***Megawatthour*** -
            One
            thousand kilowatthours.
 ***MGP*** - ****** Manufactured
            gas plant.
 ***MISO*** - ****** Midwest
            Independent Transmission System Operator, Inc.
 ***MISO
            Day Two Energy Market*** - ****** A
            market
            that began operating on April 1, 2005, and uses market-based pricing
            to
            compensate market participants for power, incorporating transmission
            congestion
            and line losses. The previous system required generators to make advance
            reservations for transmission service.
 ***Money
            pool*** - ****** Borrowing
            agreements among Ameren and its subsidiaries to coordinate and provide
            for
            certain short-term cash and working capital requirements. Separate money
            pools
            are maintained between rate-regulated and non-rate-regulated businesses.
            These
            are referred to as the utility money pool and the non-state-regulated
            subsidiary
            money pool, respectively.
 ***Moody’s*** - ****** Moody’s
            Investors Service Inc., a credit rating agency.
 ***MoPSC*** -
            Missouri Public Service Commission, a state agency that regulates the
            Missouri
            utility business and operations of UE.
 ***NO*** ***x*** ****** - ****** Nitrogen
            oxide.
 ***NRC*** -
            Nuclear
            Regulatory Commission, a U.S. government agency.
 ***NYMEX*** -
            New
            York Mercantile Exchange.
 ***OCI*** - ****** Other
            Comprehensive Income (Loss) as defined by GAAP.
 ***PGA*** -
            Purchased Gas Adjustment tariffs, which allow the passing through of
            the actual
            cost of natural gas to utility customers.
 ***PUHCA*** -
            Public
            Utility Holding Company Act of 1935, which has been repealed effective
            February
            8, 2006 by the Energy Policy Act of 2005 enacted on August 8, 2005.
 ***Resources
            Company*** -
            Ameren
            Energy Resources Company, an Ameren Corporation subsidiary that consists
            of
            non-rate-regulated operations, including Development Company, Genco,
            Marketing
            Company, AFS, and Medina Valley.
 ***RTO*** -
            Regional Transmission Organization.
 ***S&P*** -
            Standard and Poor Ratings Services, a division of The McGraw Hill Companies,
            Inc., a credit rating agency.
 ***SEC*** -
            Securities and Exchange Commission, a U.S. government agency.
 ***SFAS*** - ****** Statement
            of Financial Accounting Standards, the accounting and financial reporting
            rules
            issued by the FASB.
 ***SO*** ***2*** - ****** Sulfur
            dioxide.
 ***TFN*** -
            Transitional Funding Trust Notes issued by IP SPT as allowed under Illinois’
            deregulation legislation. IP must designate a portion of cash received
            from
            customer billings to fund payment of the TFNs. The proceeds received
            by IP are
            remitted to IP SPT and are restricted for the sole purpose of making
            payments of
            principal and interest on, and paying other fees and expenses related
            to, the
            TFNs. Since the application of FIN 46R, IP does not consolidate IP SPT
            and
            therefore the obligation to IP SPT appears on IP’s balance sheet.
 ***UE*** - ****** Union
            Electric Company, an Ameren Corporation subsidiary that operates a
            rate-regulated electric generation, transmission and distribution business,
            and
            a rate-regulated natural gas transmission and distribution business in
            Missouri
            and prior to May 2, 2005, in Illinois, as AmerenUE.
  6
  **FORWARD-LOOKING
            STATEMENTS**
 
 Statements
            in this report not based on historical facts are considered “forward-looking”
            and, accordingly, involve risks and uncertainties that could cause actual
            results to differ materially from those discussed. Although such forward-looking
            statements have been made in good faith and are based on reasonable assumptions,
            there is no assurance that the expected results will be achieved. These
            statements include (without limitation) statements as to future expectations,
            beliefs, plans, strategies, objectives, events, conditions, and financial
            performance. In connection with the “safe harbor” provi-sions of the Private
            Securities Litigation Reform Act of 1995, we are providing this cautionary
            statement to identify important factors that could cause actual results
            to
            differ materially from those anticipated. The following factors, in addition
            to
            those discussed elsewhere in this report and in our other filings with
            the SEC,
            could cause actual results to differ materially from management expectations
            as
            suggested by such forward-looking statements:
  ·
                  regulatory
                      actions, including changes in regulatory policies and ratemaking
                      determinations;
 ·
                  changes
                      in laws and other governmental actions, including monetary
                      and fiscal
                      policies;
 ·
                  the
                      effects of increased competition in the future due to, among
                      other things,
                      deregulation of certain aspects of our business at both the
                      state and
                      federal levels, and the implementation of deregulation, such
                      as when the
                      current electric rate freeze and current power supply contracts
                      expire in
                      Illinois in 2006;
 ·
                  the
                      effects of participation in the MISO, including the costs associated
                      with
                      operating in the MISO Day Two Energy
                      Market;
 ·
                  the
                      availability of fuel for the production of electricity, such
                      as coal and
                      natural gas, and purchased power and natural gas for
                      distribution;
 ·
                  the
                      ability of suppliers to add or pass through volatility of future
                      market
                      prices for fuel commodities with the risk of our ability to
                      recover any
                      increased costs;
 ·
                  the
                      effectiveness of our risk management strategies and the use
                      of financial
                      and derivative instruments;
 ·
                  prices
                      for power in the Midwest;
 ·
                  business
                      and economic conditions, including their impact on interest
                      rates;
 ·
                  disruptions
                      of the capital markets or other events that make the Ameren
                      Companies’
                      access to necessary capital more difficult or
                      costly;
 ·
                  the
                      impact of the adoption of new accounting standards and the
                      application of
                      appropriate technical accounting rules and guidance;
 ·
                  actions
                      of credit ratings agencies and the effects of such actions;
 ·
                  weather
                      conditions and other natural phenomena;
 ·
                  generation
                      plant construction, installation and performance;
 ·
                  operation
                      of UE’s nuclear power facility, including planned and unplanned outages,
                      and decommissioning costs;
 ·
                  the
                      effects of strategic initiatives, including acquisitions and
                      divestitures;
 ·
                  the
                      impact of current environmental regulations on utilities and
                      power
                      generating companies and the expectation that more stringent
                      requirements
                      will be introduced over time, which could have a negative financial
                      effect;
 ·
                  labor
                      disputes, future wages and employee benefits costs, including
                      changes in
                      returns on benefit plan assets;
 ·
                  changes
                      in the energy markets, environmental laws or regulations, interest
                      rates,
                      or other factors that could adversely affect assumptions in
                      connection
                      with the CILCORP and IP
                      acquisitions;
 ·
                  the
                      impact of conditions imposed by regulators in connection with
                      their
                      approval of Ameren’s acquisition of
                      IP;
 ·
                  the
                      inability of our counterparties to meet their obligations with
                      respect to
                      contracts and financial instruments;
 ·
                  the
                      cost and availability of transmission capacity;
 ·
                  legal
                      and administrative proceedings; and
 ·
                  acts
                      of sabotage, war or terrorist activities.
 
 Given
            these uncertainties, undue reliance should not be placed on these
            forward-looking statements. Except to the extent required by the federal
            securities laws, we undertake no obligation to publicly update or revise
            any
            forward-looking statements to reflect new information, future events,
            or
            otherwise.
  7
 **PART
                      I. FINANCIAL INFORMATION****ITEM
                      1. FINANCIAL STATEMENTS.****AMEREN
                      CORPORATION****CONSOLIDATED
                      STATEMENT OF INCOME****(Unaudited)
                      (In millions, except per share amounts)**Three
                      Months Ended
                  
                  
                  **Nine
                      Months Ended**September
                      30,
                  
                  
                  **September
                      30,****2005**
                  
                  
                  **2004**
                  
                  
                  **2005**
                  
                  
                  **2004****Operating
                      Revenues:**Electric
                  **$**
                  **1,719**
                  
                  $
                  1,227
                  
                  **$**
                  **4,257**
                  
                  $
                  3,155Gas
                  
                  **149**
                  
                  
                  78
                  
                  
                  **819**
                  
                  
                  498Other
                  
                  -
                  
                  
                  2
                  
                  
                  **3**
                  
                  
                  5Total
                      operating revenues
                  
                  **1,868**
                  
                  
                  1,307
                  
                  
                  **5,079**
                  
                  
                  3,658**Operating
                      Expenses:**Fuel
                      and purchased power
                  
                  **621**
                  
                  
                  320
                  
                  
                  **1,524**
                  
                  
                  863Gas
                      purchased for resale
                  
                  **90**
                  
                  
                  47
                  
                  
                  **550**
                  
                  
                  335Other
                      operations and maintenance
                  
                  **391**
                  
                  
                  314
                  
                  
                  **1,109**
                  
                  
                  956Depreciation
                      and amortization
                  
                  **158**
                  
                  
                  136
                  
                  
                  **472**
                  
                  
                  398Taxes
                      other than income taxes
                  
                  **98**
                  
                  
                  77
                  
                  
                  **284**
                  
                  
                  231Total
                      operating expenses
                  
                  **1,358**
                  
                  
                  894
                  
                  
                  **3,939**
                  
                  
                  2,783**Operating
                      Income**
                  
                  **510**
                  
                  
                  413
                  
                  
                  **1,140**
                  
                  
                  875**Other
                      Income and (Deductions):**Miscellaneous
                      income
                  
                  **6**
                  
                  
                  8
                  
                  
                  **19**
                  
                  
                  20Miscellaneous
                      expense
                  
                  **(3**
                  **)**
                  
                  (1
                  )
                  
                  **(12**
                  **)**
                  
                  (6
                  )Total
                      other income and (deductions)
                  
                  **3**
                  
                  
                  7
                  
                  
                  **7**
                  
                  
                  14**Interest
                      Charges and Preferred Dividends:**Interest
                  
                  **70**
                  
                  
                  62
                  
                  
                  **221**
                  
                  
                  192Preferred
                      dividends of subsidiaries
                  
                  **4**
                  
                  
                  3
                  
                  
                  **10**
                  
                  
                  8Net
                      interest charges and preferred dividends
                  
                  **74**
                  
                  
                  65
                  
                  
                  **231**
                  
                  
                  200**Income
                      Before Income Taxes**
                  
                  **439**
                  
                  
                  355
                  
                  
                  **916**
                  
                  
                  689**Income
                      Taxes**
                  
                  **159**
                  
                  
                  123
                  
                  
                  **330**
                  
                  
                  242**Net
                      Income**
                  **$**
                  **280**
                  
                  $
                  232
                  
                  **$**
                  **586**
                  
                  $
                  447**Earnings
                      per Common Share – Basic and Diluted**
                  **$**
                  **1.37**
                  
                  $
                  1.20
                  
                  **$**
                  **2.94**
                  
                  $
                  2.44**Dividends
                      per Common Share**
                  **$**
                  **0.635**
                  
                  $
                  0.635
                  
                  **$**
                  **1.905**
                  
                  $
                  1.905**Average
                      Common Shares Outstanding**
                  
                  **203.8**
                  
                  
                  193.5
                  
                  
                  **199.6**
                  
                  
                  183.5
  The
          accompanying notes are an integral part of these consolidated financial
          statements.
  8
  **AMEREN
                        CORPORATION****CONSOLIDATED
                        BALANCE SHEET****(Unaudited)
                        (In millions, except per share amounts)**September
                        30,
                    
                    
                    **December
                        31,****2005**
                    
                    
                    **2004****ASSETS****Current
                        Assets:**Cash
                        and cash equivalents
                    **$**
                    **278**
                    
                    $
                    69Accounts
                        receivables – trade (less allowance for doubtfulaccounts
                        of $16 and $14, respectively)
                    
                    **480**
                    
                    
                    442Unbilled
                        revenue
                    
                    **305**
                    
                    
                    336Miscellaneous
                        accounts and notes receivable
                    
                    **21**
                    
                    
                    38Materials
                        and supplies
                    
                    **840**
                    
                    
                    623Other
                        current assets
                    
                    **59**
                    
                    
                    74Total
                        current assets
                    
                    **1,983**
                    
                    
                    1,582**Property
                        and Plant, Net**
                    
                    **13,402**
                    
                    
                    13,297**Investments
                        and Other Assets:**Investments
                        in leveraged leases
                    
                    **124**
                    
                    
                    140Nuclear
                        decommissioning trust fund
                    
                    **244**
                    
                    
                    235Goodwill
                        and other intangibles, net
                    
                    **957**
                    
                    
                    940Other
                        assets
                    
                    **496**
                    
                    
                    411Regulatory
                        assets
                    
                    **884**
                    
                    
                    829Total
                        investments and other assets
                    
                    **2,705**
                    
                    
                    2,555**TOTAL
                        ASSETS**
                    **$**
                    **18,090**
                    
                    $
                    17,434**LIABILITIES
                        AND STOCKHOLDERS' EQUITY****Current
                        Liabilities:**Current
                        maturities of long-term debt
                    **$**
                    **347**
                    
                    $
                    423Short-term
                        debt
                    
                    **23**
                    
                    
                    417Accounts
                        and wages payable
                    
                    **461**
                    
                    
                    567Taxes
                        accrued
                    
                    **196**
                    
                    
                    26Other
                        current liabilities
                    
                    **369**
                    
                    
                    374Total
                        current liabilities
                    
                    **1,396**
                    
                    
                    1,807**Long-term
                        Debt, Net**
                    
                    **5,201**
                    
                    
                    5,021**Preferred
                        Stock of Subsidiary Subject to Mandatory
                        Redemption**
                    
                    **19**
                    
                    
                    20**Deferred
                        Credits and Other Liabilities:**Accumulated
                        deferred income taxes, net
                    
                    **1,980**
                    
                    
                    1,886Accumulated
                        deferred investment tax credits
                    
                    **132**
                    
                    
                    139Regulatory
                        liabilities
                    
                    **1,207**
                    
                    
                    1,042Asset
                        retirement obligations
                    
                    **416**
                    
                    
                    439Accrued
                        pension and other postretirement benefits
                    
                    **763**
                    
                    
                    756Other
                        deferred credits and liabilities
                    
                    **310**
                    
                    
                    315Total
                        deferred credits and other liabilities
                    
                    **4,808**
                    
                    
                    4,577**Preferred
                        Stock of Subsidiaries Not Subject to Mandatory
                        Redemption**
                    
                    **195**
                    
                    
                    195**Minority
                        Interest in Consolidated Subsidiaries**
                    
                    **15**
                    
                    
                    14**Commitments
                        and Contingencies (Notes 3, 9 and 10)****Stockholders'
                        Equity:**Common
                        stock, $.01 par value, 400.0 shares authorized –shares
                        outstanding of 204.2 and 195.2, respectively
                    
                    **2**
                    
                    
                    2Other
                        paid-in capital, principally premium on common stock
                    
                    **4,375**
                    
                    
                    3,949Retained
                        earnings
                    
                    **2,109**
                    
                    
                    1,904Accumulated
                        other comprehensive loss
                    
                    **(17**
                    **)**
                    
                    (45
                    )Other
                    
                    **(13**
                    **)**
                    
                    (10
                    )Total
                        stockholders’ equity
                    
                    **6,456**
                    
                    
                    5,800**TOTAL
                        LIABILITIES AND STOCKHOLDERS' EQUITY**
                    **$**
                    **18,090**
                    
                    $
                    17,434
 The
            accompanying notes are an integral part of these consolidated financial
            statements.
  9
  **AMEREN
                        CORPORATION****CONSOLIDATED
                        STATEMENT OF CASH FLOWS****(Unaudited)
                        (In millions)****Nine
                        Months Ended**September
                        30,**2005**
                    
                    
                    **2004****Cash
                        Flows From Operating Activities:**Net
                        income
                    **$**
                    **586**
                    
                    $
                    447Adjustments
                        to reconcile net income to net cashprovided
                        by operating activities:Depreciation
                        and amortization
                    
                    **447**
                    
                    
                    398Amortization
                        of nuclear fuel
                    
                    **25**
                    
                    
                    21Amortization
                        of debt issuance costs and premium/discounts
                    
                    **11**
                    
                    
                    8Deferred
                        income taxes and investment tax credits, net
                    
                    **83**
                    
                    
                    43Coal
                        contract settlement
                    
                    **-**
                    
                    
                    28Other
                    
                    **4**
                    
                    
                    (16
                    )Changes
                        in assets and liabilities, excluding the effects of the
                        acquisition:Receivables,
                        net
                    
                    **(1**
                    **)**
                    
                    21Materials
                        and supplies
                    
                    **(134**
                    **)**
                    
                    (32
                    )Accounts
                        and wages payable
                    
                    **(72**
                    **)**
                    
                    (192
                    )Taxes
                        accrued
                    
                    **172**
                    
                    
                    257Assets,
                        other
                    
                    **(28**
                    **)**
                    
                    (41
                    )Liabilities,
                        other
                    
                    **(11**
                    **)**
                    
                    5Pension
                        and postretirement benefit obligations, net
                    
                    **7**
                    
                    
                    (211
                    )Net
                        cash provided by operating activities
                    
                    **1,089**
                    
                    
                    736**Cash
                        Flows From Investing Activities:**Capital
                        expenditures
                    
                    **(660**
                    **)**
                    
                    (547
                    )Acquisitions,
                        net of cash acquired
                    
                    **12**
                    
                    
                    (451
                    )Nuclear
                        fuel expenditures
                    
                    **(16**
                    **)**
                    
                    (7
                    )Other
                    
                    **16**
                    
                    
                    28Net
                        cash used in investing activities
                    
                    **(648**
                    **)**
                    
                    (977
                    )**Cash
                        Flows From Financing Activities:**Dividends
                        on common stock
                    
                    **(383**
                    **)**
                    
                    (356
                    )Capital
                        issuance costs
                    
                    **(4**
                    **)**
                    
                    (40
                    )Redemptions,
                        repurchases, and maturities:Nuclear
                        fuel lease
                    
                    **-**
                    
                    
                    (67
                    )Short-term
                        debt
                    
                    **(394**
                    **)**
                    
                    (130
                    )Long-term
                        debt
                    
                    **(262**
                    **)**
                    
                    (451
                    )Preferred
                        stock
                    
                    **(1**
                    **)**
                    
                    (1
                    )Issuances:Common
                        stock
                    
                    **430**
                    
                    
                    1,418Long-term
                        debt
                    
                    **382**
                    
                    
                    404Net
                        cash provided by (used in) financing activities
                    
                    **(232**
                    **)**
                    
                    777Net
                        change in cash and cash equivalents
                    
                    **209**
                    
                    
                    536Cash
                        and cash equivalents at beginning of year
                    
                    **69**
                    
                    
                    111Cash
                        and cash equivalents at end of period
                    **$**
                    **278**
                    
                    $
                    647
 The
            accompanying notes are an integral part of these consolidated financial
            statements.
  10
 **UNION
                      ELECTRIC COMPANY****CONSOLIDATED
                      STATEMENT OF INCOME****(Unaudited)
                      (In millions)****Three
                      Months Ended,**
                  
                  
                  **Nine
                      Months Ended,****September
                      30,**
                  
                  
                  **September
                      30,****2005**
                  
                  
                  **2004**
                  
                  
                  **2005**
                  
                  
                  **2004****Operating
                      Revenues:**Electric
                  **$**
                  **876**
                  
                  $
                  768
                  
                  **$**
                  **2,134**
                  
                  $
                  1,957Gas
                  
                  **19**
                  
                  
                  17
                  
                  
                  **120**
                  
                  
                  114Total
                      operating revenues
                  
                  **895**
                  
                  
                  785
                  
                  
                  **2,254**
                  
                  
                  2,071**Operating
                      Expenses:**Fuel
                      and purchased power
                  
                  **261**
                  
                  
                  148
                  
                  
                  **586**
                  
                  
                  420Gas
                      purchased for resale
                  
                  **8**
                  
                  
                  11
                  
                  
                  **66**
                  
                  
                  69Other
                      operations and maintenance
                  
                  **188**
                  
                  
                  186
                  
                  
                  **562**
                  
                  
                  579Depreciation
                      and amortization
                  
                  **90**
                  
                  
                  73
                  
                  
                  **242**
                  
                  
                  219Taxes
                      other than income taxes
                  
                  **66**
                  
                  
                  61
                  
                  
                  **180**
                  
                  
                  172Total
                      operating expenses
                  
                  **613**
                  
                  
                  479
                  
                  
                  **1,636**
                  
                  
                  1,459**Operating
                      Income**
                  
                  **282**
                  
                  
                  306
                  
                  
                  **618**
                  
                  
                  612**Other
                      Income and (Deductions):**Miscellaneous
                      income
                  
                  **4**
                  
                  
                  5
                  
                  
                  **15**
                  
                  
                  14Miscellaneous
                      expense
                  
                  **(2**
                  **)**
                  
                  (1
                  )
                  
                  **(6**
                  **)**
                  
                  (6
                  )Total
                      other income and (deductions)
                  
                  **2**
                  
                  
                  4
                  
                  
                  **9**
                  
                  
                  8**Interest
                      Charges**
                  
                  **29**
                  
                  
                  23
                  
                  
                  **81**
                  
                  
                  74**Income
                      Before Income Taxes**
                  
                  **255**
                  
                  
                  287
                  
                  
                  **546**
                  
                  
                  546**Income
                      Taxes**
                  
                  **91**
                  
                  
                  105
                  
                  
                  **193**
                  
                  
                  197**Net
                      Income**
                  
                  **164**
                  
                  
                  182
                  
                  
                  **353**
                  
                  
                  349**Preferred
                      Stock Dividends**
                  
                  **1**
                  
                  
                  1
                  
                  
                  **4**
                  
                  
                  4**Net
                      Income Available to Common Stockholder**
                  **$**
                  **163**
                  
                  $
                  181
                  
                  **$**
                  **349**
                  
                  $
                  345
  The
            accompanying notes as they relate to UE are an integral part of these
            consolidated financial statements.
  11
 
 **UNION
                          ELECTRIC COMPANY****CONSOLIDATED
                          BALANCE SHEET****(Unaudited)
                          (In millions, except per share amounts)**September
                          30,
                      
                      
                      **December
                          31,****2005**
                      
                      
                      **2004****ASSETS****Current
                          Assets:**Cash
                          and cash equivalents
                      **$**
                      **1**
                      
                      $
                      48Accounts
                          receivable – trade (less allowance for doubtfulaccounts
                          of $5 and $3, respectively)
                      
                      **224**
                      
                      
                      187Unbilled
                          revenue
                      
                      **134**
                      
                      
                      118Miscellaneous
                          accounts and notes receivable
                      
                      **4**
                      
                      
                      13Accounts
                          receivable – affiliates
                      
                      **34**
                      
                      
                      8Current
                          portion of intercompany note receivable - CIPS
                      
                      **6**
                      
                      
                      -Materials
                          and supplies
                      
                      **259**
                      
                      
                      199Other
                          current assets
                      
                      **14**
                      
                      
                      18Total
                          current assets
                      
                      **676**
                      
                      
                      591**Property
                          and Plant, Net**
                      
                      **7,266**
                      
                      
                      7,075**Investments
                          and Other Assets:**Nuclear
                          decommissioning trust fund
                      
                      **244**
                      
                      
                      235Intercompany
                          note receivable - CIPS
                      
                      **61**
                      
                      
                      -Other
                          assets
                      
                      **290**
                      
                      
                      263Regulatory
                          assets
                      
                      **568**
                      
                      
                      585Total
                          investments and other assets
                      
                      **1,163**
                      
                      
                      1,083**TOTAL
                          ASSETS**
                      **$**
                      **9,105**
                      
                      $
                      8,749**LIABILITIES
                          AND STOCKHOLDERS' EQUITY****Current
                          Liabilities:**Current
                          maturities of long-term debt
                      **$**
                      **3**
                      
                      $
                      3Short-term
                          debt
                      
                      **-**
                      
                      
                      375Borrowings
                          from money pool
                      
                      **81**
                      
                      
                      2Accounts
                          and wages payable
                      
                      **111**
                      
                      
                      252Accounts
                          and wages payable - affiliates
                      
                      **237**
                      
                      
                      72Taxes
                          accrued
                      
                      **181**
                      
                      
                      51Other
                          current liabilities
                      
                      **101**
                      
                      
                      108Total
                          current liabilities
                      
                      **714**
                      
                      
                      863**Long-term
                          Debt, Net**
                      
                      **2,442**
                      
                      
                      2,059**Deferred
                          Credits and Other Liabilities:**Accumulated
                          deferred income taxes, net
                      
                      **1,251**
                      
                      
                      1,217Accumulated
                          deferred investment tax credits
                      
                      **97**
                      
                      
                      108Regulatory
                          liabilities
                      
                      **811**
                      
                      
                      776Asset
                          retirement obligations
                      
                      **407**
                      
                      
                      431Accrued
                          pension and other postretirement benefits
                      
                      **218**
                      
                      
                      219Other
                          deferred credits and liabilities
                      
                      **93**
                      
                      
                      80Total
                          deferred credits and other liabilities
                      
                      **2,877**
                      
                      
                      2,831**Commitments
                          and Contingencies (Notes 3, 9 and 10)****Stockholders'
                          Equity:**Common
                          stock, $5 par value, 150.0 shares authorized – 102.1 shares
                          outstanding
                      
                      **511**
                      
                      
                      511Preferred
                          stock not subject to mandatory redemption
                      
                      **113**
                      
                      
                      113Other
                          paid-in capital, principally premium on common stock
                      
                      **722**
                      
                      
                      718Retained
                          earnings
                      
                      **1,762**
                      
                      
                      1,688Accumulated
                          other comprehensive loss
                      
                      **(36**
                      **)**
                      
                      (34
                      )Total
                          stockholders' equity
                      
                      **3,072**
                      
                      
                      2,996**TOTAL
                          LIABILITIES AND STOCKHOLDERS' EQUITY**
                      **$**
                      **9,105**
                      
                      $
                      8,749
  The accompanying notes as they relate to UE
          are an
          integral part of these consolidated financial statements
 
 12
 
 **UNION
                        ELECTRIC COMPANY****CONSOLIDATED
                        STATEMENT OF CASH FLOWS****(Unaudited)
                        (In millions)****Nine
                        Months Ended****September
                        30,****2005**
                    
                    
                    **2004****Cash
                        Flows From Operating Activities:**Net
                        income
                    **$**
                    **353**
                    
                    $
                    349Adjustments
                        to reconcile net income to net cashprovided
                        by operating activities:Depreciation
                        and amortization
                    
                    **242**
                    
                    
                    219Amortization
                        of nuclear fuel
                    
                    **23**
                    
                    
                    21Amortization
                        of debt issuance costs and premium/discounts
                    
                    **3**
                    
                    
                    4Deferred
                        income taxes and investment tax credits, net
                    
                    **27**
                    
                    
                    19Coal
                        contract settlement
                    
                    **-**
                    
                    
                    28Other
                    
                    **14**
                    
                    
                    5Changes
                        in assets and liabilities:Receivables,
                        net
                    
                    **(96**
                    **)**
                    
                    (27
                    )Materials
                        and supplies
                    
                    **2**
                    
                    
                    (24
                    )Accounts
                        and wages payable
                    
                    **44**
                    
                    
                    (164
                    )Taxes
                        accrued
                    
                    **130**
                    
                    
                    231Assets,
                        other
                    
                    **(25**
                    **)**
                    
                    (36
                    )Liabilities,
                        other
                    
                    **(2**
                    **)**
                    
                    10Pension
                        and other postretirement obligations, net
                    
                    **(1**
                    **)**
                    
                    (106
                    )Net
                        cash provided by operating activities
                    
                    **714**
                    
                    
                    529**Cash
                        Flows From Investing Activities:**Capital
                        expenditures
                    
                    **(629**
                    **)**
                    
                    (374
                    )Nuclear
                        fuel expenditures
                    
                    **(16**
                    **)**
                    
                    (7
                    )Other
                    
                    **10**
                    
                    
                    -Net
                        cash used in investing activities
                    
                    **(635**
                    **)**
                    
                    (381
                    )**Cash
                        Flows From Financing Activities:**Dividends
                        on common stock
                    
                    **(209**
                    **)**
                    
                    (230
                    )Dividends
                        on preferred stock
                    
                    **(4**
                    **)**
                    
                    (4
                    )Capital
                        issuance costs
                    
                    **(3**
                    **)**
                    
                    (4
                    )Changes
                        in money pool borrowings
                    
                    **79**
                    
                    
                    189Redemptions,
                        repurchases, and maturities:Nuclear
                        fuel lease
                    
                    **-**
                    
                    
                    (67
                    )Short-term
                        debt
                    
                    **(375**
                    **)**
                    
                    (150
                    )Long-term
                        debt
                    
                    **-**
                    
                    
                    (288
                    )Issuances:Long
                        term debt
                    
                    **382**
                    
                    
                    404Capital
                        contribution from parent
                    
                    **4**
                    
                    
                    -Net
                        cash used in financing activities
                    
                    **(126**
                    **)**
                    
                    (150
                    )Net
                        change in cash and cash equivalents
                    
                    **(47**
                    **)**
                    
                    (2
                    )Cash
                        and cash equivalents at beginning of year
                    
                    **48**
                    
                    
                    15Cash
                        and cash equivalents at end of period
                    **$**
                    **1**
                    
                    $
                    13
  **Non-cash
            Investing Activities:**
 In
            2005,
            UE sold an interest in assets to CIPS in exchange for a promissory note
            from
            CIPS, and UE contributed an interest in assets to Ameren Corporation.
            See Note 3
            for further details.
 The accompanying notes as they relate to UE
          are an
          integral part of these consolidated financial statements
  13
  **CENTRAL
                      ILLINOIS PUBLIC SERVICE COMPANY****STATEMENT
                      OF INCOME****(Unaudited)
                      (In millions)****Three
                      Months Ended**
                  
                  
                  **Nine
                      Months Ended****September
                      30,**
                  
                  
                  **September
                      30,****2005**
                  
                  
                  **2004**
                  
                  
                  **2005**
                  
                  
                  **2004****Operating
                      Revenues:**Electric
                  **$**
                  **244**
                  
                  $
                  166
                  
                  **$**
                  **542**
                  
                  $
                  432Gas
                  
                  **22**
                  
                  
                  21
                  
                  
                  **133**
                  
                  
                  134Other
                  
                  **1**
                  
                  
                  -
                  
                  
                  **2**
                  
                  
                  -Total
                      operating revenues
                  
                  **267**
                  
                  
                  187
                  
                  
                  **677**
                  
                  
                  566**Operating
                      Expenses:**Purchased
                      power
                  
                  **140**
                  
                  
                  85
                  
                  
                  **331**
                  
                  
                  244Gas
                      purchased for resale
                  
                  **12**
                  
                  
                  10
                  
                  
                  **86**
                  
                  
                  82Other
                      operations and maintenance
                  
                  **39**
                  
                  
                  37
                  
                  
                  **106**
                  
                  
                  109Depreciation
                      and amortization
                  
                  **17**
                  
                  
                  13
                  
                  
                  **48**
                  
                  
                  39Taxes
                      other than income taxes
                  
                  **9**
                  
                  
                  6
                  
                  
                  **24**
                  
                  
                  20Total
                      operating expenses
                  
                  **217**
                  
                  
                  151
                  
                  
                  **595**
                  
                  
                  494**Operating
                      Income**
                  
                  **50**
                  
                  
                  36
                  
                  
                  **82**
                  
                  
                  72**Other
                      Income and (Deductions):**Miscellaneous
                      income
                  
                  **4**
                  
                  
                  6
                  
                  
                  **13**
                  
                  
                  19Miscellaneous
                      expense
                  
                  **(1**
                  **)**
                  
                  -
                  
                  
                  **(5**
                  **)**
                  
                  (1
                  )Total
                      other income and (deductions)
                  
                  **3**
                  
                  
                  6
                  
                  
                  **8**
                  
                  
                  18**Interest
                      Charges**
                  
                  **7**
                  
                  
                  8
                  
                  
                  **22**
                  
                  
                  24**Income
                      Before Income Taxes**
                  
                  **46**
                  
                  
                  34
                  
                  
                  **68**
                  
                  
                  66**Income
                      Taxes**
                  
                  **15**
                  
                  
                  11
                  
                  
                  **22**
                  
                  
                  25**Net
                      Income**
                  
                  **31**
                  
                  
                  23
                  
                  
                  **46**
                  
                  
                  41**Preferred
                      Stock Dividends**
                  
                  **1**
                  
                  
                  1
                  
                  
                  **2**
                  
                  
                  2**Net
                      Income Available to Common Stockholder**
                  **$**
                  **30**
                  
                  $
                  22
                  
                  **$**
                  **44**
                  
                  $
                  39
  The accompanying notes as they relate to CIPS
          are an
          integral part of these consolidated financial statements
  14
  **CENTRAL
                      ILLINOIS PUBLIC SERVICE COMPANY****BALANCE
                      SHEET****(Unaudited)
                      (In millions)****September
                      30,**
                  
                  **December
                      31,****2005**
                  
                  **2004****ASSETS****Current
                      Assets:**Cash
                      and cash equivalents
                  **$**
                  **-**
                  
                  $
                  2Accounts
                      receivable – trade (less allowance for doubtfulaccounts
                      of $2 and $1, respectively)
                  
                  **69**
                  
                  
                  48Unbilled
                      revenue
                  
                  **58**
                  
                  
                  71Accounts
                      receivable – affiliates
                  
                  **8**
                  
                  
                  12Current
                      portion of intercompany note receivable – Genco
                  
                  **34**
                  
                  
                  249Current
                      portion of intercompany tax receivable – Genco
                  
                  **11**
                  
                  
                  11Advances
                      to money pool
                  
                  **51**
                  
                  
                  -Materials
                      and supplies
                  
                  **81**
                  
                  
                  56Other
                      current assets
                  
                  **15**
                  
                  
                  19Total
                      current assets
                  
                  **327**
                  
                  
                  468**Property
                      and Plant, Net**
                  
                  **1,121**
                  
                  
                  953**Investments
                      and Other Assets:**Intercompany
                      note receivable – Genco
                  
                  **163**
                  
                  
                  -Intercompany
                      tax receivable – Genco
                  
                  **130**
                  
                  
                  138Other
                      assets
                  
                  **39**
                  
                  
                  23Regulatory
                      assets
                  
                  **54**
                  
                  
                  33Total
                      investments and other assets
                  
                  **386**
                  
                  
                  194**TOTAL
                      ASSETS**
                  **$**
                  **1,834**
                  
                  $
                  1,615**LIABILITIES
                      AND STOCKHOLDERS' EQUITY****Current
                      Liabilities:**Current
                      maturities of long-term debt
                  **$**
                  **20**
                  
                  $
                  20Accounts
                      and wages payable
                  
                  **40**
                  
                  
                  27Accounts
                      and wages payable - affiliates
                  
                  **75**
                  
                  
                  49Borrowings
                      from money pool
                  
                  **-**
                  
                  
                  68Current
                      portion of intercompany note payable - UE
                  
                  **6**
                  
                  
                  -Taxes
                      accrued
                  
                  **16**
                  
                  
                  -Other
                      current liabilities
                  
                  **43**
                  
                  
                  32Total
                      current liabilities
                  
                  **200**
                  
                  
                  196**Long-term
                      Debt, Net**
                  
                  **410**
                  
                  
                  430**Deferred
                      Credits and Other Noncurrent Liabilities:**Accumulated
                      deferred income taxes and investment tax credits, net
                  
                  **310**
                  
                  
                  308Intercompany
                      note payable - UE
                  
                  **61**
                  
                  
                  -Regulatory
                      liabilities
                  
                  **222**
                  
                  
                  151Other
                      deferred credits and liabilities
                  
                  **40**
                  
                  
                  40Total
                      deferred credits and other noncurrent liabilities
                  
                  **633**
                  
                  
                  499**Commitments
                      and Contingencies (Notes 3 and 9)****Stockholders'
                      Equity:**Common
                      stock, no par value, 45.0 shares authorized – 25.5 shares
                      outstanding
                  
                  **-**
                  
                  
                  -Other
                      paid-in capital
                  
                  **189**
                  
                  
                  121Preferred
                      stock not subject to mandatory redemption
                  
                  **50**
                  
                  
                  50Retained
                      earnings
                  
                  **347**
                  
                  
                  323Accumulated
                      other comprehensive income (loss)
                  
                  **5**
                  
                  
                  (4
                  )Total
                      stockholders' equity
                  
                  **591**
                  
                  
                  490**TOTAL
                      LIABILITIES AND STOCKHOLDERS' EQUITY**
                  **$**
                  **1,834**
                  
                  $
                  1,615
  The accompanying notes as they relate to CIPS
          are an
          integral part of these consolidated financial statements
  15
  **CENTRAL
                        ILLINOIS PUBLIC SERVICE COMPANY****CONSOLIDATED
                        STATEMENT OF CASH FLOWS****(Unaudited)
                        (In millions)****Nine
                        Months Ended****September
                        30,****2005**
                    
                    
                    **2004****Cash
                        Flows From Operating Activities:**Net
                        income
                    **$**
                    **46**
                    
                    $
                    41Adjustments
                        to reconcile net income to net cashprovided
                        by operating activities:Depreciation
                        and amortization
                    
                    **48**
                    
                    
                    39Amortization
                        of debt issuance costs and premium/discounts
                    
                    **1**
                    
                    
                    1Deferred
                        income taxes and investment tax credits, net
                    
                    **(5**
                    **)**
                    
                    (12
                    )Other
                    
                    **1**
                    
                    
                    6Changes
                        in assets and liabilities:Receivables,
                        net
                    
                    **21**
                    
                    
                    14Materials
                        and supplies
                    
                    **(25**
                    **)**
                    
                    (13
                    )Accounts
                        and wages payable
                    
                    **39**
                    
                    
                    (7
                    )Taxes
                        accrued
                    
                    **16**
                    
                    
                    22Assets,
                        other
                    
                    **(35**
                    **)**
                    
                    (12
                    )Liabilities,
                        other
                    
                    **41**
                    
                    
                    18Pension
                        and other postretirement obligations, net
                    
                    **-**
                    
                    
                    (18
                    )Net
                        cash provided by operating activities
                    
                    **148**
                    
                    
                    79**Cash
                        Flows From Investing Activities:**Capital
                        expenditures
                    
                    **(41**
                    **)**
                    
                    (32
                    )Proceeds
                        from intercompany note receivable - Genco
                    
                    **52**
                    
                    
                    49Changes
                        in money pool advances
                    
                    **(51**
                    **)**
                    
                    -Net
                        cash provided by (used in) investing activities
                    
                    **(40**
                    **)**
                    
                    17**Cash
                        Flows From Financing Activities:**Dividends
                        on common stock
                    
                    **(21**
                    **)**
                    
                    (46
                    )Dividends
                        on preferred stock
                    
                    **(2**
                    **)**
                    
                    (2
                    )Changes
                        in money pool borrowings
                    
                    **(68**
                    **)**
                    
                    (60
                    )Redemptions,
                        repurchases, and maturities:Long-term
                        debt
                    
                    **(20**
                    **)**
                    
                    -Capital
                        contribution from parent
                    
                    **1**
                    
                    
                    -Net
                        cash used in financing activities
                    
                    **(110**
                    **)**
                    
                    (108
                    )Net
                        change in cash and cash equivalents
                    
                    **(2**
                    **)**
                    
                    (12
                    )Cash
                        and cash equivalents at beginning of year
                    
                    **2**
                    
                    
                    16Cash
                        and cash equivalents at end of period
                    **$**
                    **-**
                    
                    $
                    4
  **Non-cash
            Investing Activities:**
 In
            2005,
            CIPS purchased an interest in assets from UE in exchange for a promissory
            note
            to UE, and CIPS received a contribution of assets from Ameren
            Corporation. See Note 3 for further details.
 The accompanying notes as they relate to CIPS
          are an
          integral part of these consolidated financial statements
  16
  **AMEREN
                      ENERGY GENERATING COMPANY****CONSOLIDATED
                      STATEMENT OF INCOME****(Unaudited)
                      (In millions)****Three
                      Months Ended**
                  
                  
                  **Nine
                      Months Ended****September
                      30,**
                  
                  
                  **September
                      30,****2005**
                  
                  
                  **2004**
                  
                  
                  **2005**
                  
                  
                  **2004****Operating
                      Revenues:**Electric
                  **$**
                  **287**
                  
                  $
                  233
                  
                  **$**
                  **777**
                  
                  $
                  655Other
                  
                  **2**
                  
                  
                  **-**
                  
                  
                  **2**
                  
                  
                  2Total
                      operating revenues
                  
                  **289**
                  
                  
                  233
                  
                  
                  **779**
                  
                  
                  657**Operating
                      Expenses:**Fuel
                      and purchased power
                  
                  **162**
                  
                  
                  107
                  
                  
                  **398**
                  
                  
                  292Other
                      operations and maintenance
                  
                  **32**
                  
                  
                  32
                  
                  
                  **108**
                  
                  
                  103Depreciation
                      and amortization
                  
                  **18**
                  
                  
                  19
                  
                  
                  **55**
                  
                  
                  57Taxes
                      other than income taxes
                  
                  **4**
                  
                  
                  5
                  
                  
                  **7**
                  
                  
                  16Total
                      operating expenses
                  
                  **216**
                  
                  
                  163
                  
                  
                  **568**
                  
                  
                  468**Operating
                      Income**
                  
                  **73**
                  
                  
                  70
                  
                  
                  **211**
                  
                  
                  189**Other
                      Income and (Deductions):**Miscellaneous
                      income
                  
                  **-**
                  
                  
                  1
                  
                  
                  **1**
                  
                  
                  -Total
                      other income and (deductions)
                  
                  **-**
                  
                  
                  1
                  
                  
                  **1**
                  
                  
                  -**Interest
                      Charges**
                  
                  **17**
                  
                  
                  25
                  
                  
                  **57**
                  
                  
                  72**Income
                      Before Income Taxes**
                  
                  **56**
                  
                  
                  46
                  
                  
                  **155**
                  
                  
                  117**Income
                      Taxes**
                  
                  **24**
                  
                  
                  17
                  
                  
                  **61**
                  
                  
                  42**Net
                      Income**
                  **$**
                  **32**
                  
                  $
                  29
                  
                  **$**
                  **94**
                  
                  $
                  75
  The accompanying notes as they relate to Genco
          are an
          integral part of these consolidated financial statements
  17
  **AMEREN
                      ENERGY GENERATING COMPANY****CONSOLIDATED
                      BALANCE SHEET****(Unaudited)
                      (In millions, except shares)****September
                      30,**
                  
                  **December
                      31,****2005**
                  
                  
                  **2004****ASSETS****Current
                      Assets:**Cash
                      and cash equivalents
                  **$**
                  **-**
                  
