<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549
                                    FORM 10-K
                (X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999
                                       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 1-3672

                     CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
             (Exact name of registrant as specified in its charter)
           Illinois                                          37-0211380
(State or other jurisdiction                (I.R.S. Employer Identification No.)
of incorporation or orginization

               607 East Adams Street, Springfield, Illinois 62739
              (Address of principal executive offices and Zip Code)
       Registrant's telephone number, including area code: (217) 523-3600

        Securities Registered Pursuant to Section 12(b) of the Act: None.

           Securities Registered Pursuant to Section 12(g) of the Act:
                                 Title Of Class

            Cumulative Preferred Stock, par value $100 per share

            Depositary Shares, each representing one-fourth of a share
              of 6.625% Cumulative Preferred Stock, par value $100 per
              share

     Indicate  by check mark  whether the  registrant  (1) has 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) has been subject to such
filing requirements for the past 90 days.
Yes  X .   No    .

     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. (X).

     Aggregate market value of voting stock held by  non-affiliates  as of March
6,  2000  determined  by  trader  derived  valuations  based on  current  market
conditions on a spread basis (excluding Preferred Stock for which prices are not
publicly available): $19,804,500.

     Shares of Common Stock without par value,  outstanding as of March 6, 2000:
25,452,373 shares (all owned by Ameren Corporation).

                      Documents incorporated by references.

     Portions of the registrant's definitive proxy statement for the 2000 annual
meeting are incorporated by reference into Part III.

<PAGE>


                                TABLE OF CONTENTS

PART I  Page

Item  1  -  Business
                General......................................................  1
                Capital Program and Financing................................  2
                Rates........................................................  3
                Fuel Supply..................................................  3
                Regulation...................................................  3
                Industry Issues..............................................  4
Item  2  -  Properties.......................................................  4
Item  3  -  Legal Proceedings................................................  6
Item  4  -  Submission of Matters to a Vote of Security Holders<F1>

Executive Officers of the Registrant (Item 401(b) of Regulation S-K).........  7

PART II

Item  5  -  Market for Registrant's Common Equity and Related
                Stockholder Matters..........................................  7
Item  6  -  Selected Financial Data..........................................  7
Item  7  -  Management's Discussion and Analysis of Financial Condition
                and Results of Operations....................................  8
Item  7A -  Quantitative and Qualitative Disclosures about Market Risk....... 16
Item  8  -  Financial Statements and Supplementary Data...................... 18
Item  9  -  Changes in and Disagreements with Accountants on Accounting
                and Financial Disclosure..................................... 36

PART III

Item 10  -  Directors and Executive Officers of the Registrant<F2>..........  36
Item 11  -  Executive Compensation2.........................................  36
Item 12  -  Security Ownership of Certain Beneficial Owners
                and Management<F2>..........................................  37
Item 13  -  Certain Relationships and Related Transactions2.................  37

PART IV

Item 14  -  Exhibits, Financial Statement Schedules and Reports on Form 8-K.  37

SIGNATURES  ................................................................  39
EXHIBITS    ................................................................  40


[FN]
<F1> Not applicable and not included herein.
<F2> Incorporated by reference.
</FN>

<PAGE>


                                     PART I

ITEM 1.  BUSINESS.

                                     GENERAL

     Central Illinois Public Service Company (AmerenCIPS or the Registrant) is a
subsidiary of Ameren Corporation  (Ameren), a holding company,  registered under
the Public  Utility  Holding  Company Act of 1935. On December 31, 1997,  CIPSCO
Incorporated  (CIPSCO) and Union Electric Company  (AmerenUE)  combined with the
result that the common  shareholders  of CIPSCO and  AmerenUE  became the common
shareholders of Ameren,  and Ameren became the owner of 100% of the common stock
of AmerenUE and  CIPSCO's  operating  subsidiaries,  the  Registrant  and CIPSCO
Investment Company (the Merger). Since the Merger, Ameren has formed a number of
other  subsidiaries  including  AmerenEnergy,  Inc.  which  serves  as  a  power
marketing  agent for the Registrant and Ameren  Services  Company which provides
shared support  services to the  Registrant.  For additional  information on the
Registrant's  business  organization,  see  Note 1 to the  "Notes  to  Financial
Statements" under Item 8 herein.

     In conjunction with the Illinois  Electric Service Customer Choice and Rate
Relief Law of 1997 (the Law), the Registrant has received  regulatory  approvals
to transfer its generating facilities to Ameren Energy Generating Company (AEG),
a nonregulated,  indirectly  wholly-owned  subsidiary of Ameren. The transfer of
the assets and liabilities (at historical net book value of  approximately  $600
million) is currently scheduled to occur in May 2000.  Discussion below relating
to "forward-looking"  statements reflects information assuming that the transfer
will occur as scheduled.  For  additional  information on the Law, its impact on
the Registrant,  and the generating facilities transfer,  see "Electric Industry
Restructuring" in "Management's  Discussion and Analysis of Financial  Condition
and  Results  of  Operations"  under  Item 7 herein  and Note 2 to the "Notes to
Financial Statements" under Item 8 herein.

     The Registrant, an Illinois corporation,  was organized in 1902. AmerenCIPS
is a public utility  operating  company  engaged in the sale of electricity  and
natural  gas in  portions  of central  and  southern  Illinois.  The  Registrant
furnishes  electric service in 557 incorporated and  unincorporated  communities
and adjacent suburban and rural areas. The Registrant also furnishes natural gas
service to retail customers in 267 incorporated and  unincorporated  communities
and  adjacent  suburban  and rural  areas  located in 41 counties of central and
southern Illinois and provides gas transportation service to end-users.

     The AmerenCIPS  service  territory is predominantly  made up of small towns
and rural areas. Of the communities served, only 5 have populations greater than
15,000.  Customer  density  on the  AmerenCIPS  gas system is  approximately  35
customers per mile of main. The  Registrant  furnishes both electric and natural
gas service in 236 of the communities served by it.

     The territory served by the Registrant, located in 66 counties in Illinois,
has an estimated population of 820,000 and is devoted principally to agriculture
and diversified  industrial  operations.  Key industries  include  petroleum and
petrochemical industries, food processing, metal fabrication and coal mining.

     For the year 1999,  85% of total  operating  revenues  was derived from the
sale of electric energy and 15% from the sale of natural gas. Electric operating
revenues as a percentage of total  operating  revenues in 1998 and 1997 were 85%
and 82%, respectively.

     The Registrant  employed 1,759 persons at December 31, 1999.  Approximately
70% of such  employees  are  represented  by local  unions  affiliated  with the
AFL-CIO.  For information on labor agreements and other labor matters,  see Note
11 to the "Notes to Financial Statements" under Item 8 herein. Approximately 45%
of the  Registrant's  employees  will  transfer to AEG in  conjunction  with the
generation facilities transfer discussed above.

                                      -1-

<PAGE<

                          CAPITAL PROGRAM AND FINANCING

     The  Registrant  is  engaged  in a  capital  program  under  which  capital
expenditures  are expected to approximate $59 million in 2000. For the five-year
period 2000-2004,  construction expenditures are estimated at $309 million. This
estimate assumes that the transfer of the Registrant's  generating facilities to
AEG will occur in 2000.

     During the five-year  period ended 1999, gross additions to the property of
the Registrant,  including  allowance for funds used during  construction,  were
approximately  $476  million  (including  $68  million  in  1999)  and  property
retirements were $259 million.

     In addition to the funds  required for  construction  during the  2000-2004
period,  $143 million will be required to repay  long-term debt as follows:  $35
million in 2000;  $30 million in 2001;  $33 million in 2002;  and $45 million in
2003. There are no repayments in 2004.

     The Registrant has transactions in the normal course of business with other
Ameren  subsidiaries and has the ability to borrow funds from Ameren or AmerenUE
or invest funds through a regulated money pool agreement.  At December 31, 1999,
the Registrant had outstanding  intercompany  borrowings of $133 million through
the regulated money pool.

     For additional  information on the Registrant's  capital program,  external
cash sources and intercompany borrowings,  see "Liquidity and Capital Resources"
in "Management's  Discussion and Analysis of Financial  Condition and Results of
Operations" under Item 7 herein and Notes 3, 7 and 11 to the "Notes to Financial
Statements" under Item 8 herein.

     Financing Restrictions.  The Mortgage Indenture of AmerenCIPS, as presently
operative,  permits the issuance of additional first mortgage bonds up to 60% of
available net expenditures for bondable property, provided the "net earnings" of
AmerenCIPS  (before  income  taxes and  otherwise  as provided  in the  Mortgage
Indenture) for a recent 12-month period equal at least twice the annual interest
requirements on all first mortgage bonds outstanding (and on all equally secured
and prior lien indebtedness) and on the bonds then to be issued. At December 31,
1999, the more  restrictive of these  requirements  was the "net earnings" test.
The "net  earnings" of  AmerenCIPS  for the year ended  December  31,  1999,  so
computed,  were equal to 5.29 times the interest  for one year on the  aggregate
amount of bonds outstanding  under the Mortgage  Indenture at December 31, 1999.
Based on the "net  earnings"  of  AmerenCIPS  (so  computed)  for the year ended
December 31, 1999,  and the bonds  outstanding  under the Mortgage  Indenture at
December  31,  1999,  the  Registrant  could have issued  about $479  million of
additional first mortgage bonds under the foregoing  interest coverage provision
(assuming an annual interest rate of 8% on such bonds).