                  $
                  1Accounts
                      receivable - affiliates
                  
                  **93**
                  
                  
                  86Accounts
                      receivable
                  
                  **13**
                  
                  
                  10Advances
                      to money pool
                  
                  **65**
                  
                  
                  -Materials
                      and supplies
                  
                  **161**
                  
                  
                  89Other
                      current assets
                  
                  **2**
                  
                  
                  2Total
                      current assets
                  
                  **334**
                  
                  
                  188**Property
                      and Plant, Net**
                  
                  **1,501**
                  
                  
                  1,749**Other
                      Assets**
                  
                  **12**
                  
                  
                  18**TOTAL
                      ASSETS**
                  **$**
                  **1,847**
                  
                  $
                  1,955**LIABILITIES
                      AND STOCKHOLDER'S EQUITY****Current
                      Liabilities:**Current
                      maturities of long-term debt
                  **$**
                  **225**
                  
                  $
                  225Current
                      portion of intercompany notes payable – CIPS
                  
                  **34**
                  
                  
                  283Borrowings
                      from money pool
                  
                  **-**
                  
                  
                  116Accounts
                      and wages payable
                  
                  **28**
                  
                  
                  32Accounts
                      and wages payable - affiliates
                  
                  **81**
                  
                  
                  28Current
                      portion of intercompany tax payable – CIPS
                  
                  **11**
                  
                  
                  11Taxes
                      accrued
                  
                  **-**
                  
                  
                  35Other
                      current liabilities
                  
                  **30**
                  
                  
                  16Total
                      current liabilities
                  
                  **409**
                  
                  
                  746**Long-term
                      Debt, Net**
                  
                  **474**
                  
                  
                  473**Intercompany
                      Notes Payable – CIPS**
                  
                  **163**
                  
                  
                  -**Deferred
                      Credits and Other Noncurrent Liabilities:**Accumulated
                      deferred income taxes, net
                  
                  **180**
                  
                  
                  144Accumulated
                      deferred investment tax credits
                  
                  **10**
                  
                  
                  12Intercompany
                      tax payable – CIPS
                  
                  **130**
                  
                  
                  138Accrued
                      pension and other postretirement benefits
                  
                  **5**
                  
                  
                  5Other
                      deferred credits and liabilities
                  
                  **11**
                  
                  
                  2Total
                      deferred credits and other noncurrent liabilities
                  
                  **336**
                  
                  
                  301**Commitments
                      and Contingencies (Notes 3 and 9)****Stockholder's
                      Equity:**Common
                      stock, no par value, 10,000 shares authorized – 2,000 shares
                      outstanding
                  
                  **-**
                  
                  
                  -Other
                      paid-in capital
                  
                  **226**
                  
                  
                  225Retained
                      earnings
                  
                  **247**
                  
                  
                  211Accumulated
                      other comprehensive loss
                  
                  **(8**
                  **)**
                  
                  (1
                  )Total
                      stockholder's equity
                  
                  **465**
                  
                  
                  435**TOTAL
                      LIABILITIES AND STOCKHOLDER'S EQUITY**
                  **$**
                  **1,847**
                  
                  $
                  1,955
  The accompanying notes as they relate to Genco
          are an
          integral part of these consolidated financial statements
  18
  **AMEREN
                      ENERGY GENERATING COMPANY****CONSOLIDATED
                      STATEMENT OF CASH FLOWS****(Unaudited)
                      (In millions)****Nine
                      Months Ended****September
                      30,****2005**
                  
                  
                  **2004****Cash
                      Flows From Operating Activities:**Net
                      income
                  **$**
                  **94**
                  
                  $
                  75Adjustments
                      to reconcile net income to net cashprovided
                      by operating activities:Depreciation
                      and amortization
                  
                  **55**
                  
                  
                  57Amortization
                      of debt issuance costs and discounts
                  
                  **1**
                  
                  
                  1Deferred
                      income taxes and investment tax credits, net
                  
                  **35**
                  
                  
                  29Other
                  
                  **(21**
                  **)**
                  
                  (2
                  )Changes
                      in assets and liabilities:Accounts
                      receivable
                  
                  **(10**
                  **)**
                  
                  (5
                  )Materials
                      and supplies
                  
                  **(56**
                  **)**
                  
                  -Accounts
                      and wages payable
                  
                  **59**
                  
                  
                  (20
                  )Taxes
                      accrued, net
                  
                  **(35**
                  **)**
                  
                  6Assets,
                      other
                  
                  **6**
                  
                  
                  1Liabilities,
                      other
                  
                  **7**
                  
                  
                  (10
                  )Pension
                      and other postretirement obligations, net
                  
                  **-**
                  
                  
                  (17
                  )Net
                      cash provided by operating activities
                  
                  **135**
                  
                  
                  115**Cash
                      Flows From Investing Activities:**Capital
                      expenditures
                  
                  **(52**
                  **)**
                  
                  (37
                  )Proceeds
                      from asset sale to UE
                  
                  **241**
                  
                  
                  -Changes
                      in money pool advances
                  
                  **(65**
                  **)**
                  
                  -Net
                      cash provided by (used in) investing activities
                  
                  **124**
                  
                  
                  (37
                  )**Cash
                      Flows From Financing Activities:**Dividends
                      on common stock
                  
                  **(59**
                  **)**
                  
                  (57
                  )Changes
                      in money pool borrowings
                  
                  **(116**
                  **)**
                  
                  (45
                  )Redemptions,
                      repurchases, and maturities:Intercompany
                      notes payable – CIPS and Ameren
                  
                  **(86**
                  **)**
                  
                  (53
                  )Capital
                      contribution from parent
                  
                  **1**
                  
                  
                  75Net
                      cash used in financing activities
                  
                  **(260**
                  **)**
                  
                  (80
                  )Net
                      change in cash and cash equivalents
                  
                  **(1**
                  **)**
                  
                  (2
                  )Cash
                      and cash equivalents at beginning of year
                  
                  **1**
                  
                  
                  2Cash
                      and cash equivalents at end of period
                  **$**
                  **-**
                  
                  $
                  -
 The accompanying notes as they relate to Genco
          are an
          integral part of these consolidated financial statements
  19
 
 **CILCORP
                      INC.****CONSOLIDATED
                      STATEMENT OF INCOME****(Unaudited)
                      (In millions)****Three
                      Months Ended**
                  
                  **Nine
                      Months Ended****September
                      30,**
                  
                  
                  **September
                      30,****2005**
                  
                  
                  **2004**
                  
                  
                  **2005**
                  
                  
                  **2004****Operating
                      Revenues:**Electric
                  **$**
                  **116**
                  
                  $
                  108
                  
                  **$**
                  **309**
                  
                  $
                  295Gas
                  
                  **41**
                  
                  
                  37
                  
                  
                  **215**
                  
                  
                  228Other
                  
                  **2**
                  
                  
                  1
                  
                  
                  **4**
                  
                  
                  3Total
                      operating revenues
                  
                  **159**
                  
                  
                  146
                  
                  
                  **528**
                  
                  
                  526**Operating
                      Expenses:**Fuel
                      and purchased power
                  
                  **54**
                  
                  
                  39
                  
                  
                  **126**
                  
                  
                  117Gas
                      purchased for resale
                  
                  **27**
                  
                  
                  24
                  
                  
                  **150**
                  
                  
                  162Other
                      operations and maintenance
                  
                  **41**
                  
                  
                  53
                  
                  
                  **122**
                  
                  
                  143Depreciation
                      and amortization
                  
                  **18**
                  
                  
                  18
                  
                  
                  **54**
                  
                  
                  51Taxes
                      other than income taxes
                  
                  **4**
                  
                  
                  4
                  
                  
                  **15**
                  
                  
                  18Total
                      operating expenses
                  
                  **144**
                  
                  
                  138
                  
                  
                  **467**
                  
                  
                  491**Operating
                      Income**
                  
                  **15**
                  
                  
                  8
                  
                  
                  **61**
                  
                  
                  35**Other
                      Income and (Deductions):**Miscellaneous
                      expense
                  
                  **(2**
                  **)**
                  
                  (2
                  )
                  
                  **(7**
                  **)**
                  
                  (4
                  )Total
                      other income and (deductions)
                  
                  **(2**
                  **)**
                  
                  (2
                  )
                  
                  **(7**
                  **)**
                  
                  (4
                  )**Interest
                      Charges and Preferred Dividends:**Interest
                  
                  **12**
                  
                  
                  13
                  
                  
                  **37**
                  
                  
                  39Preferred
                      dividends of subsidiaries
                  
                  **1**
                  
                  
                  -
                  
                  
                  **2**
                  
                  
                  1Net
                      interest charges and preferred dividends
                  
                  **13**
                  
                  
                  13
                  
                  
                  **39**
                  
                  
                  40**Income
                      (Loss) Before Income Taxes**
                  
                  **-**
                  
                  
                  (7
                  )
                  
                  **15**
                  
                  
                  (9
                  )**Income
                      Tax Benefit**
                  
                  **(5**
                  **)**
                  
                  (9
                  )
                  
                  **(1**
                  **)**
                  
                  (11
                  )**Net
                      Income**
                  **$**
                  **5**
                  
                  $
                  2
                  
                  **$**
                  **16**
                  
                  $
                  2
  The accompanying notes as they relate to CILCORP
          are
          an integral part of these consolidated financial
          statements
  20
  **CILCORP
                      INC.****CONSOLIDATED
                      BALANCE SHEET****(Unaudited)
                      (In millions, except shares)****September
                      30,**
                  
                  **December
                      31,****2005**
                  
                  
                  **2004****ASSETS****Current
                      Assets:**Cash
                      and cash equivalents
                  **$**
                  **4**
                  
                  $
                  7Accounts
                      receivables – trade (less allowance for doubtfulaccounts
                      of $3 and $3, respectively)
                  
                  **37**
                  
                  
                  46Unbilled
                      revenue
                  
                  **30**
                  
                  
                  46Accounts
                      receivables – affiliates
                  
                  **14**
                  
                  
                  9Materials
                      and supplies
                  
                  **147**
                  
                  
                  134Other
                      current assets
                  
                  **27**
                  
                  
                  19Total
                      current assets
                  
                  **259**
                  
                  
                  261**Property
                      and Plant, Net**
                  
                  **1,190**
                  
                  
                  1,179**Investments
                      and Other Assets:**Investments
                      in leveraged leases
                  
                  **109**
                  
                  
                  113Goodwill
                      and other intangibles, net
                  
                  **559**
                  
                  
                  559Other
                      assets
                  
                  **78**
                  
                  
                  33Regulatory
                      assets
                  
                  **32**
                  
                  
                  11Total
                      investments and other assets
                  
                  **778**
                  
                  
                  716**TOTAL
                      ASSETS**
                  **$**
                  **2,227**
                  
                  $
                  2,156**LIABILITIES
                      AND STOCKHOLDER'S EQUITY****Current
                      Liabilities:**Current
                      maturities of long-term debt
                  **$**
                  **16**
                  
                  $
                  16Borrowings
                      from money pool, net
                  
                  **81**
                  
                  
                  166Intercompany
                      note payable – Ameren
                  
                  **100**
                  
                  
                  72Accounts
                      and wages payable
                  
                  **49**
                  
                  
                  57Accounts
                      and wages payable - affiliates
                  
                  **44**
                  
                  
                  42Other
                      current liabilities
                  
                  **81**
                  
                  
                  58Total
                      current liabilities
                  
                  **371**
                  
                  
                  411**Long-term
                      Debt, Net**
                  
                  **612**
                  
                  
                  623**Preferred
                      Stock of Subsidiary Subject to Mandatory
                      Redemption**
                  
                  **19**
                  
                  
                  20**Deferred
                      Credits and Other Noncurrent Liabilities:**Accumulated
                      deferred income taxes, net
                  
                  **198**
                  
                  
                  214Accumulated
                      deferred investment tax credits
                  
                  **9**
                  
                  
                  10Regulatory
                      liabilities
                  
                  **69**
                  
                  
                  46Accrued
                      pension and other postretirement benefits
                  
                  **244**
                  
                  
                  242Other
                      deferred credits and liabilities
                  
                  **19**
                  
                  
                  23Total
                      deferred credits and other noncurrent liabilities
                  
                  **539**
                  
                  
                  535**Preferred
                      Stock of Subsidiary Not Subject to Mandatory
                      Redemption**
                  
                  **19**
                  
                  
                  19**Commitments
                      and Contingencies (Notes 3 and 9)****Stockholder's
                      Equity:**Common
                      stock, no par value, 10,000 shares authorized – 1,000 shares
                      outstanding
                  
                  **-**
                  
                  
                  -Other
                      paid-in capital
                  
                  **666**
                  
                  
                  565Retained
                      earnings (deficit)
                  
                  **(34**
                  **)**
                  
                  (21
                  )Accumulated
                      other comprehensive income
                  
                  **35**
                  
                  
                  4Total
                      stockholder's equity
                  
                  **667**
                  
                  
                  548**TOTAL
                      LIABILITIES AND STOCKHOLDER'S EQUITY**
                  **$**
                  **2,227**
                  
                  $
                  2,156
  The accompanying notes as they relate to CILCORP
          are
          an integral part of these consolidated financial
          statements
 21
  **CILCORP
                        INC.****CONSOLIDATED
                        STATEMENT OF CASH FLOWS****(Unaudited)
                        (In millions)****Nine
                        Months Ended****September
                        30,****2005**
                    
                    
                    **2004****Cash
                        Flows From Operating Activities:**Net
                        income
                    **$**
                    **16**
                    
                    $
                    2Adjustments
                        to reconcile net income to net cashprovided
                        by operating activities:Depreciation
                        and amortization
                    
                    **49**
                    
                    
                    51Deferred
                        income taxes and investment tax credits, net
                    
                    **(19**
                    **)**
                    
                    10Other
                    
                    **1**
                    
                    
                    5Changes
                        in assets and liabilities:Receivables,
                        net
                    
                    **20**
                    
                    
                    61Materials
                        and supplies
                    
                    **(13**
                    **)**
                    
                    8Accounts
                        and wages payable
                    
                    **(9**
                    **)**
                    
                    (26
                    )Taxes
                        accrued
                    
                    **(8**
                    **)**
                    
                    11Assets,
                        other
                    
                    **9**
                    
                    
                    5Liabilities,
                        other
                    
                    **9**
                    
                    
                    (6
                    )Pension
                        and other postretirement benefit obligations, net
                    
                    **2**
                    
                    
                    (21
                    )Net
                        cash provided by operating activities
                    
                    **57**
                    
                    
                    100**Cash
                        Flows From Investing Activities:**Capital
                        expenditures
                    
                    **(71**
                    **)**
                    
                    (95
                    )Other
                    
                    **4**
                    
                    
                    4Net
                        cash used in investing activities
                    
                    **(67**
                    **)**
                    
                    (91
                    )**Cash
                        Flows From Financing Activities:**Dividends
                        on common stock
                    
                    **(30**
                    **)**
                    
                    (18
                    )Changes
                        in money pool borrowings
                    
                    **(85**
                    **)**
                    
                    46Proceeds
                        from intercompany notes payable - Ameren
                    
                    **28**
                    
                    
                    10Redemptions,
                        repurchases, and maturities:Long-term
                        debt
                    
                    **(6**
                    **)**
                    
                    (123
                    )Preferred
                        stock
                    
                    **(1**
                    **)**
                    
                    (1
                    )Capital
                        contribution from parent
                    
                    **101**
                    
                    
                    75Net
                        cash provided by (used in) financing activities
                    
                    **7**
                    
                    
                    (11
                    )Net
                        change in cash and cash equivalents
                    
                    **(3**
                    **)**
                    
                    (2
                    )Cash
                        and cash equivalents at beginning of year
                    
                    **7**
                    
                    
                    11Cash
                        and cash equivalents at end of period
                    **$**
                    **4**
                    
                    $
                    9
  The accompanying notes as they relate to
            CILCORP are
            an integral part of these consolidated financial statements
 22
 **CENTRAL
                        ILLINOIS LIGHT COMPANY****CONSOLIDATED
                        STATEMENT OF INCOME****(Unaudited)
                        (In millions)**Three
                        Months Ended
                    
                    
                    **Nine
                        Months Ended**September
                        30,
                    
                    
                    **September
                        30,****2005**
                    
                    
                    **2004**
                    
                    
                    **2005**
                    
                    
                    **2004****Operating
                        Revenues:**Electric
                    **$**
                    **116**
                    
                    $
                    108
                    
                    **$**
                    **309**
                    
                    $
                    295Gas
                    
                    **41**
                    
                    
                    34
                    
                    
                    **212**
                    
                    
                    206Other
                    
                    **1**
                    
                    
                    -
                    
                    
                    **1**
                    
                    
                    -Total
                        operating revenues
                    
                    **158**
                    
                    
                    142
                    
                    
                    **522**
                    
                    
                    501**Operating
                        Expenses:**Fuel
                        and purchased power
                    
                    **49**
                    
                    
                    33
                    
                    
                    **117**
                    
                    
                    109Gas
                        purchased for resale
                    
                    **27**
                    
                    
                    21
                    
                    
                    **146**
                    
                    
                    140Other
                        operations and maintenance
                    
                    **43**
                    
                    
                    55
                    
                    
                    **127**
                    
                    
                    150Depreciation
                        and amortization
                    
                    **17**
                    
                    
                    16
                    
                    
                    **50**
                    
                    
                    48Taxes
                        other than income taxes
                    
                    **4**
                    
                    
                    4
                    
                    
                    **14**
                    
                    
                    18Total
                        operating expenses
                    
                    **140**
                    
                    
                    129
                    
                    
                    **454**
                    
                    
                    465**Operating
                        Income**
                    
                    **18**
                    
                    
                    13
                    
                    
                    **68**
                    
                    
                    36**Other
                        Income and (Deductions):**Miscellaneous
                        expense
                    
                    **(2**
                    **)**
                    
                    (1
                    )
                    
                    **(6**
                    **)**
                    
                    (4
                    )Total
                        other income and (deductions)
                    
                    **(2**
                    **)**
                    
                    (1
                    )
                    
                    **(6**
                    **)**
                    
                    (4
                    )**Interest
                        Charges**
                    
                    **3**
                    
                    
                    5
                    
                    
                    **10**
                    
                    
                    12**Income
                        Before Income Taxes**
                    
                    **13**
                    
                    
                    7
                    
                    
                    **52**
                    
                    
                    20**Income
                        Tax Expense (Benefit)**
                    
                    **2**
                    
                    
                    (2
                    )
                    
                    **15**
                    
                    
                    2**Net
                        Income**
                    
                    **11**
                    
                    
                    9
                    
                    
                    **37**
                    
                    
                    18**Preferred
                        Stock Dividends**
                    
                    **1**
                    
                    
                    -
                    
                    
                    **2**
                    
                    
                    1**Net
                        Income Available to Common Stockholder**
                    **$**
                    **10**
                    
                    $
                    9
                    
                    **$**
                    **35**
                    
                    $
                    17
  The accompanying notes as they relate to CILCO
          are an
          integral part of these consolidated financial statements
  23
  **CENTRAL
                      ILLINOIS LIGHT COMPANY****CONSOLIDATED
                      BALANCE SHEET****(Unaudited)
                      (In millions)**September
                      30,
                  
                  
                  **December
                      31,****2005**
                  
                  
                  **2004****ASSETS****Current
                      Assets:**Cash
                      and cash equivalents
                  **$**
                  **2**
                  
                  $
                  2Accounts
                      receivable - trade (less allowance for doubtfulaccounts
                      of $3 and $3, respectively)
                  
                  **37**
                  
                  
                  46Unbilled
                      revenue
                  
                  **30**
                  
                  
                  43Accounts
                      receivable - affiliates
                  
                  **3**
                  
                  
                  11Materials
                      and supplies
                  
                  **90**
                  
                  
                  68Other
                      current assets
                  
                  **25**
                  
                  
                  6Total
                      current assets
                  
                  **187**
                  
                  
                  176**Property
                      and Plant, Net**
                  
                  **1,187**
                  
                  
                  1,165**Other
                      Assets**
                  
                  **76**
                  
                  
                  29**Regulatory
                      Assets**
                  
                  **32**
                  
                  
                  11**TOTAL
                      ASSETS**
                  **$**
                  **1,482**
                  
                  $
                  1,381**LIABILITIES
                      AND STOCKHOLDERS' EQUITY****Current
                      Liabilities:**Current
                      maturities of long-term debt
                  **$**
                  **16**
                  
                  $
                  16Borrowings
                      from money pool
                  
                  **81**
                  
                  
                  169Accounts
                      and wages payable
                  
                  **49**
                  
                  
                  53Accounts
                      and wages payable - affiliates
                  
                  **42**
                  
                  
                  42Other
                      current liabilities
                  
                  **63**
                  
                  
                  49Total
                      current liabilities
                  
                  **251**
                  
                  
                  329**Long-term
                      Debt, Net**
                  
                  **122**
                  
                  
                  122**Preferred
                      Stock Subject to Mandatory Redemption**
                  
                  **19**
                  
                  
                  20**Deferred
                      Credits and Other Noncurrent Liabilities:**Accumulated
                      deferred income taxes, net
                  
                  **128**
                  
                  
                  130Accumulated
                      deferred investment tax credits
                  
                  **9**
                  
                  
                  10Regulatory
                      liabilities
                  
                  **211**
                  
                  
                  184Accrued
                      pension and other postretirement benefits
                  
                  **142**
                  
                  
                  131Other
                      deferred credits and liabilities
                  
                  **17**
                  
                  
                  18Total
                      deferred credits and other noncurrent liabilities
                  
                  **507**
                  
                  
                  473**Commitments
                      and Contingencies (Notes 3 and 9)****Stockholders'
                      Equity:**Common
                      stock, no par value, 20.0 shares authorized – 13.6 shares
                      outstanding
                  
                  **-**
                  
                  
                  -Preferred
                      stock not subject to mandatory redemption
                  
                  **19**
                  
                  
                  19Other
                      paid-in capital
                  
                  **414**
                  
                  
                  313Retained
                      earnings
                  
                  **130**
                  
                  
                  115Accumulated
                      other comprehensive income (loss)
                  
                  **20**
                  
                  
                  (10
                  )Total
                      stockholders' equity
                  
                  **583**
                  
                  
                  437**TOTAL
                      LIABILITIES AND STOCKHOLDERS' EQUITY**
                  **$**
                  **1,482**
                  
                  $
                  1,381
  The accompanying notes as they relate to CILCO
          are an
          integral part of these consolidated financial statements
  24
  **CENTRAL
                        ILLINOIS LIGHT COMPANY****CONSOLIDATED
                        STATEMENT OF CASH FLOWS****(Unaudited)
                        (In millions)****Nine
                        Months Ended****September
                        30,****2005**
                    
                    
                    **2004****Cash
                        Flows From Operating Activities:**Net
                        income
                    **$**
                    **37**
                    
                    $
                    18Adjustments
                        to reconcile net income to net cashprovided
                        by operating activities:Depreciation
                        and amortization
                    
                    **50**
                    
                    
                    48Deferred
                        income taxes and investment tax credits, net
                    
                    **(5**
                    **)**
                    
                    12Other
                    
                    **6**
                    
                    
                    1Changes
                        in assets and liabilities:Receivables,
                        net
                    
                    **30**
                    
                    
                    54Materials
                        and supplies
                    
                    **(22**
                    **)**
                    
                    (8
                    )Accounts
                        and wages payable
                    
                    **-**
                    
                    
                    (30
                    )Taxes
                        accrued
                    
                    **(17**
                    **)**
                    
                    (11
                    )Assets,
                        other
                    
                    **-**
                    
                    
                    3Liabilities,
                        other
                    
                    **(9**
                    **)**
                    
                    4Pension
                        and other postretirement benefit obligations, net
                    
                    **11**
                    
                    
                    (7
                    )Net
                        cash provided by operating activities
                    
                    **81**
                    
                    
                    84**Cash
                        Flows From Investing Activities:**Capital
                        expenditures
                    
                    **(71**
                    **)**
                    
                    (95
                    )Other
                    
                    **-**
                    
                    
                    1Net
                        cash used in investing activities
                    
                    **(71**
                    **)**
                    
                    (94
                    )**Cash
                        Flows From Financing Activities:**Dividends
                        on common stock
                    
                    **(20**
                    **)**
                    
                    (10
                    )Dividends
                        on preferred stock
                    
                    **(2**
                    **)**
                    
                    (1
                    )Changes
                        in money pool borrowings
                    
                    **(88**
                    **)**
                    
                    44Redemptions,
                        repurchases, and maturities:Long-term
                        debt
                    
                    **-**
                    
                    
                    (100
                    )Preferred
                        stock
                    
                    **(1**
                    **)**
                    
                    (1
                    )Capital
                        contribution from parent
                    
                    **101**
                    
                    
                    75Net
                        cash provided by (used in) financing activities
                    
                    **(10**
                    **)**
                    
                    7Net
                        change in cash and cash equivalents
                    
                    **-**
                    
                    
                    (3
                    )Cash
                        and cash equivalents at beginning of year
                    
                    **2**
                    
                    
                    8Cash
                        and cash equivalents at end of period
                    **$**
                    **2**
                    
                    $
                    5
  The accompanying notes as they relate to CILCO
          are an
          integral part of these consolidated financial statements
  25
  **ILLINOIS
                      POWER COMPANY****CONSOLIDATED
                      STATEMENT OF INCOME****(Unaudited)
                      (In millions)**--Successor--
                  
                  
                  **--Predecessor--**
                  
                  
                  **--Successor--**
                  
                  
                  **--Predecessor--****Three**
                  
                  
                  **Three**
                  
                  
                  **Nine**
                  
                  
                  **Nine**Months
                  
                  
                  **Months**
                  
                  
                  **Months**
                  
                  
                  **Months**Ended
                  
                  
                  **Ended**
                  
                  
                  **Ended**
                  
                  
                  **Ended**September
                      30,
                  
                  
                  **September
                      30,**
                  
                  
                  **September
                      30,**
                  
                  
                  **September
                      30,****2005**
                  
                  
                  **2004**
                  
                  
                  **2005**
                  
                  
                  **2004****Operating
                      Revenues:**Electric
                  **$**
                  **358**
                  
                  $
                  327
                  
                  **$**
                  **861**
                  
                  $
                  832Gas
                  
                  **61**
                  
                  
                  52
                  
                  
                  **331**
                  
                  
                  328Other
                  
                  **1**
                  
                  
                  -
                  
                  
                  **1**
                  
                  
                  -Total
                      operating revenues
                  
                  **420**
                  
                  
                  379
                  
                  
                  **1,193**
                  
                  
                  1,160**Operating
                      Expenses:**Purchased
                      power
                  
                  **187**
                  
                  
                  191
                  
                  
                  **509**
                  
                  
                  496Gas
                      purchased for resale
                  
                  **37**
                  
                  
                  29
                  
                  
                  **227**
                  
                  
                  222Other
                      operations and maintenance
                  
                  **64**
                  
                  
                  44
                  
                  
                  **166**
                  
                  
                  143Depreciation
                      and amortization
                  
                  **19**
                  
                  
                  21
                  
                  
                  **59**
                  
                  
                  61Amortization
                      of regulatory assets
                  
                  **-**
                  
                  
                  11
                  
                  
                  **-**
                  
                  
                  32Taxes
                      other than income taxes
                  
                  **14**
                  
                  
                  15
                  
                  
                  **54**
                  
                  
                  52Total
                      operating expenses
                  
                  **321**
                  
                  
                  311
                  
                  
                  **1,015**
                  
                  
                  1,006**Operating
                      Income**
                  
                  **99**
                  
                  
                  68
                  
                  
                  **178**
                  
                  
                  154**Other
                      Income and (Deductions):**Interest
                      income from former affiliate
                  
                  **-**
                  
                  
                  43
                  
                  
                  **-**
                  
                  
                  128Miscellaneous
                      income
                  
                  **2**
                  
                  
                  4
                  
                  
                  **6**
                  
                  
                  16Miscellaneous
                      expense
                  
                  **-**
                  
                  
                  -
                  
                  
                  **(1**
                  **)**
                  
                  (1
                  )Total
                      other income and (deductions)
                  
                  **2**
                  
                  
                  47
                  
                  
                  **5**
                  
                  
                  143**Interest
                      Charges**
                  
                  **11**
                  
                  
                  35
                  
                  
                  **32**
                  
                  
                  114**Income
                      Before Income Taxes**
                  
                  **90**
                  
                  
                  80
                  
                  
                  **151**
                  
                  
                  183**Income
                      Taxes**
                  
                  **36**
                  
                  
                  29
                  
                  
                  **60**
                  
                  
                  71**Net
                      Income**
                  
                  **54**
                  
                  
                  51
                  
                  
                  **91**
                  
                  
                  112**Preferred
                      Stock Dividends**
                  
                  **1**
                  
                  
                  1
                  
                  
                  **2**
                  
                  
                  2**Net
                      Income Available to Common Stockholder**
                  **$**
                  **53**
                  
                  $
                  50
                  
                  **$**
                  **89**
                  
                  $
                  110
  The accompanying notes as they relate to IP
          are an
          integral part of these consolidated financial statements
  26
  **ILLINOIS
                        POWER COMPANY****CONSOLIDATED
                        BALANCE SHEET****(Unaudited)
                        (In millions)**September
                        30,
                    
                    
                    **December
                        31,****2005**
                    
                    
                    **2004****ASSETS****Current
                        Assets:**Cash
                        and cash equivalents
                    **$**
                    **5**
                    
                    $
                    5Account
                        receivables (less allowance for doubtfulaccounts
                        of $6 and $6, respectively)
                    
                    **96**
                    
                    
                    101Unbilled
                        revenue
                    
                    **81**
                    
                    
                    98Miscellaneous
                        accounts and notes receivable
                    
                    **24**
                    
                    
                    8Advances
                        to money pool
                    
                    **50**
                    
                    
                    140Materials
                        and supplies
                    
                    **130**
                    
                    
                    85Other
                        current assets
                    
                    **8**
                    
                    
                    69Total
                        current assets
                    
                    **394**
                    
                    
                    506**Property
                        and Plant, Net**
                    
                    **2,019**
                    
                    
                    1,984**Investments
                        and Other Assets:**Investment
                        in IP SPT
                    
                    **7**
                    
                    
                    7Goodwill
                    
                    **326**
                    
                    
                    320Other
                        assets
                    
                    **43**
                    
                    
                    37Regulatory
                        assets
                    
                    **222**
                    
                    
                    198Accumulated
                        deferred income taxes
                    
                    **18**
                    
                    
                    65Total
                        investments and other assets
                    
                    **616**
                    
                    
                    627**TOTAL
                        ASSETS**
                    **$**
                    **3,029**
                    
                    $
                    3,117**LIABILITIES
                        AND STOCKHOLDERS’ EQUITY****Current
                        Liabilities**:Current
                        maturities of long-term debt
                    **$**
                    **-**
                    
                    $
                    70Current
                        maturities of long-term debt to IP SPT
                    
                    **68**
                    
                    
                    74Accounts
                        and wages payable
                    
                    **131**
                    
                    
                    118Accounts
                        and wages payable - affiliates
                    
                    **25**
                    
                    
                    4Taxes
                        accrued
                    
                    **19**
                    
                    
                    5Other
                        current liabilities
                    
                    **85**
                    
                    
                    102Total
                        current liabilities
                    
                    **328**
                    
                    
                    373**Long-term
                        Debt, Net**
                    
                    **706**
                    
                    
                    713**Long-term
                        Debt to IP SPT**
                    
                    **207**
                    
                    
                    278**Deferred
                        Credits and Other Liabilities:**Regulatory
                        liabilities
                    
                    **113**
                    
                    
                    76Accrued
                        pension and other postretirement liabilities
                    
                    **252**
                    
                    
                    248Other
                        deferred credits and other noncurrent liabilities
                    
                    **124**
                    
                    
                    149Total
                        deferred credits and other liabilities
                    
                    **489**
                    
                    
                    473**Commitments
                        and Contingencies (Notes 3 and 9)****Stockholders’
                        Equity:**Common
                        stock, no par value, 100.0 shares authorized – 23.0 shares outstanding
                    
                    **-**
                    
                    
                    -Other
                        paid-in-capital
                    
                    **1,196**
                    
                    
                    1,207Preferred
                        stock not subject to mandatory redemption
                    
                    **46**
                    
                    
                    46Retained
                        earnings
                    
                    **57**
                    
                    
                    27Total
                        stockholders’ equity
                    
                    **1,299**
                    
                    
                    1,280**TOTAL
                        LIABILITIES AND STOCKHOLDERS’ EQUITY**
                    **$**
                    **3,029**
                    
                    $
                    3,117
  The accompanying notes as they relate to IP
          are an
          integral part of these consolidated financial statements
  27
  **ILLINOIS
                        POWER COMPANY****CONSOLIDATED
                        STATEMENT OF CASH FLOWS****(Unaudited)
                        (In millions)****---Successor---**
                    
                    **---Predecessor---****Nine**
                    
                    **Nine****Months**
                    
                    **Months****Ended**
                    
                    **Ended****September
                        30,**
                    
                    **September
                        30,****2005**
                    
                    **2004****Cash
                        Flows From Operating Activities:**Net
                        income
                    **$**
                    **91**
                    
                    $
                    112Adjustments
                        to reconcile net income to net cashprovided
                        by operating activities:Depreciation
                        and amortization
                    
                    **31**
                    
                    
                    95Amortization
                        of debt issuance costs and premium/discounts
                    
                    **2**
                    
                    
                    4Deferred
                        income taxes and investment tax credits, net
                    
                    **39**
                    
                    
                    (59
                    )Other
                    
                    **-**
                    
                    
                    1Changes
                        in assets and liabilities:Receivables,
                        net
                    
                    **11**
                    
                    
                    23Materials
                        and supplies
                    
                    **(45**
                    **)**
                    
                    (13
                    )Accounts
                        and wages payable
                    
                    **34**
                    
                    
                    (2
                    )Assets,
                        other
                    
                    **25**
                    
                    
                    13Liabilities,
                        other
                    
                    **15**
                    
                    
                    (29
                    )Pension
                        and other postretirement benefit obligations, net
                    
                    **4**
                    
                    
                    13Net
                        cash provided by operating activities
                    
                    **207**
                    
                    
                    158**Cash
                        Flows From Investing Activities:**Capital
                        expenditures
                    
                    **(95**
                    **)**
                    
                    (100
                    )Changes
                        in money pool advances
                    
                    **90**
                    
                    
                    -Other
                    
                    **1**
                    
                    
                    4Net
                        cash used in investing activities
                    
                    **(4**
                    **)**
                    
                    (96
                    )**Cash
                        Flows From Financing Activities:**Dividends
                        on common stock
                    
                    **(60**
                    **)**
                    
                    -Dividends
                        on preferred stock
                    
                    **(2**
                    **)**
                    
                    (2
                    )Prepaid
                        interest on note receivable from former affiliate
                    
                    **-**
                    
                    
                    43Redemptions,
                        repurchases, and maturities:Long-term
                        debt
                    
                    **(135**
                    **)**
                    
                    (65
                    )TFN
                        over funding
                    
                    **(6**
                    **)**
                    
                    (4
                    )Net
                        cash used in financing activities
                    
                    **(203**
                    **)**
                    
                    (28
                    )Net
                        change in cash and cash equivalents
                    
                    **-**
                    
                    
                    34Cash
                        and cash equivalents at beginning of year
                    
                    **5**
                    
                    
                    17Cash
                        and cash equivalents at end of period
                    **$**
                    **5**
                    
                    $
                    51
  The accompanying notes as they relate to IP
          are an
          integral part of these consolidated financial statements
  28
  **AMEREN
          CORPORATION** **(Consolidated)**
 **UNION
          ELECTRIC COMPANY** **(Consolidated)**
 **CENTRAL
          ILLINOIS PUBLIC SERVICE COMPANY**
 **AMEREN
          ENERGY GENERATING COMPANY** **(Consolidated)**
 **CILCORP
          INC.** **(Consolidated)**
 **CENTRAL
          ILLINOIS LIGHT COMPANY** **(Consolidated)**
 **ILLINOIS
          POWER COMPANY** **(Consolidated)**
 
 **COMBINED
          NOTES TO FINANCIAL STATEMENTS**
 **(Unaudited)**
 **September
          30, 2005**
 
 **NOTE
          1 -** **SUMMARY
          OF SIGNIFICANT ACCOUNTING POLICIES** ****
 
 **General**
 
 Ameren,
          headquartered in St. Louis, Missouri, is a public utility holding company
          registered with the SEC under the PUHCA. Ameren’s primary asset is the common
          stock of its subsidiaries. Ameren’s subsidiaries operate rate-regulated electric
          generation, transmission and distribution businesses, rate-regulated natural
          gas
          transmission and distribution businesses and non-rate-regulated electric
          generation businesses in Missouri and Illinois. Dividends on Ameren’s common
          stock and payments on its obligations are dependent on distributions made
          to it
          by its subsidiaries. Ameren’s principal subsidiaries are listed below.
 
 ·
                UE,
                    or Union Electric Company, also known as AmerenUE, operates a
                    rate-regulated electric generation, transmission and distribution
                    business, and a rate-regulated natural gas transmission and distribution
                    business in Missouri and, prior to May 2, 2005, in Illinois.
                    See Note 3 -
                    Rate and Regulatory Matters for information regarding the May
                    2005
                    transfer of UE’s Illinois electric and natural gas transmission and
                    distribution businesses to CIPS and the addition of a large new
                    electric
                    customer in June 2005.
 ·
                CIPS,
                    or Central Illinois Public Service Company, also known as AmerenCIPS,
                    operates a rate-regulated electric and natural gas transmission
                    and
                    distribution business in Illinois.
 ·
                Genco,
                    or Ameren Energy Generating Company, operates a non-rate-regulated
                    electric generation business in Illinois and Missouri. See Note
                    3 - Rate
                    and Regulatory Matters for information regarding the May 2005
                    transfer of
                    Genco’s 10 CTs located in Pinckneyville and Kinmundy, Illinois to
                    UE.
 ·
                CILCO,
                    or Central Illinois Light Company, also known as AmerenCILCO,
                    is a
                    subsidiary of CILCORP (a holding company) and operates a rate-regulated
                    electric transmission and distribution business, a primarily
                    non-rate-regulated electric generation business, and a rate-regulated
                    natural gas transmission and distribution business in Illinois.
 ·
                IP,
                    or Illinois Power Company, also known as AmerenIP, operates a
                    rate-regulated electric and natural gas transmission and distribution
                    business in Illinois. Ameren acquired IP on September 30, 2004,
                    from
                    Dynegy. See Note 2 - Acquisitions and Note 8 - Related Party
                    Transactions
                    for further information.
 
 Ameren
          has various other subsidiaries responsible for the short and long-term
          marketing
          of power, procurement of fuel, management of commodity risks and provision
          of
          other shared services. Ameren has an 80% ownership interest in EEI through
          UE
          and Resources Company, which each own 40% of EEI. Ameren consolidates EEI
          for
          financial reporting purposes, while UE reports EEI under the equity method.
  The
          financial statements of Ameren are prepared on a consolidated basis and
          therefore include the accounts of its majority-owned subsidiaries. As the
          acquisition of IP occurred on September 30, 2004, Ameren’s Consolidated
          Statements of Income and Cash Flows for the periods ended September 30,
          2004, do
          not reflect IP’s results of operations or financial position. See Note 2 -
          Acquisitions for further information on the accounting for the IP acquisition.
          All significant intercompany transactions have been eliminated. All tabular
          dollar amounts are in millions, unless otherwise indicated.
 
 Our
          accounting policies conform to GAAP. Our financial statements reflect all
          adjustments (which include normal, recurring adjustments) necessary, in
          our
          opinion, for a fair presentation of our results. The preparation
          of
          financial statements in conformity with GAAP requires management to make
          certain
          estimates and assumptions. Such estimates and assumptions affect
          reported
          amounts of assets and liabilities, the disclosure of contingent assets
          and
          liabilities at the dates of financial statements and the reported amounts
          of
          revenues and expenses during the reported periods. Actual results
          could
          differ from those estimates. The results of operations of an interim
          period
          may not give a true indication of results for a full year. Certain
          reclassifications have been made to prior year’s financial statements to conform
          to 2005 reporting. These statements should be read in conjunction with
          the
          financial statements and the notes thereto included in the Ameren Companies’
          combined Form 10-K for the fiscal year ended December 31, 2004.
 
 As
          part
          of the acquisition of IP on September 30, 2004, Ameren “pushed down” the effects
          of purchase accounting to the financial statements of IP. Accordingly,
          IP’s
          postacquisition financial statements reflect a new basis of accounting,
          and
          separate financial statement amounts are presented for preacquisition
          (predecessor) and postacquisition (successor) periods, separated by a bold
          black
          line. As a result of the acquisition of IP, certain reclassifications have
          been
          made to make IP prior-year financial statements conform to our current
          presentation.
  29
 **Earnings
          Per Share**
 
 There
          were no material differences between Ameren’s basic and diluted earnings per
          share for the three months and nine months ended September 30, 2005 and
          2004.
  **Asset
          Retirement Obligations**
 
 Asset
          retirement obligations at Ameren and UE increased by $6 million and $18
          million
          for the three months and nine months ended September 30, 2005, respectively,
          to
          reflect the accretion of obligations to their present value. Additionally,
          Ameren and UE’s asset retirement obligations decreased by $42 million for the
          quarter ended September 30, 2005, due to revisions in estimated future
          cash
          flows to decommission UE’s Callaway nuclear plant. Increases to Genco’s,
          CILCORP’s, and CILCO’s asset retirement obligations due to accretion were
          immaterial during the three and nine months ended September 30, 2005.
          Substantially all of this accretion was recorded as an increase to regulatory
          assets. A change in estimate resulted in a $1 million increase in Genco’s asset
          retirement obligation during the nine months ended September 30,
          2005.
 
 **Accounting
          Changes and Other Matters**
 
 *FIN
          47, “Accounting for Conditional Asset Retirement Obligations”*
 
 In
          February 2005, the FASB issued FIN 47, “Accounting for Conditional Asset
          Retirement Obligations,” which clarifies that a legal obligation
          to perform an asset retirement activity that is conditional on a future
          event is
          within the scope o f
          SFAS
          No. 143*.*Accordingly, an entity would be required to recognize a liability for the
          fair
          value of an asset retirement obligation that is conditional on a future
          event if
          the liability's fair value can be estimated reasonably. Ameren, UE, Genco,
          CILCORP and CILCO expect to record additional asset retirement obligations
          associated with asbestos removal, ash pond remediation, and river structures.
          We
          are still in the process of quantifying the asset retirement obligations.
          The
          difference between the net asset and liability recorded upon the adoption
          of FIN
          47 related to rate-regulated assets will be recorded as an additional regulatory
          asset to the extent that we expect to continue to recover the cost of removal
          in
          electric and gas rates. The adoption of this interpretation for the year
          ended
          December 31, 2005, could have a material impact on our results of
          operations.
 