     The Articles of Incorporation  of AmerenCIPS  provide,  in effect,  that so
long as any CIPS preferred stock is outstanding,  AmerenCIPS  shall not, without
the requisite vote of the holders of preferred  stock,  unless the retirement of
such stock is provided  for,  (a) issue any  preferred  or equal  ranking  stock
(except to retire or in exchange for an equal amount  thereof) unless the "gross
income  available for interest" of AmerenCIPS for a recent 12-month period is at
least one and one-half  (1-1/2) times the sum of (i) one year's  interest on all
funded debt and notes maturing more than 12 months after the date of issuance of
such shares and (ii) one year's  dividend  requirement on all preferred stock to
be  outstanding  after such  issue,  or (b) issue or assume any  unsecured  debt
securities  maturing less than two years from the date of issuance or assumption
(except for certain refunding or retirement  purposes) if immediately after such
issuance or assumption the total amount of all such  unsecured  debt  securities
would exceed 20% of the sum of all secured debt  securities  and the capital and
surplus of  AmerenCIPS.  For the year ended December 31, 1999, the "gross income
available for interest" of AmerenCIPS  equalled 2.43 times the sum of the annual
interest  charges and dividend  requirements on all such funded debt,  notes and
preferred stock  outstanding at December 31, 1999. Such "gross income  available
for interest" was

                                      -2-

<PAGE>

sufficient under the test to support the issuance of additional  preferred stock
(assuming an annual dividend rate on such preferred stock of 6.75%) in an amount
in excess of the maximum  amount  ($185  million)  of  authorized  and  unissued
preferred stock under the Articles.


                                      RATES

     For the year 1999, approximately 78% of the Registrant's electric operating
revenues were based on rates regulated by the Illinois Commerce Commission (ICC)
and 22% were regulated by the Federal Energy Regulatory Commission (FERC) of the
U. S. Department of Energy. The Registrant's gas operating revenues for the year
1999 were based on rates  regulated  exclusively by the ICC. For  information on
rate matters in these  jurisdictions,  see "Electric Industry  Restructuring" in
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations"  under  Item  7  herein  and  Note  2 to  the  "Notes  to  Financial
Statements" under Item 8 herein.


                                   FUEL SUPPLY
<TABLE>
<CAPTION>

Cost of Fuels                                                Year
-------------            ----------------------------------------------------------------------------
                             1999            1998            1997           1996           1995
                             ----            ----            ----           ----           ----
<S>                      <C>             <C>             <C>             <C>            <C>
Per Million BTU - Coal   139.700(cent)   152.738(cent)   163.000(cent)   171.000(cent)  176.000(cent)
</TABLE>


     Over 99% of the net  kilowatthour  generation of the Registrant in 1999 was
provided by coal-fired  generating units and the remainder by an oil-fired unit.
As  discussed  under  "General"  section  above,  the  Registrant's   generating
facilities are scheduled to be transferred to AEG in the year 2000.

     For additional  information on the Registrant's "Fuel Supply", see "Results
of Operations" in "Management's  Discussion and Analysis of Financial  Condition
and  Results  of  Operations"  under  Item 7 herein and Note 11 to the "Notes to
Financial Statements" under Item 8 herein.


                                   REGULATION

     Information  contained in this section could be impacted by the transfer of
the  Registrant's  generating  facilities  to AEG. See  discussion  in "General"
section above for more information.

     The  Registrant  is subject to regulation  by the  Securities  and Exchange
Commission  and, as a subsidiary of Ameren,  is subject to the provisions of the
Public  Utility  Holding  Company  Act of 1935.  The  Registrant  is  subject to
regulation  by the  ICC as to  rates,  service,  accounts,  issuance  of  equity
securities,  issuance  of debt  having a maturity  of more than  twelve  months,
mergers, and various other matters. The Registrant is also subject to regulation
by the FERC as to rates and  charges  in  connection  with the  transmission  of
electric energy in interstate  commerce and the sale of such energy at wholesale
in interstate  commerce,  mergers,  and certain other matters.  Authorization to
issue  debt  having a maturity  of twelve  months or less is  obtained  from the
Securities and Exchange Commission.

     For information on regulatory matters in these jurisdictions, including the
current status of electric utility restructuring in Illinois, see "Liquidity and
Capital  Resources"  and  "Electric  Industry  Restructuring"  in  "Management's
Discussion and Analysis of Financial  Condition and Results of Operations" under
Item 7 herein and Notes 1 and 2 to the  "Notes to  Financial  Statements"  under
Item 8 herein.

     The Registrant is regulated, in certain of its operations, by air and water
pollution and hazardous waste regulations at the city, county, state and federal
levels.  The  Registrant  is  in  substantial   compliance  with  such  existing
regulations.

                                      -3-

<PAGE>

     Environmental  Issues.  On December 22, 1995, a complaint  was filed in the
Circuit  Court for the  Seventh  Judicial  Circuit,  Sangamon  County,  Illinois
against the  Registrant  and several  other  defendants.  The  complaint  sought
unspecified  monetary  damages  and  alleged  that,  as a result of  exposure to
carcinogens contained in coal tar at the AmerenCIPS  Taylorville gas plant site,
plaintiffs'  children had suffered from a rare form of childhood cancer known as
"neuroblastoma". In 1998, a jury awarded plaintiffs $3.2 million. In March 2000,
the Illinois Appellate Court, on an appeal by AmerenCIPS, upheld the plaintiffs'
verdict.  The Registrant  plans to seek an appeal of the court's decision to the
Illinois Supreme Court. The Registrant  believes that final  disposition of this
matter  will not have a  material  adverse  effect  on the  financial  position,
results of operations or liquidity of AmerenCIPS.

     On August 2, 1996, the Illinois Attorney General filed a complaint with the
Illinois  Pollution  Control  Board  alleging  various  violations of wastewater
discharge   permit   conditions  and  ground  water   standards  at  AmerenCIPS'
Hutsonville Power Station.  The complaint seeks monetary penalties and the award
of attorney fees. The Registrant,  the Illinois Environmental  Protection Agency
and the Attorney  General have reached a settlement  in principle  resolving the
complaint which will require the Registrant to perform  remedial  actions at the
site.  Any final  settlement  of this matter  must be  approved by the  Illinois
Pollution  Control Board.  While the Registrant cannot predict the final outcome
of this  matter,  it does not  believe  that the  final  resolution  will have a
material  adverse  effect  on  financial  position,  results  of  operations  or
liquidity of the Registrant.

     See  "Liquidity  and Capital  Resources" in  "Management's  Discussion  and
Analysis of Financial  Conditions and Results of Operations" under Item 7 herein
and Note 11 to the  "Notes to  Financial  Statements"  under Item 8 herein for a
further discussion of environmental issues.


                                 INDUSTRY ISSUES

     The  Registrant  is facing  issues  common to the  electric and gas utility
industries  which have  emerged  during the past  several  years.  These  issues
include:  the  potential  for more  intense  competition  and for  changing  the
structure of regulation; changes in the structure of the industry as a result of
changes in federal  and state  laws,  including  the  formation  of  unregulated
generating  entities;  on-going  consideration  of  additional  changes  of  the
industry by federal and state authorities;  continually developing environmental
laws,  regulations  and issues,  including  proposed new air quality  standards;
public  concern  about the siting of new  facilities;  proposals for demand side
management  programs;  and global climate  issues.  The Registrant is monitoring
these  issues and is unable to predict at this time what impact,  if any,  these
issues will have on its operations, financial condition, or liquidity.

     For additional  information on certain of these issues,  see "Liquidity and
Capital  Resources"  and  "Electric  Industry   Restructuring"  in  Management's
Discussion and Analysis of Financial  Condition and Results of Operations" under
Item 7 herein and Notes 2 and 11 to the "Notes to  Financial  Statements"  under
Item 8 herein.

     Year 2000  Issue.  The Year 2000 Issue  relates to how dates are stored and
used in computer systems,  applications,  and embedded  systems.  As the century
date  change  occurred,  certain  date-sensitive  systems had to  recognize  and
properly treat the year as 2000 and not as 1900. This inability to recognize and
properly  treat the year as 2000  could  have  caused  these  systems to process
critical  financial and  operational  information  incorrectly.  The  Registrant
encountered  no  significant  problems  associated  with the Year 2000  Issue at
year-end.  For information on this issue, see "Year 2000 Issue" in "Management's
Discussion and Analysis of Financial  Condition and Results of Operations" under
Item 7 herein.

ITEM 2.  PROPERTIES.

     Information  contained in this section could be impacted by the transfer of
the  Registrant's  generating  facilities  to AEG. See  discussion  in "General"
section above for more information.