 *SFAS
          No. 153, “Exchanges of Nonmonetary Assets - an amendment of APB Opinion No.
          29”*
 
 In
          December 2004, the FASB issued SFAS No. 153, which amends APB Opinion No.
          29 to
          require the accounting at fair value for nonmonetary exchanges with commercial
          substance. The Ameren Companies are required to apply the provisions of
          SFAS No.
          153 prospectively to transactions occurring after July 1, 2005. During
          the third
          quarter of 2005, Ameren, UE and Genco had emission allowance swaps that
          were
          accounted for at fair value under SFAS No. 153. See Note 9 - Commitments
          and
          Contingencies for further details related to these transactions.
 
 **Interchange
          Revenues**
 
 The
          following table presents the interchange revenues included in Operating
          Revenues
          - Electric for the three months and nine months ended September 30, 2005
          and
          2004. See Note 8 - Related Party Transactions for further information on
          affiliate purchased power transactions.
 
 **Three
                    Months**
                
                **Nine
                    Months****2005**
                
                **2004**
                
                **2005**
                
                **2004**Ameren(a)
                **$**
                **92**
                
                $
                95
                
                **$**
                **359**
                
                $
                282UE
                
                **110**
                
                
                83
                
                
                **336**
                
                
                238CIPS
                
                **8**
                
                
                7
                
                
                **26**
                
                
                27Genco
                
                **56**
                
                
                38
                
                
                **165**
                
                
                113CILCORP
                
                **-**
                
                
                10
                
                
                **26**
                
                
                30CILCO
                
                **-**
                
                
                10
                
                
                **26**
                
                
                30
 
 (a)
                Includes
                    amounts for Ameren Registrant and non-Registrant subsidiaries
                    and
                    intercompany eliminations, but excludes 2004 amounts for IP.
                    Includes
                    interchange revenues for EEI of $9 million and $24 million for
                    the three
                    months and nine months ended September 30, 2005, respectively
                    (2004 - $15
                    million and $45 million, respectively).
 
 **Purchased
          Power**
 
 The
          following table presents the purchased power expenses included in Operating
          Expenses - Fuel and Purchased Power for the three months and nine months
          ended
          September 30, 2005 and 2004. See Note 8 - Related Party Transactions for
          further
          information on affiliate purchased power transactions.
 
 **Three
                    Months**
                
                **Nine
                    Months****2005**
                
                **2004**
                
                **2005**
                
                **2004**Ameren(a)
                **$**
                **327**
                
                $
                119
                
                **$**
                **782**
                
                $
                271UE
                
                **102**
                
                
                55
                
                
                **206**
                
                
                157CIPS
                
                **140**
                
                
                85
                
                
                **331**
                
                
                244Genco
                
                **89**
                
                
                43
                
                
                **206**
                
                
                117CILCORP
                
                **25**
                
                
                10
                
                
                **46**
                
                
                39CILCO
                
                **25**
                
                
                10
                
                
                **46**
                
                
                39IP(b)
                
                **187**
                
                
                191
                
                
                **509**
                
                
                496
 
 (a)
                Includes
                    amounts for Ameren Registrant and non-Registrant subsidiaries
                    and
                    intercompany eliminations, but excludes 2004 amounts for IP.
                    Includes
                    purchased power for EEI of nil and $1 million for the three months
                    and
                    nine months ended September 30, 2005, respectively (2004 - $25
                    million and
                    $40 million, respectively).
 (b)
                2004
                    amounts represent predecessor information.
 
 **Excise
          Taxes**
 
 Excise
          taxes reflected on Missouri electric, Missouri gas, and Illinois gas customer
          bills are imposed on us. They are recorded gross in Operating Revenues
          and Taxes
          Other than Income Taxes on each company’s statement of income. Excise taxes
          reflected on Illinois electric customer bills are imposed on the consumer.
          They
          are recorded as tax collections payable and included in Taxes Accrued.
          The
          following table presents
  30
  excise
          taxes recorded in Operating Revenues and Taxes Other than Income Taxes
          for the
          three months and nine months ended September 30, 2005 and 2004:
 
 **Three
                    Months**
                
                **Nine
                    Months****2005**
                
                **2004**
                
                **2005**
                
                **2004**Ameren(a)
                **$**
                **44**
                
                $
                35
                
                **$**
                **125**
                
                $
                100UE
                
                **35**
                
                
                31
                
                
                **84**
                
                
                82CIPS
                
                **3**
                
                
                2
                
                
                **10**
                
                
                9CILCORP
                
                **1**
                
                
                2
                
                
                **7**
                
                
                9CILCO
                
                **1**
                
                
                2
                
                
                **7**
                
                
                9IP(b)
                
                **5**
                
                
                9
                
                
                **24**
                
                
                26
  (a)
                Excludes
                    2004 amounts for IP.
 (b)
                2004
                    amounts represent predecessor
                    information.
 
 **NOTE
          2 -** **ACQUISITIONS**
 
 **IP
          and EEI**
 
 On
          September 30, 2004, Ameren completed the acquisition of all the common
          stock and
          662,924 shares of preferred stock of IP and an additional 20% ownership
          interest
          in EEI from subsidiaries of Dynegy. Ameren acquired IP to complement its
          existing Illinois gas and electric operations. The purchase included IP’s
          rate-regulated electric and natural gas transmission and distribution business
          serving 600,000 electric and 415,000 gas customers in areas contiguous
          to our
          existing Illinois utility service territories. With the acquisition, IP
          became
          an Ameren subsidiary operating as AmerenIP.
 
 The
          total
          transaction value was $2.3 billion, including the assumption of $1.8 billion
          of
          IP debt and preferred stock. Cash consideration was $429 million, net of
          $51
          million cash acquired, and included transaction costs. Ameren placed $100
          million of the cash portion of the purchase price in an escrow account
          pending
          resolution of certain contingent environmental obligations of IP and other
          Dynegy affiliates for which Ameren was provided indemnification by Dynegy.
          On
          July 27, 2005, the conditions for release of the escrow account were satisfied
          and Dynegy was remitted the $100 million. In addition, this transaction
          included
          a fixed-price capacity power supply agreement for IP’s annual purchase in 2005
          and 2006 of 2,800 megawatts of electricity from DYPM. This agreement is
          expected
          to supply about 70% of IP’s electric customer requirements during those two
          years. The remaining 30% of IP’s power needs in 2005 and 2006 will be supplied
          by other companies through contracts and open market purchases. In the
          event
          that suppliers are unable to supply the electricity required by existing
          agreements, IP would be forced to find alternative suppliers to meet its
          load
          requirements, thus exposing itself to market price risk, which could have
          a
          material impact on Ameren’s and IP’s results of operations, financial position,
          or liquidity.
  Ameren
          funded this acquisition with the issuance of new Ameren common stock. Ameren
          issued an aggregate of 30 million common shares in February 2004 and July
          2004,
          which generated net proceeds of $1.3 billion. Proceeds from these issuances
          were
          used to finance the cash portion of the purchase price and to reduce IP
          debt
          assumed as part of this transaction and to pay related premiums.
 
 In
          December 2004, 230 IP employees accepted a voluntary separation opportunity,
          which provided
          an enhanced separation benefit and extended medical and dental benefits.
          Employees who accepted the voluntary separation opportunity have been leaving
          IP
          throughout 2005 as business needs warrant. These voluntary separations
          are
          consistent with Ameren’s plan for the integration of IP and conditions in the
          ICC order approving the acquisition, which relate to the realization of
          administrative synergies from the acquisition. As of September 30, 2005,
          separation costs of $25 million were deferred as a regulatory asset for
          future
          recovery from customers, which is also consistent with the ICC
          order.
 
 For
          income tax purposes, Ameren and Dynegy have elected to treat Ameren’s
          acquisition of IP stock as an asset acquisition under Section 338(h)(10)
          of the
          Internal Revenue Code of 1986, as amended.
 
 During
          the quarter ended September 30, 2005, Ameren finalized the allocation of
          the
          purchase price and completed its valuations of the acquired net assets
          and
          liabilities of IP and EEI, including third-party valuations of property
          and
          plant, intangible assets, pension and other postretirement benefit obligations,
          and contingent obligations. The
          fair
          value of IP’s power supply agreements, including the fixed-price capacity power
          supply agreement with DYPM recorded at the acquisition date, resulted in
          a net
          liability of $109 million (September 30, 2005 - $59 million). This amount
          is
          being amortized through December 31, 2006. In addition, IP recorded a fair
          value
          adjustment, resulting in a net asset of $20 million (September 30, 2005
          - $6
          million), for IP’s power supply agreement with EEI that expires at the end of
          2005. T he
          excess
          of the purchase price for IP’s common stock and preferred stock over net assets
          acquired was allocated to goodwill in the amount of $326 million, net of
          future
          tax benefits. For income tax purposes, a portion of the purchase price
          will be
          allocated to goodwill and that portion will be deducted ratably over a
          15-year
          period. Goodwill increased by $6 million since December 31, 2004, primarily
          because of net adjustments to regulatory assets, income tax accounts, property
          and plant, accrued environmental reserves, and net assets for IP’s power supply
          agreement with EEI. These increases in goodwill were partially offset by
          net
          adjustments to accrued severance, accrued relocation and accrued claims
          expenses, as well as cash payments from Dynegy under working capital and
          indemnification provisions pursuant to the terms of the stock purchase
          agreement. The following table presents the final estimated fair values
          of the
          assets acquired and liabilities assumed at the date of Ameren’s acquisition of
          IP.
   31
 
 Current
                    assets
                $
                368Property
                    and plant
                
                1,962Investments
                    and other noncurrent assets
                
                370Goodwill
                
                326Total
                    assets acquired
                
                3,026Current
                    liabilities
                
                221Long-term
                    debt, including current maturities
                
                1,982Accrued
                    pension and other postretirement liabilities
                
                244Other
                    non-current liabilities
                
                211Total
                    liabilities assumed
                
                2,658Preferred
                    stock assumed
                
                13Net
                    assets acquired
                $
                355
 
 The
          following unaudited pro forma financial information presents a summary
          of
          Ameren’s consolidated results of operations for the three months and nine months
          ended September 30, 2004, as if the acquisition of IP had been completed
          at the
          beginning of 2004, including pro forma adjustments to reflect the allocation
          of
          the purchase price to the acquired net assets. The pro forma financial
          information does not include cost savings that may result from the combination
          of Ameren with IP.
 
 **2004**
                **Three**
                  **Months**
                
                **Nine**
                  **Months**Operating
                    revenues
                $
                1,686
                
                $
                4,818Net
                    income
                
                293
                
                
                583Earnings
                    per share - basic
                
                1.51
                
                
                3.02- diluted
                
                1.51
                
                
                3.01
 
 This
          pro
          forma information is not necessarily indicative of the results of operations
          as
          they would have been had the transaction been effected on the assumed date,
          nor
          is it an indication of trends for future results.
 
 IP’s
          Note
          Receivable from Former Affiliate of $2.3 billion was eliminated as of September
          30, 2004, and prior to Ameren’s acquisition of IP to meet the conditions of the
          closing.
 
 The
          portion of the total transaction value attributable to Ameren’s acquisition of
          Dynegy’s 20% ownership interest in EEI now held by Resources Company was $125
          million. The
          purchase price for this ownership interest was allocated, based on fair
          value,
          to property and plant ($55 million) and emission allowances ($48 million),
          partially offset by a net liability for power supply agreements ($25 million)
          and a reduction to net deferred tax assets ($31 million). The excess of
          purchase
          price over fair value was allocated to goodwill in the amount of $65 million.
          Goodwill increased by $11 million since December 31, 2004, due to adjustments
          to
          property and plant and the net liability for power supply agreements, partially
          offset by adjustments to both emission allowances and income tax accounts,
          resulting from the refinement of the third-party valuation of EEI’s net
          assets.
 
 **NOTE
          3 -** **RATE
          AND REGULATORY MATTERS** ****
 
 Below
          is
          a summary of significant regulatory proceedings. With respect to pending
          matters, we are unable to predict the ultimate outcome of these
          regulatory
          proceedings, the timing of the final decisions of the various agencies
          or the
          impact on our results of operations, financial position, or
          liquidity.
 
 **Intercompany
          Transfer of Illinois Service Territory and Electric Generating Facilities**
 
 *Illinois
          Service Territory Transfer*
 
 On
          May 2,
          2005, following the receipt of all required regulatory approvals, UE completed
          the transfer of its Illinois electric and natural gas service territory,
          including its Illinois-based distribution assets and certain of its transmission
          assets, at a net book value of $133 million to CIPS. UE’s electric generating
          facilities and a certain insignificant amount of its electric transmission
          and
          communication facilities in Illinois were not part of the transfer. Pursuant
          to
          the asset transfer agreement, UE transferred 50% of the assets directly
          to CIPS
          in consideration for a CIPS subordinated promissory note in the principal
          amount
          of approximately $67 million and 50% of the assets by means of a dividend
          in
          kind to Ameren, followed by a capital contribution by Ameren to CIPS. With
          the
          completion of this transfer, UE no longer operates as a public utility
          in
          Illinois subject to ICC regulation.
 
 In
          February 2005, the MoPSC issued an order approving the transfer and clarified
          its order in March 2005. The MoPSC’s order, as clarified, included the following
          principal conditions:
 
 ·
                The
                    order allows UE to recover in rates up to 6% of unknown UE
                    generation-related liabilities associated with the generation
                    that was
                    formerly allocated to UE’s Illinois service territory if UE can show that
                    the benefits of the transfer of the Illinois service territory
                    outweigh
                    these costs in future rate cases.
 ·
                The
                    order requires an amendment to the joint dispatch agreement among
                    UE,
                    Genco and CIPS to declare that margins on short-term power sales
                    will be
                    divided based on generation output as opposed to load. In testimony
                    filed
                    by UE with the MoPSC to support the transfer, UE indicated this
                    amendment
                    would have provided UE with additional annual margins and Genco
                    with
                    reduced annual margins of $7 million to $24 million based on
                    certain
                    assumptions and historical results. The increased allocation
                    of short-term
                    power sales margins to UE would have the effect of lowering the
                    revenue
                    required to be collected through rates the next time electric
                    rates are
                    adjusted. The ultimate impact of any modifications to
                    the joint
                    dispatch agreement will be determined by future native load demand,
                    the
                    availability of electric generation from UE and Genco and market
                    prices,
                    among other things, but such impact could be
                    material.
 ·
                The
                    MoPSC also ordered that UE may complete the transfer prior to
                    receipt of
                    all regulatory approvals necessary to effectuate the required
                    amendment to
                    the
    32
  joint
          dispatch agreement based on UE’s commitment that for ratemaking
          purposes the joint dispatch agreement amendment should be deemed to be
          made by
          UE as of the date the transfer is closed.  In the event that the
          regulatory
          approvals for the amendment are not obtained, this commitment would result
          in
          just the allocation of these additional margins to UE for determining the
          revenue requirements in the ratemaking process, with no impact on Genco’s
          margins. A proposed amendment of the joint dispatch agreement to
          reflect this MoPSC order is expected to be filed with the FERC in late
          2005.
 ·
                The
                    order requires that, in a future rate case, revenues UE could
                    have
                    received for incremental energy transfers under the joint dispatch
                    agreement resulting from the service territory transfer be imputed
                    based
                    on market prices unless UE can show the benefits of the transfer
                    of the
                    Illinois service territory outweigh the difference between the
                    market
                    prices and the actual cost-based charges for such incremental
                    energy
                    transfers.
 
 *Electric
          Generating Facilities Transfer*
 
 On
          May 2,
          2005, following the receipt of all required regulatory approvals, Genco
          completed the transfer to UE of its 550 megawatts of CTs at Pinckneyville
          and
          Kinmundy, Illinois, at a net book value of $241 million. This transfer
          completed
          the remainder of UE’s commitment under the 2002 Missouri electric rate case
          settlement, which required the addition of 700 megawatts of generation
          capacity
          by June 30, 2006.
  The
          Illinois service territory transfer and the electric generating facilities
          transfer, discussed above, were accounted for at book value with no gain
          or loss
          recognition.
 
 **Missouri**
 
 *Noranda
          Aluminum, Inc. (Noranda)*
  Following
          the receipt of all regulatory approvals and satisfaction of all regulatory
          and
          other conditions, the tariff by which UE serves Noranda became effective
          June 1,
          2005. UE serves Noranda under a 15-year agreement to supply approximately
          470
          megawatts (peak load) of electricity (or approximately 5% of UE’s generating
          capability, including currently committed purchases) to Noranda’s primary
          aluminum smelter in southeast Missouri.
 
 **Illinois**
 
 *Electric*
 
 By
          2002,
          all of the Illinois residential, commercial and industrial customers of
          UE,
          CIPS, CILCO and IP had a choice in electric suppliers under the provisions
          of
          the Illinois Customer Choice Law. Under
          the
          Illinois Customer Choice Law, UE, CIPS, CILCO and IP rates initially were
          frozen
          through January 1, 2005. Due
          to an
          amendment to the Illinois Customer Choice Law, the rate freeze was extended
          through January 1, 2007. As a result of this extension, and pursuant to
          orders
          of the ICC, CIPS and Marketing Company, and CILCO and AERG, extended their
          respective power supply agreements through December 31, 2006. See Note
          8 - Related Party Transactions for a discussion of these affiliate power
          supply
          agreements.
  During
          2004, the ICC conducted workshops to seek input from interested parties
          on the
          framework for retail electric rate determination and power procurement
          after the
          current Illinois electric rate freeze expires on January 1, 2007, and supply
          contracts expire on December 31, 2006. In late 2004 the ICC issued a report
          outlining a process that would have CIPS, CILCO and IP procure power through
          an
          auction monitored by the ICC, which received strong support in the
          ICC
          workshops. The form of power supply would meet the full requirements of
          the
          utility and the risk of fluctuations in power requirements would be borne
          by the
          supplier. In addition, the report noted that many stakeholders, including
          Ameren, supported a process whereby the price of power resulting from the
          auction would be the price used to determine the power component of customer
          rates. This purchased power would be charged to customers through a direct
          pass-through mechanism. With regard to the delivery service component of
          customer rates, it is expected that all Illinois delivery service companies
          will
          file rate cases, at which time the delivery service component of customer
          rates
          will be updated. CIPS, CILCO and IP intend to file revised tariffs with
          the ICC
          by the end of 2005 that would modify their electric delivery service rates
          effective January 2, 2007. Genco and AERG would probably participate in
          the
          power procurement auction through Marketing Company, but there is expected
          to be
          a limit imposed by the ICC on the maximum amount of power they could supply
          CIPS, CILCO and IP.
 
 In
          February 2005, CIPS, CILCO and IP filed with the ICC a proposed process
          for the
          power procurement auction and a rate mechanism to pass power costs through
          to
          customers, among other things, which was consistent with the auction process
          described above. These proposals are subject to review and approval by
          the ICC
          by January 2006. The ICC Staff and interveners filed testimony regarding
          the
          proposed process for the power procurement auction in June 2005. In its
          testimony, the ICC Staff continued to support the power procurement auction
          process, but sought modifications to aspects of the CIPS, CILCO and IP
          proposals. The Illinois attorney general and the Citizens Utility Board
          (CUB) in
          their testimonies recommended, among other things, that the ICC initiate
          a new
          docket to investigate alternatives to an auction. CIPS, CILCO and IP filed
          rebuttal testimony in early July. That testimony modified certain aspects
          of the
          February proposal, and substantially addressed issues raised by the ICC
          staff
          and certain other interveners. The modifications included changes to the
          timing
          of the auction, a limitation of 35% on the amount of power any single supplier
          can provide Ameren’s Illinois utilities’
  33
   expected
          annual load and allowing suppliers to switch their bids between similar
          products
          in the auction in Illinois. The evidentiary phase of the proceedings has
          now
          concluded, and the parties are currently filing briefs in support of their
          respective positions. An administrative law judge proposed order is anticipated
          in late November or early December 2005.
  In
          May
          2005, the Illinois attorney general, the CUB and the Environmental Law
          and
          Policy Center (ELPC) filed a motion to dismiss the proposed procurement
          auction
          in the CIPS, CILCO and IP February 2005 ICC filing. The administrative
          law judge
          denied that motion in June 2005. The Illinois attorney general, the CUB
          and the
          ELPC subsequently appealed the administrative law judge’s ruling to the ICC, and
          this interlocutory appeal was also denied by the ICC in July 2005.
 
 On
          September 1, 2005, the Illinois attorney general, the Cook County state’s
          attorney, the CUB and the ELPC filed a two-count complaint in the Circuit
          Court
          of Cook County, Illinois against the ICC and the individual ICC commissioners
          (the attorney general’s lawsuit). The first count asks that the defendants be
          required to show by what authority the ICC claims it could approve market-based
          rates for electric service that has not been “declared competitive” pursuant to
          Section 16-113 of the Illinois Public Utilities Act (PUA). The second count
          seeks a declaratory judgment that the ICC lacks authority to approve
          market-based rates for electric service that has not been “declared competitive”
          pursuant to Section 16-113 of the PUA, and seeks injunctive relief prohibiting
          ICC approval of proposals by CIPS, CILCO and IP and Commonwealth Edison
          Company
          that would impose market-based rates on customers who have electric service
          that
          has not been “declared competitive” pursuant to Section 16-113 of the PUA. CIPS,
          CILCO and IP believe the claims are without merit and are vigorously opposing
          them. The legal argument underlying the attorney general’s lawsuit is
          substantially similar to the legal argument presented to the administrative
          law
          judge, and to the ICC on interlocutory appeal, and rejected by both, in
          June and
          July 2005, respectively (as referred to above).
 
 On
          September 2, 2005, Illinois Governor Blagojevich sent a letter to the ICC
          expressing his opposition to CIPS, CILCO and IP’s proposed auction process for
          procuring electric power to take effect after the current Illinois electric
          rate
          freeze expires and requesting dismissal of the pending proceeding for approval
          of such process. On September 15, 2005, CIPS, CILCO and IP responded to
          the
          governor's letter citing the legal deficiencies of his position and the
          potential adverse consequences which could result if his position is ultimately
          sustained. Copies of the governor’s letter and CIPS, CILCO and IP’s response
          letter appear as Exhibits 99.1 and 99.2, respectively to the Current Report
          on
          Form 8-K dated September 15, 2005.
 
 Both
          the
          Illinois governor's letter and the attorney general's lawsuit assert that
          the
          energy component of CIPS, CILCO and IP’s retail rates for electricity should not
          be based on their costs to procure energy and capacity in the wholesale
          market.
          We are unable to predict the ultimate outcome of the attorney general's
          lawsuit
          or the pending ICC proceeding (as affected by the governor's letter), the
          timing
          of the final decisions on such matters or the impact on our results of
          operations, financial position, or liquidity. However, any decision or
          action
          that impairs the ability of CIPS, CILCO and IP to fully recover purchased
          power
          or distribution costs from their electric customers in a timely manner
          could
          result in material adverse consequences. As noted in the Ameren Illinois
          utilities' response letter to the Illinois governor, these consequences
          could
          include a significant drop in credit ratings (potentially to below investment
          grade status), a loss of access to the capital markets, higher borrowing
          costs,
          higher power supply costs, an inability to make timely energy infrastructure
          investments, reduced customer service, job losses and financial insolvency.
          See
          Liquidity and Capital Resources under Part I, Item 2, of this report for
          a
          discussion of recent credit rating agency actions.
 
 In
          light
          of efforts to limit the ability of CIPS, CILCO and IP to recover their
          costs,
          the Ameren Illinois utilities have intervened in the attorney general's
          lawsuit
          and are vigorously defending their proposed power procurement auction process
          in
          proceedings before the ICC. As interveners in the attorney general’s lawsuit,
          CIPS, CILCO and IP will deny the allegations in the complaint and seek
          a
          determination that the ICC has appropriate legal authority to approve the
          proposed electric power procurement auction process pending before the
          ICC. In
          October 2005, the Ameren Illinois utilities filed a motion for summary
          judgment
          in the attorney general’s lawsuit. A hearing in the matter is currently
          scheduled for December 2005. Subsequent to the governor’s letter, ICC chairman,
          Edward Hurley, resigned. Illinois Governor Blagojevich immediately appointed
          Martin A. Cohen to replace Mr. Hurley. Mr. Cohen was previously the executive
          director of the CUB, which is a leading consumer advocacy group in Illinois.
          In
          November 2005, the Illinois Senate rejected Mr. Cohen’s appointment as ICC
          chairman.
 
 In
          early
          2005, the Illinois legislature held hearings regarding the framework for
          retail
          rate determination and power procurement. We cannot predict what actions,
          if
          any, the Illinois legislature will take.
  Ameren,
          CIPS, CILCO and IP will continue to explore a number of legal and regulatory
          actions, strategies and alternatives to address these Illinois electric
          issues,
          including the possible proposal of an electric rate increase phase-in plan.
          There can be no assurance that Ameren and the Ameren Illinois utilities
          will
          prevail in opposition to the attorney general's lawsuit, the stated opposition
          by the Illinois governor and other stakeholders, or that the legal and
          regulatory actions, strategies and alternatives that Ameren and the Ameren
          Illinois utilities are considering will be successful.
  34
 *Gas*
 
 In
          May
          2005, the ICC issued an order awarding IP increases in annual natural gas
          delivery rates of $11 million. In the order approving Ameren’s acquisition of
          IP, the ICC prohibited IP from filing for any proposed increase in gas
          delivery
          rates to be effective prior to January 1, 2007, beyond this recently authorized
          gas delivery rate increase. IP filed an appeal in the appellate court for
          the
          Third District in Illinois regarding certain disallowances issued by the
          ICC in
          its May 2005 order. Ameren sought indemnification from Dynegy with regard
          to the
          disallowances under the stock purchase agreement covering Ameren’s acquisition
          of IP from Dynegy, and in July 2005 Dynegy paid to Ameren $8 million in
          full
          settlement of this indemnification claim. Under the terms of the settlement,
          IP
          will retain the benefits of any successful appeal of the May 2005 ICC order
          with
          no refund obligation to Dynegy.
 
 **Federal**
 
 *Hydroelectric
          License Renewal*
 
 In
          May
          2005, UE, the U.S. Department of the Interior and various state agencies
          reached
          a settlement agreement which is expected to lead to the FERC’s relicensing of
          UE’s Osage hydroelectric plant for another 40 years. The settlement must be
          approved by the FERC, which, together with the relicense, is expected by
          year-end 2005. The current FERC license expires on February 28, 2006.
 
 *EEI
          Market-based Rate Request*
 
 In
          September 2005, EEI submitted a filing to the FERC seeking authority to
          sell
          power at market-based rates.  EEI’s existing contracts with UE, CIPS (which
          has resold its power entitlement to Marketing Company), IP, Kentucky Utilities
          Company and the DOE for the supply of power from its Joppa plant expire
          on
          December 31, 2005.  EEI would use its market rate authority after
          those
          contracts expire.  The Missouri Office of Public Counsel (OPC) filed
          a
          protest with the FERC in EEI’s filing in October 2005. The OPC contended
          that the FERC should reject EEI’s request and instead compel EEI to sell to UE
          under the terms of their existing contract, which expires on December 31,
          2005. EEI subsequently filed a response to the protest. In
          its
          response, EEI contended that the OPC had not presented any evidence which
          would
          justify a rejection of EEI’s request, and that the OPC was in effect improperly
          requesting a continuation of the contract which was set to terminate on
          December
          31, 2005. We cannot predict the outcome of this proceeding.
 
 *PUHCA
          Repeal*
 
 The
          Energy Policy Act of 2005 repeals the PUHCA effective February 8, 2006.
          Thereafter, authorization from the SEC under the PUHCA will no longer be
          required for any of the Ameren Companies to take any action, including
          the
          issuance of securities. Upon the repeal of the PUHCA, UE, CIPS, CILCO and
          IP
          will require the approval of the FERC (instead of the SEC) to issue short-term
          debt securities. In addition, these Ameren utilities will continue to require
          authorization from the applicable state public utility regulatory agency
          in
          order to issue stock and long-term debt securities. Genco and EEI will
          continue
          to be subject to the FERC’s jurisdiction over approval to issue any securities,
          long-term or short-term. With the repeal of the PUHCA, Ameren and CILCORP
          will
          not require SEC (under the PUHCA), FERC or state public utility regulatory
          agency approval to issue securities.
  **NOTE
          4 - SHORT-TERM BORROWINGS AND LIQUIDITY**
 
 Short-term
          borrowings have typically consisted of commercial paper issuances and drawings
          under committed bank credit facilities with maturities generally within
          1 to 45
          days.
 
 The
          following table summarizes the short-term borrowing activity and relevant
          interest rates as of September 30, 2005 and December 31, 2004,
          respectively:
 
 **Ameren**(a)
                  **UE****September
                      30, 2005:**Short-term
                      borrowings at September 30, 2005
                  **$****23**
                  **$****-**Average
                      daily borrowings outstanding during 2005
                  **199**
                  **169**Weighted
                      average interest rate during 2005
                  **3.68%**
                  **2.55%**Peak
                      short-term borrowings during 2005
                  **$****468**
                  **$****424**Peak
                      interest rate during 2005
                  **4.71%**
                  **3.45%****December
                      31, 2004:**Short-term
                      borrowings at December 31, 2004
                  $417
                  $375Average
                      daily borrowings outstanding during 2004
                  47
                  33Weighted
                      average interest rate during 2004
                  2.19%
                  1.56%Peak
                      short-term borrowings during 2004
                  $419
                  $375Peak
                      interest rate during 2004
                  2.97%
                  2.40%
 
 (a)
                Includes
                    amounts for Ameren Registrant and non-Registrant subsidiaries
                    and
                    intercompany eliminations, but excludes amounts for IP prior
                    to September
                    30, 2004.
 
 35
 
 In
          July
          2005, Ameren, UE, CIPS, CILCO, Genco and IP entered into a five-year revolving
          credit agreement, maturing on July 14, 2010, with various lenders which
          provides
          for loans to, and letters of credit issued for, the accounts of Ameren,
          UE,
          CIPS, CILCO, Genco and IP in an amount up to $1.15 billion. The entire
          amount of
          the facility is available to Ameren; UE may directly borrow under this
          facility
          up to $500 million on a short-term 364-day basis; and CIPS, Genco, CILCO
          and IP
          may also each directly borrow under this facility up to $150 million, also
          on a
          short-term 364-day basis. The interest rates applicable under the
          facility
          are based on a Eurodollar rate plus a margin applicable to the particular
          borrowing company, a competitive-rate bid by the lenders, or a rate equal
          to the
          higher of JPMorgan Chase Bank, N.A.’s prime rate and the sum of the federal
          funds effective rate plus 1/2 percent per annum, plus the margin applicable
          to
          the particular borrowing company. The credit agreement contains customary
          terms
          and conditions (see Indebtedness Provisions and Other Covenants below for
          financial covenant provisions). The Ameren Companies will use the proceeds
          of
          any borrowings under this facility for general corporate purposes, including
          for
          working capital, commercial paper liquidity support and to fund loans under
          the
          money pool arrangements. The obligations of Ameren, UE, CIPS, Genco, CILCO
          and
          IP under this facility are several and not joint. The obligations of UE,
          CIPS,
          Genco, CILCO and IP are not guaranteed by any other subsidiary. See Exhibit
          10.1
          to the Current Report on Form 8-K dated July 15, 2005, for the full
          agreement.
 
 Upon
          execution of the new $1.15 billion credit agreement, Ameren terminated
          its $235
          million amended and restated three-year revolving credit agreement, dated
          as of
          September 21, 2004, and its $350 million three-year revolving credit agreement
          dated as of July 14, 2004. In addition, this agreement replaced UE’s bilateral
          credit agreements in an aggregate amount of $153.5 million, CIPS’ bilateral
          credit agreements in an aggregate amount of $15 million, CILCO’s bilateral
          credit agreements in an aggregate amount of $60 million and EEI’s bilateral
          credit agreement in an aggregate amount of $25 million.
 
 Also
          in
          July 2005, Ameren, as sole borrower, entered into an amended and restated
          credit
          agreement, which revised its $350 million five-year revolving credit agreement
          dated as of July 14, 2004. The changes to this facility made the entire
          amount
          of commitments available in the form of letters of credit as well as loans,
          extended the maturity date to July 2010 and conformed, as applicable, the
          affirmative and negative covenants, events of default and representations
          and
          warranties to the July 2005 $1.15 billion revolving credit agreement discussed
          above. See Exhibit 10.2 to the Current Report on Form 8-K, dated July 15,
          2005,
          for the full amended and restated credit agreement.
 
 After
          giving effect to these changes, at September 30, 2005, Ameren had $1.5
          billion
          of committed credit facilities consisting of two facilities each maturing
          in
          July 2010. These facilities are available for use by UE, CIPS, CILCO, IP
          and
          Ameren Services through a utility money pool arrangement, subject to applicable
          regulatory short-term borrowing authorizations. All of the $1.5 billion
          was
          available for use, subject to applicable regulatory short-term borrowing
          authorizations, by Ameren directly, by CILCORP and EEI through direct short-term
          borrowings from Ameren, and by most of Ameren’s non-rate-regulated subsidiaries
          including, but not limited to, Resources Company, Genco, Marketing Company,
          AFS,
          AERG and Ameren Energy, through a non-state-regulated subsidiary money
          pool
          agreement. The committed bank credit facilities are used to support our
          commercial paper programs under which no amounts were outstanding for Ameren
          and
          UE at September 30, 2005 (December 31, 2004 - $417 million and $375 million
          at
          Ameren and UE, respectively). Access to these credit facilities for the
          Ameren
          Companies is subject to reduction based on use by affiliates.
 
 Ameren
          has money pool agreements with and among its subsidiaries to coordinate
          and
          provide for certain short-term cash and working capital requirements. Separate
          money pools are maintained between rate-regulated and non-rate-regulated
          entities. Ameren Services is responsible for operation and administration
          of the
          money pool agreements. See Note 8 - Related Party Transactions for a detailed
          explanation of these money pool arrangements.
  In
          April
          2005, EEI renewed a $20 million bank credit facility, which is scheduled
          to
          mature in the second quarter of 2006.
 
 Ameren
          and UE are authorized by the SEC under the PUHCA to have an aggregate of
          up to
          $1.5 billion and $1 billion, respectively, of short-term unsecured debt
          instruments outstanding at any time. The aggregate amount of short-term
          borrowings outstanding at any time at IP may not exceed $500 million pursuant
          to
          authorizations from the ICC and the SEC under the PUHCA. In addition, CIPS,
          CILCORP and CILCO have the PUHCA authority to have an aggregate of up to
          $250
          million each of short-term unsecured debt instruments outstanding at any
          time.
          Borrowings under Ameren’s non-state-regulated subsidiary money pool agreement by
          Genco, Development Company and Medina Valley, each an exempt wholesale
          generator, are considered investments for purposes of the SEC’s 50% aggregate
          investment limitation under the PUHCA. Based on Ameren’s aggregate investment in
          these exempt wholesale generators as of September 30, 2005, the maximum
          permissible borrowings under Ameren’s non-state-regulated subsidiary money pool
          pursuant to this limitation for these entities totaled $548 million. See
          Note 3
          - Rate and Regulatory Matters for information on PUHCA repeal.
 
 36
 
 Genco
          is
          authorized by the FERC to have up to $300 million of short-term debt outstanding
          at any time.
  **Indebtedness
          Provisions and Other Covenants**
 
 Ameren’s
          bank credit agreements contain provisions which, among other things, place
          restrictions on the ability to incur liens, sell assets, and merge with
          other
          entities. The $1.15 billion July 2005 revolving credit agreement discussed
          above
          also contains a provision that limits Ameren’s, UE’s, CIPS’, Genco’s and IP’s
          total indebtedness to 65% of total capitalization and CILCO’s total indebtedness
          to 60% of total capitalization pursuant to a calculation set forth in the
          agreement. The $350 million July 2005 amended and restated credit agreement
          contains a similar provision only with respect to Ameren. Exceeding these
          debt
          levels would result in a default under the credit agreements. As of September
          30, 2005, the ratio of total indebtedness to total capitalization (calculated
          in
          accordance with this provision) for Ameren, UE, CIPS, Genco, CILCO and
          IP was
          46%, 44%, 41%, 52%, 28% and 43%, respectively (December 31, 2004 - Ameren
          50%,
          UE 44%, CIPS 53%, CILCO ---43%, not applicable for Genco or IP). The credit
          agreements also require us to meet minimum ERISA funding rules. In addition,
          these credit agreements contain cross-default provisions that could trigger
          a
          default under the facilities in the event Ameren’s subsidiaries (subject to the
          definition in the underlying credit agreements), other than certain project
          finance subsidiaries, default in indebtedness of $50 million or greater,
          fail to
          pay the amounts drawn (as a direct borrower) under an Ameren credit facility,
          or
          enter bankruptcy proceedings. In addition, a default in indebtedness of
          $50
          million or greater or a bankruptcy would cause a default under the agreements
          supporting $100 million of Ameren LIBOR swaps.
 
 None
          of
          the Ameren Companies’ short-term credit agreements or financing arrangements
          contain credit rating triggers. EEI’s credit agreement contains a credit rating
          trigger under which a default can occur in the event any of the credit
          ratings
          of EEI’s sponsors (UE, CIPS, IP and Kentucky Utilities Company) fall below Baa3
          or BBB- by Moody’s and S&P, respectively, and the sponsors do not cover a
          payment default. At September 30, 2005, the Ameren Companies and EEI were
          in
          compliance with their credit agreement provisions and covenants *.*
 
 **NOTE
          5 -** **LONG-TERM
          DEBT AND EQUITY FINANCINGS**
 
 **Ameren**
 
 Under
          DRPlus, pursuant to an effective SEC Form S-3 registration statement, and
          under
          our 401(k) plans, pursuant to effective SEC Form S-8 registration statements,
          Ameren issued a total of 1.6 million new shares of common stock in the
          first
          nine months of 2005 valued at $85 million.
 
 In
          March
          2002, Ameren issued $345 million of adjustable conversion-rate equity security
          units consisting of $345 million of senior unsecured notes due 2007 and
          stock
          purchase contracts. In February 2005, the annual interest rate on these
          senior
          unsecured notes was reset to 4.263% through a remarketing process in accordance
          with and as required by the original terms of the related financing agreements.
          The proceeds from remarketing the senior unsecured notes were used by the
          holders of the equity security units to purchase treasury securities to
          secure
          their obligations to purchase Ameren common stock on May 15, 2005, pursuant
          to
          the stock purchase contracts. Ameren did not receive any proceeds as part
          of the
          remarketing. In the remarketing, Ameren purchased $95 million in principal
          amount of the senior unsecured notes, which were subsequently retired.
          In May
          2005, settlement of the stock purchase contracts resulted in Ameren issuing
          7.4
          million shares of common stock in exchange for $345 million of proceeds.
          The
          adjustable conversion-rate equity security units ceased trading on the
          New York
          Stock Exchange before the opening of the market on May 16, 2005.
 
 **UE**
 
 On
          October 20, 2005, the SEC declared effective a Form S-3 shelf registration
          statement filed by UE on September 23, 2005, amended on October 12, 2005,
          covering the offering from time to time of up to $1 billion of various
          forms of
          long-term debt and preferred securities.
 
 In
          July
          2005, UE issued, pursuant to its then-effective September 2003 SEC Form
          S-3
          shelf registration statement, $300 million of 5.30% senior secured notes
          due
          August 1, 2037, with interest payable semi-annually on February 1 and August
          1
          of each year beginning in February 2006. UE received net proceeds of $297
          million, which were used to repay short-term debt.
 
 In
          January 2005, UE issued, pursuant to its then-effective September 2003
          SEC Form
          S-3 shelf registration statement, $85 million of 5.00% senior secured notes
          due
          February 1, 2020, with interest payable semi-annually on February 1 and
          August 1
          of each year beginning in August 2005. UE received net proceeds of $83
          million,
          which were used to repay short-term debt incurred to fund the December
          2004
          maturity of UE’s $85 million 7.375% first mortgage bonds.
 
 **CIPS**
 
 In
          June
          2005, $20 million of CIPS’ 6.49% first mortgage bonds matured and were
          retired.
 
 37
 **CILCORP**
 
 In
          October and May 2005, CILCORP paid $80 million and $6 million to repurchase
          $69
          million and $5 million, respectively,
          in principal amount of its 8.70% senior notes due 2009.
 
 In
          July
          2005, CILCO redeemed 11,000 shares of its 5.85% Class A preferred stock
          at a
          redemption price of $100 per share plus accrued and unpaid dividends. The
          redemption satisfied CILCO’s mandatory sinking fund redemption requirement for
          this series of preferred stock for 2005.
 
 In
          conjunction with Ameren’s acquisition of CILCORP in January 2003, CILCORP’s
          long-term debt was recorded at fair value. Amortization related to fair
          value
          adjustments was $2 million (2004 - $2 million) and $6 million (2004 - $6
          million) for the three months and nine months ended September 30, 2005,
          respectively, and was included as a reduction to Interest Charges.
 
 **IP**
 In
          conjunction with Ameren’s acquisition of IP in September 2004, IP’s long-term
          debt was recorded at fair value. Amortization related to these fair value
          adjustments was $3 million and $12 million for the three
          months and
          nine months ended September 30, 2005, respectively, and was included as
          a
          reduction to Interest Charges.
 
 **Indenture
          Provisions and Other Covenants**
 
 The
          information below represents a summary of the Ameren Companies’ compliance with
          indenture provisions and other covenants. See Note 6 - Long-term Debt and
          Equity
          Financings in the Ameren Companies combined Annual Report on Form 10-K
          for the
          fiscal year ended December 31, 2004, for a detailed description of these
          provisions.
 
 UE’s,
          CIPS’, CILCO’s and IP’s indenture provisions and articles of incorporation
          include covenants and provisions related to the issuances of first mortgage
          bonds and preferred stock. The following table includes the earnings coverage
          ratio for interest charges and preferred dividends and bonds and preferred
          stock
          issuable for the 12 months ended September 30, 2005, at an assumed interest
          and
          dividend rate of 7%.
 
 **Interest**
                  **Coverage**
                  **Ratio**
                **Bonds**
                  **Issuable****(a)**
                **Dividend**
                  **Coverage**
                  **Ratio**
                **Preferred**
                  **Stock**
                  **Issuable**UE
                6.6
                3,523
                64.8
                2,116CIPS
                3.9
                224
                2.3
                215CILCO
                11.6
                734
                24.9
                256IP
                4.9
                908
                3.6
                951
 
 (a)
                Amount
                    of bonds issuable based on meeting required coverage
                    ratios.
 