                                      -4-

<PAGE>

     In planning its construction program, the Registrant is presently utilizing
a forecast of  kilowatthour  sales  growth of  approximately  1.2% and peak load
growth of 1.4%, each compounded annually, and is providing for a minimum reserve
margin of approximately 15% above its anticipated peak load requirements.

     The Registrant is a member of one of the ten regional electric  reliability
councils  organized for  coordinating the planning and operation of the nation's
bulk  power  supply  -  MAIN  (Mid-America   Interconnected  Network)  operating
primarily in  Wisconsin,  Illinois and  Missouri.  The  Registrant's  bulk power
system is operated as an Ameren-wide  control area and transmission system under
the FERC approved Joint Dispatch  Agreement between the Registrant and AmerenUE.
Ameren  has  interconnections  for  transmission  service  and the  exchange  of
electric energy,  directly and through the facilities of others,  with more than
twenty power suppliers.

     The Registrant has also received  regulatory  approvals to join the Midwest
Independent   System  Operator   (Midwest  ISO)  which  will  operate   electric
transmission  systems and  maintain  system  reliability  and  security  for its
members. For a discussion of the Midwest ISO which is expected to be operational
in the  year  2001,  see  "Electric  Industry  Restructuring"  in  "Management's
Discussion and Analysis of Financial  Condition and Results of Operations" under
Item 7 herein and Note 2 to the  "Notes to  Financial  Statements"  under Item 8
herein.

     The  Registrant  owns 20% of the  capital  stock of Electric  Energy,  Inc.
(EEI), and its affiliate,  AmerenUE, owns 40% of such stock. The balance is held
by two other  sponsoring  companies  -- Kentucky  Utilities  Company  (KU),  and
Illinova  Generating  (IG).  EEI owns and  operates  a  generating  plant with a
nominal  capacity of 1,000 mW. 50% of the  plant's  output is  committed  to the
Paducah Project of the U.S. Department of Energy, 20% to KU, 15% to AmerenUE and
7.5% each to IG and AmerenCIPS.

     As of December 31, 1999, the Registrant owned  approximately  4,700 circuit
miles of electric  transmission  lines. The Registrant also owned 4,800 miles of
natural gas transmission and  distribution  mains,  four underground gas storage
fields and one propane-air  gas plant used to supplement the available  pipeline
supply  of  natural  gas  during  periods  of  abnormally  high  demands.  Other
properties of the Registrant  include  distribution  lines,  underground  cable,
office buildings, warehouses, garages and repair shops.

     AmerenCIPS has fee title to all principal  plants and other important units
of  property,  or to the real  property  on which such  facilities  are  located
(subject to mortgage liens securing  outstanding  indebtedness of the Registrant
and to permitted liens and judgment liens, as defined).

     Substantially  all of  AmerenCIPS'  property  and plant is  subject  to the
direct first lien of an Indenture of Mortgage or Deed of Trust dated  October 1,
1941, as amended and supplemented.

     The following table sets forth information with respect to the Registrant's
generating  facilities  and  capability  at the time of the expected  2000 peak.
These  facilities  are  part  of  the  assets  due to be  transferred  to AEG as
discussed  under  "General"  section above.  As a part of this  transfer,  these
facilities and the real property on which they are located will be released from
the above referenced mortgage lien.

                                      -5-

<PAGE>


    Energy                                                   Gross Kilowatt
    Source       Plant                  Location          Installed Capability
    ------       -----                  --------          --------------------
    Coal      Newton                 Newton, IL                1,170,000
              Coffeen                Coffeen, IL                 950,000
              Grand Tower            Grand Tower, IL             202,000
              Hutsonville
                (Units 3 & 4)        Hutsonville, IL             161,000
              Meredosia
                (Units 1, 2 & 3)     Meredosia, IL               359,000
                                                              ----------
                                     Total Coal                2,842,000
    Oil       Hutsonville
                (Diesel)             Hutsonville, IL               3,000
              Meredosia
                (Unit 4)             Meredosia, IL               182,000
                                                              ----------
                                     Total Oil                   185,000

                                            TOTAL              3,027,000
                                                               =========

ITEM 3.  LEGAL PROCEEDINGS.

     The Registrant is involved in legal and  administrative  proceedings before
various  courts and  agencies  with  respect to matters  arising in the ordinary
course  of  business,  some of which  involve  substantial  amounts.  Management
believes  that  the  final  disposition  of  these  proceedings  will not have a
material  adverse  effect on its  financial  position,  results of operations or
liquidity.

     For additional  information on legal and  administrative  proceedings,  see
"Regulation  -  Environmental  Issues" under Item 1 herein,  "Electric  Industry
Restructuring" in "Management's  Discussion and Analysis of Financial  Condition
and Results of Operations" under Item 7 herein, and Notes 2 and 11 to the "Notes
to Financial Statements" under Item 8 herein.

                            ___________________________

     Statements made in this report which are not based on historical facts, are
"forward-looking"  and, accordingly,  involve risks and uncertainties that could
cause actual results to differ  materially from those  discussed.  Although such
"forward-looking"  statements  have  been  made in good  faith  and are based on
reasonable assumptions,  there is no assurance that the expected results will be
achieved.  These statements include (without limitation) statements as to future
expectations,   beliefs,  plans,  strategies,  objectives,  events,  conditions,
financial  performance  and the Year 2000 Issue.  In  connection  with the "Safe
Harbor" provisions of the Private Securities  Litigation Reform Act of 1995, the
Registrant is providing this cautionary  statement to identify important factors
that could cause actual results to differ materially from those anticipated. The
following factors,  in addition to those discussed  elsewhere in this report and
in subsequent securities filings,  could cause results to differ materially from
management expectations as suggested by such "forward-looking"  statements:  the
effects of regulatory actions;  changes in laws and other governmental  actions;
the impact on the Registrant of current regulations related to the phasing-in of
the opportunity  for some customers to choose  alternative  energy  suppliers in
Illinois; the effects of increased competition in the future due to, among other
things, deregulation of certain aspects of the Registrant's business at both the
state and Federal  levels;  future market  prices for fuel and purchased  power,
electricity,  and  natural  gas,  including  the use of  financial  instruments;
average rates for electricity in the Midwest;  business and economic conditions;
interest rates;  weather  conditions;  fuel prices and availability;  generation
plant performance;  the impact of current environmental regulations on utilities
and generating  companies and the expectation  that more stringent  requirements
will be introduced over time, which could potentially have a negative  financial
effect; monetary and fiscal policies;  future wages and employee benefits costs;
and legal and administrative proceedings.

                                      -6-

<PAGE>

INFORMATION REGARDING EXECUTIVE OFFICERS REQUIRED BY ITEM 401(b) OF
REGULATION S-K:

                    Age At                                    Date First Elected
    Name           12/31/99    Present Position                   or Appointed
    ----           --------    ----------------                   ------------
G. L. Rainwater       53      President,
                              Chief Executive Officer                1/1/98
                              and Director                         12/31/97
T. R. Voss            52      Senior Vice President                  6/1/99
W. L. Baxter          38      Vice President,                       4/22/99
                              Controller and                       12/31/97
                              Director                              4/22/99
M. J. Montana         53      Vice President                        4/28/98
G. W. Moorman         56      Vice President                         6/1/88
C. D. Nelson          46      Vice President                        4/28/98
J. L. Simpson         43      Vice President                         6/1/99
S. R. Sullivan        39      Vice President, General Counsel
                              and Secretary                         11/7/98
J. E. Birdsong        45      Treasurer                            12/31/97

     All officers  are elected or  appointed  annually by the Board of Directors
following the election of such Board at the annual meeting of stockholders  held
in April.  Except for  Messrs.  Baxter  and  Sullivan,  each of the  above-named
executive  officers has been employed by the Company or its  affiliates for more
than five years in executive or management positions.  Mr. Baxter was previously
employed by PricewaterhouseCoopers  LLP. Mr. Sullivan was previously employed by
Anheuser Busch Companies, Inc.


                                     PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

     There is no market for the  Registrant's  Common Stock since all shares are
owned by its parent, Ameren.


ITEM 6.  SELECTED FINANCIAL DATA.

<TABLE>
<CAPTION>

For the Years Ended
December 31 (In Thousands)               1999         1998         1997         1996         1995
--------------------------               ----         ----         ----         ----         ----

<S>                                 <C>          <C>          <C>          <C>          <C>
Operating revenues                  $  928,122   $  847,424   $  852,075   $  881,102   $  828,073
Operating income                        94,715      120,044      102,495      116,531      106,029
Net income                              53,980       80,147       38,620       77,393       70,631
Preferred stock dividends                3,833        3,745        3,715        3,721        3,850
Net income after preferred
  stock dividends                       50,147       76,402       34,905       73,672       66,781
Common stock dividends                  90,342       72,285       43,300       62,950       71,000

As of December 31,

Total assets                        $1,781,754   $1,764,397   $1,788,707   $1,795,353   $1,759,838
Long-term debt                         493,625      528,446      558,474      421,228      478,926
Total common stockholder's equity      534,378      575,370      572,759      581,224      570,419

</TABLE>

                                      -7-

<PAGE>


ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

OVERVIEW

Central  Illinois  Public Service  Company  (AmerenCIPS or the  Registrant) is a
subsidiary of Ameren  Corporation  (Ameren),  a holding company registered under
the Public Utility Holding Company Act of 1935 (PUHCA).  In December 1997, Union
Electric Company  (AmerenUE) and CIPSCO  Incorporated  (CIPSCO) combined to form
Ameren,  with  AmerenUE and CIPSCO's  subsidiaries,  the  Registrant  and CIPSCO
Investment Company (CIC), becoming subsidiaries of Ameren (the Merger).