 As
          of
          September 30, 2005, UE also had $31 million of total retained earnings
          restricted by a mortgage indenture against payment of common dividends,
          except
          those dividends payable in common stock.
 
 Genco’s
          and CILCORP’s indentures include provisions which require the companies to
          maintain certain debt service coverage and debt to capital ratios in order
          for
          the companies to pay dividends, make certain principal or interest payments,
          make certain loans to affiliates, or incur additional indebtedness. The
          following table summarizes these ratios for the 12 months ended September
          30,
          2005:
 
 **Required**
                  **Interest**
                  **Coverage**
                  **Ratio**
                **Actual**
                  **Interest**
                  **Coverage**
                  **Ratio**
                **Required**
                  **Debt
                    to**
                  **Capital**
                  **Ratio**
                **Actual**
                  **Debt
                    to**
                  **Capital**
                  **Ratio**Genco(a)
                1.75
                5.6
                60%
                51%CILCORP(b)
                2.2
                2.8
                67%
                51%
 
 (a)
                Interest
                    coverage ratio relates to covenants regarding certain dividend,
                    principal
                    and interest payments on certain subordinated intercompany borrowings.
                    The
                    debt to capital ratio relates to a debt incurrence covenant,
                    which also
                    requires an interest coverage ratio of
                    2.5.
 (b)
                CILCORP
                    must maintain the required interest coverage ratio and debt to
                    capital
                    ratio in order to make any payment of dividends or intercompany
                    loans to
                    affiliates other than to its direct or indirect
                    subsidiaries.
 
 The
          ability for the Ameren Companies to issue securities in the future will
          depend
          on such tests at that time.
 
 **Off-Balance
          Sheet Arrangements**
 
 At
          September 30, 2005, none of the Ameren Companies had any off-balance sheet
          financing arrangements, other than operating leases entered into in the
          ordinary
          course of business. None of the Ameren Companies expect to engage in any
          significant off-balance sheet financing arrangements in the near
          future.
   38
 **NOTE
          6** **-
          OTHER INCOME AND DEDUCTIONS**
 
 The
          following table presents Other Income and Deductions for each of the Ameren
          Companies for the three months and nine months ended September 30, 2005
          and
          2004, respectively:
 
 **Three
                    Months**
                
                **Nine
                    Months****2005**
                
                **2004**
                
                **2005**
                
                **2004****Ameren:**(a)Miscellaneous
                    income:Interest
                    and dividend income
                **$**
                **3**
                
                $
                5
                
                **$**
                **5**
                
                $
                10Allowance
                    for equity funds used during construction
                
                **3**
                
                
                2
                
                
                **10**
                
                
                6Other
                
                **-**
                
                
                1
                
                
                **4**
                
                
                4Total
                    miscellaneous income
                **$**
                **6**
                
                $
                8
                
                **$**
                **19**
                
                $
                20Miscellaneous
                    expense:Minority
                    interest in subsidiary
                **$**
                **(1**
                **)**
                $
                (1
                )
                **$**
                **(2**
                **)**
                $
                (4
                )Loss
                    on disposition of property
                
                **(1**
                **)**
                
                -
                
                
                **(3**
                **)**
                
                -Other
                
                **(1**
                **)**
                
                -
                
                
                **(7**
                **)**
                
                (2
                )Total
                    miscellaneous expense
                **$**
                **(3**
                **)**
                $
                (1
                )
                **$**
                **(12**
                **)**
                $
                (6
                )**UE:**Miscellaneous
                    income:Interest
                    and dividend income
                **$**
                **-**
                
                $
                1
                
                **$**
                **-**
                
                $
                3Equity
                    in earnings of subsidiary
                
                **1**
                
                
                1
                
                
                **3**
                
                
                4Allowance
                    for equity funds used during construction
                
                **3**
                
                
                2
                
                
                **9**
                
                
                6Gain
                    on disposition of property
                
                **-**
                
                
                1
                
                
                **-**
                
                
                1Other
                
                **-**
                
                
                -
                
                
                **3**
                
                
                -Total
                    miscellaneous income
                **$**
                **4**
                
                $
                5
                
                **$**
                **15**
                
                $
                14Miscellaneous
                    expense:Other
                **$**
                **(2**
                **)**
                $
                (1
                )
                **$**
                **(6**
                **)**
                $
                (6
                )Total
                    miscellaneous expense
                **$**
                **(2**
                **)**
                $
                (1
                )
                **$**
                **(6**
                **)**
                $
                (6
                )**CIPS:**Miscellaneous
                    income:Interest
                    and dividend income
                **$**
                **4**
                
                $
                6
                
                **$**
                **13**
                
                $
                19Total
                    miscellaneous income
                **$**
                **4**
                
                $
                6
                
                **$**
                **13**
                
                $
                19Miscellaneous
                    expense:Other
                **$**
                **(1**
                **)**
                $
                -
                
                **$**
                **(5**
                **)**
                $
                (1
                )Total
                    miscellaneous expense
                **$**
                **(1**
                **)**
                $
                -
                
                **$**
                **(5**
                **)**
                $
                (1
                )**Genco:**Miscellaneous
                    income:Other
                **$**
                **-**
                
                $
                1
                
                **$**
                **1**
                
                $
                -Total
                    miscellaneous income
                **$**
                **-**
                
                $
                1
                
                **$**
                **1**
                
                $
                -**CILCORP:**Miscellaneous
                    expense:Other
                **$**
                **(2**
                **)**
                $
                (2
                )
                **$**
                **(7**
                **)**
                $
                (4
                )Total
                    miscellaneous expense
                **$**
                **(2**
                **)**
                $
                (2
                )
                **$**
                **(7**
                **)**
                $
                (4
                )**CILCO:**Miscellaneous
                    expense:Other
                **$**
                **(2**
                **)**
                $
                (1
                )
                **$**
                **(6**
                **)**
                $
                (4
                )Total
                    miscellaneous expense
                **$**
                **(2**
                **)**
                $
                (1
                )
                **$**
                **(6**
                **)**
                $
                (4
                )**IP:**(b)Miscellaneous
                    income:Interest
                    and dividend income
                **$**
                **1**
                
                $
                2
                
                **$**
                **3**
                
                $
                3Tilton
                    Lease
                
                **-**
                
                
                1
                
                
                **-**
                
                
                8Allowance
                    for equity funds used during construction
                
                **-**
                
                
                -
                
                
                **1**
                
                
                -Gain
                    on disposition of property
                
                **-**
                
                
                -
                
                
                **-**
                
                
                1Other
                
                **1**
                
                
                1
                
                
                **2**
                
                
                4Total
                    miscellaneous income
                **$**
                **2**
                
                $
                4
                
                **$**
                **6**
                
                $
                16Miscellaneous
                    expense:Other
                **$**
                **-**
                
                $
                -
                
                **$**
                **(1**
                **)**
                $
                (1
                )Total
                    miscellaneous expense
                **$**
                **-**
                
                $
                -
                
                **$**
                **(1**
                **)**
                $
                (1
                )
 
 (a)
                Includes
                    amounts for Ameren Registrant and non-Registrant subsidiaries
                    and
                    intercompany eliminations, but excludes 2004 amounts for
                    IP.
 (b)
                2004
                    amounts represent predecessor information.
  39
 **NOTE
          7 - DERIVATIVE FINANCIAL INSTRUMENTS**
 
 The
          following table presents balances in certain accounts for cash flow hedges
          as of
          September 30, 2005:
 
 **Ameren**(a)
                
                **UE**
                
                **CIPS**
                
                **Genco**
                
                **CILCORP**
                
                **CILCO**
                
                **IP****2005:**Balance
                    Sheet:Other
                    assets
                **$**
                **194**
                
                **$**
                **22**
                
                **$**
                **43**
                
                **$**
                **-**
                
                **$**
                **82**
                
                **$**
                **82**
                
                **$**
                **31**Other
                    deferred credits and liabilities
                
                **132**
                
                
                **40**
                
                
                **22**
                
                
                **10**
                
                
                **22**
                
                
                **22**
                
                
                **31**Accumulated
                    OCI:Power
                    forwards and swaps(b)
                
                **(21**
                **)**
                
                **(13**
                **)**
                
                **-**
                
                
                **(9**
                **)**
                
                **-**
                
                
                **-**
                
                
                **1**Interest
                    rate swaps(c)
                
                **4**
                
                
                **-**
                
                
                **-**
                
                
                **4**
                
                
                **-**
                
                
                **-**
                
                
                **-**Gas
                    swaps and futures contracts(d)
                
                **93**
                
                
                **15**
                
                
                **21**
                
                
                **-**
                
                
                **59**
                
                
                **59**
                
                
                **-**
 
 (a)
                Includes
                    amounts for Ameren Registrant and non-Registrant subsidiaries
                    and
                    intercompany eliminations.
 (b)
                Represents
                    the mark-to-market value for the hedged portion of electricity
                    price
                    exposure for periods generally less than one year.
 (c)
                Represents
                    a gain associated with interest rate swaps at Genco that were
                    a partial
                    hedge of the interest rate on debt issued in June 2002. The swaps
                    cover
                    the first 10 years of debt that has a 30-year maturity and the
                    gain in OCI
                    is amortized over a 10-year period that began in June
                    2002.
 (d)
                Represents
                    a gain associated with natural gas swaps and futures contracts.
                    The swaps
                    are a partial hedge of our natural gas requirements through March
                    2008.
 
 The
          pretax net gain or loss on power forward derivative instruments is
          included
          in Operating Revenues - Electric or Operating Expenses - Fuel and
          Purchased
          Power at Ameren, UE and Genco. This represents the impact
          of
          discontinued cash flow hedges, the ineffective portion of cash flow hedges,
          and
          the reversal of amounts previously recorded in OCI due to transactions
          going to
          delivery or settlement, resulting in a $2 million loss for Ameren and a
          $1
          million loss for UE and Genco for the three months ended September 30,
          2005
          (2004 - $2 million loss for Ameren and a $1 million loss for UE and Genco)
          and a
          $2 million loss for Ameren and a $1 million loss for UE and Genco for the
          nine
          months ended September 30, 2005 (2004 - less than $1 million loss for Ameren,
          UE
          and Genco).
 
 **Other
          Derivatives**
 
 The
          following table represents the net change in market value of option
          transactions, which are used to manage our positions in SO 2 emission
          allowances and coal. Certain of these transactions are treated as nonhedge
          transactions under SFAS No. 133, “Accounting for Derivative Instruments and
          Hedging Activities,” as amended. The net change in the market value of
          SO 2 and coal
          options is recorded in Operating Expenses - Fuel and Purchased
          Power.
  
 **Three
                    Months**
                
                **Nine
                    Months**Gains
                    (Losses)(a)
                **2005**
                
                **2004**
                
                **2005**
                
                **2004****SO****2****options:**Ameren(b)
                **$**
                **(4**
                **)**
                $
                4
                
                **$**
                **(10**
                **)**
                $
                2UE
                **$**
                **(4**
                **)**
                $
                4
                
                **$**
                **(5**
                **)**
                $
                (2
                )Genco
                **$**
                **-**
                
                $
                -
                
                **$**
                **(5**
                **)**
                $
                4
 
 (a)
                Coal
                    option gains and losses were less than $1 million for all periods
                    shown
                    above.
 (b)
                Includes
                    amounts for Ameren Registrant and non-Registrant subsidiaries
                    and
                    intercompany eliminations, but excludes 2004 amounts for
                    IP.
 
 **NOTE
          8 -** **RELATED
          PARTY TRANSACTIONS**
 
 The
          Ameren Companies have engaged in, and may in the future engage in, affiliate
          transactions in the normal course of business. These transactions primarily
          consist of gas and power purchases and sales, services received or rendered,
          and
          borrowings and lendings. Transactions between affiliates are reported as
          intercompany transactions on their financial statements, but are eliminated
          in
          consolidation for Ameren’s financial statements. For a discussion of our material related party agreements,
          see Note 14 - Related Party Transactions under Part II, Item 8 of the Ameren
          Companies’ combined Form 10-K for the fiscal year ended December 31, 2004. Below
          are updates to several of these related party transactions.
 
 **Electric
          Power Supply Agreements**
 
 The
          following table presents the amount of gigawatthour sales under related
          party
          electric power supply agreements.
 
 **Three
                    Months**
                **Nine
                    Months****2005**
                **2004**
                **2005**
                **2004**Genco
                    sales to
                  Marketing
                    Company
                
                **6,788**
                
                5,121
                
                **16,884**
                
                14,586Marketing
                    Company
                  sales
                    to CIPS
                
                **3,565**
                
                2,143
                
                **8,118**
                
                5,880EEI
                    sales to UE
                
                **789**
                
                796
                
                **2,230**
                
                2,442EEI
                    sales to CIPS
                
                **394**
                
                397
                
                **1,337**
                
                1,219EEI
                    sales to IP
                
                **433**
                
                445
                
                **1,227**
                
                1,313
 
 **Joint
          Dispatch Agreement**
 
 UE
          and
          Genco jointly dispatch electric generation under an agreement among UE,
          Genco
          and CIPS. Each affiliate has the option to serve its load requirements
          from its
          own generation first and then each allows access to any available remaining
          generation to its affiliate at incremental cost. Any excess generation
          not used
          by UE or Genco to serve load requirements is sold to third parties through
          Ameren Energy, serving as each affiliate’s agent. These third party sales
  40
 margins
          are allocated between UE and Genco using the
          ratio of each company’s load requirements to the companies’ combined load
          regardless of which company sourced the power. To allocate power costs
          between
          UE and Genco, an intercompany sale is recorded by the company sourcing
          the power
          to the other company. Ameren Energy also acts as agent on behalf of UE
          and Genco
          to purchase power when they require it. The joint dispatch agreement can
          be
          terminated by either party upon one year’s notice.
  Due
          to
          the MoPSC order approving UE’s Illinois service territory transfer to CIPS or
          future regulatory proceedings, there could be changes to the agreement
          between
          UE and Genco to jointly dispatch electric generation or changes to the
          effect of
          that agreement on revenues and/or electric margins. Such changes could
          affect
          the pricing or availability of power transferred between Genco and UE.
          Based on
          operating performance for the past year, such changes would likely result
          in a
          transfer of electric margins from Genco to UE. The ultimate impact of any
          modifications to the joint dispatch agreement will be determined by future
          native load demand, the availability of electric generation from UE and
          Genco
          and market prices, among other things, but such impact could be material.
          Ameren’s earnings could be affected if electric rates for UE are adjusted by the
          MoPSC to reflect the provisions of the MoPSC order approving the service
          territory transfer and/or other changes to the joint dispatch agreement.
          See
          Note 3 - Rate and Regulatory Matters for a discussion of modifications
          to the
          joint dispatch agreement ordered by the MoPSC.
 
 The
          following table presents the amount of gigawatthour sales under the joint
          dispatch agreement.
 
 **Three
                    Months**
                **Nine
                    Months****2005**
                **2004**
                **2005**
                **2004****Joint
                    Dispatch Agreement**UE
                    sales to Genco
                
                **2,804**
                
                2,355
                
                **9,567**
                
                6,339Genco
                    sales to UE
                
                **857**
                
                682
                
                **2,673**
                
                1,974
 
 **Money
          Pools**
 
 *Utility*
 
 Through
          the utility money pool, the pool participants can access committed credit
          facilities at Ameren and excess cash at Ameren, UE, CIPS, CILCO and IP.
          See Note
          4 - Short-term Borrowings and Liquidity for amounts available under credit
          facilities. The total amount available to the pool participants from the
          utility
          money pool at any given time is reduced by the amount of borrowings by
          their
          affiliates, but increased to the extent the pool participants have surplus
          funds
          or other external sources are used to increase the available amounts. The
          average interest rate for borrowing under the utility money pool for the
          three
          months ended September 30, 2005 was 3.5% (2004 - 1.5%) and for the nine
          months
          ended September 30, 2005 was 3.0% (2004 - 1.2%) .
 
 *Non-state-regulated
          subsidiaries*
 
 Through
          the non-state-regulated subsidiary money pool, pool participants can access
          committed credit facilities at Ameren and excess cash at Ameren, Genco
          and other
          pool participants. See Note 4 - Short-term Borrowings and Liquidity for
          amounts
          available under credit facilities. The
          average interest rate for borrowing under the non-state-regulated subsidiary
          money pool for the three months ended September 30, 2005 was 4.1% (2004
          - 8.8%)
          and for the nine months ended September 30, 2005 was 5.9% (2004 -
          8.8%).
 
 CILCORP
          has been granted authority by the SEC under the PUHCA to borrow up to $250
          million directly from Ameren in a separate arrangement unrelated to the
          money
          pools. At September 30, 2005, CILCORP had notes payable under this arrangement
          of $100 million. The interest rate under this arrangement is the same as
          the
          non-state-regulated subsidiary money pool. See Note 3 - Rate and Regulatory
          Matters regarding PUHCA repeal.
 
 **Intercompany
          Promissory Notes**
  On
          May 1,
          2005, Genco and CIPS amended the maturity date and interest rate of the
          subordinated note payable to CIPS by issuing to CIPS an amended and restated
          subordinated promissory note in the principal amount of approximately $249
          million with an interest rate of 7.125% per annum, a 5-year amortization
          schedule and a maturity date of May 1, 2010. As of September 30, 2005,
          $197
          million was outstanding under this note.
 
 Also
          on
          May 1, 2005, the remaining principal balance under Genco’s note payable to
          Ameren of $34 million was repaid.
 
 On
          May 2,
          2005, CIPS issued to UE a subordinated promissory note in the principal
          amount
          of approximately $67 million as consideration for 50% of UE’s Illinois-based
          utility assets transferred to CIPS on that date. The note bears interest
          at
          4.70% per annum and has a 10-year amortization schedule and a maturity
          date of
          May 2, 2010. As of September 30, 2005, $67 million was outstanding under
          this
          note. See Note 3 - Rate and Regulatory Matters for a discussion of this
          intercompany transfer.
 
 **Intercompany
          Transfer of Illinois Service Territory and Electric Generating
          Facilities**
 
 See
          Note
          3 - Rate and Regulatory Matters for a discussion of the related party
          transactions engaged in with respect to the intercompany transfer of UE’s
          Illinois service territory and Genco’s electric generating
          facilities.
  On
          June
          22, 2005, UE purchased an uninstalled 117 megawatt CT and related vendor
          contract rights from
  41
  Development Company for an estimated market price of
          approximately $25 million. Also on that date, UE also purchased wet compression
          upgrade equipment for this CT and related vendor contract rights from Resources
          Company for an estimated market price of approximately $2 million. The
          unit went
          into commercial operation on October 14, 2005, at Venice, Illinois.
  **Summary
          of Related Party Transactions**
 
 The
          following tables present the impact of related party transactions on the
          Ameren
          Companies’ statements of income based primarily on the transactions discussed
          above and in Note 14 - Related Party Transactions under Part II, Item 8
          of the
          Ameren Companies’ combined Form 10-K for the fiscal year ended December 31,
          2004.
 
 **UE**
 
 **Three
                    Months**
                
                **Nine
                    Months****Consolidated
                    Statement of Income**
                **2005**
                
                **2004**
                
                **2005**
                
                **2004**Operating
                    revenues from affiliates:Power
                    supply agreement with EEI
                **$**
                **(a**
                **)**
                $
                5
                
                **$**
                **(a**
                **)**
                $
                7Joint
                    dispatch agreement with Genco
                
                **50**
                
                
                31
                
                
                **147**
                
                
                89Share
                    of joint dispatch agreement interchange sales
                
                **60**
                
                
                46
                
                
                **189**
                
                
                142Gas
                    transportation agreement with Genco
                
                **(a**
                **)**
                
                (a
                )
                
                **(a**
                **)**
                
                (a
                )Total
                    operating revenues
                **$**
                **110**
                
                $
                82
                
                **$**
                **336**
                
                $
                238Fuel
                    and purchased power expenses from affiliates:Power
                    supply agreements:EEI
                **$**
                **16**
                
                $
                15
                
                **$**
                **46**
                
                $
                47Marketing
                    Company
                
                **-**
                
                
                2
                
                
                **4**
                
                
                7Joint
                    dispatch agreement with Genco
                
                **26**
                
                
                13
                
                
                **57**
                
                
                37Total
                    fuel and purchased power expenses
                **$**
                **42**
                
                $
                30
                
                **$**
                **107**
                
                $
                91Other
                    operating expenses:Support
                    service agreements:Ameren
                    Services
                **$**
                **38**
                
                $
                37
                
                **$**
                **119**
                
                $
                113Ameren
                    Energy
                
                **1**
                
                
                1
                
                
                **3**
                
                
                1AFS
                
                **1**
                
                
                1
                
                
                **3**
                
                
                3Total
                    other operating expenses
                **$**
                **40**
                
                $
                39
                
                **$**
                **125**
                
                $
                117Interest
                    expense:Borrowings
                    from money pool
                **$**
                **2**
                
                $
                1
                
                **$**
                **4**
                
                $
                2
 
 (a)
                Less
                    than $1 million.
 
 **CIPS**
 
 **Three
                    Months**
                
                **Nine
                    Months****Statement
                    of Income**
                **2005**
                
                **2004**
                
                **2005**
                
                **2004**Operating
                    revenues from affiliates:Power
                    supply agreements with Marketing CompanyPMarketing
                    Company
                **$**
                **8**
                
                $
                8
                
                **$**
                **25**
                
                $
                24Fuel
                    and purchased power expenses from affiliates:Power
                    supply agreements:Marketing
                    Company
                **$**
                **121**
                
                $
                77
                
                **$**
                **291**
                
                $
                220EEI
                
                **8**
                
                
                8
                
                
                **25**
                
                
                24Total
                    fuel and purchased power expenses
                **$**
                **129**
                
                $
                85
                
                **$**
                **316**
                
                $
                244Other
                    operating expenses:Support
                    service agreements:Ameren
                    Services
                **$**
                **10**
                
                $
                12
                
                **$**
                **32**
                
                $
                36AFS
                
                **(a**
                **)**
                
                1
                
                
                **1**
                
                
                1Total
                    other operating expenses
                **$**
                **10**
                
                $
                13
                
                **$**
                **33**
                
                $
                37Interest
                    income (expense):Note
                    receivable from Genco
                **$**
                **4**
                
                $
                5
                
                **$**
                **12**
                
                $
                18Advances
                    to (borrowings from) money pool
                
                **1**
                
                
                (a
                )
                
                **1**
                
                
                (a
                )
 
 (a)
                Less
                    than $1 million.
  42
 **Genco**
 
 **Three
                        Months**
                    
                    **Nine
                        Months****Consolidated
                        Statement of Income**
                    **2005**
                    
                    **2004**
                    
                    **2005**
                    
                    **2004**Operating
                        revenues from affiliates:Power
                        supply agreements:Marketing
                        Company
                    **$**
                    **229**
                    
                    $
                    190
                    
                    **$**
                    **603**
                    
                    $
                    531EEI
                    
                    **-**
                    
                    
                    2
                    
                    
                    **(a**
                    **)**
                    
                    3Joint
                        dispatch agreement with UE
                    
                    **26**
                    
                    
                    13
                    
                    
                    **57**
                    
                    
                    37Share
                        of joint dispatch agreement interchange sales
                    
                    **31**
                    
                    
                    23
                    
                    
                    **109**
                    
                    
                    72Operating
                        lease with Development Company
                    
                    **3**
                    
                    
                    3
                    
                    
                    **8**
                    
                    
                    8Total
                        operating revenues
                    **$**
                    **289**
                    
                    $
                    231
                    
                    **$**
                    **777**
                    
                    $
                    651Fuel
                        and purchased power expenses from affiliates:Joint
                        dispatch agreement with UE
                    **$**
                    **50**
                    
                    $
                    31
                    
                    **$**
                    **147**
                    
                    $
                    89Power
                        purchase agreement with Marketing Company
                    
                    **2**
                    
                    
                    (a
                    )
                    
                    **4**
                    
                    
                    (a
                    )Gas
                        transportation agreement with UE
                    
                    **(a**
                    **)**
                    
                    (a
                    )
                    
                    **(a**
                    **)**
                    
                    (a
                    )Total
                        fuel and purchased power expenses
                    **$**
                    **52**
                    
                    $
                    31
                    
                    **$**
                    **151**
                    
                    $
                    89Other
                        operating expenses:Support
                        service agreements:Ameren
                        Services
                    **$**
                    **5**
                    
                    $
                    4
                    
                    **$**
                    **15**
                    
                    $
                    12Ameren
                        Energy
                    
                    **1**
                    
                    
                    (a
                    )
                    
                    **2**
                    
                    
                    1AFS
                    
                    **1**
                    
                    
                    1
                    
                    
                    **2**
                    
                    
                    2Total
                        other operating expenses
                    **$**
                    **7**
                    
                    $
                    5
                    
                    **$**
                    **19**
                    
                    $
                    15Interest
                        expense (income):Borrowings
                        from (advances to) money pool
                    **$**
                    **(1**
                    **)**
                    $
                    4
                    
                    **$**
                    **2**
                    
                    $
                    10Note
                        payable to CIPS
                    
                    **4**
                    
                    
                    5
                    
                    
                    **12**
                    
                    
                    18Note
                        payable to Ameren
                    
                    **-**
                    
                    
                    1
                    
                    
                    **1**
                    
                    
                    2
 (a)
                Less
                    than $1 million.
 
 **CILCORP**
 
 **Three
                    Months**
                
                **Nine
                    Months****Consolidated
                    Statement of Income**
                **2005**
                
                **2004**
                
                **2005**
                
                **2004**Operating
                    revenues from affiliates:Power
                    supply agreements:Bilateral
                    supply agreement with Marketing Company
                **$**
                **2**
                
                $
                9
                
                **$**
                **23**
                
                $
                28Fuel
                    and purchased power expenses from affiliates:Executory
                    tolling agreement with Medina Valley
                **$**
                **9**
                
                $
                6
                
                **$**
                **27**
                
                $
                23Bilateral
                    supply agreement with Marketing Company
                
                **3**
                
                
                3
                
                
                **10**
                
                
                12Total
                    fuel and purchased power expenses
                **$**
                **12**
                
                $
                9
                
                **$**
                **37**
                
                $
                35Other
                    operating expenses:Support
                    services agreements:Ameren
                    Services
                **$**
                **9**
                
                $
                12
                
                **$**
                **30**
                
                $
                37AFS
                
                **1**
                
                
                (a
                )
                
                **2**
                
                
                1Total
                    other operating expenses
                **$**
                **10**
                
                $
                12
                
                **$**
                **32**
                
                $
                38Interest
                    expense:Note
                    payable to Ameren
                **$**
                **1**
                
                $
                1
                
                **$**
                **4**
                
                $
                3Borrowings
                    from money pool
                
                **1**
                
                
                1
                
                
                **3**
                
                
                3
 
 (a)
                Less
                    than $1 million.
 
 **CILCO**
 
 **Three
                      Months**
                  
                  **Nine
                      Months****Consolidated
                      Statement of Income**
                  **2005**
                  
                  **2004**
                  
                  **2005**
                  
                  **2004**Operating
                      revenues from affiliates:Power
                      supply agreements:Bilateral
                      supply agreement with Marketing Company
                  **$**
                  **2**
                  
                  $
                  9
                  
                  **$**
                  **23**
                  
                  $
                  28Fuel
                      and purchased power expenses from affiliates:Executory
                      tolling agreement with Medina Valley
                  **$**
                  **9**
                  
                  $
                  6
                  
                  **$**
                  **27**
                  
                  $
                  23Bilateral
                      supply agreement with Marketing Company
                  
                  **3**
                  
                  
                  3
                  
                  
                  **10**
                  
                  
                  12Total
                      fuel and purchased power expenses
                  **$**
                  **12**
                  
                  $
                  9
                  
                  **$**
                  **37**
                  
                  $
                  35
   43
 
 **Three
                      Months**
                  
                  **Nine
                      Months**Consolidated
                      Statement of Income
                  
                  **2005**
                  
                  
                  **2004**
                  )
                  
                  **2005**
                  
                  
                  **2004**
 Other
                      operating expenses:Support
                      services agreements:Ameren
                      Services
                  **$**
                  **8**
                  
                  $
                  11
                  
                  **$**
                  **29**
                  
                  $
                  35AFS
                  
                  **1**
                  
                  
                  1
                  
                  
                  **2**
                  
                  
                  1Total
                      other operating expenses
                  **$**
                  **9**
                  
                  $
                  12
                  
                  **$**
                  **31**
                  
                  $
                  36Interest
                      expense:Borrowings
                      from money pool
                  **$**
                  **1**
                  
                  $
                  2
                  
                  **$**
                  **3**
                  
                  $
                  4
  **IP**
 
 **Three
                              Months**
                          
                          **Nine
                              Months**Consolidated
                              Statement of Income
                          
                          **2005**
                          
                          
                          **2004**(a
                          )
                          
                          **2005**
                          
                          
                          **2004**(a
                          )Operating
                              revenues from affiliates and former affiliates:Retail
                              electricity sales to DMG
                          **$**
                          **-**
                          
                          $
                          (b
                          )
                          **$**
                          **-**
                          
                          $
                          1Retail
                              natural gas sales to DMG
                          
                          **-**
                          
                          
                          1
                          
                          
                          **-**
                          
                          
                          4Transmission
                              sales to DYPM
                          
                          **-**
                          
                          
                          4
                          
                          
                          **-**
                          
                          
                          10Interconnection
                              transmission with DYPM
                          
                          **-**
                          
                          
                          1
                          
                          
                          **-**
                          
                          
                          3Interest
                              income from former affiliates
                          
                          **-**
                          
                          
                          43
                          
                          
                          **-**
                          
                          
                          128Total
                              operating revenues
                          **$**
                          **-**
                          
                          $
                          49
                          
                          **$**
                          **-**
                          
                          $
                          146Fuel
                              and purchased power expenses from affiliates and former
                              affiliates:Power
                              supply agreements:DMG
                          **$**
                          **-**
                          
                          $
                          114
                          
                          **$**
                          **-**
                          
                          $
                          346EEI
                          
                          **13**
                          
                          
                          7
                          
                          
                          **40**
                          
                          
                          21Gas
                              purchased from Dynegy
                          
                          **-**
                          
                          
                          (b
                          )
                          
                          **-**
                          
                          
                          6Total
                              fuel and purchased power expenses
                          **$**
                          **13**
                          
                          $
                          121
                          
                          **$**
                          **40**
                          
                          $
                          373Other
                              operating expenses:Support
                              services agreements:Ameren
                              Services
                          **$**
                          **20**
                          
                          $
                          -
                          
                          **$**
                          **42**
                          
                          $
                          -AFS
                          
                          **(b**
                          **)**
                          
                          -
                          
                          
                          **1**
                          
                          
                          -Services
                              and facilities agreement - Dynegy
                          
                          **-**
                          
                          
                          3
                          
                          
                          **-**
                          
                          
                          11Total
                              other operating expenses
                          **$**
                          **20**
                          
                          $
                          3
                          
                          **$**
                          **43**
                          
                          $
                          11Interest
                              expense (income):Interest
                              expense for IP SPT
                          **$**
                          **3**
                          
                          $
                          5
                          
                          **$**
                          **9**
                          
                          $
                          17Interest
                              expense on Tilton lease
                          
                          **-**
                          
                          
                          1
                          
                          
                          **-**
                          
                          
                          8Interest
                              income on Tilton lease
                          
                          **-**
                          
                          
                          (1
                          )
                          
                          **-**
                          
                          
                          (8
                          )Advances
                              to money pool
                          
                          **(1**
                          **)**
                          
                          -
                          
                          
                          **(3**
                          **)**
                          
                          -
 (a)
                Represents
                    predecessor information.
 (b)
                Less
                    than $1 million.
 
 **NOTE
          9 -** **COMMITMENTS
          AND CONTINGENCIES**
 
 Reference
          is made to Note 1 - Summary of Significant Accounting Policies, Note 3
          - Rate
          and Regulatory Matters, Note 14 - Related Party Transactions and Note 15
          -
          Commitments and Contingencies under Part II, Item 8 of the Ameren Companies’
          combined Form 10-K for the fiscal year ended December 31, 2004.
 
 44
 **Callaway
          Nuclear Plant**
 
 The
          following table presents insurance coverage at UE’s Callaway nuclear plant at
          September 30, 2005. This coverage was renewed on October 1, 2005:
 
 
 **Type
                      and Source of Coverage**
                  **Maximum
                      Coverages**
                  
                  **Maximum
                      Assessments for Single Incidents**Public
                      liability:American
                      Nuclear Insurers
                  $
                  300
                  
                  $
                  -Pool
                      participation
                  
                  10,461
                  
                  
                  101
                  (a)$
                  10,761
                  (b)
                  $
                  101Nuclear
                      worker liability:American
                      Nuclear Insurers
                  $
                  300
                  (c)
                  $
                  4Property
                      damage:Nuclear
                      Electric Insurance Ltd.
                  $
                  2,750
                  (d)
                  $
                  21Replacement
                      power:Nuclear
                      Electric Insurance Ltd.
                  $
                  490
                  (e)
                  $
                  7
 
 (a)
                Retrospective
                    premium under the Price-Anderson liability provisions of the
                    Atomic Energy
                    Act of 1954, as amended (Price-Anderson). Thisis
                    subject to retrospective assessment with respect to loss from
                    an incident
                    at any licensed U.S. reactor, payable at $15 million per year.
                    Renewal of
                    Price-Anderson was part of the Energy Policy Act of 2005, which
                    was signed
                    by President Bush in August 2005.
 (b)
                Limit
                    of liability for each incident under
                    Price-Anderson.
 (c)
                Industry
                    limit for potential liability from workers claiming exposure
                    to the
                    hazards of nuclear radiation.
 (d)
                Includes
                    premature decommissioning costs.
 (e)
                Weekly
                    indemnity of $4.5 million for 52 weeks, which commences after
                    the first
                    eight weeks of an outage, plus $3.6 million per week for 71.1
                    weeks
                    thereafter.
  Price-Anderson
          limits the liability for claims from an incident involving any licensed
          U.S.
          nuclear facility. The limit is based on the number of licensed reactors
          and is
          adjusted at least every five years to reflect changes in the  Consumer
          Price Index. Utilities owning a nuclear reactor cover this exposure through
          a
          combination of private insurance and mandatory participation in a financial
          protection pool, as established by Price-Anderson.
 
 If
          losses
          from a nuclear incident at the Callaway nuclear plant exceed the limits
          of, or
          are not subject to, insurance, or if coverage is unavailable, UE self-insures
          the risk. If a serious nuclear incident occurred, it could have a material
          but
          indeterminable adverse effect on our results of operations, financial position,
          or liquidity.
 
 **Other
          Obligations**
 
 To
          supply
          a portion of the fuel requirements of our generating plants, we have entered
          into various long-term commitments for the procurement of coal, natural
          gas and
          nuclear fuel. In addition, we have entered into various long-term commitments
          for the purchase of electricity and natural gas for distribution. For a
          complete
          listing of our obligations and commitments, see Contractual Obligations
          under
          Part II, Item 7 and Note 15 - Commitments and Contingencies under Part
          II, Item
          8 of the Ameren Companies’ combined Form 10-K for the fiscal year ended December
          31, 2004.
 
 As
          of
          September 30, 2005, the commitments for the procurement of coal have increased
          from amounts previously disclosed as of December 31, 2004. The following
          table
          presents the total estimated coal purchase commitments at September 30,
          2005:
 
 **2005**
                
                **2006**
                
                **2007**
                
                **2008**
                
                **2009**
                
                **Thereafter**(a)Ameren(b)
                $
                776
                
                $
                867
                
                $
                916
                
                $
                869
                
                $
                633
                
                $
                377UE
                
                397
                
                
                413
                
                
                483
                
                
                414
                
                
                279
                
                
                193Genco
                
                209
                
                
                262
                
                
                247
                
                
                296
                
                
                237
                
                
                107CILCORP
                
                84
                
                
                91
                
                
                87
                
                
                74
                
                
                52
                
                
                36CILCO
                
                84
                
                
                91
                
                
                87
                
                
                74
                
                
                52
                
                
                36
 
 (a)
                Commitments
                    for coal are until 2010.
 (b)
                Includes
                    amounts for Registrant and non-Registrant Ameren subsidiaries
                    and
                    intercompany eliminations.
  45
 As
          of
          September 30, 2005, the commitments for the procurement of natural gas
          have
          increased from amounts previously disclosed as of December 31, 2004. The
          following table presents the total estimated natural gas purchase commitments
          at
          September 30, 2005:
 
 **2005**
                
                **2006**
                
                **2007**
                
                **2008**
                
                **2009**
                
                **Thereafter**(a)Ameren(b)
                $
                478
                
                $
                569
                
                $
                292
                
                $
                168
                
                $
                74
                
                $
                22UE
                
                77
                
                
                62
                
                
                28
                
                
                15
                
                
                7
                
                
                8CIPS
                
                81
                
                
                94
                
                
                58
                
                
                41
                
                
                25
                
                
                -Genco
                
                18
                
                
                19
                
                
                19
                
                
                14
                
                
                2
                
                
                3CILCORP
                
                156
                
                
                195
                
                
                100
                
                
                64
                
                
                35
                
                
                -CILCO
                
                156
                
                
                195
                
                
                100
                
                
                64
                
                
                35
                
                
                -IP
                
                126
                
                
                191
                
                
                87
                
                
                33
                
                
                4
                
                
                11
 
 (a)
                Commitments
                    for natural gas are until 2014.
 (b)
                Includes
                    amounts for Registrant and non-Registrant Ameren subsidiaries
                    and
                    intercompany eliminations.
 
  **Environmental
          Matters**
 
 We
          are
          subject to various environmental regulations by federal, state and local
          authorities. From the beginning phases of siting and development to the
          ongoing
          operation of existing or new electric generating, transmission and distribution
          facilities, and natural gas storage plants, transmission and distribution
          facilities, our activities involve compliance with diverse laws and regulations.
          These address noise, emissions, and impacts to air and water, protected
          and
          cultural resources (such as wetlands, endangered species, and
          archeological/historical resources), and chemical and waste handling. Our
          activities often require complex and lengthy processes as we obtain approvals,
          permits or licenses for new, existing or
          modified facilities. Additionally, the use and handling of various chemicals
          or
          hazardous materials (including wastes) requires preparation of release
          prevention plans and emergency response procedures. As new laws or regulations
          are promulgated, we assess their applicability and implement the necessary
          modifications to our facilities or their operations, as required. The more
          significant matters are discussed below.
 
 *Clean
          Air Act*
 
 In
          March
          2005, the EPA issued its final regulations with respect to SO 2 and
          NO x emissions (the Clean Air Interstate Rule) and mercury emissions from coal-fired
          power plants. The new regulations will require significant additional reductions
          in these emissions from UE, Genco and
          CILCO
          power plants in phases, beginning in 2010. The following table presents
          preliminary estimated capital costs based on current available technology
          to
          comply with the  Clean
          Air
          Interstate Rule and mercury  rules:
 
 **2005**
                **2006
                    - 2009**
                **2010
                    - 2015**
                **Total**Ameren
                $50
                $
                    510 - $1,360
                $
                    355 - $ 1,130
                $1,400
                    - $1,900UE
                20
                160
                    - 880
                175
                    - 880
                840
                    - 1,140Genco
                10
                250
                    - 340
                140
                    - 200
                400
                    - 550CILCO
                20
                100
                    - 140
                40
                    - 50
                160
                    - 210
 
 Each
          state has until the fall of 2006 to develop state regulations implementing
          the
          Clean Air Interstate Rule and mercury rules. While the federal rules mandate
          a
          specific emissions cap for SO 2 ,
          NO x and
          mercury emissions by state from utility boilers, the states have considerable
          flexibility in allocating emission allowances to individual utility boilers.
          In
          addition, a state may choose to hold back certain emission allowances for
          growth
          or other reasons, and may implement a more stringent program than required
          by
          the federal rule. The costs reflected in the above table assume each Ameren
          generating unit will be allocated allowances based on the model “cap and trade”
          rule guidelines issued by the EPA. Should either Missouri or Illinois decide
          to
          develop alternative allowance allocations for utility units, the cost impact
          could be material. At this time, we are unable to determine the impact
          such a
          state decision would have on our results of operations, financial position,
          or
          liquidity.
 
 *Emission
          Credits*
 
 As
          of
          September 30, 2005, UE, Genco, CILCO, and EEI held 1.58 million, 0.53 million,
          0.27 million, and 0.29 million tons, respectively, of SO 2 emission
          allowances with vintages from 2005 to 2012. Each company possesses additional
          allowances for use in periods beyond 2012. As of September 30, 2005, UE,
          Genco,
          CILCO and EEI Illinois facilities held 289, 17,579, 4,366, and 5,090 tons,
          respectively, of NO X emission
          allowances with vintages from 2004 to 2007. The Illinois Environmental
          Protection Agency (the Illinois EPA) is still determining some NO x emission
          allowance allocations for 2005 through 2008. As of September 30, 2005,
          the
          SO 2 and
          NO x emission
          allowances for UE, Genco, CILCO and EEI were carried in inventory at a
          book
          value of $63 million, $88 million, $56 million and $44 million, respectively.
          UE, Genco, CILCO and EEI expect to use a substantial portion of the
          SO 2 and
          NO x allowances for ongoing operations. Allocations of NO x emission
          allowances for Missouri facilities are pending the finalization of rules
          by
          Missouri regulators. New environmental regulations, including the Clean
          Air
          Interstate Rule, the timing of the installation of pollution control equipment,
          and the level of operations will have a
 46
 significant
          impact on the amount of allowances actually
          required for ongoing operations.
  In
          the
          third quarter of 2005, Genco and UE entered into nonmonetary swaps of certain
          of
          their earlier vintage- year SO 2 emission
          allowances for later vintage-year allowances. As a result, Genco recorded
          a gain
          equal to the difference between the fair value of allowances received less
          the
          book value of allowances exchanged. The gain was recorded as a $21 million
          (pre-tax) reduction to fuel expense and an increase to inventory. UE recorded
          an
          increase to inventory and regulatory liabilities of $63 million. See Note
          1 -
          Summary of Significant Accounting Policies for a discussion of SFAS No.
          153,
          which provides guidance on accounting for exchanges of nonmonetary
          assets.
 
 *New
          Source Review*
 
 The
          EPA
          has been conducting an enforcement initiative in an effort to determine
          whether
          modifications at a number of coal-fired power plants owned by electric
          utilities
          in the U.S. are subject to New Source Review requirements or New Source
          Performance Standards under the Clean Air Act. The EPA’s inquiries focus on
          whether the best available emission control technology was or should have
          been
          used at such power plants when major maintenance or capital improvements
          were
          made.
 
 IP
          and
          DMG had been the subject of a Notice of Violation from the EPA and a complaint
          filed in 1999 by the United States in the U.S. District Court for the Southern
          District of Illinois alleging violations of the Clean Air Act and certain
          related federal and Illinois regulations in connection with certain equipment
          repairs, replacements, and maintenance activities at the three Baldwin
          Power
          Station generating units, currently owned by DMG and formerly owned by
          IP.
 
 In
          May
          2005, the court approved a comprehensive settlement among DMG, the EPA,
          the U.S.
          and other intervening parties that resolved this litigation. The settlement
          agreement is set forth in a consent decree and resolves all claims in the
          litigation as well as similar claims that may have been brought with respect
          to
          other generation facilities owned by DMG and formerly owned by IP. This
          consent
          decree relieves IP of any civil liability under the Clean Air Act and related
          federal and Illinois regulations with respect to IP’s former ownership of the
          Baldwin Power Station and other generation assets now owned by DMG.
 
 In
          April
          2005, Genco received a request from the EPA for information pursuant to
          Section
          114(a) of the Clean Air Act seeking detailed operating and maintenance
          history
          data with respect to its Meredosia, Hutsonville, Coffeen and Newton facilities,
          EEI’s Joppa facility and AERG’s E.D. Edwards and Duck Creek facilities. All of
          these facilities are coal-fired power plants. The information request requires Genco
          to
          provide responses to specific EPA questions regarding certain projects
          and
          maintenance activities in order to determine compliance with certain Illinois
          air pollution and emissions rules and with the New Source Performance Standard
          requirements of the Clean Air Act. Genco is complying with this information
          request, but cannot predict the outcome of this matter at this
          time.
 
 *Remediation*
 
 We
          are
          involved in a number of remediation actions to clean up hazardous waste
          sites as
          required by federal and state law. Such statutes require that responsible
          parties fund remediation actions regardless of fault, legality of original
          disposal, or ownership of a disposal site. UE, CIPS, CILCO and IP have
          each been
          identified by the federal or state governments as a potentially responsible
          party at several contaminated sites. Several of these sites involve facilities
          that were transferred by CIPS to Genco in May 2000 and were transferred
          by CILCO
          to AERG in October 2003. As part of each transfer, CIPS or CILCO has
          contractually agreed to indemnify Genco or AERG for remediation costs associated
          with pre-existing environmental contamination at the transferred sites.
 
 As
          of
          September 30, 2005, CIPS, CILCO, and IP owned or were otherwise responsible
          for
          14, four, and 25 former MGP sites, respectively, in Illinois. All of these
          sites
          are in various stages of investigation, evaluation and remediation. Under
          its
          current schedule, Ameren anticipates that remediation at these sites should
          be
          completed by 2015. The ICC permits each company to recover remediation
          and
          litigation costs associated with their former MGP sites located in Illinois
          from
          their Illinois electric and natural gas utility customers through environmental
          adjustment rate riders. To be recoverable, such costs must be prudently
          and
          properly incurred; costs are subject to annual reconciliation review by
          the ICC.
          As of September 30, 2005, CIPS, CILCO, and IP had recorded liabilities
          of $24
          million, $3 million, and $64 million, respectively, to represent estimated
          minimum obligations. On May 2, 2005, as a part of its Illinois utility
          service
          territory transfer, UE transferred its one Illinois-based former MGP site
          to
          CIPS. In connection with the transfer, CIPS succeeded to UE’s ICC-approved
          environmental adjustment rate rider, which permits CIPS to recover remediation
          and litigation costs associated with UE’s former MGP site from UE’s transferred
          Illinois electric and natural gas utility customers. For a discussion of
          the
          Illinois utility service territory transfer, see Note 3 - Rate and Regulatory
          Matters in this report.
  47
 In
          addition, UE owns or is otherwise responsible for 10 MGP sites in Missouri
          and
          one in Iowa. UE does not have in effect in Missouri a rate rider mechanism,
          which permits remediation costs associated with MGP sites to be recovered
          from
          utility customers. UE does not have any retail utility operations in Iowa.
          Because of the unknown and unique characteristics of each site (such as
          amount
          and type of residues present, physical characteristics of the site and
          the
          environmental risk), and uncertain regulatory requirements, we are not
          able to
          determine the maximum liability for the remediation of these sites. As
          of
          September 30, 2005, UE had recorded $10 million to represent its estimated
          minimum obligation of its MGP sites. UE also is responsible for four electric
          sites in Missouri that have corporate clean-up liability, the majority
          of which
          are the result of federal agency mandates. As of September 30, 2005, UE
          had
          recorded $5 million to represent its estimated minimum obligation for these
          sites. At this time, we are unable to determine what portion of these costs,
          if
          any, will be eligible for recovery from insurance carriers.
 
 In
          June
          2000, the EPA notified UE and numerous other companies that former landfills
          and
          lagoons in Sauget, Illinois, may contain soil and groundwater contamination.
          These sites are known as Sauget Area 2. From approximately 1926 until 1976,
          UE
          operated a power generating facility adjacent to Sauget Area 2 and currently
          owns a parcel of property that was used as a landfill. Under the terms
          of an
          Administrative Order and Consent, UE has joined with other potentially
          responsible parties to evaluate the extent of potential contamination with
          respect to Sauget Area 2.
 
 In
          October 2002, UE was included in a Unilateral Administrative Order issued
          by the
          EPA listing potentially liable parties for groundwater contamination for
          a
          portion of the Sauget Area 2 site. The Unilateral Administrative Order
          encompasses the groundwater contamination releasing to the Mississippi
          River
          adjacent to Monsanto Chemical Company’s (now known as Solutia) former chemical
          waste landfill and the resulting impact area in the Mississippi River.
          UE was
          asked to participate in response activities that involve the installation
          of a
          barrier wall around a chemical waste site with three recovery wells to
          divert
          groundwater flow. The projected cost for this remedy method is $26 million.
          In
          November 2002, UE sent a letter to the EPA asserting its defenses to the
          Unilateral Administrative Order and requested its removal from the list
          of
          potentially responsible parties under the Unilateral Administrative Order.
          Solutia agreed to comply with the Unilateral Administrative Order. However,
          in
          December 2003, Solutia filed for bankruptcy protection and is now seeking
          to
          discharge its environmental liabilities. In March 2004, Pharmacia Corporation,
          the former parent company of Solutia, confirmed its intent to comply with
          the
          EPA’s Unilateral Administrative Order.
 
 As
          the
          status of future remediation at Sauget Area 2 or compliance with the Unilateral
          Administrative Order is uncertain, we are unable to predict the ultimate
          impact
          of the
          Sauget Area 2 site on our results of operations, financial position, or
          liquidity. In December 2004, the U.S. Supreme Court, in Cooper Industries,
          Inc.
          vs. Aviall Services, Inc., limited the circumstances under which potentially
          responsible parties could assert cost-recovery claims against other potentially
          responsible parties. As a result of this ruling, UE may not be able to
          recover
          from other potentially responsible parties the costs it incurs in complying
          with
          EPA orders. Any liability or responsibility that may be imposed on UE as
          a
          result of this Sauget, Illinois environmental matter was not transferred
          to CIPS
          as a part of UE’s May 2005 Illinois utility service territory transfer discussed
          above and in Note 3 - Rate and Regulatory Matters.
 
 In
          December 2004, AERG submitted a comprehensive package to the Illinois EPA
          to
          address groundwater and surface water issues associated with the recycle
          pond,
          ash ponds and reservoir at the Duck Creek power plant facility. Information
          submitted by AERG is currently under review by the Illinois EPA. CILCORP
          and
          CILCO both have a liability of $4 million at September 30, 2005, included
          on
          their Consolidated Balance Sheets for the estimated cost of the remediation
          effort to treat and discharge the recycle system water in order to address
          these
          groundwater and surface water issues.
 
 In
          addition, our operations, or those of our predecessor companies, involve
          the
          use, disposal and, in appropriate circumstances, the cleanup of substances
          regulated under environmental protection laws. We are unable to determine
          the
          impact these actions may have on our results of operations, financial position,
          or liquidity.
  **Sustainable
          Energy Plan**
 
 In
          July
          2005, the ICC entered a resolution affirming Illinois Governor Blagojevich’s
          Sustainable Energy Plan as well as an ICC Staff report dated July 7, 2005.
          CIPS,
          CILCO and IP were requested to file documentation explaining how they intend
          to
          implement the plan. The Ameren Illinois utilities continue to give consideration
          to this plan. The plan calls for, among other things, a renewable portfolio
          standard whereby 2% of the bundled retail load should be supplied by renewable
          energy resources in 2007, 3% in 2008, 4% in 2009, 5% in 2010, 6% in 2011,
          7% in
          2012 and 8% in 2013; and an energy efficiency portfolio standard whereby
          there
          is a 10% reduction in projected annual load growth in 2007-2008; 15% in
          2009-2011; 20% in 2012-2014; and 25% in 2015-2017.
  48
 **Asbestos-related
          Litigation**
 
 Ameren,
          UE, CIPS, Genco, CILCO and IP have been named, along with numerous other
          parties, in a number of lawsuits that have been filed by certain plaintiffs
          claiming varying degrees of injury from asbestos exposure. Most have been
          filed
          in the Circuit Court of Madison County, Illinois. The number of total defendants
          named in each case is significant; as many as 166 parties are named in
          some
          pending cases and as few as five in others. However, the average number
          of
          parties is 61 in the cases that were pending as of September 30,
          2005.
  The
          claims filed against Ameren, UE, CIPS, Genco, CILCO and IP allege injury
          from
          asbestos exposure during the plaintiffs’ activities at our present or former
          electric generating plants. Former CIPS plants are now owned by Genco,
          and most
          former CILCO plants are now owned by AERG. Most of IP’s plants were transferred
          to a Dynegy subsidiary prior to Ameren’s acquisition of IP. As a part of the
          transfer of ownership of the CIPS and CILCO generating plants, CIPS or
          CILCO has
          contractually agreed to indemnify Genco or AERG for liabilities associated
          with
          asbestos-related claims arising from activities prior to the transfer.
          Each
          lawsuit seeks unspecified damages in excess of $50,000, which, if proved,
          typically would be shared among the named defendants.
  From
          July
          1, 2005 through September 30, 2005, five additional asbestos-related lawsuits
          were filed against UE, CIPS, CILCO and IP, mostly in the Circuit Court
          of
          Madison County, Illinois; 18 lawsuits were dismissed and 16 were settled.
          The
          following table presents the status as of September 30, 2005, of the
          asbestos-related lawsuits that have been filed against the Ameren
          Companies:
 
 **Specifically
                    Named as Defendant****Total**(a)
                
                **Ameren**
                
                **UE**
                
                **CIPS**
                
                **Genco**
                
                **CILCO**
                
                **IP**Filed
                
                285
                
                
                26
                
                
                152
                
                
                107
                
                
                2
                
                
                25
                
                
                127Settled
                
                87
                
                
                -
                
                
                47
                
                
                36
                
                
                -
                
                
                8
                
                
                41Dismissed
                
                135
                
                
                21
                
                
                88
                
                
                42
                
                
                2
                
                
                4
                
                
                59Pending
                
                63
                
                
                5
                
                
                17
                
                
                29
                
                
                -
                
                
                13
                
                
                27
 
 (a)
                Addition
                    of the numbers in the individual columns does not equal the total
                    column
                    because some of the lawsuits name multiple Ameren entities as
                    defendants.
  As
          of
          September 30, 2005, five asbestos-related lawsuits were pending against
          EEI. The
          general liability insurance maintained by EEI provides coverage with respect
          to
          liabilities arising from asbestos-related claims.
 
 The
          Ameren Companies believe that the final disposition of these proceedings
          will
          not have a material adverse effect on their results of operations, financial
          position, or liquidity.
 
 See
          Note
          3 - Rate and Regulatory Matters - IP and EEI Acquisition under Part II,
          Item 8
          of the Ameren Companies’ combined Form 10-K for the fiscal year ended December
          31,
 2004,
          for
          information on the ICC’s approval of a tariff rider through which
          asbestos-related litigation claims will be allowed to be recovered from
          IP’s
          electric customers, subject to certain terms, commencing in 2007.
 
 **Other
          Matters**
 
 *Leveraged
          Leases*
 
 Ameren
          owns interests in assets, acquired through the acquisition of CIPSCO Inc.
          and
          CILCORP, that have been financed as leveraged leases. One of these is a
          $10
          million net investment by an Ameren subsidiary in a leveraged lease involving
          an
          aircraft leased to Delta Air Lines, Inc. In September 2005, Delta Air Lines
          filed for protection under Chapter 11 of the U.S. Bankruptcy Code. While
          Ameren
          continues in its ownership role of the lease, Ameren cannot predict the
          ultimate
          ability of Delta Air Lines to service debt and pay future rentals required
          under
          the lease or the outcome of the bankruptcy process. Accordingly, Ameren
          recorded
          an impairment of $10 million ($6 million, net of tax), in the third quarter
          of
          2005.
 
 By
          order
          dated April 15, 2004, the SEC determined that certain non-utility interests
          and
          investments of CILCORP, including investments in several leveraged lease
          transactions held by CILCORP’s subsidiary, CIM, or CIM’s subsidiaries, are not
          retainable by Ameren under PUHCA standards. The non-retainable interests
          primarily consist of lease interests in commercial real estate properties
          and
          equipment. The April 2004 SEC Order requires that Ameren cause CIM or any
          subsidiary to sell or otherwise dispose of the non-retainable interests.
          Ameren
          and CILCORP are actively pursuing the sale of their interest in leveraged
          lease
          transactions.
 
 **NOTE
          10 - CALLAWAY NUCLEAR PLANT**
 
 Under
          the
          Nuclear Waste Policy Act of 1982, the DOE is responsible for the permanent
          storage and disposal of spent nuclear fuel. The DOE currently charges one
          mill,
          or 1 / 10 of one
          cent, per nuclear-generated kilowatthour sold for future disposal of spent
          fuel.
          Pursuant to this act, UE collects one mill from its electric customers
          for each
          kilowatthour of
  49
 
  electricity
            that it generates and sells from its Callaway nuclear plant. Electric
            utility
            rates charged to customers provide for recovery of such costs. The DOE
            is not
            expected to have its permanent storage facility for spent fuel available
            until
            at least 2012. UE has sufficient installed storage capacity at its Callaway
            nuclear plant until 2020. It has the capability for additional storage
            capacity
            through the licensed life of the plant. The delayed availability of the
            DOE’s
            disposal facility is not expected to adversely affect the continued operation
            of
            the Callaway nuclear plant through its currently licensed
            life.
 Electric utility rates charged to customers provide for the recovery of
          the
          Callaway nuclear plant’s decommissioning costs, which include decontamination,
          dismantling, and site restoration costs, over an assumed 40-year life of
          the
          plant, ending with the expiration of the plant’s operating license in 2024. The
          Callaway nuclear plant site is assumed to be decommissioned based on immediate
          dismantlement method and removal from service. Ameren and UE have recorded
          an
          asset retirement obligation for the Callaway nuclear plant decommissioning
          costs
          at fair value, which represents the present value of estimated future cash
          outflows. See the discussion of asset retirement obligations in Note 1
          - Summary
          of Significant Accounting Policies. Decommissioning costs are charged to
          cost of
          services used to establish electric rates for UE’s customers. These costs
          amounted to $7 million in each of the years 2004, 2003 and 2002. Every
          three
          years, the MoPSC requires UE to file an updated cost study for decommissioning
          its Callaway nuclear plant. Electric rates may be adjusted at such times
          to
          reflect changed estimates. An updated cost study for decommissioning UE’s
          Callaway nuclear plant was filed in August 2005. Based on the results of
          this
          updated cost study and associated financial analysis, UE has determined
          that the
          current deposits to the trust fund continue to be appropriate and do not
          need to
          be changed. The MoPSC is currently reviewing the updated cost study
          and
          UE’s application to keep the current deposits to the trust fund unchanged.
          Also
          as a result of the cost study, the asset retirement obligation for the
          Callaway
          nuclear plant decommissioning costs was revised. See Note 1 - Summary of
          Significant Accounting Policies for details of the asset retirement obligation
          adjustment. Costs collected from customers are deposited in an external
          trust
          fund to provide for the Callaway nuclear plant’s decommissioning. If the assumed
          return on trust assets is not earned, we believe that it is probable that
          any
          such earnings deficiency will be recovered in rates. The fair value of
          the
          nuclear decommissioning trust fund for UE’s Callaway nuclear plant is reported
          in Nuclear Decommissioning Trust Fund in Ameren’s and UE’s Consolidated Balance
          Sheets. This amount is legally restricted. It may be used only to fund
          the costs
          of nuclear decommissioning. Changes in the fair value of the trust fund
          are
          recorded as an increase or decrease to the nuclear decommissioning trust
          fund
          and to the regulatory asset recorded in connection with the adoption of
          SFAS No.
          143. In connection with UE’s transfer of its Illinois service territory to CIPS
          on May 2, 2005, the assets and liabilities related to the Illinois portion
          of
          the decommissioning trust fund are being transferred to the Missouri and
          the
          FERC jurisdictions. See Note 3 - Rate and Regulatory Matters for further
          information about this intercompany transfer.


**NOTE
        11** **-** **** **STOCKHOLDERS’
        EQUITY**
 
 **Outstanding
        Shares of Common Stock**
  The following table reconciles the outstanding shares of Ameren common stock
        for
        the three months and nine months ended September 30, 2005 and 2004:
 **Three
                  Months**
              **Nine
                  Months****2005**
              **2004**
              **2005**
              **2004**Shares
                  outstanding at beginning of period
              **203.8**
              183.3
              **195.2**
              162.9Shares
                  issued
              **0.4**
              11.5
              **9.0**
              31.9Shares
                  outstanding at end of period
              **204.2**
              194.8
              **204.2**
              194.8
 
 **Paid-In
        Capital**
  During the nine months ended September 30, 2005, Ameren issued 1.6 million
        shares of common stock valued at $85 million under DRPlus and Ameren’s 401(k)
        plans and 7.4 million shares of common stock in exchange for proceeds of
        $345
        million to holders of the adjustable conversion-rate equity security units
        offset by $5 million related to open market purchases for employee stock
        options
        and restricted stock awards. See Note 5 - Long-term Debt and Equity Financings
        for further information.
   50
  **Other
        Comprehensive Income**
  Comprehensive income includes net income as reported on the statements of
        income
        and all other changes in common stockholders’ equity, except those resulting
        from transactions with common shareholders. A reconciliation of net income
        to
        comprehensive income for the three months and nine months ended September
        30,
        2005 and 2004, is shown below for the Ameren Companies:
 **Three
                      Months**
                  
                  **Nine
                      Months****2005**
                  
                  **2004**
                  
                  **2005**
                  
                  **2004****Ameren:**(a)Net
                      income
                  
                  **$**
                  **280**
                  
                  $
                  232
                  
                  **$**
                  **586**
                  
                  $
                  447Unrealized
                      gain on derivative hedging instruments, net of taxes of $11,
                      $3,
                      $22,
                    and $15, respectively
                  
                  
                  **15**
                  
                  
                  10
                  
                  
                  **33**
                  
                  
                  16Reclassification
                      adjustments for (gains) losses included in net income, net
                      of
                    taxes (benefit) of $2, $(2), $3, and $(1), respectively
                  
                  
                  **(2**
                  **)**
                  
                  5
                  
                  
                  **(5**
                  **)**
                  
                  1Total
                      comprehensive income, net of taxes
                  
                  **$**
                  **293**
                  
                  $
                  247
                  
                  **$**
                  **614**
                  
                  $
                  464**UE:**Net
                      income
                  
                  **$**
                  **164**
                  
                  $
                  182
                  
                  **$**
                  **353**
                  
                  $
                  349Unrealized
                      gain (loss) on derivative hedging instruments, net of taxes
                      (benefit)
                    of $(2), $1, $-, and $3, respectively
                  
                  
                  **(4**
                  **)**
                  
                  2
                  
                  
                  **(1**
                  **)**
                  
                  5Reclassification
                      adjustments for (gains) included in net income, net of taxes
                    (benefit) of $-, $-, $- and $-, respectively
                  
                  
                  **(1**
                  **)**
                  
                  -
                  
                  
                  **(1**
                  **)**
                  
                  -Total
                      comprehensive income, net of taxes$
                  
                  **$**
                  **159**
                  
                  $
                  184
                  
                  **$**
                  **351**
                  
                  $
                  354**CIPS:**Net
                      income
                  
                  **$**
                  **31**
                  
                  $
                  23
                  
                  **$**
                  **46**
                  
                  $
                  41Unrealized
                      gain on derivative hedging instruments, net of taxes of $4,
                      $2,
                      $7,
                    and $4, respectively
                  
                  
                  **7**
                  
                  
                  2
                  
                  
                  **11**
                  
                  
                  6Reclassification
                      adjustments for (gains) losses included in net income, net
                      of
                    taxes of $1, $-, $1 and $-, respectively
                  
                  
                  **(1**
                  **)**
                  
                  1
                  
                  
                  **(2**
                  **)**
                  
                  -Total
                      comprehensive income, net of taxes
                  
                  **$**
                  **37**
                  
                  $
                  26
                  
                  **$**
                  **55**
                  
                  $
                  47**Genco:**Net
                      income
                  
                  **$**
                  **32**
                  
                  $
                  29
                  
                  **$**
                  **94**
                  
                  $
                  75Unrealized
                      (loss) on derivative hedging instruments, net of taxes (benefit)
                      of
                    $(3), $-, $(3), and $(1), respectively
                  
                  
                  **(5**
                  **)**
                  
                  -
                  
                  
                  **(6**
                  **)**
                  
                  (1
                  )Reclassification
                      adjustments for (gains) included in net income, net of taxes
                      of
                    $-, $-, $-, and $-, respectively
                  
                  
                  **-**
                  
                  
                  -
                  
                  
                  **-**
                  
                  
                  (1
                  )Total
                      comprehensive income, net of taxes
                  
                  **$**
                  **27**
                  
                  $
                  29
                  
                  **$**
                  **88**
                  
                  $
                  73**CILCORP:**Net
                      income
                  
                  **$**
                  **5**
                  
                  $
                  2
                  
                  **$**
                  **16**
                  
                  $
                  2Unrealized
                      gain on derivative hedging instruments, net of taxes of $13,
                      $6,
                      $19,
                    and $7, respectively
                  
                  
                  **19**
                  
                  
                  7
                  
                  
                  **31**
                  
                  
                  12Reclassification
                      adjustments for (gains) losses included in net income, net
                      of
                    taxes (benefit) of $-, $(1), $-, and $-, respectively
                  
                  
                  **(1**
                  **)**
                  
                  2
                  
                  
                  **-**
                  
                  
                  -Total
                      comprehensive income, net of taxes
                  
                  **$**
                  **23**
                  
                  $
                  11
                  
                  **$**
                  **47**
                  
                  $
                  14**CILCO:**Net
                      income
                  
                  **$**
                  **11**
                  
                  $
                  9
                  
                  **$**
                  **37**
                  
                  $
                  18Unrealized
                      gain on derivative hedging instruments, net of taxes of $13,
                      $6,
                      $20,
                    and $8, respectively
                  
                  
                  **19**
                  
                  
                  7
                  
                  
                  **30**
                  
                  
                  13Reclassification
                      adjustments for (gains) loss included in net income, net of
                    taxes of $-, $-, $1, and $-, respectively
                  
                  
                  **(1**
                  **)**
                  
                  1
                  
                  
                  **(1**
                  **)**
                  
                  (1
                  )Total
                      comprehensive income, net of taxes
                  
                  **$**
                  **29**
                  
                  $
                  17
                  
                  **$**
                  **66**
                  
                  $
                  30**IP:**(b)Net
                      income
                  
                  **$**
                  **54**
                  
                  $
                  51
                  
                  **$**
                  **91**
                  
                  
                  112Minimum
                      pension liability adjustment, net of taxes of $-, $-, $- and
                      $-,
                    respectively
                  
                  
                  **-**
                  
                  
                  -
                  
                  
                  **-**
                  
                  
                  1Total
                      comprehensive income, net of taxes
                  
                  **$**
                  **54**
                  
                  $
                  51
                  
                  **$**
                  **91**
                  
                  $
                  113
 (a)
              Includes
                  amounts for Ameren Registrant and non-Registrant subsidiaries and
                  intercompany eliminations, but excludes 2004 amounts for
                  IP.
 (b)
              Includes
                  predecessor information for 2004.
 
   51
 
 **NOTE
        12 - RETIREMENT BENEFITS**
 
 Ameren’s
        pension plans are funded in compliance with income tax regulations and federal
        funding requirements. Based on our assumptions at December 31, 2004 and assuming
        continuation of the current federal interest rate relief beyond 2005, in
        order
        to maintain minimum funding levels for Ameren’s pension plans, we do not expect
        future contributions to be required until 2009 at which time we would expect
        a
        required contribution of approximately $300 million. These amounts are estimates
        and may change based on actual stock market performance, changes in interest
        rates and any changes in government regulations.
  The
        following table presents the cash contributions made to our defined benefit
        retirement plan qualified trusts in the third quarter of 2005 and
        2004:
 **2005**
              
              **2004**Ameren(a)
              
              **$**
              **88**
              
              $
              295UE
              
              
              **56**
              
              
              186CIPS
              
              
              **10**
              
              
              33Genco
              
              
              **9**
              
              
              29CILCORP
              
              
              **11**
              
              
              41CILCO
              
              
              **11**
              
              
              41
 
 (a)
              Includes
                  amounts for Ameren Registrant and non-Registrant subsidiaries and
                  intercompany eliminations, but excludes 2004 amounts for
                  IP.
  The
        following table presents the cash contributions made to our postretirement
        plan
        in the nine months ended September 30, 2005 and 2004:
 **2005**
              
              **2004**Ameren(a)
              
              **$**
              **35**
              
              $
              32UE
              
              
              **23**
              
              
              23CIPS
              
              
              **4**
              
              
              4Genco
              
              
              **1**
              
              
              1CILCORP
              
              
              **3**
              
              
              4CILCO
              
              
              **3**
              
              
              4IP
              
              
              **4**
              
              
              -
  (a)  Includes
        amounts for Ameren Registrant and non-Registrant subsidiaries and intercompany
        eliminations, but excludes 2004 amounts for IP.
  The following table presents Ameren’s net periodic benefit costs and the
        components of those costs for pension and other postretirement benefits
        (expensed and capitalized) for the three months and nine months ended September
        30, 2005 and 2004:
 **Pension
                  Benefits****(a)****Three
                  Months**
              
              **Nine
                  Months****2005**
              
              **2004**
              
              **2005**
              
              **2004**Service
                  cost
              
              **$**
              **14**
              
              $
              10
              
              **$**
              **43**
              
              $
              31Interest
                  cost
              
              
              **41**
              
              
              33
              
              
              **124**
              
              
              96Expected
                  return on plan assets
              
              
              **(45**
              **)**
              
              (30
              )
              
              **(136**
              **)**
              
              (89
              )Amortization
                  cost:Prior
                  service cost
              
              
              **3**
              
              
              3
              
              
              **8**
              
              
              9Losses
              
              
              **9**
              
              
              6
              
              
              **28**
              
              
              18Net
                  periodic benefit cost
              
              **$**
              **22**
              
              $
              22
              
              **$**
              **67**
              
              $
              65
 
 (a)
              Includes
                  amounts for Ameren Registrant and non-Registrant subsidiaries and
                  intercompany eliminations, but excludes 2004 amounts for
                  IP.
  **Postretirement
                  Benefits****(a)****Three
                  Months**
              
              **Nine
                  Months****2005**
              
              **2004**
              
              **2005**
              
              **2004**Service
                  cost
              
              **$**
              **5**
              
              $
              3
              
              **$**
              **16**
              
              $
              10Interest
                  cost
              
              
              **17**
              
              
              13
              
              
              **53**
              
              
              41Expected
                  return on plan assets
              
              
              **(11**
              **)**
              
              (7
              )
              
              **(34**
              **)**
              
              (23
              )Amortization
                  cost:Transition
                  obligation
              
              
              **1**
              
              
              1
              
              
              **2**
              
              
              3Prior
                  service cost
              
              
              **(2**
              **)**
              
              (1
              )
              
              **(4**
              **)**
              
              (3
              )Losses
              
              
              **9**
              
              
              7
              
              
              **28**
              
              
              24Net
                  periodic benefit cost
              
              **$**
              **19**
              
              $
              16
              
              **$**
              **61**
              
              $
              52
 
 (a)
              Includes
                  amounts for Ameren Registrant and non-Registrant subsidiaries and
                  intercompany eliminations, but excludes 2004 amounts for
                  IP.
  UE, CIPS, Genco, CILCORP, CILCO and IP are participants in Ameren’s plans and
        are responsible for their proportional share of the pension and other
        postretirement costs. The following table presents the pension and other
        postretirement costs incurred for the three months and nine months ended
        September 30, 2005 and 2004:
 **Pension
                  Benefits****Three
                  Months**
              
              **Nine
                  Months****2005**
              
              **2004**
              
              **2005**
              
              **2004**UE
              
              **$**
              **13**
              
              $
              15
              
              **$**
              **39**
              
              $
              40CIPS
              
              
              **3**
              
              
              3
              
              
              **9**
              
              
              9Genco
              
              
              **2**
              
              
              2
              
              
              **6**
              
              
              6CILCORP
              
              
              **3**
              
              
              2
              
              
              **9**
              
              
              8CILCO
              
              
              **5**
              
              
              4
              
              
              **14**
              
              
              13IP(a)
              
              
              **1**
              
              
              -
              
              
              **4**
              
              
              -
 
 (a)
              Includes
                  predecessor information for 2004.
  **Postretirement
                  Benefits****Three
                  Months**
              
              **Nine
                  Months****2005**
              
              **2004**
              
              **2005**
              
              **2004**UE
              
              **$**
              **11**
              
              $
              10
              
              **$**
              **33**
              
              $
              31CIPS
              
              
              **3**
              
              
              2
              
              
              **9**
              
              
              7Genco
              
              
              **1**
              
              
              1
              
              
              **3**
              
              
              3CILCORP
              
              
              **2**
              
              
              3
              
              
              **8**
              
              
              8CILCO
              
              
              **3**
              
              
              5
              
              
              **12**
              
              
              14IP(a)
              
              
              **3**
              
              
              -
              
              
              **9**
              
              
              -
 
 (a)
              Includes
                  predecessor information for 2004.
   **NOTE
        13 -** **SEGMENT
        INFORMATION** ****
  As discussed in the Ameren Companies combined Form 10-K for the fiscal year
        ended December 31, 2004, Ameren’s two reportable segments are: (1) Utility
        Operations, which generates electricity and transmits and distributes natural
        gas and electricity and (2) Other, which is comprised of the parent holding
        company, Ameren Corporation.
  Ameren’s
        reportable segment Utility Operations includes the operations of UE, CIPS,
        Genco, CILCORP and CILCO. The operations of IP are included in Ameren’s Utility
        Operations segment from September 30, 2004.
   52
  The
        accounting policies for segment data are the same as those described in Note
        1 -
        Summary of Significant Accounting Policies. Segment data include intersegment
        revenues, as well as a charge for allocating costs of administrative support
        services to each of the operating companies, which, in each case, is eliminated
        upon consolidation. Ameren Services allocates administrative support services
        based on various factors, such as headcount, number of customers, and total
        assets. The following table presents information about the reported revenues
        and
        net income of Ameren for the three months and nine months ended September
        30,
        2005 and 2004:
 **Utility
                  Operations**
              
              **Other**
              
              **Reconciling
                  Items**(a)
              
              **Total****Three
                  Months 2005:**Operating
                  revenues
              
              $
              2,289
              
              $
              -
              
              $
              (421
              )
              $
              1,868Net
                  income
              
              
              280
              
              
              -
              
              
              -
              
              
              280**Three
                  Months 2004:**(**b**)Operating
                  revenues
              
              $
              1,596
              
              $
              -
              
              $
              (289
              )
              $
              1,307Net
                  income
              
              
              247
              
              
              (15
              )
              
              -
              
              
              232**Nine
                  Months 2005:**Operating
                  revenues
              
              $
              6,185
              
              $
              -
              
              $
              (1,106
              )
              $
              5,079Net
                  income
              
              
              591
              
              
              (5
              )
              
              -
              
              
              586**Nine
                  Months 2004:**(**b**)Operating
                  revenues
              
              $
              4,536
              
              $
              -
              
              $
              (878
              )
              $
              3,658Net
                  income
              
              
              459
              
              
              (12
              )
              
              -
              
              
              447
  (a)
              Elimination
                  of intercompany revenues.
 (b)
              Excludes
                  2004 amounts for IP.
 
 **ITEM
        2.   MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        RESULTS OF OPERATIONS.**
 
 **OVERVIEW** **
 
 **Ameren
        Executive Summary**
  Significantly warmer summer weather and earnings from IP, acquired on September
        30, 2004, drove an increase in year-over-year per share earnings in the third
        quarter of 2005. These increases were offset, in part, by higher fuel and
        purchased power costs, and higher operating expenses at UE’s Callaway nuclear
        plant due to the start of a 70 to 75-day scheduled outage on September 17,
        2005.
        Ameren’s earnings for the first nine months of 2005 also benefited from stronger
        interchange power sales margins and less impact from UE’s Callaway nuclear plant refueling and maintenance outages.  The plant
        had
        only 13 days of the fall 2005 outage in the first nine months of 2005 compared
        to 64 days for the spring 2004 outage in the first nine months of
        2004.
  **General**
  Ameren, headquartered in St. Louis, Missouri, is a public utility holding
        company registered with the SEC under the PUHCA. Ameren’s primary asset is the
        common stock of its subsidiaries. Ameren’s subsidiaries operate rate-regulated
        electric generation, transmission and distribution businesses, rate-regulated
        natural gas transmission and distribution businesses and non-rate-regulated
        electric generation businesses in Missouri and Illinois as discussed
        below. Dividends
        on Ameren’s common stock are dependent on distributions made to it by its
        subsidiaries. Ameren’s principal subsidiaries are listed below. See Note 1 -
        Summary of Significant Accounting Policies to our financial statements under
        Part I, Item 1, of this report for a detailed description of Ameren’s principal
        subsidiaries.
 
 ·
              UE
                  operates a rate-regulated electric generation, transmission and
                  distribution business, and a rate-regulated natural gas transmission
                  and
                  distribution business in Missouri and, prior to May 2, 2005, in
                  Illinois.
 ·
              CIPS
                  operates a rate-regulated electric and natural gas transmission
                  and
                  distribution business in Illinois.
 ·
              Genco
                  operates a non-rate-regulated electric generation business in Illinois
                  and
                  Missouri.
 ·
              CILCO
                  is a subsidiary of CILCORP (a holding company) and operates a
                  rate-regulated electric transmission and distribution business,
                  a
                  primarily non-rate-regulated electric generation business through
                  its
                  subsidiary, AERG, and a rate-regulated natural gas transmission
                  and
                  distribution business in Illinois.
 ·
              IP
                  operates a rate-regulated electric and natural gas transmission
                  and
                  distribution business in Illinois.  See Note 2 - Acquisitions
                  to our
                  financial statements under Part I, Item 1, of this report for further
                  information.
   The financial statements of Ameren are prepared on a consolidated basis and
        therefore include the accounts of its majority-owned subsidiaries. As the
        acquisition of IP occurred on September 30, 2004, Ameren’s Consolidated
        Statements of Income and Cash Flows for the three months and nine months
        ended
        September 30, 2004, do not reflect IP’s results of operations or financial
        position. See Note 2 - Acquisitions for further information on the accounting
        for the IP acquisition. All significant intercompany transactions have been
        eliminated. All tabular dollar amounts are in millions, unless otherwise
        indicated.
  In
        addition to presenting results of operations and earnings amounts in total,
        certain information in this report is expressed in cents per share. These
        amounts reflect factors
   53
 
  that
          directly affect Ameren’s earnings. We believe this per share information is
          useful because it enables readers to understand the impact of these factors
          on
          Ameren’s earnings per share. All references in this report to earnings per share
          are based on weighted-average diluted common shares outstanding during
          the
          applicable period.
 
 **IP
        Acquisition**
  On September 30, 2004, Ameren completed the acquisition of all the common
        stock
        and 662,924 shares of preferred stock of IP and an additional 20% ownership
        interest in EEI from subsidiaries of Dynegy. Ameren acquired IP to complement
        its existing Illinois gas and electric operations. The purchase included
        IP’s
        rate-regulated electric and natural gas transmission and distribution business
        serving 600,000 electric and 415,000 gas customers in areas contiguous to
        our
        existing Illinois utility service territories. With the acquisition, IP became
        an Ameren subsidiary operating as AmerenIP.
 
 The
        total
        transaction value was $2.3 billion, including the assumption of $1.8 billion
        of
        IP debt and preferred stock. Cash consideration was $429 million, net of
        $51
        million cash acquired, and included transaction costs. Ameren placed $100
        million of the cash portion of the purchase price in an escrow account pending
        resolution of certain contingent environmental obligations of IP and other
        Dynegy affiliates for which Ameren was provided indemnification by Dynegy.
        On
        July 27, 2005, the conditions for release of the escrow account were satisfied
        and Dynegy was remitted the $100 million. In addition, this transaction included
        a fixed-price capacity power supply agreement for IP’s annual purchase in 2005
        and 2006 of 2,800 megawatts of electricity from DYPM. This agreement is expected
        to supply about 70% of IP’s electric customer requirements during those two
        years. The remaining 30% of IP’s power needs in 2005 and 2006 will be supplied
        by other companies through contracts and open market purchases. In the event
        that suppliers are unable to supply the electricity required by existing
        agreements, IP would be forced to find alternative suppliers to meet its
        load
        requirements, thus exposing itself to market price risk, which could have
        a
        material impact on Ameren’s and IP’s results of operations, financial position,
        or liquidity.
  Ameren funded this acquisition with the issuance of new Ameren common stock.
        Ameren issued an aggregate of 30 million common shares in February 2004 and
        July
        2004, which generated net proceeds of $1.3 billion. Proceeds from these
        issuances were used to finance the cash portion of the purchase price and
        to
        reduce IP debt assumed as part of this transaction and to pay related
        premiums.
  For income tax purposes, Ameren and Dynegy have elected to treat Ameren’s
        acquisition of IP stock as an asset acquisition under Section 338(h)(10)
        of the
        Internal Revenue Code of 1986, as amended.
 
 **Acquisition
        Accounting**
  The amortization of noncash purchase accounting fair value adjustments at
        IP and
        Ameren increased Ameren’s and IP’s net income by $14 million and $10 million,
        respectively, for the three months, and $40 million and $29 million,
        respectively, for the nine months ended September 30, 2005. The amortization
        of
        the fair value adjustments at IP that increased net income were related to
        pension and postretirement liabilities, long-term debt, and a power supply
        contract with DYPM to supply IP 2,800 megawatts of electricity for 2005 and
        2006. Partially offsetting these items at IP was the amortization of the
        fair
        value adjustment related to a power supply contract with EEI that expires
        at
        year end 2005.
        The
        following table presents the favorable (unfavorable) impact on Ameren’s and IP’s
        net income related to the amortization of purchase accounting fair value
        adjustments associated with the IP acquisition during the three months and
        nine
        months ended September 30, 2005:
 **Three
                  Months**
              
              **Nine
                  Months****Ameren**
              
              **IP**
              
              **Ameren**
              
              **IP**Statement
                  of Income line item:Other operations andmaintenance(a)
              
              **$**
              **7**
              
              **$**
              **7**
              
              **$**
              **20**
              
              **$**
              **20**Interest(b)
              
              
              **3**
              
              
              **3**
              
              
              **13**
              
              
              **13**Purchased
                  power(c)
              
              
              **13**
              
              
              **7**
              
              
              **33**
              
              
              **15**Income
                  taxes(d)
              
              
              **(9**
              **)**
              
              **(7**
              **)**
              
              **(26**
              **)**
              
              **(19**
              **)**Impact
                  on net income
              
              **$**
              **14**
              
              **$**
              **10**
              
              **$**
              **40**
              
              **$**
              **29**
 
 (a)
              Related
                  to the adjustment to fair value of the pension plan and postretirement
                  plans.
 (b)
              Related
                  to the adjustment to fair value of the IP debt assumed at acquisition
                  on
                  September 30, 2004, and the unamortized gain or loss on reacquired
                  debt.
                  The net write-up to fair value of the IP debt assumed, excluding
                  early
                  redemption premiums, is being amortized over the anticipated remaining
                  life of the debt.
 (c)
              Related
                  to the amortization of fair value adjustments on power supply contracts.
 (d)
              Tax
                  effect of the amortization adjustments.
 