In  conjunction  with the Illinois  Electric  Service  Customer  Choice and Rate
Relief Law of 1997 (the Law), the Registrant has received  regulatory  approvals
to transfer its generating facilities to Ameren Energy Generating Company (AEG),
a nonregulated,  indirectly  wholly-owned  subsidiary of Ameren. The transfer of
the assets and liabilities (at historical net book value of  approximately  $600
million) is currently scheduled to occur in May 2000.  Discussion below relating
to "forward-looking"  statements reflects information assuming that the transfer
will occur as scheduled.  For  additional  information on the Law, its impact on
the Registrant,  and the generating facilities transfer,  see "Electric Industry
Restructuring" below and Note 2 to the Notes to Financial Statements.

RESULTS OF OPERATIONS

Earnings
Earnings for 1999, 1998 and 1997, were $50 million, $76 million and $35 million,
respectively.  Earnings  fluctuated  due to many  conditions,  primarily:  sales
growth,  weather  variations,  credits  to  electric  customers,  electric  rate
reductions, gas rate increases, competitive market forces, fluctuating operating
costs,  charges for coal contract  terminations,  a targeted employee separation
plan,  merger-related  expenses,  changes in interest expense, changes in income
and property taxes, and an extraordinary charge.

In the fourth quarter of 1999, the Registrant  recorded a nonrecurring charge to
earnings in connection with coal contract  terminations with two coal suppliers.
The charge  reduced  earnings $31 million,  net of income taxes (see  discussion
below under "Electric  Operations"  and Note 11 - Commitments and  Contingencies
under Notes to  Financial  Statements  for further  information).  In 1998,  the
Registrant also recorded a nonrecurring  charge to earnings in connection with a
targeted  separation  plan it offered  to  employees  in July  1998.  The charge
reduced  earnings  $4  million,  net of income  taxes,  (see  Note 4 -  Targeted
Separation Plan under Notes to Financial Statements for further information). In
addition,  the Registrant  recorded an  extraordinary  charge to earnings in the
fourth quarter of 1997 for the write-off of generation-related regulatory assets
and  liabilities of the  Registrant's  retail  electric  business as a result of
electric  industry  restructuring  legislation  enacted in  Illinois in December
1997. The write-off reduced earnings $25 million,  net of income taxes (see Note
2  -  Regulatory  Matters  under  Notes  to  Financial  Statements  for  further
information).

The significant  items affecting  revenues,  expenses and earnings for the years
ended December 31, 1999, 1998 and 1997 are detailed in the following pages.

Electric Operations
Electric Revenues                             Variations from Prior Year
--------------------------------------------------------------------------------
(In Millions)                                 1999       1998       1997
--------------------------------------------------------------------------------
Rate variations                               $(7)       $(5)      $  -
Effect of abnormal weather                    (16)        13         (1)
Growth and other                                9         14          5
Interchange sales                              88         (1)       (29)
--------------------------------------------------------------------------------
                                              $74        $21       $(25)
--------------------------------------------------------------------------------

Electric  revenues for 1999 increased $74 million,  compared to 1998,  primarily
due to an 11% increase in total kilowatthour  sales. This increase was primarily
driven by a 37% increase in interchange  sales, due to strong marketing efforts.
This increase was partially  offset by a residential rate decrease (see Note 2 -
Regulatory Matters under notes to Financial Statements for further information).
In addition, revenues were lower due to a 1% decrease in native sales, resulting
from milder weather.

                                      -8-

<PAGE>

Electric  revenues for 1998  increased $21 million,  compared to 1997.  Revenues
increased  primarily  due  to  higher  sales  to  retail  customers  within  the
Registrant's service territory,  as a result of warm summer weather and economic
growth in the service area.  Weather-sensitive  residential and commercial sales
increased  6% and 4%,  respectively,  while  industrial  sales  grew  4%.  These
increases were partially  offset by a 5% rate decrease to residential  customers
beginning  in August  1998  (see  Note 2 -  Regulatory  Matters  under  Notes to
Financial Statements for further information).