 The
        amortization of fair value adjustments at EEI as a result of the additional
        20%
        interest acquired by Ameren on September 30, 2004, was related to plant in
        service, emission credits and a power supply agreement with IP that expires
        at
        year end 2005. The following table presents the favorable (unfavorable) impact
        on Ameren’s net income related to the amortization of purchase accounting fair
        value adjustments associated with the EEI acquisition during the three months
        and nine months ended September 30, 2005:
 **Three
                  Months**
              
              **Nine
                  Months**Statement
                  of Income line item:Interchange
                  revenues(a)
              
              **$**
              **1**
              
              **$**
              **3**Fuel
                  and purchased power(b)
              
              
              **(2**
              **)**
              
              **(4**
              **)**Depreciation
                  and amortization(c)
              
              
              **-**
              
              
              **(1**
              **)**Impact
                  on net income
              
              **$**
              **(1**
              **)**
              **$**
              **(2**
              **)**
 
 (a)
              Related
                  to the amortization of a power supply
                  contract.
 (b)
              Related
                  to the amortization of emission credits.
 (c)
              Includes
                  the amortization of the fair value adjustment related to plant
                  assets.
   54
 **RESULTS
        OF OPERATIONS**
 
 **Earnings
        Summary**
  Our results of operations and financial position are affected by many factors.
        Weather, economic conditions, and the actions of key customers or competitors
        can significantly affect the demand for our services. Our results are also
        affected by seasonal fluctuations caused by winter heating and summer cooling
        demand. With approximately 85% of Ameren’s revenues directly subject to
        regulation by various state and federal agencies, decisions by regulators
        can
        have a material impact on the prices we charge for our services. Our
        non-rate-regulated sales are subject to market conditions for power. We
        principally use coal, nuclear fuel, natural gas, and oil in our operations.
        The
        prices for these commodities can fluctuate significantly due to the world
        economic and political environment, weather, supply and demand levels and
        many
        other factors. We do not currently have
        fuel
        or purchased power cost recovery mechanisms in Missouri or Illinois for our
        electric utility businesses, but we do
        have gas cost recovery mechanisms (PGAs) in each state for our gas delivery
        businesses. The electric and gas rates for UE in Missouri are set through
        June
        2006, and electric rates are set for CIPS, CILCO and IP in Illinois through
        the
        end of 2006, so that cost decreases or increases will not be immediately
        reflected in rates. Fluctuations in interest rates affect our cost of borrowing
        and pension and postretirement benefits. We employ various risk management
        strategies in order to try to reduce our exposure to commodity risks and
        other
        risks inherent in our business. The reliability of our power plants and
        transmission and distribution systems and the level of purchased power costs,
        operating and administrative costs, and capital investment are key factors
        that
        we seek to control in order to optimize our results of operations ,
        financial position, and
        liquidity.
  Ameren’s net income increased $48 million to $280 million, or $1.37 per share,
        in the third quarter of 2005 from $232 million, or $1.20 per share, in the
        third
        quarter of 2004. Ameren’s net income increased $139 million to $586 million, or
        $2.94 per share, for the nine months ended September 30, 2005, compared to
        year-ago earnings of $447 million, or $2.44 per share, in the first nine
        months
        of 2004. The change in net income for the three months and nine months ended
        September 30, 2005 was primarily due to the inclusion of IP results in the
        current year, warmer weather in the summer of the current year compared to
        unusually mild conditions in the same period in 2004, and the timing of the
        refueling and maintenance outages at UE’s Callaway nuclear plant between the
        current year and prior year. The Callaway nuclear plant had a 64-day refueling
        and maintenance outage in the second quarter of 2004. A refueling and
        maintenance outage began in mid-September of 2005. The timing of the refueling
        and maintenance outage also contributed to improved power plant availability
        and
        the opportunity for increased interchange sales and margins in the first
        nine
        months of 2005. Partially offsetting these increases to net income were
        incremental costs of operating in the MISO Day Two Energy Market, decreased
        emission allowance sales and increased fuel, labor and depreciation costs
        in the
        current-year periods. In the third quarter of 2005, unscheduled plant outages
        at
        AERG also reduced net income as compared to the 2004 period. In addition,
        the
        net income for the nine months ended September 30, 2004, benefited from a
        FERC-ordered refund of $18 million in exit fees, which had been previously
        paid
        by UE and CIPS to the MISO, upon their re-entry into the MISO.
  As a holding company, Ameren’s net income and cash flows are primarily generated
        by its principal subsidiaries: UE, CIPS,
        Genco, CILCORP and IP. The following table presents the contribution by Ameren’s
        principal subsidiaries to Ameren’s consolidated net income for the three months
        and nine months ended September 30, 2005 and 2004:
 **Three
                  Months**
              
              **Nine
                  Months****2005**
              
              **2004**
              
              **2005**
              
              **2004**Net
                  income:UE(a)
              
              **$**
              **163**
              
              $
              181
              
              **$**
              **349**
              
              $
              345CIPS
              
              
              **30**
              
              
              22
              
              
              **44**
              
              
              39Genco(a)
              
              
              **32**
              
              
              29
              
              
              **94**
              
              
              75CILCORP(a)
              
              
              **5**
              
              
              2
              
              
              **16**
              
              
              2IP(b)
              
              
              **53**
              
              
              -
              
              
              **89**
              
              
              -Other(c)
              
              
              **(3**
              **)**
              
              (2
              )
              
              **(6**
              **)**
              
              (14
              )Ameren
                  net income
              
              **$**
              **280**
              
              $
              232
              
              **$**
              **586**
              
              $
              447
 
 (a)
              Includes
                  earnings from unregulated interchange power sales that provided
                  $16
                  million and $67 million of UE’s net income in the three months and nine
                  months ended September 30, 2005, respectively (2004 - third quarter
                  - $14
                  million; year-to-date - $46 million), $8 million and $38 million
                  of
                  Genco’s net income in the three months and nine months ended September
                  30,
                  2005, respectively (2004 - third quarter - $6 million; year-to-date
                  - $23
                  million), and $2 million and $11 million of CILCORP’s net income in the
                  three months and nine months ended September 30, 2005,
                  respectively.
 (b)
              Ameren
                  acquired IP on September 30, 2004.
 (c)
              Includes
                  corporate general and administrative expenses, transition costs
                  associated
                  with the IP acquisition and other non-rate-regulated
                  operations.
  **Electric
        Operations**
  ****The
        following table presents the favorable (unfavorable) variations in electric
        margins, defined as electric revenues less fuel and purchased power costs,
        for
        the three months and nine months ended September 30, 2005, from the comparable
        periods in 2004. We consider electric and interchange margins useful measures
        to
        analyze the change in profitability of our electric operations between periods.
        We have included the analysis below as a complement to our financial information
        provided in accordance with GAAP. However, electric and interchange margins
        may
        not be a presentation defined under GAAP and may not
   55
  be
        comparable to other companies’ presentations or more useful than the GAAP
        information we are providing elsewhere in this report.
  The
        variation for Ameren shows the contribution from IP for the three months
        and
        nine months ended September 30, 2005, as a separate line item, which facilitates
        comparison of other margin components. IP’s electric margins in 2005 include
        purchase accounting adjustments and are compared with the same periods in
        2004
        when Ameren did not own IP and it did not contribute to Ameren’s electric
        margins.
 **Ameren**(a)
                  
                  **UE**
                  
                  **CIPS**
                  
                  **Genco**
                  
                  **CILCORP**
                  
                  **CILCO**
                  
                  **IP**(b)**Three
                      Months**Electric
                      revenue change:IP
                  
                  $
                  358
                  
                  $
                  -
                  
                  $
                  -
                  
                  $
                  -
                  
                  $
                  -
                  
                  $
                  -
                  
                  $
                  -Effect
                      of weather (estimate)
                  
                  
                  87
                  
                  
                  56
                  
                  
                  18
                  
                  
                  -
                  
                  
                  13
                  
                  
                  13
                  
                  
                  42Growth
                      and other (estimate)
                  
                  
                  50
                  
                  
                  25
                  
                  
                  59
                  
                  
                  36
                  
                  
                  5
                  
                  
                  5
                  
                  
                  (11
                  )Interchange
                      revenues
                  
                  
                  (3
                  )
                  
                  27
                  
                  
                  1
                  
                  
                  18
                  
                  
                  (10
                  )
                  
                  (10
                  )
                  
                  -Total
                  
                  $
                  492
                  
                  $
                  108
                  
                  $
                  78
                  
                  $
                  54
                  
                  $
                  8
                  
                  $
                  8
                  
                  $
                  31Fuel
                      and purchased power change:IP
                  
                  $
                  (187
                  )
                  $
                  -
                  
                  $
                  -
                  
                  $
                  -
                  
                  $
                  -
                  
                  $
                  -
                  
                  $
                  -Fuel:Generation
                      and other
                  
                  
                  (78
                  )
                  
                  (52
                  )
                  
                  -
                  
                  
                  (3
                  )
                  
                  (5
                  )
                  
                  (6
                  )
                  
                  -Price
                  
                  
                  (15
                  )
                  
                  (14
                  )
                  
                  -
                  
                  
                  (6
                  )
                  
                  5
                  
                  
                  5
                  
                  
                  -Purchased
                      power
                  
                  
                  (21
                  )
                  
                  (47
                  )
                  
                  (55
                  )
                  
                  (46
                  )
                  
                  (15
                  )
                  
                  (15
                  )
                  
                  4Total
                  
                  $
                  (301
                  )
                  $
                  (113
                  )
                  $
                  (55
                  )
                  $
                  (55
                  )
                  $
                  (15
                  )
                  $
                  (16
                  )
                  $
                  4Net
                      change in electric margins
                  
                  $
                  191
                  
                  $
                  (5
                  )
                  $
                  23
                  
                  $
                  (1
                  )
                  $
                  (7
                  )
                  $
                  (8
                  )
                  $
                  35**Nine
                      Months**Electric
                      revenue change:IP
                  
                  $
                  861
                  
                  $
                  -
                  
                  $
                  -
                  
                  $
                  -
                  
                  $
                  -
                  
                  $
                  -
                  
                  $
                  -Effect
                      of weather (estimate)
                  
                  
                  95
                  
                  
                  61
                  
                  
                  20
                  
                  
                  -
                  
                  
                  14
                  
                  
                  14
                  
                  
                  49Growth
                      and other (estimate)
                  
                  
                  76
                  
                  
                  25
                  
                  
                  91
                  
                  
                  70
                  
                  
                  4
                  
                  
                  4
                  
                  
                  (20
                  )Rate
                      reductions
                  
                  
                  (7
                  )
                  
                  (7
                  )
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Interchange
                      revenues
                  
                  
                  77
                  
                  
                  98
                  
                  
                  (1
                  )
                  
                  52
                  
                  
                  (4
                  )
                  
                  (4
                  )
                  
                  -Total
                  
                  $
                  1,102
                  
                  $
                  177
                  
                  $
                  110
                  
                  $
                  122
                  
                  $
                  14
                  
                  $
                  14
                  
                  $
                  29Fuel
                      and purchased power change:IP
                  
                  $
                  (509
                  )
                  $
                  -
                  
                  $
                  -
                  
                  $
                  -
                  
                  $
                  -
                  
                  $
                  -
                  
                  $
                  -Fuel:Generation
                      and other
                  
                  
                  (112
                  )
                  
                  (95
                  )
                  
                  -
                  
                  
                  8
                  
                  
                  (11
                  )
                  
                  (9
                  )
                  
                  -Price
                  
                  
                  (38
                  )
                  
                  (22
                  )
                  
                  -
                  
                  
                  (25
                  )
                  
                  9
                  
                  
                  8
                  
                  
                  -Purchased
                      power
                  
                  
                  (2
                  )
                  
                  (49
                  )
                  
                  (87
                  )
                  
                  (89
                  )
                  
                  (7
                  )
                  
                  (7
                  )
                  
                  (13
                  )Total
                  
                  $
                  (661
                  )
                  $
                  (166
                  )
                  $
                  (87
                  )
                  $
                  (106
                  )
                  $
                  (9
                  )
                  $
                  (8
                  )
                  $
                  (13
                  )Net
                      change in electric margins
                  
                  $
                  441
                  
                  $
                  11
                  
                  $
                  23
                  
                  $
                  16
                  
                  $
                  5
                  
                  $
                  6
                  
                  $
                  16
 
 (a)
              Includes
                  amounts for Ameren Registrant and non-Registrant subsidiaries and
                  intercompany eliminations.
 (b)
              Compared
                  to predecessor information for the three months and nine months
                  ended
                  September 30, 2004.
  *Ameren*
  Ameren’s electric margin increased $191 million for the three months and $441
        million for the nine months ended September 30, 2005, compared with the same
        periods in 2004. The acquisition of IP added electric margins of $171 million
        and $352 million in the three months and nine months, respectively. Electric
        margin also increased due to higher interchange margins and favorable weather
        conditions in 2005, as discussed below, along with organic growth. Partially
        offsetting these increases to electric margin were incremental costs of
        operating in the MISO Day Two Energy Market incurred in the current year
        periods, increased purchased power due to unscheduled coal-fired plant outages
        at AERG and reduced industrial sales to unregulated markets outside of our
        core
        service territory. Fuel costs increased as a result of higher fuel prices
        and
        the use of higher-cost CT generation to meet increased weather-driven demand.
        Increased emission allowance utilization costs at Genco and AERG were partially
        offset by a reduction of fuel costs at Genco resulting from trading emission
        allowances for different vintage years as discussed below. Emission credit
        sales
        at UE decreased $9 million and $29 million for the third quarter and first
        nine
        months of 2005, respectively, as compared with the same periods in 2004,
        as UE
        continues to evaluate options for complying with the Clean Air Interstate
        Rule,
        which includes the possibility of using emission credits for compliance
        purposes. Electric rate reductions resulting from the 2002 UE electric rate
        case
        settlement in Missouri negatively affected electric revenues by $7 million
        during the first quarter of 2005. These were the final rate reductions under
        the
        rate case settlement.
  Margins on interchange sales increased $3 million for the three months and
        $65
        million for the nine months ended September 30, 2005, as compared with the
        same
        periods in 2004, principally because of higher power prices.
   56
  Average
        realized power prices on interchange sales increased to approximately $46
        and
        $40 per megawatthour in the third quarter and first nine months of 2005,
        respectively, from approximately $28 and $29 per megawatthour in the comparable
        periods of 2004. High natural gas, emission allowance and coal prices in
        2005
        contributed to higher power prices. Increased availability of low-cost
        generation resulting from improved power plant availability, including the
        timing of the Callaway nuclear plant refueling and maintenance outages in
        the
        current and prior years, also contributed to increased interchange margins
        for
        the nine-month period. The MISO Day Two Energy Market also resulted in an
        increase in margins on interchange sales by an estimated $21 million in the
        first nine months of 2005, as compared to the year-ago period. In the third
        quarter of 2005, there was less excess power available for sale due to the
        warmer weather, the current year Callaway refueling and maintenance outage,
        and
        the addition of Noranda, as discussed below. Ameren’s baseload electric
        generating plants’ average capacity factors were approximately 82% and 79% for
        the third quarter and first nine months of 2005, respectively, compared with
        81%
        and 76% for the same periods in 2004. Equivalent availability factors were
        92%
        and 87% for the third quarter and first nine months of 2005, respectively,
        compared with 94% and 85% for the prior-year periods. Third quarter availability
        in the current year was negatively impacted by the Callaway refueling and
        maintenance outage and unscheduled coal-fired plant outages at
        AERG.
 
 Warmer summer weather this year, as compared to abnormally mild conditions
        in
        the prior year, resulted in an increase in cooling degree-days of 53% in
        the
        third quarter of 2005 compared to the prior-year period. Cooling degree-days
        increased 16% from normal conditions in the third quarter of 2005. Excluding
        IP
        sales, weather-sensitive residential and commercial sales were up 22% and
        8% for
        the third quarter of 2005, compared with the third quarter of 2004.
 
 Industrial
        sales, excluding IP sales in the current year, decreased 3% in the nine months
        ended September 30, 2005, primarily as a result of the expiration and
        non-renewal of low-margin non-rate-regulated power sales contracts to customers
        outside of our core service territory along with decreased resale of power
        to
        the DOE by EEI under a power supply contract which expires at the end of
        2005.
        Partially offsetting these decreases were sales to Noranda - a significant
        new
        UE customer in 2005 as discussed below, which drove an increase in industrial
        sales in the third quarter of 2005.
 
 Ameren’s
        fuel and purchased power costs, excluding the IP results, increased $114
        million
        in the three months and
        $152
        million in the nine months ended September 30, 2005, compared with the same
        periods of 2004, primarily because of MISO Day Two Energy Market costs,
        increased fuel and purchased power prices, unscheduled coal-fired plant outages,
        increased CT generation as a result of the warmer weather in the current
        year,
        and increased emission allowance utilization at Genco and AERG. MISO costs
        included in purchased power, excluding IP, were $41 million and $59 million
        for
        the three and nine months ended September 30, 2005, respectively. MISO costs
        were greater due to higher than anticipated line losses, congestion
        charges
        and charges associated with deviations of actual from forecasted
        loads. We attribute some of these higher costs to the relative infancy
        of
        the MISO Day Two Energy Market. Emission allowance utilization increased
        $12
        million and $43 million for the third quarter and nine months ended September
        30, 2005, respectively. These increases in fuel and purchased power costs
        more
        than offset the effect of reduced purchased power costs related to the Callaway
        plant refueling and maintenance outage in the second quarter of the prior
        year.
        Purchased power costs incurred for the prior year refueling and maintenance
        outage were $24 million. The current year refueling and maintenance outage
        began
        in mid-September and has not resulted in a significant amount of power purchases
        from outside sources as of the end of the third quarter. Fuel and purchased
        power costs were reduced in the current year by a $21 million gain at Genco
        resulting from the nonmonetary swap of certain earlier vintage year
        SO 2 emission
        allowances for later vintage year allowances. See Note 9 - Commitments and
        Contingencies to our financial statements under Part I, Item 1, of this report
        for further information.
 
 *UE*
  UE’s electric margin decreased $5 million for the third quarter of 2005, but
        increased $11 million for the nine months ended September 30, 2005, compared
        with the same periods in 2004. Increased interchange margins and favorable
        weather conditions in the summer of the current year added to margins for
        the
        three- and nine-month periods in 2005. Margins on interchange sales with
        non-affiliates increased $3 million and $33 million in the third quarter
        and
        first nine months of 2005, respectively, compared with the same periods of
        2004,
        primarily because of higher power prices and the MISO Day Two Energy Market.
        Margins on sales to affiliates for the first nine months of 2005 also increased
        over the prior year period because of increased sales to Genco under the
        joint
        dispatch agreement resulting from a major power plant maintenance outage
        at
        Genco in 2005. Residential and commercial sales increased 17% and 4% in the
        third quarter of 2005, compared with the third quarter of 2004, primarily
        as a
        result of favorable weather conditions.
  Offsetting these increases to margin were the transfer of UE’s Illinois service
        territory to CIPS, rate reductions in
   57
 
 the
        first
        quarter of the current year, and decreased emission credit sales. On May
        2,
        2005, following the receipt of all required regulatory approvals, UE completed
        the transfer of its Illinois service territory, including its Illinois-based
        electric utility, to CIPS. The transfer resulted in an estimated decrease
        in
        electric margin of $35 million and $58 million in the third quarter and first
        nine months of 2005, respectively. Emission credit sales decreased $9 million
        and $29 million for the third quarter and first nine months of 2005,
        respectively, as compared with the same periods in 2004.
 
 Effective June 1, 2005, UE commenced supplying approximately 470 megawatts
        (peak load) of electric service (or approximately 5% of UE’s generating
        capability, including currently committed purchases) to Noranda’s primary
        aluminum smelter in southeast Missouri under a 15-year agreement. The additional
        sales to Noranda increased electric margin by $25  million
        and $34 million in the third quarter and first nine months of 2005,
        respectively. This increase in industrial sales was partially offset by the
        effect of the transfer of UE’s Illinois service territory to CIPS.
 
 Fuel
        and
        purchased power increased in the third quarter and first nine months of 2005,
        as
        compared with the same periods in 2004, primarily because of MISO Day Two
        Energy
        Market costs, increased fuel and purchased power prices, and increased
        generation to serve increased demand. MISO costs included in purchased power
        were $28 million and $40 million for the three and nine months ended September
        30, 2005, respectively. The current year Callaway refueling and maintenance
        outage began in mid-September, as compared to the prior year refueling and
        maintenance outage which was completed in the second quarter of 2004. As
        a
        result, purchased power costs of $24 million were incurred in the prior year
        due
        to the Callaway refueling and maintenance outage. The current year refueling
        and
        maintenance outage resulted in power purchases of $4 million as of the end
        of
        the third quarter.
  *CIPS*
 
 CIPS’
        electric margin increased $23 million in both the three months and nine months
        ended September 30, 2005, as compared with the same periods in 2004. The
        increases were primarily due to favorable weather conditions, increased
        industrial sales as a result of the transfer to CIPS of UE’s Illinois service
        territory, and customers switching to CIPS from Marketing Company. The transfer
        resulted in an estimated increase in electric margin of $18 million and $27 million
        in the third quarter and first nine months of 2005, respectively. Partially
        offsetting these margin increases were increased purchased power costs related
        to UE’s Illinois service territory transfer and customer switching, and MISO
        costs. MISO costs included in purchased power were $7 million and $10 million
        for the three and nine months ended September 30, 2005, respectively.
 
 *Genco*
  Genco’s electric margin was comparable in the third quarter of 2005 with the
        same period in 2004, but increased $16 million in the nine months ended
        September 30, 2005. Interchange margins increased $3 million in the three
        months
        and $23 million in the nine months ended September 30, 2005, compared with
        the
        same periods of 2004, primarily because of higher power prices and
        the MISO
        Day Two Energy Market. Wholesale margins decreased during the current quarter
        primarily due to purchasing higher cost power to serve greater load. The
        increase in load was due to Genco’s power supply agreement with Marketing
        Company serving increased volume from the transfer of UE’s Illinois service
        territory and warmer than normal weather. A loss of $6 million due
        to the
        settlement of SO 2 emission
        allowance options was recognized in the first quarter of 2005. Increased
        purchased power, principally from UE under the joint dispatch agreement,
        was the
        result of a major power plant maintenance outage, which occurred primarily
        during the first quarter of 2005. Emission allowance utilization increased
        fuel
        and purchased power costs by $10 million and $29 million for the third quarter
        and nine months ended September 30, 2005, respectively. Fuel and purchased
        power
        costs were reduced in the current year by a gain of $21 million resulting
        from
        the nonmonetary swap of certain earlier vintage year SO 2 emission
        allowances for later vintage year allowances.
 
 *CILCORP
        and CILCO*
 
 Electric
        margin decreased $7 million and $8 million at CILCORP and CILCO, respectively,
        in the three months ended September 30, 2005, but increased $5 million and
        $6
        million, respectively, in the nine months ended September 30, 2005, compared
        with the same periods of 2004. Increases in electric margin for the nine-month
        period were primarily due to increased interchange margins and the use of
        lower
        cost coal at one of AERG’s power plants, along with the effect of favorable
        weather in the summer of the current year. The decrease in third quarter
        margins
        was primarily due to increased purchased power costs as a result of MISO
        costs
        and suboptimal plant performance in the current year quarter, partially offset
        by increased interchange margins and favorable weather. MISO costs included
        in
        purchased power were $3 million and $5 million for the three and nine months
        ended September 30, 2005, respectively. Emission allowance utilization decreased
        margins by $5 million and $15 million in the three months and nine months
        ended
        September 30, 2005, respectively, as compared to the same prior year
        periods.
   58
 
 *IP*
 
 IP’s
        electric margin increased $35 million and $16 million in the three months
        and
        nine months ended September 30, 2005, respectively, compared to the same
        periods
        in the prior year, primarily due to favorable weather conditions. Offsetting
        this increase to electric margins was reduced industrial revenues in the
        third
        quarter and first nine months of 2005 due to customers choosing alternative
        suppliers. In addition, purchased power costs increased in 2005 due to higher
        net power prices and MISO costs. While power costs decreased in 2005 under
        IP’s
        power supply agreement with DYPM, costs on remaining power purchase contracts
        were higher than in the same periods of the prior year. MISO costs included
        in
        purchased power were $3 million and $5 million for the three and nine months
        ended September 30, 2005, respectively.
 
 **Gas
        Operations**
 
 The
        following table presents the favorable (unfavorable) variations in gas margins,
        defined as gas revenues less gas purchased for resale, for the three months
        and
        nine months ended September 30, 2005, from the comparable periods in 2004.
        We
        consider gas margin to be a useful measure to analyze the change in
        profitability of our gas utility operations between periods. We have included
        the table below as a complement to our financial information provided in
        accordance with GAAP. However, gas margin may not be a presentation defined
        under GAAP and may not be comparable to other companies’ presentations or more
        useful than the GAAP information we are providing elsewhere in this
        report.
 **Three
                  Months**
              
              **Nine
                  Months**Ameren(a)
              
              $
              28
              
              $
              106UE
              
              
              5
              
              
              9CIPS
              
              
              (1
              )
              
              (5
              )CILCORP
              
              
              1
              
              
              (1
              )CILCO
              
              
              1
              
              
              (c
              )IP(b)
              
              
              1
              
              
              (2
              )
 
 (a)
              Includes
                  amounts for Ameren Registrant and non-Registrant subsidiaries and
                  intercompany eliminations.
 (b)
              Compared
                  to predecessor information for the three months and nine months
                  ended
                  September 30, 2004.
 (c)
              Less
                  than $1 million.
  Ameren’s gas margin increased $28 million for the quarter and $106 million for
        the nine months ended September 30, 2005, as compared with the same prior
        year
        periods, primarily due to the inclusion of IP results in the current year.
        Excluding the IP results, gas margin was comparable for the three-month and
        nine-month periods. For
        the
        first nine months of 2005, rate increases at UE and IP along with increased
        transportation revenues offset the negative effect of mild winter weather.
        Ameren’s gas sales in the first nine months of 2005 increased almost 41%, due to
        the IP acquisition, while gas sales in Ameren’s preacquisition service territory
        were down 18% in the same period due to the mild winter weather. UE’s gas margin
        increased for the nine months ended September 30, 2005, as compared with
        the
        same period in the prior year, primarily due to the effect of rate increases
        in
        the first quarter of 2005. CIPS’ gas margin decreased for the first nine months
        of 2005 primarily due to unfavorable winter weather conditions and decreased
        in
        the third quarter of 2005 compared to the year-ago period primarily due to
        gas
        storage field losses. The transfer of UE’s Illinois service territory to CIPS
        resulted in an increase of $1 million and $2 million in CIPS’ gas margin for the
        three and nine months ended September 30, 2005, respectively, with an equivalent
        decrease in UE’s gas margin. CILCORP’s and CILCO’s gas margins were comparable
        for the three and nine months ended September 30, 2005, with the same periods
        in
        the prior year. IP’s gas margin decreased for the first nine months of the
        current year due to unfavorable winter weather in the first quarter of 2005,
        partially offset by the effects of a rate increase effective in May 2005
        of $4
        million. IP’s gas margin was comparable in the three months ended September 30,
        2005, to the same period in the prior year.
 
 **Operating
        Expenses and Other Statement of Income Items**
 
 *Other
        Operations and Maintenance*
  **Ameren’s
        other operations and maintenance expenses increased $77 million for the three
        months and $153 million for the nine months ended September 30, 2005, compared
        with the same periods in 2004. The IP results in the current year added other
        operations and maintenance expenses of $64 million in the third quarter and
        $166
        million in the first nine months. Excluding the IP results, other operations
        and
        maintenance expenses decreased in the nine-month period primarily due to
        decreased power plant maintenance costs of $29 million, primarily as a result
        of
        the refueling and maintenance outage at UE’s Callaway nuclear plant completed
        during the second quarter of 2004. Maintenance costs for the prior year outage
        were $31 million while maintenance costs for the current year outage were
        $3
        million in the nine-month period. The current year refueling and maintenance
        outage began September 17, 2005, and is expected to last 70 to 75 days, longer
        than the typical outage, as UE is performing upgrades to steam generators
        and
        replacements of turbine rotors in addition to normal maintenance procedures.
        The
        plant is expected to gain approximately 60 megawatts of additional generating
        capacity as a result of efficiency improvements achieved through these upgrades.
        Ameren, UE and CIPS received a refund of previously paid exit fees of $18
        million upon their re-entry into the MISO during the second quarter of 2004.
        This refund did not recur in 2005 and, therefore, other
   59
  operations
        and maintenance expenses increased for the first nine months of 2005 relative
        to
        2004 for this item. An impairment of $10 million was recorded in the third
        quarter of 2005 related to our investment in a leveraged lease of an aircraft
        to
        Delta Air Lines, Inc. due to its Chapter 11 bankruptcy filing in September
        2005.
        Labor costs, storm repair expenditures, and uncollectible reserves increased
        in
        the three and nine months ended September 30, 2005, as compared to the same
        periods in the prior year.
 
 Other
        operations and maintenance expenses at UE increased $2 million in the three
        months, but decreased $17 million in the nine months, ended September 30,
        2005,
        compared with the same periods of 2004. The decrease in the first nine months
        was primarily due to decreased power plant maintenance costs at Callaway
        as a
        result of the timing of the current year versus prior year refueling and
        maintenance outages as discussed above, and an unscheduled outage at Callaway
        in
        the first quarter of 2004. Offsetting this favorable variance was the receipt
        of
        a $12 million MISO exit fee refund during the second quarter of the prior
        year.
        Storm repair expenditures and uncollectible reserves increased in the third
        quarter and first nine months of the current year, as compared to the same
        periods in the prior year. Labor costs increased in the third quarter of
        2005,
        partially due to the current year Callaway refueling and maintenance outage,
        but
        were comparable for the nine-month period. The transfer of UE’s Illinois service
        territory to CIPS resulted in decreased other operations and maintenance
        expenses of $6 million and $10 million in the three and nine months ended
        September 30, 2005.
  Other
        operations and maintenance expenses at CIPS were comparable in the three
        months
        ended September 30, 2005, with the same period in 2004. For the nine-month
        period, CIPS’ portion of the MISO exit fee refund in the prior year of $5
        million was more than offset by decreases in various other operations and
        maintenance expenses in the current year. The transfer of UE’s Illinois service
        territory to CIPS resulted in an increase in other operations and maintenance
        expenses of $6 million and $10 million for the three and nine months ended
        September 30, 2005.
 
 Genco’s
        other operations and maintenance expenses were comparable in the three months
        ended September 30, 2005, with the same period in 2004. Genco’s other operations
        and maintenance expenses increased $5 million in the first nine months of
        2005
        primarily due to a major power plant maintenance outage in the first quarter
        of
        2005.
  Other
        operations and maintenance expenses at both CILCORP and CILCO decreased $12
        million in the third quarter of 2005 and decreased $21 million and $23 million,
        respectively, for the nine months ended September 30, 2005, as compared with
        the
        same periods in 2004. Other operations and maintenance expenses decreased
        primarily due to the settlement in the prior year of a litigation
        claim
        with Enron Power Marketing, Inc. The AES Corporation indemnified Ameren,
        and
        Ameren assigned the indemnification to CILCORP and CILCO, for the $13 million
        after-tax cost of the $21 million claim settlement. As a result, other
        operations and maintenance expenses in the third quarter of 2004 reflected
        the
        net cost of $8 million while income taxes reflected a tax benefit of $8
        million.
 
 Other
        operations and maintenance expenses at IP increased $20 million for the third
        quarter and $23 million for the first nine months of 2005, respectively,
        as
        compared to the same periods in 2004, primarily due to the receipt of a refund
        of previously paid exit fees of $9 million from MISO during the third quarter
        of
        the prior year. Other operations and maintenance expenses also increased
        due to
        higher overhead and labor costs associated with the integration of systems
        and
        operations with Ameren.
 
 *Depreciation
        and Amortization*
 
 Ameren’s
        depreciation and amortization expenses increased $22 million in the three
        months
        and $74 million in the nine months ended September 30, 2005, compared with
        the
        same periods of 2004, principally because of the acquisition of IP, which
        added
        $19 million and $59 million to each period, respectively. Capital additions
        also
        resulted in increased depreciation expenses in the current year.
 
 Depreciation
        and amortization expenses at UE increased $17 million in the three months
        and
        $23 million in the first nine months of the current year compared with the
        same
        periods of 2004. The increases were primarily due to capital additions and
        depreciation on CTs transferred from Genco in May 2005, partially offset
        by
        reduced depreciation on property transferred to CIPS in the Illinois service
        territory transfer in May 2005.
 
 CIPS’
        depreciation and amortization expense increased $4 million in the third quarter
        and $9 million in the nine-month period ended September 30, 2005, compared
        with
        the same periods of 2004, because of depreciation on property transferred
        from
        UE in the Illinois service territory transfer and capital
        additions.
 
 Depreciation
        and amortization expenses at Genco decreased $1 million in the three months
        and
        $2 million in the nine months ended September 30, 2005, compared with the
        same
        periods of 2004, because of the transfer of CTs from Genco to UE in May
        2005.
 
 Depreciation
        and amortization expenses at CILCORP and CILCO were comparable for the third
        quarter of 2005, but increased $3 million and $2 million, respectively,
        in
        the
   60
 
  nine
          months ended September 30, 2005, compared with the same periods
          of 2004,
          because of capital additions.
 
 IP’s
        depreciation and amortization expenses, excluding the amortization of regulatory
        assets, were comparable in the three months and nine months ended September
        30,
        2005, with the same periods of 2004. Amortization of regulatory assets at
        IP
        decreased $11 million in the three months and $32 million for the nine months
        ended September 30, 2005, as compared with the same periods of 2004. The
        transition cost regulatory asset was eliminated in conjunction with Ameren’s
        acquisition of IP in September 2005.
 
 *Taxes
        Other Than Income Taxes*
 
 Taxes
        other than income taxes increased $21 million in the third quarter and $53
        million in the nine months of the current year, compared with the same periods
        of 2004, principally because of the acquisition of IP, which added $14 million
        and $54 million, respectively. Excluding IP in the current year, taxes other
        than income taxes at Ameren increased $7 million for the third quarter of
        2005
        over the year-ago period primarily because of higher gross receipts taxes,
        but
        were comparable for the first nine months of 2005.
 
 UE’s
        taxes other than income taxes increased in the third quarter of 2005, compared
        with the same period of the prior year, primarily because of increased gross
        receipts taxes resulting from increased sales. Taxes other than income taxes
        increased in the first nine months of 2005, compared to the same period of
        the
        prior year, primarily because of increased property taxes due to higher
        assessments. Property taxes were partially reduced in 2005 by the transfer
        of
        UE’s Illinois service territory to CIPS.
 
 Taxes
        other than income taxes at CIPS increased for the three and nine months ended
        September 30, 2005, compared to the same periods in the prior year, primarily
        because of increased property taxes resulting from the transfer to CIPS of
        UE’s
        Illinois service territory.
 
 Genco’s
        taxes other than income taxes were comparable in the three months, but decreased
        $9 million in the nine months, ended September 30, 2005, compared with the
        same
        periods of 2004, due to a favorable property tax court decision in the first
        quarter of 2005.
  Both
        CILCORP’s and CILCO’s taxes other than income taxes were comparable for the
        third quarter of 2005 compared with the same period in 2004, but decreased
        in
        the first nine months of 2005, compared with the first nine months of 2004,
        primarily because of reduced gross receipts taxes related to transfers of
        customers to Marketing Company.
 
 Taxes
        other than income taxes at IP were comparable in the three months and nine
        months ended September 30, 2005, with the same periods of 2004.
 
 *Other
        Income and Deductions*
 
 Other
        income and deductions decreased $4 million in the third quarter and $7 million
        in the first nine months of the current year, compared with the same periods
        of
        2004. Excluding IP, other income and deductions at Ameren decreased $6 million
        in the three months and $12 million in the first nine months of 2005, compared
        to the year-ago periods. Other income and deductions decreased primarily
        due to
        reduced interest income resulting from the investment of equity issuance
        proceeds in the prior year and other items discussed below with respect to
        the
        other Ameren Companies.
  Other
        income and deductions at UE and Genco were comparable in the three months
        and
        nine months ended September 30, 2005, with the same periods in
        2004.
  CIPS’
        other income and deductions decreased $3 million and $10 million in the third
        quarter and first nine months of 2005, respectively, as compared with the
        same
        prior-year periods, primarily because of reduced interest income on the
        intercompany note receivable from Genco.
  Other
        income and deductions at CILCORP and CILCO were comparable in the three months,
        but decreased $3 million and $2 million, respectively, in the nine months
        ended
        September 30, 2005, compared with the same periods in 2004, primarily because
        of
        the write-off of unrecoverable natural gas costs.
  Other
        income and deductions at IP decreased $45 million in the third quarter and
        $138
        million in the nine months ended September 30, 2005, compared with the same
        periods of 2004, primarily because of reduced interest income after the
        elimination of IP’s Note Receivable from Former Affiliate in conjunction with
        Ameren’s acquisition of IP on September 30, 2004.
 
 *Interest*
 
 Interest
        expense increased at Ameren in the three months and nine months ended September
        30, 2005, compared with the same periods of 2004, principally due to the
        acquisition of IP, which added $11 million for the third quarter and $32
        million
        for the first nine months of 2005. Excluding the IP results in the current
        year,
        interest expense was comparable with the same periods in 2004.
   61
 
 UE’s
        interest expense increased in the third quarter and first nine months of
        2005
        primarily because of the issuance of $300 million of senior secured notes
        in
        July of 2005.
  Genco’s
        interest expense decreased $8 million in the three months and $15 million
        in the
        nine months ended September 30, 2005, compared with the same periods of 2004,
        primarily because of a reduction in principal amounts outstanding on
        intercompany promissory notes to CIPS and Ameren.
  Interest
        expense at IP decreased $24
        million in the three months and $82 million in the nine months ended September
        30, 2005, compared with the same periods of 2004, primarily
        because of redemptions and repurchases of indebtedness of $700 million in
        the
        fourth quarter of 2004 and $70 million in early 2005 and reductions in notes
        payable to IP SPT.
  Interest expense at CIPS, CILCORP and CILCO in the three months and nine
        months
        ended September 30, 2005, was comparable to the same periods of
        2004.
 
 *Income
        Taxes*
  Income
        tax expense at Ameren increased $36 million in the third quarter and $88
        million
        in the first nine months of the current year, compared with the same periods
        of
        2004, because of higher pretax income primarily due to the inclusion of IP
        results in 2005. IP added income tax expenses of $36 million and $60 million
        to
        the three months and nine months ended September 30, 2005, respectively.
        Partially offsetting these increases was the recognition in 2005 of a deduction
        allowed under the Jobs Creation Act of $1 million and $3 million for the
        three-
        and nine-month periods, respectively. During the third quarter of 2004, a
        tax
        benefit was realized related to CILCO’s settlement of its litigation claim with
        Enron Power Marketing, Inc. This tax benefit resulted in lower tax expense
        during the third quarter of 2004 as compared to the third quarter of 2005.
        UE’s
        income tax expense was lower in the third quarter of 2005 due to lower pretax
        income. UE’s income tax expense was partially reduced in the current year by the
        recognition of the Jobs Creation Act deduction. Income tax expense increased
        at
        CIPS in the third quarter of 2005 due to higher pretax income, but decreased
        in
        the nine months ended September 30, 2005, compared
        with the same periods of 2004, because of the effect of tax credits and other
        permanent items. Income tax expense was higher at CILCORP and CILCO in the
        third
        quarter and nine months, compared with the same periods in 2004, due to higher
        pretax income and the tax benefit in the third quarter of the prior year
        related
        to CILCO’s settlement of its litigation claim with Enron Power Marketing, Inc.
        Income tax expense at Genco increased for the three and nine months ended
        September 30, 2005, due to higher pretax income. IP’s income tax expense was
        higher in the third quarter of 2005 due to higher pretax income, but lower
        for
        the nine-month period as net income decreased from the prior year.
 
 **LIQUIDITY
          AND CAPITAL RESOURCES**
  The tariff-based gross margins of Ameren’s rate-regulated utility operating
        companies (UE, CIPS, CILCO and IP) continue to be the principal source of
        cash
        from operating activities for Ameren and its rate-regulated subsidiaries.
        A
        diversified retail customer mix of primarily rate-regulated residential,
        commercial and industrial classes provide a reasonably predictable source
        of
        cash flows. For cash flows from operating activities, Genco principally relies
        on power sales to an affiliate under a contract expiring at the end of 2006
        and
        sales to other wholesale and industrial customers under long-term contracts.
        In
        addition, we plan to use short-term borrowings to support normal operations
        and
        other temporary capital requirements.
 The following table presents net cash
        provided by (used in) operating, investing and financing activities for the
        nine
        months ended September 30, 2005 and 2004:
 **Net
                  Cash Provided By**
                **Operating
                  Activities**
              
              **Net
                  Cash Provided By**
                **(Used
                  In) Investing Activities**
              
              **Net
                  Cash Provided By**
                **(Used
                  In) Financing Activities****2005**
              
              **2004**
              
              **Variance**
              
              **2005**
              
              **2004**
              
              **Variance**
              
              **2005**
              
              **2004**
              
              **Variance**Ameren(a)
              
              **$**
              **1,089**
              
              $
              736
              
              $
              353
              
              **$**
              **(648**
              **)**
              $
              (977
              )
              $
              329
              
              **$**
              **(232**
              **)**
              $
              777
              
              $
              (1,009
              )UE
              
              
              **714**
              
              
              529
              
              
              185
              
              
              **(635**
              **)**
              
              (381
              )
              
              (254
              )
              
              **(126**
              **)**
              
              (150
              )
              
              24CIPS
              
              
              **148**
              
              
              79
              
              
              69
              
              
              **(40**
              **)**
              
              17
              
              
              (57
              )
              
              **(110**
              **)**
              
              (108
              )
              
              (2
              )Genco
              
              
              **135**
              
              
              115
              
              
              20
              
              
              **124**
              
              
              (37
              )
              
              161
              
              
              **(260**
              **)**
              
              (80
              )
              
              (180
              )CILCORP
              
              
              **57**
              
              
              100
              
              
              (43
              )
              
              **(67**
              **)**
              
              (91
              )
              
              24
              
              
              **7**
              
              
              (11
              )
              
              18CILCO
              
              
              **81**
              
              
              84
              
              
              (3
              )
              
              **(71**
              **)**
              
              (94
              )
              
              23
              
              
              **(10**
              **)**
              
              7
              
              
              (17
              )IP(b)
              
              
              **207**
              
              
              158
              
              
              49
              
              
              **(4**
              **)**
              
              (96
              )
              
              92
              
              
              **(203**
              **)**
              
              (28
              )
              
              (175
              )
 
 (a)
              Includes
                  amounts for Ameren Registrant and non-Registrant subsidiaries and
                  intercompany eliminations, but excludes 2004 amounts for
                  IP.
 (b)
              2004
                  amounts include predecessor
                  information.
  
 62
  **Cash
        Flows from Operating Activities**
  Cash flows provided by operating activities increased for Ameren, UE, CIPS,
        Genco and IP in the nine months ended September 30, 2005, compared with the
        same
        period of 2004. Ameren’s increase of $353 million was primarily attributable to
        $207 million of cash flow from operations of IP, which was acquired on September
        30, 2004. Excluding the impact of IP, Ameren’s increase in electric margins of
        $89 million also contributed to the increase in cash flow from operations.
        In
        addition, decreased pension and other postretirement benefit contributions
        of
        $204 million contributed to the favorable variance in cash flow from operations.
        Partially offsetting the positive variance in 2005 were increased tax payments
        of $131 million, additional SO 2 emission
        allowance purchases in 2005 of $41 million (net of allowances expensed),
        and the
        absence in 2005 of $28 million of cash from the UE coal contract settlement
        received in 2004. Other working capital changes were primarily the result
        of
        timing differences.
  At UE, decreased pension and postretirement benefit contributions of $142
        million and higher electric margins and reduced other operations and maintenance
        expenses totaling $28 million, as discussed under Results of Operations,
        contributed to the favorable variance in cash flow from operations. In 2005,
        increased tax payments of $80 million and the lack of coal contract settlement
        payments mentioned above partially offset the positive factors. Timing
        differences related to working capital also contributed to UE’s cash flows for
        the nine months ended September 30, 2005, compared to the same period last
        year.
  CIPS’ increase in cash flows from operating activities in the nine months ended
        September 30, 2005, was principally due to a reduction of $25 million in
        pension
        and postretirement benefits compared to the same period last year, and timing
        differences related to working capital for the nine months ended September
        30,
        2005, compared to the same period last year.
  Cash flows provided by operating activities increased for Genco in the nine
        months ended September 30, 2005, compared with the same period in 2004 due
        to
        decreased pension and other postretirement benefit contributions of $21 million,
        and timing differences in accounts and wages payable. These increases were
        partially offset by a $56 million increase in cash used for materials and
        supplies inventory, which included $48 million of SO 2 emissions allowance purchases.
  Cash flows from operating activities decreased for CILCORP and CILCO in the
        nine
        months ended September 30, 2005, compared with the same period in 2004.
        Contributing to the reduction in cash flows from operating activities were
        purchases of SO 2 emission
        allowances of $7 million and increased tax payments of $40 million
        for
        CILCO and $24 million for CILCORP. Differences in the timing and amount of
        accounts and wages payable and accounts receivable also contributed to CILCORP’s
        and CILCO’s decrease in cash flows from operating activities. These decreases
        were partially offset by a decrease in pension and other postretirement
        contributions of $33 million, and increased electric margins as discussed
        under
        Results of Operations.
  IP had a $49 million increase in cash flows from operating activities for
        the
        first nine months of 2005, as compared to the first nine months of 2004.
        Cash
        flows from operating activities in the 2005 period benefited from the receipt
        of
        income tax refunds, compared to tax payments of $160 million in the year-ago
        period. The increase in cash from operations in 2005 was partially offset
        by the
        absence of interest income from a former affiliate that is included in the
        year-ago period.
  **Cash
        Flows from Investing Activities**
  ****Cash
        flows used in investing activities increased for UEand
        decreased for Ameren, CILCORP, CILCO and IP for the nine months ended September
        30, 2005, compared with the same period in 2004. Investing activities were
        a
        source of cash for Genco in the first nine months of 2005, as compared to
        a use
        of cash in the first nine months of 2004. Investing activities were a use
        of
        cash for CIPS in the first nine months of 2005 as compared to a source of
        cash
        in the first nine months of 2004.
  Ameren’s
        decrease in cash used in investing activities was primarily due to a use
        of cash
        of $451 million related to the acquisition of IP. In 2005, Ameren’s net decrease
        in cash used in investing activities was partially offset by capital
        expenditures of $95 million at IP.
  UE’s cash flows used in investing activities increased primarily due to
        increased capital expenditures. UE’s capital expenditures included $241 million
        for 550 megawatts of CTs purchased from Genco in May 2005, and $59 million
        at
        the Callaway nuclear plant for upgrades during a refueling and maintenance
        outage. In addition, capital expenditures included $25 million for a 117
        megawatt CT from Development Company and $2 million for related equipment
        from
        Resources Company. Otherwise, UE’s capital expenditures decreased $72
        million.
 
 CIPS’ increase in cash flows used in investing activities
        for the
        nine months ended September 30, 2005, compared to the year-ago period was
        primarily due to a $51 million advance to the utility money pool and a $9
        million increase in capital expenditures. The increased capital expenditures
        were used to improve the reliability of the transmission and distribution
        systems.
   63
  Genco’s cash flows provided by investing activities increased in the
        nine
        months ended September 30, 2005, compared
        with the same period in 2004, because of the sale of 550 megawatts of CTs
        at
        Pinckneyville and Kinmundy, Illinois to UE for $241 million. These proceeds
        were
        partially offset by increased capital expenditures and net advances to the
        non-state-regulated subsidiary money pool. Genco’s
        higher capital expenditures were attributed to upgrades at one of its power
        plants in the first quarter of 2005.
 
 CILCORP’s
        and CILCO’s cash flows used in investing activities decreased in the
        nine
        months ended September 30, 2005, compared
        with the same period in 2004 primarily because of reduced capital expenditures.
        In 2004, AERG made capital expenditures for significant power plant upgrades
        to
        increase fuel supply flexibility for power generation.
 
 IP’s decrease
        in cash flows used in investing activities for the nine months ended
        September 30, 2005, was primarily because of $90 million of cash received
        for
        repayment of prior period utility money pool advances.
 
 *Intercompany
        Transfer of Illinois Service Territory*
  On May 2, 2005, UE completed the transfer of its Illinois-based electric
        and
        natural gas service territory to CIPS, at a net book value of $133 million.
        UE
        transferred 50% of the assets directly to CIPS in consideration for a CIPS
        subordinated promissory note in the principal amount of approximately $67
        million and 50% of the assets by means of a dividend in kind to Ameren, followed
        by a capital contribution by Ameren to CIPS. See Note 3 - Rate and Regulatory
        Matters, under Part I, Item 1 of this report for a discussion of the asset
        transfer.
 
 We continually review our generation port-folio and expected power needs.
        As a
        result, we could modify our plan for generation capacity, which could include
        changing the times when certain assets will be added to or removed from our
        portfolio, the type of generation asset technology that will be employed,
        and
        whether capacity may be purchased, among other things. Any changes that we
        may
        plan to make for future generating needs could result in significant capital
        expenditures or losses being incurred, which could be material.
 
 See Note 9 - Commitments and Contingencies to our financial statements under
        Part I, Item 1, of this report for a discussion of environmental
        matters.
  **Cash
        Flows from Financing Activities**
  Cash flows from financing activities decreased for Ameren in the
        nine
        months ended September 30, 2005, as
        compared with the same period of 2004, primarily because of the receipt of
        $1,418 million related to common stock issuances in the first nine months
        of
        2004. These proceeds were principally used to fund the acquisition of IP
        and
        Dynegy’s 20% interest in EEI on September 30, 2004, and to redeem certain IP
        indebtedness subsequent to the acquisition. In 2005, total common stock proceeds
        of $430 million included $345 million from the issuance of 7.4 million shares
        of
        common stock related to the settlement of a stock purchase obligation in
        Ameren’s adjustable conversion-rate equity security units. In 2005, increased
        short-term debt redemptions of $264 million contributed to the net use of
        cash
        for financing activities. Decreased long-term debt redemptions of $189 million
        and the absence in 2005 of a 2004 $67 million UE nuclear fuel lease payment
        partially offset the decrease in cash from financing activities in
        2005.
  UE’s cash flows used in financing activities decreased $24 million in the
        nine
        months ended September 30, 2005, compared
        with the same period of 2004. This decrease was caused, in part, by lower
        redemptions of long-term debt, a decrease in the payment of dividends to
        Ameren
        and the absence of a nuclear fuel lease payment that was made in the first
        three
        months of 2004. These decreases in cash used in financing activities were
        partially offset by higher redemptions of short-term debt, lower issuances
        of
        long-term debt, and a net decrease in utility money pool borrowings.
  CIPS’ cash flows used in financing activities increased slightly in the
        nine
        months ended September 30, 2005, as
        compared with the same period of 2004. A $25 million cash benefit from reduced
        dividends paid to Ameren was offset by increased redemptions of long-term
        debt
        of $20 million, and a net increase in utility money pool borrowings of $8
        million.
 
 Genco’s cash flows used in financing activities increased in the
        nine
        months ended September 30, 2005, as
        compared with the same period of 2004, primarily because of a net increase
        in
        non-state-regulated subsidiary money pool repayments of $71 million, incremental
        payments of $34 million on its note payable to Ameren, and payment of $52
        million on its note payable to CIPS. The funds for these note repayments
        came
        from the $241 million in proceeds from the May 2005 sale of 550 megawatts
        of CTs
        to UE. Net cash used in financing activities also increased due to a decrease
        in
        capital contributions of $74 million. Genco has $225 million of 7.75% senior
        notes that mature on November 1, 2005, that Genco intends to repay with
        cash.
  Effective May 1, 2005, Genco and CIPS amended certain terms of Genco’s
        subordinated affiliate note payable to CIPS by the issuance to CIPS of an
        amended and restated subordinated promissory note in the principal amount
        of
        approximately $249 million with an interest rate of 7.125% per annum, a 5-year
        amortization schedule and a maturity of May 1, 2010.
  CILCORP’s
        cash flows from financing activities increased by $18 million, and CILCO’s cash
        flows from financing activities decreased by $17 million inthe
        nine
        months ended September 30, 2005,compared
        with the same period of 2004. CILCORP’s net increase in the use of cash for
   64
  money
        pool borrowings of $131 million for the first nine months of 2005
        compared
        to the same period in 2004 was partially offset by an increase in capital
        contributions from Ameren in the amount of $26 million. There were no
        significant debt redemptions in 2005 compared to 2004 debt redemptions of
        $123
        million and $100 million at CILCORP and CILCO, respectively. Dividend payments
        to Ameren increased $12 million and $10 million for CILCORP and CILCO,
        respectively, and CILCORP’s proceeds from intercompany notes with Ameren
        increased $18 million for the first nine months of 2005 compared to the same
        period in 2004.
  IP’s cash flows used in financing activities increased in the
        nine
        months ended September 30, 2005, compared
        with the same period of 2004 primarily because of incremental redemptions,
        repurchases and maturities of long-term debt of $70 million and dividend
        payments of $60 million made to Ameren in 2005, partially offset by the absence
        in 2005 of prepaid interest on the note receivable from a former affiliate
        of
        $43 million.
 
 **Short-term
        Borrowings and Liquidity**
 
 For
        information on short-term borrowing activity, relevant interest rates, and
        borrowings under Ameren’s utility money pool arrangement and non-state-regulated
        subsidiary money pool arrangement, see Note 4 - Short-term Borrowings and
        Liquidity to our financial statements under Part I, Item 1, of this report.
  The
        following table presents the committed bank credit facilities of Ameren and
        EEI
        as of September 30, 2005. See Note 4 - Short-term Borrowings and Liquidity
        to
        our financial statements under Part I, Item 1, of this report for additional
        information concerning these credit facilities.
 **Credit
                  Facility**
              
              **Expiration**
              
              **Amount
                  Committed**
              
              **Amount
                  Available****Ameren:**(a)Multiyear
                  revolving(b)
              
              July
                  2010
              
              $
              1,150
              
              $
              1,150Multiyear
                  revolving
              
              July
                  2010
              
              
              350
              
              
              350**EEI:**One
                  bank credit facility
              
              April
                  2006
              
              
              20
              
              
              -Total
              
              
              
              
              $
              1,520
              
              $
              1,500
 
 (a)
              Ameren
                  Companies may access these credit facilities through intercompany
                  borrowing arrangements.
 (b)
              UE,
                  CIPS, CILCO, Genco and IP are also direct borrowers under this
                  agreement.
  In addition to committed credit facilities, a further source of liquidity
        for
        Ameren from time to time is available cash and cash equivalents. At September
        30, 2005, Ameren had $278million of cash and cash equivalents.
  Ameren and UE are authorized by the SEC under the PUHCA to have an aggregate
        of
        up to $1.5 billion and $1 billion, respectively, of short-term unsecured
        debt
        instruments outstanding at any time. The aggregate amount of short-term
        borrowings outstanding at any time at IP may not exceed $500 million pursuant
        to
        authorizations from the ICC and the SEC under the PUHCA. In addition, CIPS,
        CILCORP and CILCO have PUHCA authority to have an aggregate of up to $250
        million each of short-term unsecured debt instruments outstanding at any
        time.
        Genco is authorized by the FERC to have up to $300 million of short-term
        debt
        outstanding at any time.
  See Note 3 - Rate and Regulatory Matters to our financial statements under
        Part
        I, Item 1, of this report for information concerning PUHCA repeal.
 
 **Long-term
        Debt and Equity**
  The following table presents the issuances of common stock and the issuances,
        redemptions, repurchases and maturities of long-term debt and preferred stock
        for the nine months ended September 30, 2005 and 2004, for certain of the
        Ameren
        Companies. For additional information, see Note 5 - Long-term Debt and Equity
        Financings to our financial statements under Part I, Item 1, of this
        report.
 **Month
                            Issued, Redeemed, Repurchased or Matured**
                        
                        **Nine
                            Months****2005**
                        
                        **2004****Issuances***Long-term
                            debt***UE:**5.30%
                            Senior secured notes due 2037
                        
                        
                        July
                        
                        **$**
                        **297**
                        
                        $
                        -5.00%
                            Senior secured notes due 2020
                        
                        
                        January
                        
                        
                        **85**
                        
                        
                        -5.10%
                            Senior secured notes due 2019
                        
                        
                        September
                        
                        
                        **-**
                        
                        
                        3005.50%
                            Senior secured notes due 2014
                        
                        
                        May
                        
                        
                        **-**
                        
                        
                        104Total
                            Ameren long-term debt issuances
                        
                        
                        
                        
                        **$**
                        **382**
                        
                        $
                        404
   65
  **Month
                              Issued, Redeemed,**
                            **Repurchased
                              or Matured**
                          
                          **Nine
                              Months****2005**
                          
                          **2004***Common
                              stock***Ameren:**7,402,320
                              Shares at $46.61(a)
                          
                          
                          May
                          
                          **$**
                          **345**
                          
                          $
                          -10,925,000
                              Shares at $42.00.....
                          
                          
                          July
                          
                          
                          **-**
                          
                          
                          45919,063,181
                              Shares at $45.90.....
                          
                          
                          February
                          
                          
                          **-**
                          
                          
                          875DRPlus
                              and 401(k)(b)
                          
                          
                          Various
                          
                          
                          **85**
                          
                          
                          84Total
                              common stock issuances
                          
                          
                          
                          
                          **$**
                          **430**
                          
                          $
                          1,418Total
                              Ameren long-term debt and common stock issuances
                          
                          
                          
                          
                          **$**
                          **812**
                          
                          $
                          1,822**Redemptions,
                              Repurchases and Maturities***Long-term
                              debt***Ameren:**Senior
                              notes due 2007(c)
                          
                          
                          February
                          
                          **$**
                          **95**
                          
                          $
                          -**UE:**6.87%
                              First mortgage bonds due 2004......................................................
                            7.00%
                              First mortgage bonds due 2024
                          
                          
                          August
                            June
                          
                          
                          -
                            -
                          
                          
                          188
                            100**CIPS:**6.49%
                              First mortgage bonds due 2005
                          
                          
                          June
                          
                          
                          **20**
                          
                          
                          -**CILCORP:**8.70%
                              Senior notes due 2009
                          
                          
                          May
                          
                          
                          **6**
                          
                          
                          -9.375%
                              Senior bonds due 2029
                          
                          
                          Various
                          
                          
                          **-**
                          
                          
                          23**CILCO:**5.85%
                              Series preferred stock
                            Secured
                              bank term loan
                          
                          
                          July
                            February
                          
                          
                          **1**
                            **-**
                          
                          
                          1
                            100**EEI:**2000
                              Bank term loan, 7.61% due 2004
                          
                          
                          June
                          
                          
                          **-**
                          
                          
                          40**IP:**6.75%
                              First mortgage bonds due 2005
                          
                          
                          March
                          
                          
                          **70**
                          
                          
                          -Note
                              payable to IP SPT5.38%
                              Series due 2005
                          
                          
                          Various
                          
                          
                          **71**
                          
                          
                          65Less:
                              IP activity prior to acquisition date
                          
                          
                          
                          
                          
                          **-**
                          
                          
                          (65
                          )Total
                              Ameren long-term debt redemptions, repurchases and
                              maturities
                          
                          
                          
                          
                          **$**
                          **263**
                          
                          $
                          452
 (a)
              Shares
                  issued upon settlement of the purchase contracts, which were a
                  component
                  of the adjustable conversion-rate equity security units. See Note
                  5 -
                  Long-term Debt and Equity Financings to our financial statements
                  under
                  Part I, Item 1, of this report.
 (b)
              Includes
                  issuances of common stock of 1.6 million shares during the nine
                  months
                  ended September 30, 2005, under DRPlus and 401(k)
                  plans.
 (c)
              Component
                  of the adjustable conversion-rate equity security units. See Note
                  5 -
                  Long-term Debt and Equity Financings to our financial statements
                  under
                  Part I, Item 1, of this report.
  The following table presents the authorized amounts under SEC shelf registration
        statements filed and declared effective for certain of the Ameren Companies
        as
        of September 30, 2005:
 **Effective****Date**
              
              **Authorized**
                **Amount**
              
              **Issued**
              
              **Available****Debt:**Ameren
              July
                  2004
              
              $
              2,000
              
              $
              459
              
              $
              1,541UE(a)
              September
                  2003
              
              
              1,000
              
              
              989
              
              
              11CIPS
              May
                  2001
              
              
              250
              
              
              150
              
              
              100
 
 (a)
              On
                  October 20, 2005, the SEC declared effective a Form S-3 shelf registration
                  statement filed by UE covering the offering from time to time of
                  up to $1
                  billion in various forms of long-term debt and preferred securities.
  Ameren also has approximately 5.7 million shares of common stock available
        for
        issuance under various other SEC effective registration statements applicable
        to
        our DRPlus and 401(k) plans as of September 30, 2005.
 
 Ameren,
        UE and CIPS may sell all or a portion of the remaining securities registered
        under the registration statements if market conditions and capital requirements
        warrant such a sale. Any such offer and sale will be made only by means of
        a
        prospectus meeting the requirements of the Securities Act of 1933 and the
        rules
        and regulations thereunder.
 
 **Indebtedness
        Provisions, Other Covenants and Off-Balance Sheet
        Arrangements**
  See Note 4 - Short-term Borrowings and Liquidity to our financial statements
        under Part I, Item 1, of this report for a discussion of the covenants and
        provisions contained in certain of the Ameren Companies’ bank credit facilities.
        Also see Note 5 - Long-term Debt and Equity Financings to our financial
        statements under Part I, Item 1, of this report for a discussion of off-balance
        sheet arrangements and of covenants and provisions contained in certain of
        the
        Ameren Companies’ indenture agreements and articles of incorporation.
 
 Our credit agreements contain indebtedness cross-default provisions that
        could
        trigger a default under the facilities. In the event Ameren’s subsidiaries
        (subject to the definition in the underlying credit agreements), other than
        certain project finance subsidiaries, default in indebtedness of
   66
  $50
        million or greater, fail to pay the amounts drawn (as a direct borrower)
        under
        an Ameren credit facility, or enter bankruptcy proceedings, a default under
        the
        Ameren credit facilities would occur. A CILCO bankruptcy would also cause
        a
        default under CILCORP’s debt agreements. In addition, a default of $50 million
        or greater or a bankruptcy would cause a default under the agreements supporting
        $100 million of Ameren LIBOR swaps.
 
 At September 30, 2005, the Ameren Companies were in compliance with their
        credit
        agreement, indenture and articles of incorporation provisions and covenants.
 
 We
        rely
        on access to short-term and long-term capital markets as a significant source
        of
        funding for capital requirements not satisfied by our operating cash flows.
        Our
        inability to raise capital on favorable terms, particularly during times
        of
        uncertainty in the capital markets, could negatively impact our ability to
        maintain and grow our businesses. After assessing our current operating
        performance, liquidity, and credit ratings (see Credit Ratings below), we
        believe that we will continue to have access to the capital markets. However,
        events beyond our control may create uncertainty in the capital markets.
        Such
        events might cause our cost of capital to increase or our ability to access
        the
        capital markets to be adversely affected.
 
 **Dividends**
 
 The amount and timing of dividends payable on Ameren’s common stock are within
        the sole discretion of Ameren’s board of directors. The board of directors has
        not set specific targets or payout parameters when declaring common stock
        dividends. However, the board considers various issues including Ameren’s
        historic earnings and cash flow, projected earnings, cash flow and potential
        cash flow requirements, dividend payout rates at other utilities, return
        on
        investments with similar risk characteristics and overall business
        considerations. Dividends paid by Ameren to shareholders during the first
        nine
        months of 2005 totaled $383 million, or $1.905 per share (2004 - $356 million
        or
        $1.905 per share).
  UE’s preferred stock dividends are payable November 15, 2005, to shareholders
        of
        record on October 20, 2005. CIPS’
        preferred stock dividends are payable December 30, 2005, to shareholders
        of
        record on December 8, 2005. CILCO’s preferred stock dividend is payable January
        3, 2006, to shareholders of record on December 5, 2005. CILCO paid a preferred
        stock dividend of less than $1 million on October 3, 2005. IP paid a preferred
        stock dividend of approximately $1 million on November 1, 2005.
  Certain
        of our financial agreements and corporate organizational documents contain
        covenants and conditions that, among other things, restrict the Ameren
        Companies’ payment of dividends. UE would experience restrictions on dividend
        payments if it were to extend or defer interest payments on its subordinated
        debentures. CIPS has provisions in its articles of incorporation restricting
        dividend payments based on ratios of common stock to total capitalization
        and
        other provisions related to certain operating expenses and accumulations
        of
        earned surplus. Genco’s indenture includes restrictions that prohibit making any
        dividend payments if debt service coverage ratios are below a defined threshold.
        CILCORP has restrictions if leverage ratio and interest coverage ratio
        thresholds are not met or if CILCORP’s senior long-term debt does not have
        specified ratings as described in its indenture. CILCO has restrictions on
        dividend payments relative to the ratio of its balance of retained earnings
        to
        the annual dividend requirement on its preferred stock and amounts to be
        set
        aside for any sinking fund retirement of its 5.85% Series preferred stock.
        At
        September 30, 2005, none of the conditions described above that would restrict
        the payment of dividends existed. In its approval of the acquisition of IP
        by
        Ameren, the ICC issued an order that provides for the ability of IP to pay
        dividends on its common stock subject to certain conditions related to credit
        ratings of IP and Ameren and the elimination of IP’s 11.50% mortgage bonds.
        Given the current credit ratings of IP and the amount of IP’s 11.50% mortgage
        bonds that remain outstanding, IP’s payment of dividends on its common stock is
        restricted to $80 million in 2005 and $160 million cumulatively through 2006.
        In
        addition, in accordance with the order issued by the ICC, IP will establish
        a
        dividend policy comparable to the dividend policy of Ameren’s other Illinois
        utilities and consistent with achieving and maintaining a common equity to
        total
        capitalization ratio between 50% and 60%.
 
 The
        following table presents dividends paid by Ameren Corporation and by Ameren’s
        subsidiaries to their respective parents for the nine months ended September
        30,
        2005 and 2004:
 **Nine
                  Months****2005**
              
              **2004**UE
              
              **$**
              **209**
              
              $
              230CIPS
              
              
              **21**
              
              
              46Genco
              
              
              **59**
              
              
              57CILCORP(a)
              
              
              **30**
              
              
              18IP(b)
              
              
              **60**
              
              
              -Non-Registrants
              
              
              **4**
              
              
              5Dividends
                  paid by Ameren
              
              **$**
              **383**
              
              $
              356
 
 (a)
              CILCO
                  paid dividends of $20 million and $10 million for the nine months
                  ended
                  September 30, 2005 and 2004,
                  respectively.
 (b)
              Prior
                  to October 2004, the ICC prohibited IP from paying dividends. If
                  permitted
                  to be paid, IP’s dividends would have been paid directly to Illinova and
                  therefore indirectly to Dynegy.
   67
  **Contractual
        Obligations**
 
 For
        a
        complete listing of our obligations and commitments, see Contractual Obligations
        under Part II, Item 7 and Note 15 - Commitments and Contingencies under Part
        II,
        Item 8 of the Ameren Companies’ combined Form 10-K for the fiscal year ended
        December 31, 2004. See Note 12 - Retirement Benefits to our financial statements
        under Part I, Item 1 of this report for information regarding expected minimum
        funding levels for our pension plan.
 
 Subsequent
        to December 31, 2004, obligations related to the procurement of coal and
        natural
        gas increased at Ameren, UE, CIPS, Genco, CILCORP, CILCO and IP to $6,041
        million, $2,376 million, $299 million, $1,433 million, $974 million, $974
        million and $452 million, respectively, as of September 30, 2005. Total other
        obligations at December 31, 2004, updated for material changes since year-end
        through September 30, 2005, at Ameren, UE, CIPS, Genco, CILCORP, CILCO and
        IP
        were $6,464 million, $2,531 million, $543 million, $1,433 million, $999 million,
        $999 million and $753 million, respectively.
  **Credit
        Ratings**
 
 The
        following table presents the principal credit ratings of the Ameren Companies
        by
        Moody’s, S&P and Fitch effective as of the date of this report and
        subsequent to the rating changes issued October 3, 2005 as discussed
        below:
 **Moody’s**
              **S&P**
              **Fitch****Ameren:**Issuer/corporate
                  credit rating
              A3
              BBB+
              N/AUnsecured
                  debt
              A3
              BBB
              A-Commercial
                  paper
              P-2
              A-2
              F2**UE:**Secured
                  debt
              A1
              BBB+
              A+Commercial
                  paper
              P-1
              A-2
              F1**CIPS:**Secured
                  debt
              A1
              A-
              A**Genco:**Unsecured
                  debt
              A3/Baa2
              BBB+
              BBB+**CILCORP:**Unsecured
                  debt
              Baa2
              BBB
              BBB+**CILCO:**Secured
                  debt
              A2
              A-
              A**IP:**Secured
                  debt
              Baa1
              BBB+
              BBB
 
 On October 3, 2005, S&P downgraded the Ameren Companies’ corporate secured
        debt credit ratings from A- to BBB+ and downgraded secured debt ratings one
        notch at UE and IP principally as a result of recent unfavorable actions
        by the
        Illinois governor with respect to CIPS, CILCO and IP electric rates in 2007.
        S&P also placed the Ameren Companies’ ratings on negative credit watch. On
        September 30, 2005, Moody’s placed long-term ratings of Ameren, CIPS, CILCORP,
        CILCO and IP under review for possible downgrade due to concerns similar
        to
        those expressed by S&P.  Fitch
        has not made any changes to ratings or outlook at this time. See Note 3 -
        Rate
        and Regulatory Matters for a more detailed discussion of actions by the Illinois
        governor.
  On
        March
        31, 2005, Moody’s upgraded IP’s credit ratings. IP’s senior secured debt rating
        was upgraded from Baa3 to Baa1.
  Any adverse change in the Ameren Companies’ credit ratings may reduce access to
          capital and/or increase the cost of borrowings and power supply, among
          other
          things, resulting in
          a
          negative impact on earnings.  At September 30, 2005, if UE, CIPS,
          Genco,
          CILCORP, CILCO or IP were to receive a sub-investment-grade rating (less
          than
          BBB- or Baa3), Ameren,
          UE, CIPS, Genco, CILCORP, CILCO and IP could have been required to post
          collateral for certain trade obligations amounting to $84 million, $41
          million,
          $1 million, $3 million, less than $1 million, less than $1 million, and
          $1
          million, respectively. In addition, the cost of borrowing under our credit
          facilities can increase or decrease based on credit ratings. A credit rating
          is
          not a recommendation to buy, sell or hold securities and it should be evaluated
          independently of any other rating. Ratings are subject to revision or withdrawal
          at any time by the assigning rating
          organization.
  **OUTLOOK**
  Below are some key trends that may impact the Ameren Companies’ financial
        condition, results of operations or liquidity in 2005 and beyond:
  *Revenues*
 
 ·
              By
                  the end of 2006, electric rates for Ameren’s operating subsidiaries will
                  have been fixed or declining for periods ranging from 15 years
                  to 25
                  years. In 2006, electric rate adjustment moratoriums and power
                  supply
                  contracts expire in Ameren’s regulatory jurisdictions.
 ·
              Approximately
                  8 million megawatthours supplied annually by Genco and 6 million
                  megawatthours supplied annually by AERG have been subject to contracts
                  to
                  provide CIPS and CILCO, respectively, with power. The prices in
                  these
                  power supply contracts of $34.00 per megawatthour for AERG and
                  $38.50 per
                  megawatthour for Genco were below estimated market prices for similar
                  contracts in October 2005. CIPS, CILCO and IP made filings with
                  the ICC in
                  2005, outlining, among other things, a proposed framework for power
                  procurement after 2006 through an auction
                  process.
 ·
              In
                  September 2005, the Illinois attorney general and other parties
                  filed a
                  lawsuit against the ICC seeking a declaratory judgment that the
                  ICC lacks
                  authority to approve market-based rates for electric service that
                  have not
                  been “declared competitive” pursuant to Illinois law
 68
 and seeking injunctive relief prohibiting ICC
                  approval of
                  the proposed power procurement auction process. Additionally, the
                  governor
                  of Illinois sent a letter to the ICC expressing his view that rate
                  increases are unjustified, his opposition to the proposed auction
                  process
                  and his contention that the ICC lacks authority to approve such
                  market-based rates. Both the Illinois governor's letter and the
                  Illinois
                  attorney general's lawsuit assert that the energy component of
                  the Ameren Illinois utilities' retail rates for electricity
                  should
                  not be based on their cost to procure energy and capacity in the
                  wholesale
                  market. We intervened in the Illinois attorney general’s lawsuit to seek a
                  determination that the ICC is acting within its authority in the
                  rate
                  approval process. Any decision or action that impairs CIPS’, CILCO’s and
                  IP’s ability to fully recover purchased power costs from our electric
                  customers in a timely manner could result in material adverse consequences
                  for these companies and for Ameren.
 ·
                The Ameren Illinois utilities intend to file
                  revised
                  tariffs with the ICC by the end of 2005 that would modify their
                  electric
                  delivery service rates effective January 2, 2007. In March 2005
                  legislative hearings, Ameren indicated it expected that the average
                  rates
                  for its Illinois utilities, on a combined basis, may increase by
                  10% to
                  20% in 2007 over present bundled rate levels, with 50% to 70% of
                  this
                  increase resulting from higher power costs. This estimate was based
                  on a
                  number of assumptions about market prices for power, which were
                  based on
                  2005 prices at that time, the type of power supply product to be
                  procured,
                  future auction results, ratemaking outcomes and various other factors.
                  Since that time, fuel prices have increased.  As such, in
                  September
                  2005, Ameren revised its estimate of the potential rate increase
                  to 20% to
                  35%, with power prices representing around 70% of the increase.Actual
                  results could be significantly different from these assumptions. 
                  See
                  Note 3 - Rate and Regulatory Matters to our financial statements
                  under
                  Part I, Item 1, of this
                  report.
 ·
                Based
                    on the results of a cost of service study that will be submitted
                    by UE by
                    January 1, 2006 and the status of the environmental and fuel
                    cost recovery
                    rulemaking proceedings outlined below, UE will determine what
                    course of
                    action it believes should be taken in resetting electric rates
                    for
                    Missouri.  The MoPSC staff and other stakeholders will
                    also review
                    the study and, based upon their analyses, may also make rate
                    recommendations.
 ·
              We
                  expect continued economic growth in our service territory to benefit
                  electric demand in 2005. However, higher prices for energy could
                  result in
                  reduced demand from consumers.
 ·
              UE,
                  Genco and CILCO are seeking to raise the equivalent availability
                  and
                  capacity factors of their power plants from 2004 levels through
                  a process
                  improvement program.
 ·
              In
                  2005, we expect natural gas and coal prices to support power prices
                  in
                  excess of 2004 levels. Power prices in the Midwest affect the amount
                  of
                  revenues UE, Genco and CILCO (through AERG) can generate by marketing
                  any
                  excess power into the interchange markets and influence the cost
                  of power
                  we purchase in the interchange markets.
 ·
              On
                  April 1, 2005, the MISO Day Two Energy Market began operating.
                  The Day Two
                  market presents an opportunity for increased power sales from UE,
                  Genco
                  and CILCO power plants and improved access to power for UE, CIPS,
                  CILCO
                  and IP. The MISO Day Two Energy Market also presents the risk of
                  significantly higher MISO-related costs. Due to the MISO Day Two
                  Energy
                  Market, we have incurred higher operating expenses.  In
                  part, these
                  higher charges were due to volatile summer weather patterns and
                  related
                  loads.  In addition, we attribute some of these higher charges
                  to the
                  relative infancy of the MISO Day Two Energy Market, suboptimal
                  dispatching
                  of power plants and price volatility.  We will continue
                  to fine tune
                  our operations and work closely with MISO to insure that the MISO
                  Day Two
                  Energy Market operates more efficiently and effectively in the
                  future.
  *Fuel
        and Purchased Power*
 
 ·
              In
                  2004, 86% of Ameren’s electric generation (UE-80%, Genco-93%,
                  CILCO-99%) was supplied by its coal-fired power plants and
                  approximately 85% of the coal used by these plants (UE-97%, Genco-66%,
                  CILCO-26%) was delivered by railroads from the Powder River
                  Basin
                  (“PRB”) in Wyoming. In May 2005, the joint Burlington Northern-Union
                  Pacific rail line in the PRB suffered two derailments due to unstable
                  track conditions. As a result, the Federal Rail Administration
                  placed slow
                  orders, or speed restrictions, on sections of the line until the
                  track
                  could be made safe. In addition, large sections of track on a Union
                  Pacific rail line were damaged by heavy rains near Topeka, Kansas
                  in
                  October 2005. These actions reduced deliveries of coal from PRB
                  mines.
                  Because of the railroad delivery problems, UE, Genco, and CILCO
                  expect to
                  receive about 80 to 90% of scheduled deliveries of PRB coal until
                  track
                  repairs are complete and the slow orders are removed. The railroads
                  are
                  projecting that maintenance of the joint rail line will be completed
                  in
                  December 2005 and normal deliveries should resume at that time.
                  The tracks
                  on the Union Pacific rail line near Topeka, Kansas have been temporarily
                  repaired, but significant levels of congestion have resulted. Ameren,
                  UE,
                  Genco and CILCO believe they have sufficient coal inventories to
                  reliably
                  maintain generation through the maintenance period at the projected
                  delivery levels. In order to reduce coal inventory shortage risk
                  should
                  other variations in deliveries occur, Ameren, UE, Genco and CILCO
                  are
                  implementing a coal management strategy. This
                  strategy
 69
   includes reducing sales of power during low-margin
                  periods and purchasing economically available coal in the spot
                  market.
                  Actual power plant performance, power market conditions, weather-induced
                  demand for power, availability of alternative coal supplies and
                  the actual
                  time required for the railroads to resume normal deliveries of
                  PRB coal
                  could have a significant impact on the effectiveness of these
                  strategie
 ·
                Ameren’s
                    coal and related transportation costs are expected to increase
                    3% to 5% in
                    2005, an additional 5% to 10% in 2006, and to increase
                    again by
                    10% to 15% in 2007. Recent coal delivery disruptions could negatively
                    impact these estimates. See Item 3 - Quantitative and Qualitative
                    Disclosures about Market Risk for information about the percentage
                    of coal
                    and transportation requirements that are price-hedged for 2005
                    through
                    2009.
 ·
              In
                  July 2005, a new law was enacted that will enable the MoPSC
                  to put in
                  place fuel, purchased power and environmental cost recovery mechanisms
                  for
                  Missouri’s utilities. The legislation also includes rate case filing
                  requirements, a 2.5% annual rate increase cap for the environmental
                  recovery mechanism and prudency reviews, among other things. Detailed
                  rules for these mechanisms are expected to be issued by the MoPSC
                  in
                  2006.
  *Other
          Costs*
 
 ·
              UE’s
                  Callaway nuclear plant is undergoing a refueling and maintenance
                  outage
                  that began in September 2005, and is expected to last 70 to 75
                  days.
                  During this outage, major capital equipment will be replaced and
                  upgraded
                  providing an expected 60 megawatt increase in the generating capacity
                  of
                  the plant. As a result, the outage will last longer than a typical
                  refueling and maintenance outage, which usually lasts 30 to 35
                  days and
                  occurs approximately every 18 months. During an outage, maintenance
                  and
                  purchased power costs increase, and the amount of excess power
                  available
                  for sale decreases versus non-outage
                  years.
 ·
              Over
                  the next few years, we expect increased expenses for rising employee
                  benefit costs as well as higher insurance and security costs associated
                  with additional measures we have taken, or may have to take, at
                  UE’s
                  Callaway nuclear plant and our other operating
                  plants.
 ·
              We
                  are currently undertaking cost reduction or control initiatives
                  associated
                  with the strategic sourcing of purchases and streamlining of
                  administrative functions.
 
 *Capital
        Expenditures*
 
 ·
              The
                  EPA has issued more stringent emission limits on all coal-fired
                  power
                  plants. Between 2005 and 2015, Ameren expects that certain of the
                  Ameren
                  Companies will be required to invest between $1.4 and $1.9 billion
                  to
                  retrofit their power plants with pollution control equipment. These
                  investments will also result in higher ongoing operating expenses.
                  Approximately two-thirds of this investment will be in Ameren’s regulated
                  Missouri operations and therefore is expected to be recoverable
                  over time
                  from ratepayers. The recoverability of amounts expended in
                  non-rate-regulated operations will depend on whether market prices
                  for
                  power adjust as a result of this increased
                  investment.
 ·
              In
                  June 2005, UE issued a request for proposal for the purchase of
                  500 to 800
                  megawatts of capacity and associated energy starting in 2006 through
                  the
                  acquisition of gas-fired, simple-cycle or combined-cycle electric
                  generating resources currently operating in the MISO.  UE
                  is also
                  evaluating its longer-term needs for new baseload and peaking electric
                  generation capacity.
 
 *Affiliate
        Transactions*
 
 ·
              Due
                  to the MoPSC order approving UE’s Illinois service territory transfer to
                  CIPS or future regulatory proceedings, there could be changes to
                  the
                  agreement between UE and Genco to jointly dispatch electric generation
                  or
                  changes to the effect of that agreement on revenues and/or electric
                  margins. Such changes could affect the pricing or availability
                  of power
                  transferred between Genco and UE. Based on operating performance
                  for the
                  past year, such changes would likely result in a transfer of electric
                  margins from Genco to UE. The ultimate impact of any modifications
                  to the
                  joint dispatch agreement will be determined by future native load
                  demand,
                  the availability of electric generation from UE and Genco and market
                  prices, among other things, but such impact could be material.
                  Ameren’s
                  earnings could be affected if electric rates for UE are adjusted
                  by the
                  MoPSC to reflect the provisions of the MoPSC order approving the
                  service
                  territory transfer and/or other changes to the joint dispatch agreement.
                  See Note 3 - Rate and Regulatory Matters to our financial statements
                  in
                  Part 1, Item 1 of this report for a discussion of modifications
                  to the
                  joint dispatch agreement ordered by the
                  MoPSC.
 
 *Recent
        Acquisitions*
 
 ·
              Ameren,
                  CILCORP, CILCO and IP expect to continue to focus on realizing
                  integration
                  synergies associated with these acquisitions, including lower fuel
                  costs
                  at CILCORP and CILCO and reduced administrative and operating expenses
                  at
                  IP.
 
 *Other*
 
 ·
                In
                    August 2005, the president signed into law the Energy Policy
                    Act of
                    2005. This legislation includes several provisions that
                    impact the
                    Ameren Companies, including,
   70
  among others, the repeal of the PUHCA effective
                  in
                  February 2006, under which Ameren is registered, and tax incentives
                  for
                  investments in pollution control equipment, electric transmission
                  property, clean coal facilities and natural gas distribution
                  lines. The Energy Policy Act of 2005 also extends the Price-Anderson
                  nuclear plant liability provisions under the Atomic Energy Act
                  of
                  1954.
 
 The
        outcome and developments related to the above items could have a material
        impact
        on our results of operations, financial position, or liquidity. Additionally,
        in
        the ordinary course of business, we evaluate strategies to enhance our results
        of operations, financial position, and liquidity. These strategies may include
        acquisitions, divestitures, opportunities to reduce costs or increase revenues,
        and other strategic initiatives to increase Ameren’s shareholder value. We are
        unable to predict which, if any, of these initiatives will be executed. The
        execution of these initiatives may have a material impact on our future results
        of operations, financial position, or liquidity.
 
 **RISK
        FACTORS**
 
 **Ameren
        may not be able to integrate IP successfully into its other businesses or
        achieve the benefits it anticipates.**
 
 Ameren
        cannot ensure that it will be able to integrate IP successfully with its
        other
        businesses. The integration of IP with its other businesses will present
        significant challenges; Ameren may not be able to operate the combined company
        as effectively as expected. Ameren may also fail to achieve the anticipated
        benefits of the acquisition as quickly or as cost-effectively as anticipated,
        or
        it may not be able to achieve those benefits at all. If Ameren is unable
        to
        integrate its businesses effectively or to achieve the benefits anticipated,
        its
        results of operations, financial position, or liquidity may be materially
        adversely affected.
  **The
        electric and gas rates that certain Ameren Companies are allowed to charge
        in
        Missouri and Illinois are largely set through 2006. These “rate freezes,” along
        with other actions of regulators that can significantly affect our earnings,
        liquidity and business activities, are largely outside our
        control.**
 
 The
        rates
        that certain Ameren Companies are allowed to charge for their services are
        the
        single most important item influencing the results of operations, financial
        position, and liquidity of the Ameren Companies. Our industry is highly
        regulated. The regulation of the rates that we charge our customers is
        determined, in large part, by governmental organizations outside of our control,
        including the MoPSC, the ICC, and the FERC. We are also subject to regulation
        by
        the SEC under the PUHCA until its repeal becomes effective in February 2006.
        Decisions made by these regulators could have a material impact on our results
        of operations, financial position, or liquidity.
 
 As
        a part
        of the settlement of UE’s Missouri electric rate case in 2002, UE is subject to
        a rate moratorium that prohibits changes in its electric rates in Missouri
        before July 1, 2006, subject to limited statutory and other exceptions.
        Furthermore, as part of the settlement of UE’s Missouri gas rate case, which was
        approved by the MoPSC on January 13, 2004, UE agreed to a rate moratorium.
        UE will make no changes in its gas delivery rates prior to July 1,
        2006,
        subject to certain exceptions. Also, in the order approving Ameren’s acquisition
        of IP, the ICC prohibited IP from filing for any proposed increase in gas
        delivery rates to be effective prior to January 1, 2007, beyond IP’s
        then-pending request for a gas delivery rate increase. In addition, a provision
        of the Illinois legislation related to the restructuring of the Illinois
        electric industry put a rate freeze into effect in Illinois through
        January 1, 2007, for CIPS, CILCO and IP. This Illinois legislation
        also
        requires that 50% of the earnings from each respective Illinois jurisdiction
        in
        excess of certain levels be refunded to CIPS’, CILCO’s and IP’s Illinois
        customers through 2006. The ICC conducted workshops seeking input from
        interested parties on the framework to be used for retail rate determination
        and
        for power procurement by customers after the current Illinois rate freeze
        and
        power supply contracts end in 2006. In February, 2005, CIPS, CILCO and IP
        made
        filings with the ICC outlining a proposed framework for a power procurement
        auction and a rate mechanism to pass generation costs through to customers,
        among other things. In September 2005, the Illinois attorney general and
        other
        parties filed a lawsuit against the ICC seeking a declaratory judgment that
        the
        ICC lacks authority to approve market-based rates for electric service that
        have
        not been “declared competitive” pursuant to Illinois law and seeking injunctive
        relief prohibiting ICC approval of the proposed power procurement auction.
        Additionally, the governor of Illinois sent a letter to the ICC expressing
        his
        opposition to the proposed auction process and his contention that the ICC
        lacks
        authority to approve such market-based rates. Both the Illinois governor's
        letter and the attorney general's lawsuit assert that the energy component
        of
        the Ameren Illinois utilities' retail rates for electricity should
        not be
        based on their cost to procure energy and capacity in the wholesale market.
        We
        have intervened in the attorney general’s lawsuit to seek a determination that
        the ICC is acting within its authority in the rate approval process. Any
        decision or action that impairs our ability to fully recover purchased power
        costs from our electric customers in a timely manner could result in material
        adverse consequences, including a significant drop in credit ratings potentially
        to below investment grade status, a loss of access to capital markets, higher
        borrowing costs, higher power supply costs, an inability to make timely energy
        infrastructure investments, reduced customer service, job losses and financial
        insolvency.  See
        the
        Credit Ratings section in Liquidity and Capital Resources
   71
  above
        for
        a discussion of the credit rating changes recently issued in response to
        actions
        in Illinois.
 
 As
        a part
        of the settlement of UE’s Missouri electric rate case in 2002, UE also undertook
        to use commercially reasonable efforts to make critical energy infrastructure
        investments of $2.25 billion to $2.75 billion from January 1, 2002
        through
        June 30, 2006. Ameren also committed IP to make between $275 million
        and
        $325 million in energy infrastructure investments over its first two years
        of
        ownership, in conjunction with the ICC’s approval of Ameren’s acquisition of IP.
        UE’s agreement to a rate moratorium in Missouri and CIPS’, CILCO’s and IP’s rate
        freezes mean that capital expenditures will not become recoverable in rates,
        and
        will not earn a return, before July 1, 2006, for UE and January 2, 2007,
        for
        CIPS, CILCO and IP. Therefore, undertakings with respect to energy
        infrastructure investments and funding new programs, coupled with the rate
        reductions and rate moratoriums, could result in increased financing
        requirements for UE, CIPS, CILCO and IP and thus have a material impact on
        our
        results of operations, financial position, and liquidity.
 
 The
        Ameren Companies do not currently have in either Missouri or Illinois a fuel
        adjustment clause for their electric operations that would allow them to
        recover
        from customers, the costs for purchased power or increased fuel used for
        generation. Therefore, to the extent that we have not hedged our fuel and
        power
        costs, we are exposed to changes in fuel and power prices to the extent that
        fuel for our electric generating facilities and power must be purchased on
        the
        open market in order for us to serve our customers. See the Outlook section
        above for a discussion of Missouri legislation enabling a fuel adjustment
        clause.
 
 Steps
        taken and being considered at the federal and state levels continue to change
        the structure of the electric industry and utility regulation. At the federal
        level, the FERC has
        been
        mandating changes in the regulatory framework for transmission-owning public
        utilities such as UE, CIPS, CILCO and IP. In Missouri, restructuring bills
        have
        been introduced in the past, but no legislation has been passed.
 
 Principally
        because of rate reductions and rate moratoriums that affect certain Ameren
        Companies, increased costs and investments have resulted in decreased returns
        in
        Ameren’s distribution utility businesses. In 2005, Ameren began the process for
        preparing and submitting proposals for utility rate adjustments in Illinois
        and
        Missouri to take effect after the expiration of the applicable rate
        moratoriums.
 
 We
        are
        not able to predict what rate treatment certain Ameren Companies will receive
        after the rate moratoriums expire in Missouri and Illinois. See Note 3 -
        Rate
        and Regulatory Matters to our financial statements under Part I, Item 1,
        of this
        report. In response to competitive, economic, political, legislative and
        regulatory pressures, we may be subject to further rate moratoriums, rate
        refunds, limits on rate increases or rate reductions, including phase-in
        plans,
        any and all of which could have a significant adverse affect on our results
        of
        operations, financial position, or liquidity.
 
 **Increased
        federal and state environmental regulation will require UE, Genco and CILCO
        to
        incur large capital expenditures and increase operating
        costs.**
 
 Approximately
        65% of Ameren’s generating capacity is coal-fired. The balance is nuclear,
        gas-fired, hydro, and oil-fired. In March 2005, the EPA issued final regulations
        with respect to SO 2 ,
        NO x, and
        mercury emissions from coal-fired power plants. These new rules will require
        significant additional reductions in these emissions from our power plants
        in
        phases, beginning in 2010. Although these new rules are being challenged
        in the
        courts, preliminary estimates of capital costs based on Ameren systems’ current
        technology, to comply with the EPA proposed SO 2 ,
        NO x, and
        mercury emission regulations, range from $1.4 billion to $1.9 billion by
        2015.
 
 Future
        initiatives regarding greenhouse gas emissions and global warming continue
        to be
        the subject of much debate. Coal-fired power plants are significant sources
        of
        carbon dioxide emissions, a principal greenhouse gas. The related Kyoto Protocol
        was signed by the United States, but it has since been rejected by the
        president, who instead has asked for an 18% voluntary decrease in carbon
        intensity. In response to the administration’s request, six electric power
        sector trade associations, including the Edison Electric Institute, of which
        Ameren is a member, and the Tennessee Valley Authority (TVA), signed a
        Memorandum of Understanding (MOU) with the DOE in December 2004 calling for
        a 3%
        - 5% decrease in carbon intensity from ****** the
        utility sector between 2002 and 2012 on a voluntary basis. Currently, Ameren
        is
        considering various initiatives to comply with the MOU. These include enhanced
        generation at our nuclear and hydro power plants, increased efficiency measures
        at our coal-fired units, and investing in renewable energy and carbon
        sequestration projects.
 
 The
        EPA
        has been conducting an enforcement initiative in an effort to determine whether
        modifications at a number of coal-fired power plants owned by electric utilities
        in the U.S. are subject to New Source Review requirements or New Source
        Performance Standards under the Clean Air Act. The EPA’s inquiries focus on
        whether the best available emission control technology was or should have
        been
        used at such power plants when major maintenance or capital improvements
        were
        made.
 
 In
        April
        2005, Genco received a request from the EPA for information pursuant to Section
        114(a) of the Clean Air Act seeking detailed operating and maintenance history
        data with respect to its Meredosia, Hutsonville, Coffeen and Newton
   72
  facilities,
        EEI’s Joppa facility and AERG’s E.D. Edwards and Duck Creek facilities. All of
        these facilities are coal-fired plants. The information request requires
        Genco
        to provide responses to specific EPA questions regarding certain projects
        and
        maintenance activities in order to determine compliance with certain Illinois
        air pollution and emissions rules and with the New Source Performance Standard
        requirements of the Clean Air Act. Genco is fully complying with this
        information request, but cannot predict the outcome of this matter at this
        time.
 
 We
        are
        unable to predict the ultimate effect of any new environmental regulations,
        voluntary compliance guidelines, enforcement initiatives, or legislation
        on our
        results of operations, financial position, or liquidity. Any of these factors
        would add significant pollution control expenditures and operating costs
        to
        UE’s, Genco’s and CILCO’s generating assets and, therefore, could also increase
        financing requirements for some Ameren Companies. Although costs incurred
        by UE
        would be eligible for recovery in rates over time, subject to MoPSC approval
        in
        a rate proceeding, there is no similar mechanism for recovery of costs by
        Genco
        or CILCO in Illinois.
 
 **UE’s,
        CIPS’, CILCO’s and IP’s participation in the MISO could increase costs, reduce
        revenues, and reduce UE’s, CIPS’, CILCO’s and IP’s control over their
        transmission assets. Genco could also incur increased costs or reduced revenues
        as a result of participation in the MISO Day Two Energy
        Market.**
 
 On
        May 1,
        2004, functional control of the UE and CIPS transmission systems was transferred
        to the MISO. On September 30, 2004, IP transferred functional control of
        its
        transmission system to the MISO. CILCO had transferred functional control
        of its
        transmission system to the MISO before its acquisition by Ameren. Ameren,
        UE,
        CIPS, CILCO and
        IP
        may be required to incur expenses or expand their  transmission
        systems according to decisions made by MISO rather than according to their
        internal planning process. See Note 3 - Rate and Regulatory Matters to our
        financial statements under Part II, Item 8, of the Ameren Companies’ combined
        Form 10-K for the fiscal year ended December 31, 2004.
 
 The
        MISO
        Day Two Energy Market, which began operation on April 1, 2005, is designed
        to
        result in improved transparency of power pricing and efficiency in generation
        dispatch. Since this is a new and complex market, the market has incurred
        significant price volatility and sub-optimal dispatching of power plants.
        In
        addition, the sale of power in this market-based environment has resulted
        in
        unanticipated transmission congestion, and other settlement charges.
 
 Until
        we
        achieve some degree of operational experience participating in the MISO,
        including the MISO Day Two Energy Market, we are unable to predict the impact
        that the MISO participation or ongoing RTO developments at the FERC or other
        regulatory authorities will have on our results of operations, financial
        position, or liquidity.
 
 **Increasing
        costs associated with our defined benefit retirement plans, health care plans,
        and other employee- related benefits may adversely affect our results of
        operations, financial position, or liquidity.**
  We
        have
        defined benefit and postretirement plans that cover substantially all of
        our
        employees. Assumptions related to future costs, returns on investments, interest
        rates, and other actuarial assumptions have a significant impact on our earnings
        and funding requirements. Based on our assumptions at December 31, 2004 and
        assuming continuation of the current federal interest rate relief beyond
        2005,
        in order to maintain minimum funding levels for Ameren’s pension plans, we do
        not expect future contributions to be required until 2009 at which time we
        would
        expect a required contribution of approximately $300 million. However, in
        the
        meantime we may continue our practice of making voluntary contributions to
        maintain more prudent funded levels than minimally required. These amounts
        are
        estimates and may change based on actual stock market performance, changes
        in
        interest rates and any changes in government regulations.
 
 In
        addition to the costs of our retirement plans, the costs of providing health
        care benefits to our employees and retirees have increased substantially
        in
        recent years. We believe that our employee benefit costs, including costs
        related to health care plans for our employees and former employees, will
        continue to rise. The increasing costs and funding requirements associated
        with
        our defined benefit retirement plans, health care plans and other employee
        benefits may adversely affect our results of operations, financial position,
        or
        liquidity.
 
 **UE’s,
        Genco’s, CILCO’s, AERG’s, Medina Valley’s and EEI’s electric generating
        facilities are subject to operational risks that could result in unscheduled
        plant outages, unanticipated operation and maintenance expenses, and increased
        purchased power costs.**
 
 UE,
        Genco, CILCO, AERG, Medina Valley, and EEI own and operate coal, nuclear,
        gas-fired, hydro, and oil-fired generating facilities. Operation of electric
        generating facilities involves certain risks that can adversely affect energy
        output and efficiency levels. Included among these risks are:
 
 ·
              increased
                  prices for fuel and fuel
                  transportation;
 ·
              facility
                  shutdowns due to a failure of equipment or processes or operator
                  error;
 ·
              longer-than-anticipated
                  maintenance outages;
 73
  ·
                disruptions
                    in the delivery of fuel and lack of adequate
                    inventories;
 ·
              labor
                  disputes;
 ·
              inability
                  to comply with regulatory or permit
                  requirements;
 ·
              disruptions
                  in the delivery of electricity;
 ·
              increased
                  capital expenditures requirements, including those due to environmental
                  regulation; and
 ·
              unusual
                  or adverse weather conditions, including catastrophic events such
                  as
                  fires, explosions, floods or other similar occurrences affecting
                  electric
                  generating facilities.
 
 **A
        substantial portion of Genco’s and CILCO’s generating capacity is committed
        under affiliate contracts that expire at the end of 2006. Upon expiration
        of
        these contracts, Genco’s and CILCO’s electric generating facilities must compete
        for the sale of energy and capacity, which exposes them to price
        risk.**
 
 As
        of
        September 30, 2005, Genco and CILCO, through AERG, owned 4,200 megawatts
        and
        1,100 megawatts, respectively, of non-rate-regulated electric generating
        facilities. Of these non-rate-regulated electric generating facilities,
        approximately 3,500 megawatts are currently under full-requirements contracts
        with our affiliates. The remainder of the generating capacity must compete
        for
        the sale of energy and capacity.
 
 To
        the
        extent electric capacity generated by these facilities is not under contract
        to
        be sold, the revenues and results of operations of these non-rate-regulated
        subsidiaries will generally depend on the prices that they can obtain for
        energy
        and capacity in Illinois and adjacent markets. Among the factors that could
        influence such prices (all of which are beyond our control to a significant
        degree) are:
  ·
              the
                  current and future market prices for natural gas, fuel oil and
                  coal;
 ·
              current
                  and forward prices for the sale of
                  electricity;
 ·
              the
                  extent of additional supplies of electric energy from current competitors
                  or new market entrants;
 ·
              the
                  pace of deregulation in our market area and the expansion of deregulated
                  markets;
 ·
              the
                  regulatory and pricing structures developed for Midwest energy
                  markets as
                  they continue to evolve and the pace of development of regional
                  markets
                  for energy and capacity outside of bilateral
                  contracts;
 ·
              future
                  pricing for, and availability of, transmission services on transmission
                  systems, and the effect of RTOs and export energy transmission
                  constraints, which could limit the ability to sell energy in markets
                  adjacent to Illinois;
 ·
              the
                  rate of growth in electricity usage as a result of population changes,
                  regional economic conditions, and the implementation of conservation
                  programs; and
 ·
              climate
                  conditions prevailing in the Midwest
                  market.
 
 In
        a
        report issued by the ICC in late 2004 and in filings made with the ICC in
        February 2005 by CIPS, CILCO and IP, a process was outlined that would have
        CIPS, CILCO and IP procuring power through an auction monitored by the ICC
        after
        the current Illinois rate freeze and power supply contracts end in 2006.
        Genco
        and AERG, through Marketing Company, would probably participate in this auction,
        but with a proposed limit of 35% on the maximum amount of power that any
        single
        supplier could supply to Ameren’s Illinois utilities. See Note 3 - Rate and
        Regulatory Matters to our financial statements under Part I, Item 1, of this
        report for a discussion of the pending ICC proceeding relating to the adoption
        of a power procurement auction process, including the lawsuit which has been
        filed by the Illinois attorney general and others against the adoption of
        such
        auction process and the Illinois governor’s letter to the ICC in opposition to
        it.
 
 Genco
        and
        UE have signed an agreement to dispatch their generating facilities jointly,
        which produces benefits and efficiencies for both generating parties. Recently
        completed or future federal and state regulatory proceedings and policies
        may
        evolve in ways that could affect Genco’s ability to participate in these
        affiliate transactions on current terms. For example, as a result of the
        MoPSC
        order approving the transfer of UE’s Illinois service territory to CIPS, certain
        terms of the joint dispatch agreement were ordered to be modified. Due to
        this
        MoPSC order or future regulatory proceedings, there could be changes to the
        joint dispatch agreement that would affect revenues and/or electric margins.
        Such changes could affect the pricing or availability of power transferred
        between Genco and UE. Based on operating performance for the past year, such
        changes would likely result in a transfer of electric margins from Genco
        to UE.
        The ultimate impact of any modifications to the joint dispatch agreement
        will be
        determined by future native load demand, the availability of electric generation
        from UE and Genco and market prices, among other things, but such impact
        could
        be material. Ameren’s earnings could be affected if electric rates for UE are
        adjusted by the MoPSC to reflect the provisions of the MoPSC order approving
        the
        service territory transfer and/or other changes to the joint dispatch agreement.
        See Note 3 - Rate and Regulatory Matters to our financial statements in Part
        1,
        Item 1 of this report for a discussion of modifications to the joint dispatch
        agreement ordered by the MoPSC.
 
 **UE’s
        ownership and operation of a nuclear generating facility creates business,
        financial and waste disposal risks.**
 
 UE
        owns
        the Callaway nuclear plant, which represents approximately 13% of UE’s
        generation capacity. Therefore, UE is subject to the risks of nuclear
        generation, which include the following:
 
 ·
              potential
                  harmful effects on the environment and human health resulting from
                  the
                  operation of nuclear facilities
 74
   and the storage, handling and disposal of
                    radioactive
                    materials;
 ·
                  limitations
                      on the amounts and types of insurance commercially available
                      to cover
                      losses that might arise in connection with UE’s nuclear operations or
                      those of others in the United
                      States;
 ·
              uncertainties
                  with respect to contingencies and assessment amounts if insurance
                  coverage
                  is inadequate;
 ·
              increased
                  public and governmental concerns over the adequacy of security
                  at nuclear
                  power plants;
 ·
              uncertainties
                  with respect to the technological and financial aspects of decommissioning
                  nuclear plants at the end of their licensed lives (UE’s facility operating
                  license for the Callaway nuclear plant expires in 2024); and
 ·
              costly
                  and extended outages for scheduled or unscheduled
                  maintenance.
 
 The
        NRC
        has broad authority under federal law to impose licensing and safety
        requirements for the operation of nuclear generation facilities. In the event
        of
        non-compliance, the NRC has the authority to impose fines, shut down a unit,
        or
        both, depending upon its assessment of the severity of the situation, until
        compliance is achieved. Revised safety requirements promulgated by the NRC
        could
        necessitate substantial capital expenditures at nuclear plants such as UE’s. In
        addition, if a serious nuclear incident occurred, it could have a material
        but
        indeterminable adverse effect on UE’s results of operations, financial position,
        or liquidity. A major incident at a nuclear facility anywhere in the world
        could
        cause the NRC to limit or prohibit the operation or licensing of any domestic
        nuclear unit.
  Operating
        performance at UE’s Callaway nuclear plant has resulted in unscheduled or
        extended outages including the extension of Callaway’s scheduled refueling and
        maintenance outage in 2004. In addition, Ameren and UE incurred significant
        unanticipated replacement power and maintenance costs. As a result, the
        operating performance at UE’s Callaway nuclear plant has declined in comparison
        with both its past operating performance and the operating performance of
        other
        nuclear plants in the U.S. Ameren and UE are actively working to address
        the
        factors that led to the decline in Callaway’s operating performance. Management
        and supervision of operating personnel, equipment reliability, maintenance
        worker practices, engineering performance, and overall organizational
        effectiveness have been reviewed with some actions taken and other actions
        currently under consideration. However, Ameren and UE cannot predict whether
        such efforts will result in an overall improvement of operations at Callaway.
        Any actions taken are expected to result in incremental operating costs at
        Callaway. Further, additional unscheduled or extended outages at Callaway
        could
        have a material adverse effect on the results of operations, financial position,
        or liquidity of Ameren and UE.
 
 **Our
        energy risk management strategies may not be effective in managing fuel and
        electricity pricing risks, which could result in unanticipated liabilities
        or
        increased volatility in our earnings.**
 
 We
        are
        exposed to changes in market prices for natural gas, fuel, electricity, and
        emission credits. Prices for natural gas, fuel, electricity, and emission
        credits may fluctuate substantially over relatively short periods of time
        and
        expose us to commodity price risk. We use long-term purchase and sales contracts
        in addition to derivatives such as forward contracts, futures contracts,
        options, and swaps to manage these risks. We attempt to manage our risk
        associated with these activities through enforcement of established risk
        limits
        and risk management procedures. We cannot assure that these strategies will
        be
        successful in managing our pricing risk, or that they will not result in
        net
        liabilities to us as a result of future volatility in these
        markets.
 
 Although
        we routinely enter into contracts to hedge our exposure to the risks of demand,
        market effects of weather, and changes in commodity prices, we do not always
        hedge the entire exposure of our operations from commodity price volatility.
        Furthermore, our ability to hedge our exposure to commodity price volatility
        depends on liquid commodity markets. As a result, to the extent the commodity
        markets are illiquid, we may not be able to execute our risk management
        strategies, which could result in greater unhedged positions than we would
        prefer at a given time. To the extent that unhedged positions exist, fluctuating
        commodity prices can adversely affect our results of operations, financial
        position, or liquidity.
 
 **Our
        counterparties may not meet their obligations to us.**
 
 We
        are
        exposed to risk that counterparties who owe us money, energy or other
        commodities or services will not be able to perform their obligations. Should
        the counterparties to these arrangements (which include agreements for a
        subsidiary of Dynegy and others to supply electricity to IP during 2005 and
        2006) fail to perform, we might be forced to replace the underlying commitment
        at then-current market prices. In such event, we might incur losses in addition
        to the amounts, if any, already paid to the counterparties.
 
 **Our
        facilities are considered critical infrastructure and may be targets for
        acts of
        terrorism.**
 
 Like
        other electric and gas utilities, our power generation plants, fuel storage
        facilities, and transmission and distribution facilities may be targets of
        terrorist activities that could result in disruption of our ability to produce
        or distribute some portion of our energy products. Any such disruption could
        result in a significant decrease in revenues or significant additional costs
   75
 
  to
          repair, which could have a material adverse effect on our results of operations,
          financial position, or liquidity.
 
 **Our
        businesses are dependent on our ability to access the capital markets
        successfully. We may not have access to sufficient capital in the amounts
        and at
        the times needed.**
 
 We
        use
        short-term and long-term capital markets as a significant source of liquidity
        and funding for capital requirements, including those related to future
        environmental compliance, not satisfied by our operating cash flows. The
        inability to raise capital on favorable terms, particularly during times
        of
        uncertainty in the capital markets, could negatively impact our ability to
        maintain and expand our businesses. Based on our current credit ratings,
        we
        believe that we will continue to have access to the capital markets. However,
        events beyond our control may create uncertainty in the capital markets that
        could increase our cost of capital or impair our ability to access the capital
        markets. See the Credit Ratings section in Liquidity and Capital Resources
        above
        for a discussion of the credit rating changes recently issued in response
        to the
        controversy in Illinois over the proposed future power procurement
        process.
  **REGULATORY
        MATTERS**
  See Note 3 - Rate and Regulatory Matters to our financial statements under
        Part
        I, Item 1, of this report.
 
 **ITEM
        3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
        RISK.**
  Market risk represents the risk of changes in value of a physical asset or
        a
        financial instrument, derivative or non-derivative, caused by fluctuations
        in
        market variables such as interest rates, commodity prices and equity security
        prices. We handle market risks in accordance with established policies, which
        may include entering into various derivative transactions. In the normal
        course
        of business, we also face risks that are either nonfinancial or nonquantifiable.
        Such risks, principally business, legal and operational risks, are not
        represented in the following discussion.
 
 Our risk-management objective is to optimize our physical generating assets
        within prudent risk parameters. Our risk-management policies are set by a
        Risk
        Management Steering Committee, which is comprised of senior-level Ameren
        officers.
 
 Except
        as
        discussed below, there were no material changes from the disclosures in the
        Ameren Companies’ combined Annual Report on Form 10-K for the fiscal year ended
        December 31, 2004. See the 2004 Form 10-K for a more detailed discussion
        of our
        market risks.
 
 **Interest
        Rate Risk**
 
 We are exposed to market risk through changes in interest rates. The following
        table presents the estimated increase (decrease) in our annual interest expense
        and net income if interest rates were to increase by 1% on variable rate
        debt
        outstanding at September 30, 2005:
 **Interest
                  Expense**
              
              **Net
                  Income**(a)Ameren
              
              $
              9
              
              $
              (6
              )UE
              
              
              5
              
              
              (3
              )CIPS
              
              
              (b
              )
              
              (b
              )Genco
              
              
              (b
              )
              
              (b
              )CILCORP
              
              
              2
              
              
              (1
              )CILCO
              
              
              1
              
              
              (1
              )IP
              
              
              3
              
              
              (2
              )
 
 (a)
              Calculations
                  are based on an effective tax rate of 36%.
 (b)
              Less
                  than $1 million.
 
 **Credit
        Risk**
  Credit risk represents the loss that would be recognized if counterparties
        fail
        to perform as contracted. NYMEX-traded futures contracts are supported by
        the
        financial and credit quality of the clearing members of the NYMEX and have
        nominal credit risk. On all other transactions, we are exposed to credit
        risk in
        the event of nonperformance by the counterparties to the
        transaction.
   76
 
 Our
        physical and financial instruments are subject to credit risk consisting
        of
        trade accounts receivables, executory contracts with market risk exposures,
        and
        leveraged lease investments. The risk associated with trade receivables is
        mitigated by the large number of customers in a broad range of industry groups
        who make up our customer base. At September 30, 2005, no nonaffiliated customer
        represented greater than 10%, in the aggregate, of our accounts receivable.
        Our
        revenues are primarily derived from sales of electricity and natural gas
        to
        customers in Missouri and Illinois. UE, Genco and Marketing Company have
        credit
        exposure associated with accounts receivable from nonaffiliated companies
        for
        interchange power sales. At September 30, 2005, UE’s, Genco’s and Marketing
        Company’s combined credit exposure to non-investment-grade counterparties
        related to interchange sales was $83 million, net of collateral (2004 - $4
        million). We establish credit limits for these counterparties and monitor
        the
        appropriateness of these limits on an ongoing basis through a credit
        risk-management program that involves daily exposure reporting to senior
        management, master trading and netting agreements, and credit support, such
        as
        letters of credit and parental guarantees. We also analyze each counterparty’s
        financial condition prior to entering into sales, forwards, swaps, futures
        or
        option contracts, and we monitor counterparty exposure associated with our
        leveraged leases. We
        are
        currently evaluating our credit exposure associated with the implementation
        of
        the MISO Day Two Energy Market on April 1, 2005. At September 30, 2005, we
        estimate this credit exposure to be $4 million.
 
 **Equity
        Price Risk**
 
 Our
        costs
        of providing defined benefit retirement and postretirement benefit plans
        are
        dependent upon a number of factors, including the rate of return on plan
        assets.
        To the extent the value of plan assets declines, the effect could be reflected
        in net income and OCI, and the amount of cash required to be contributed
        to the
        plans.
  **Commodity
        Price Risk**
  The Ameren Companies are exposed to changes in market prices for natural
        gas,
        fuel, and electricity to the extent they cannot be recovered through rates.
  The following table presents the percentages of the projected required supply
        of
        coal and coal transportation for our coal-fired power plants, nuclear fuel
        for
        UE’s Callaway nuclear plant and natural gas for our gas-fired generation (CTs)
        and retail distribution, as appropriate, which are price-hedged over the
        remainder of 2005 through 2009:
 **2005**
              **2006**
              **2007**-**2009****Ameren:**Coal
              100%
              100%
              79%Coal
                  transportation(a)
              100
              97
              84Nuclear
                  fuel
              100
              64
              25Natural
                  gas for generation
              100
              14
              3Natural
                  gas for distribution(b)
              n/a
              65
              7**UE:**Coal
              100%
              100%
              75%Coal
                  transportation(a)
              100
              100
              85Nuclear
                  fuel
              100
              64
              25Natural
                  gas for generation
              98
              6
              3Natural
                  gas for distribution(b)
              n/a
              79
              10**CIPS:**Natural
                  gas for distribution(b)
              n/a
              72%
              13%**Genco:**Coal
              100%
              100%
              91%Coal
                  transportation(a)
              100
              98
              71Natural
                  gas for generation
              100
              13
              4**CILCORP:**Coal
              100%
              100%
              76%Coal
                  transportation(a)
              100
              72
              64Natural
                  gas for distribution(b)
              n/a
              67
              11**CILCO:**Coal
              100%
              100%
              76%Coal
                  transportation(a)
              100
              72
              64Natural
                  gas for distribution(b)
              n/a
              67
              11**IP:**Natural
                  gas for distribution(b)
              n/a
              57%
              1%
 
 (a)
              Excludes
                  rail fuel surcharges for period
                  2006-2009.
 (b)
              Represents
                  the percentage of natural gas price-hedged for the peak winter
                  season
                  which includes the months of November through March. The year 2005
                  represents the period January 2005 through March 2005 and therefore
                  is
                  non-applicable (n/a) for this report. The year 2006 represents
                  November
                  2005 through March 2006. This continues each successive year through
                  March
                  2009.
  77
  The
        following table presents the estimated increase in our total fuel expense
        and
        decrease in net income if coal and coal transportation costs were to increase
        by
        1% on any requirements currently not covered by fixed-price contracts for
        the
        remainder of 2005 through 2009:
 **Coal**
              
              **Transportation****Fuel**
                **Expense**
              
              **Net**
                **Income**(a)
              
              **Fuel**
                **Expense**
              
              **Net**
                **Income**(a)Ameren
              
              $
              5
              
              $
              (3
              )
              $
              3
              
              $
              (2
              )UE
              
              
              3
              
              
              (2
              )
              
              (b
              )
              
              (b
              )Genco
              
              
              1
              
              
              (1
              )
              
              1
              
              
              (1
              )CILCORP
              
              
              (b
              )
              
              (b
              )
              
              1
              
              
              (1
              )CILCO
              
              
              (b
              )
              
              (b
              )
              
              1
              
              
              (1
              )
 
 (a)
              Calculations
                  are based on an effective tax rate of
                  36%.
 (b)
              Less
                  than $1 million.
  In
        the
        event of a significant increase in coal prices, UE, Genco and CILCO would
        probably take actions to further mitigate their exposure to this market risk.
        However, due to the uncertainty of the specific actions that would be taken
        and
        their possible effects, the sensitivity analysis assumes no change in our
        financial structure or fuel sources.
 
 See
        Note
        9 - Commitments and Contingencies to our financial statements under Part
        I, Item
        1, of this report for further information.
  **Fair
          Value of Contracts**
 
 Most
        of
        our commodity contracts qualify for treatment as normal purchases and normal
        sales. We use derivatives principally to manage the risk of changes in market
        prices for natural gas, fuel, electricity and emission credits. The following
        table presents the favorable (unfavorable) changes in the fair value of all
        derivative contracts marked-to-market during the three months and nine months
        ended September 30, 2005. The sources used to determine the fair value of
        these
        contracts were other external sources. All of these contracts have maturities
        of
        less than three years.
 **Ameren**(a)
              
              **UE**
              
              **CIPS**
              
              **CILCORP**
              
              **CILCO****Three
                  Months**
                Fair
                  value of contracts at beginning of period, net
              
              $
              41
              
              $
              (7
              )
              $
              12
              
              $
              30
              
              $
              30Contracts
                  realized or otherwise settled during the period
              
              
              (4
              )
              
              (1
              )
              
              (1
              )
              
              (1
              )
              
              (1
              )Changes
                  in fair values attributable to changes in valuation technique and
                assumptions
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -Fair
                  value of new contracts entered into during the period
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -Other
                  changes in fair value
              
              
              26
              
              
              (10
              )
              
              10
              
              
              30
              
              
              30Fair
                  value of contracts outstanding at end of period, net
              
              $
              63
              
              $
              (18
              )
              $
              21
              
              $
              59
              
              $
              59**Nine
                  Months**
                Fair
                  value of contracts at beginning of period, net
              
              $
              21
              
              $
              (10
              )
              $
              6
              
              $
              14
              
              $
              14Contracts
                  realized or otherwise settled during the period
              
              
              (13
              )
              
              (1
              )
              
              (3
              )
              
              (2
              )
              
              (2
              )Changes
                  in fair values attributable to changes in valuation technique and
                assumptions
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -Fair
                  value of new contracts entered into during the period
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -Other
                  changes in fair value
              
              
              55
              
              
              (7
              )
              
              18
              
              
              47
              
              
              47Fair
                  value of contracts outstanding at end of period, net
              
              $
              63
              
              $
              (18
              )
              $
              21
              
              $
              59
              
              $
              59
 
 (a)
              Includes
                  amounts for Ameren Registrant and non-Registrant subsidiaries and
                  intercompany eliminations.
  78
  **ITEM
        4.   CONTROLS AND PROCEDURES.**
  (a)
              Evaluation
                  of Disclosure Controls and
                  Procedures
  As of September 30, 2005, the principal executive officer and principal
            financial officer of each of the Ameren Companies have evaluated the
            effectiveness of the design and operation of such Registrant’s disclosure
            controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
            of the
            Exchange Act). Based upon that evaluation, the principal executive officer
            and
            principal financial officer of each of the Ameren Companies have concluded
            that
            such disclosure controls and procedures are effective in timely alerting
            them to
            any material information relating to such Registrant that is required
            in such
            Registrant’s reports filed or submitted to the SEC under the Exchange Act and
            are effective in ensuring that information required to be disclosed in
            reports
            filed under the Exchange Act is recorded, processed, summarized and reported
            within the time periods specified in the SEC’s rules and forms.
 
 (b)
              Change
                  in Internal Controls
 
 There
        has
        been no change in the Ameren Companies’ internal control over financial
        reporting during their most recent fiscal quarter that has materially affected,
        or is reasonably likely to materially affect, their internal control over
        financial reporting. In the fourth quarter of 2005, Ameren converted IP’s
        billing system to Ameren’s billing system. In that regard, certain aspects of
        IP’s accounting and financial reporting processes were modified to conform to
        the existing Ameren internal controls. Also in the fourth quarter, the Ameren
        Companies completed the implementation of a new fixed asset application system.
        Internal controls over financial reporting were modified to accommodate this
        new
        application system. The Ameren Companies expect this new system to enhance
        their
        internal controls over the fixed asset accounting process.
 
 
 
 79
 
 **PART
        II.   OTHER INFORMATION**
 
 **ITEM
        1.** **LEGAL
        PROCEEDINGS** **.**
 
 Note
        3 -
        Rate and Regulatory Matters, Note 8 - Related Party Transactions and Note
        9 -
        Commitments and Contingencies to our financial statements under Part I, Item
        1
        of this report contain information on legal and administrative proceedings
        which
        are incorporated by reference under this item.
 
 **ITEM
        2.   UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
        PROCEEDS.**
 ****
 The
        following table presents Ameren Corporation’s purchases of equity securities
        reportable under Item 703 of Regulation S-K:
 **Period**
              **(a)
                  Total Number**
                **of
                  Shares**
                **(or
                  Units) Purchased**(a)
              **(b)
                  Average Price**
                **Paid
                  per Share**
                **(or
                  Unit)**
              **(c)
                  Total Number of Shares (or Units) Purchased as Part of Publicly
                  Announced
                  Plans or Programs**
              **(d)
                  Maximum Number (or Approximate Dollar Value) of Shares (or Units)
                  that May
                  Yet Be Purchased Under the Plans or Programs**July
                  1 - July 31, 2005
              4,000
              $55.04
              -
              -August
                  1 - August 31, 2005
              -
              -
              -
              -September
                  1 -
                September
                  30, 2005
              1,000
              56.03
              -
              -Total
              5,000
              $55.24
              -
              -
 
 (a)
              These
                  shares of Ameren common stock were purchased by Ameren in open-market
                  transactions in satisfaction of Ameren’s obligations upon the exercise by
                  employees of options issued under Ameren’s Long-term Incentive Plan of
                  1998. Ameren does not have any publicly announced equity securities
                  repurchase plans or programs.
  The
        following table presents CILCO’s purchases of equity securities reportable under
        Item 703 of Regulation S-K:
 **Period**
              **(a)
                  Total Number of Shares**
                **(or
                  Units) Purchased**(a)
              **(b)
                  Average Price**
                **Paid
                  per Share**
                **(or
                  Unit)**
              **(c)
                  Total Number of Shares (or Units) Purchased as Part of Publicly
                  Announced
                  Plans or Programs**
              **(d)
                  Maximum Number (or Approximate Dollar Value) of Shares (or Units)
                  that May
                  Yet Be Purchased Under the Plans or Programs**July
                  1 - July 31, 2005
              11,000
              $100.00
              -
              -August
                  1 - August 31, 2005
              -
              -
              -
              -September
                  1 -
                September
                  30, 2005
              -
              -
              -
              -Total
              11,000
              $100.00
              -
              -
 
 (a)
              CILCO
                  redeemed these shares of its 5.85% Class A preferred stock to satisfy
                  the
                  mandatory sinking fund redemption requirement for this series of
                  preferred
                  stock for 2005. CILCO does not have any publicly announced equity
                  securities repurchase plans or
                  programs.
 
 None
        of
        the other Registrants purchased equity securities reportable under Item 703
        of
        Regulation S-K during the July 1 to September 30, 2005, period.
 
 **ITEM
        5.   OTHER INFORMATION.**
  The
        2006
        annual meeting of shareholders of Ameren, UE, CIPS, CILCO and IP will be
        held on
        May 2, 2006, rather than on April 25, 2006, as previously reported. 
        Any
        shareholder proposal intended for inclusion in the proxy or information
        statement material for the 2006 annual shareholders meetings must be received
        by
        the secretary of the applicable company on or before November 15,
        2005.
  Effective
        August 28, 2005, Ameren’s board of directors amended Ameren’s Policy Regarding
        Nominations of Directors to require all directors standing for re-election
        to
        agree that in the event any director fails to obtain the required majority
        vote
        at an annual meeting of shareholders, such director shall tender his or her
        resignation as a director for consideration by Ameren’s Nominating and Corporate
        Governance Committee and recommendation to Ameren’s board.  This policy, as
        amended, is applicable to Ameren, UE, CIPS, CILCO and IP and can be found
        in the
        Investors’ section of Ameren’s website at http://www.ameren.com.
  
 80
 
 **ITEM
        6.** **EXHIBITS** **.**
 
 (a)  Exhibits. The documents listed below are being filed on behalf of Ameren,
        UE,
        CIPS, Genco, CILCORP, CILCO and IP as indicated.
 
 **Exhibit
                    Designation**
                **Registrant(s)**
                **Nature
                    of Exhibit****Rule
                    13a-14(a) / 15d-14(a) Certifications**31.1
                Ameren
                Rule
                    13a-14(a)/15d-14(a) Certification of Principal Executive Officer
                    of
                    Ameren31.2
                Ameren
                Rule
                    13a-14(a)/15d-14(a) Certification of Principal Financial Officer
                    of
                    Ameren31.3
                UE
                Rule
                    13a-14(a)/15d-14(a) Certification of Principal Executive Officer
                    of
                    UE31.4
                UE
                Rule
                    13a-14(a)/15d-14(a) Certification of Principal Financial Officer
                    of
                    UE31.5
                CIPS
                Rule
                    13a-14(a)/15d-14(a) Certification of Principal Executive Officer
                    of
                    CIPS31.6
                CIPS
                Rule
                    13a-14(a)/15d-14(a) Certification of Principal Financial Officer
                    of
                    CIPS31.7
                Genco
                Rule
                    13a-14(a)/15d-14(a) Certification of Principal Executive Officer
                    of
                    Genco31.8
                Genco
                Rule
                    13a-14(a)/15d-14(a) Certification of Principal Financial Officer
                    of
                    Genco31.9
                CILCORP
                Rule
                    13a-14(a)/15d-14(a) Certification of Principal Executive Officer
                    of
                    CILCORP31.10
                CILCORP
                Rule
                    13a-14(a)/15d-14(a) Certification of Principal Financial Officer
                    of
                    CILCORP31.11
                CILCO
                Rule
                    13a-14(a)/15d-14(a) Certification of Principal Executive Officer
                    of
                    CILCO31.12
                CILCO
                Rule
                    13a-14(a)/15d-14(a) Certification of Principal Financial Officer
                    of
                    CILCO31.13
                IP
                Rule
                    13a-14(a)/15d-14(a) Certification of Principal Executive Officer
                    of
                    IP31.14
                IP
                Rule
                    13a-14(a)/15d-14(a) Certification of Principal Financial Officer
                    of
                    IP**Section
                    1350 Certifications**32.1
                Ameren
                Section
                    1350 Certification of Principal Executive Officer of
                    Ameren32.2
                Ameren
                Section
                    1350 Certification of Principal Financial Officer of
                    Ameren32.3
                UE
                Section
                    1350 Certification of Principal Executive Officer of UE32.4
                UE
                Section
                    1350 Certification of Principal Financial Officer of UE32.5
                CIPS
                Section
                    1350 Certification of Principal Executive Officer of
                    CIPS32.6
                CIPS
                Section
                    1350 Certification of Principal Financial Officer of
                    CIPS32.7
                Genco
                Section
                    1350 Certification of Principal Executive Officer of
                    Genco32.8
                Genco
                Section
                    1350 Certification of Principal Financial Officer of
                    Genco32.9
                CILCORP
                Section
                    1350 Certification of Principal Executive Officer of
                    CILCORP32.10
                CILCORP
                Section
                    1350 Certification of Principal Financial Officer of
                    CILCORP32.11
                CILCO
                Section
                    1350 Certification of Principal Executive Officer of
                    CILCO32.12
                CILCO
                Section
                    1350 Certification of Principal Financial Officer of
                    CILCO32.13
                IP
                Section
                    1350 Certification of Principal Executive Officer of IP32.14
                IP
                Section
                    1350 Certification of Principal Financial Officer of
                    IP















81





**SIGNATURES**




Pursuant to the requirements of the Exchange Act, each Registrant has duly
      caused this report to be signed on its behalf by the undersigned thereunto
      duly
      authorized. The signaature for each undersigned company shall be deemed to
      relate only to matters having reference to such company or its
      subsidiaries.





**AMEREN
                CORPORATION**(Registrant)By:
              /s/ Martin
                J.
                LyonsMartin
                J. LyonsVice President
                and
                Controller(Principal Accounting
                Officer)


**UNION
              ELECTRIC
              COMPANY**(Registrant)By:
            /s/ Martin
              J.
              LyonsMartin
              J. LyonsVice President
              and
              Controller(Principal Accounting
              Officer)




**CENTRAL
              ILLINOIS PUBLIC SERVICE
              COMPANY**(Registrant)By:
            /s/ Martin
              J.
              LyonsMartin
              J. LyonsVice President
              and
              Controller(Principal Accounting
              Officer)




**AMEREN ENERGY
              GENERATING
              COMPANY**(Registrant)By:
            /s/ Martin
              J.
              LyonsMartin
              J. LyonsVice President
              and
              Controller(Principal Accounting
              Officer)








82




**CILCORP
                INC.**(Registrant)By:
              /s/ Martin
                J.
                LyonsMartin
                J. LyonsVice President
                and
                Controller(Principal Accounting
                Officer)


**CENTRAL
                ILLINOIS LIGHT
                COMPANY**(Registrant)By:
              /s/ Martin
                J.
                LyonsMartin
                J. LyonsVice President
                and
                Controller(Principal Accounting
                Officer)




**ILLINOIS
              POWER
              COMPANY**(Registrant)By:
            /s/ Martin
              J.
              LyonsMartin
              J. LyonsVice President
              and
              Controller(Principal Accounting
              Officer)






Date: 
      November 9, 2005




83