Electric  revenues  for  1997  decreased  primarily  due  to a 19%  decrease  in
interchange sales due to market conditions and differences in the classification
of certain  interchange and purchased power transactions  resulting from Federal
Energy  Regulatory  Commission  (FERC)  Order  888,  as well as a 3%  decline in
industrial  sales.  Residential  sales remained constant with prior year levels,
while commercial sales increased 2% over the same period.

Fuel and Purchased Power                       Variations from Prior Year
--------------------------------------------------------------------------------
(In Millions)                                 1999       1998       1997
--------------------------------------------------------------------------------
Fuel:
    Generation                                $17       $(25)      $  7
    Price                                     (18)        (2)        (8)
    Generation efficiencies and other          (7)        (6)        (4)
    Coal contract termination payments         52          -          -
Purchased power                                40         21        (27)
--------------------------------------------------------------------------------
                                              $84       $(12)      $(32)
--------------------------------------------------------------------------------

The $84 million increase in fuel and purchased power costs for 1999, compared to
1998, was primarily due to increased  generation and purchased power,  resulting
from higher sales volume and coal contract termination payments discussed below,
partially offset by lower fuel costs.

In the fourth  quarter of 1999,  the  Registrant  and two of its coal  suppliers
executed  agreements to terminate their existing coal supply contracts effective
December 31, 1999.  Under these  agreements,  the  Registrant  made  termination
payments to the suppliers totaling  approximately $52 million. These termination
payments were recorded as a  nonrecurring  charge in the fourth quarter of 1999.
Total pretax fuel cost savings from these  termination  agreements are estimated
to be $183 million (or $131  million net of the  termination  payments)  through
2010,  which is the  maximum  period  that  would  have  remained  on any of the
terminated coal supply contracts.  Approximately $66 million of pretax fuel cost
savings is  expected  to be realized  over the next three  years.  See Note 11 -
Commitments and  Contingencies  under Notes to Financial  Statements for further
information.

The $12 million decrease in fuel and purchased power costs for 1998, compared to
1997,  was  primarily  driven by lower fuel  costs due to lower fuel  prices and
utilizing joint dispatch generation.  Upon consummation of the Merger,  AmerenUE
and AmerenCIPS began jointly dispatching  generation,  therefore allowing Ameren
to utilize the most cost efficient  plants of both operating  companies to serve
customers in either service  territory.  The decrease in 1997 fuel and purchased
power costs was driven mainly by a decrease in interchange  sales and lower fuel
prices.

Gas Operations
Gas revenues in 1999 increased $7 million,  compared to 1998, primarily due to a
gas rate  increase  which  became  effective  in  February  1999  (see  Note 2 -
Regulatory Matters under Notes to Financial  Statements for further information)
and higher gas costs recovered through the Registrant's purchased gas adjustment
clause.  These increases were partially offset by a 10% decline in retail sales,
resulting  primarily  from  milder  winter  weather,  as well as a  decrease  in
off-system  sales of gas to others.  Gas revenues in 1998  decreased $26 million
compared to 1997,  primarily due to a 7% decline in retail sales  resulting from
milder winter  weather and lower gas costs  recovered  through the  Registrant's
purchase  gas  adjustment  clause.  Gas  revenues in 1997  decreased  $4 million
primarily  due to a 10%  decline  in retail  sales  resulting  from mild  winter
weather.

Gas costs in 1999  increased $4 million  compared to 1999.  This increase in gas
costs was  primarily due to higher gas prices,  partially  offset by lower total
sales. Gas costs in 1998 declined $28 million compared to 1997. This decrease in
gas costs  was due to lower  sales  and  lower  gas  prices.  Gas costs for 1997
remained relatively flat when compared to 1996 costs.

Other Operating Expenses
Other  operating  expense  variations in 1997 through 1999  reflected  recurring
factors such as growth, inflation, labor and benefit increases, in addition to a
charge for the targeted separation plan (TSP), as discussed below.

                                      -9-

<PAGE>

In 1998,  Ameren  announced  plans  to  reduce  its  other  operating  expenses,
including plans to eliminate  approximately  400 employee  positions by mid-1999
through a hiring  freeze  and the TSP.  During  the  third  quarter  of 1998,  a
nonrecurring,  pretax  charge  of $7  million  was  recorded,  representing  the
Registrant's  share of costs  incurred to implement the TSP. The  elimination of
these positions,  exclusive of the nonrecurring charge, reduced the Registrant's
operating  expenses  approximately  $4 million  in 1998,  and  approximately  $7
million in 1999, and is expected to reduce the Registrant's  operating  expenses
by  approximately  $6 million to $7 million each year  thereafter.  See Note 4 -
Targeted  Separation  Plan  under  Notes to  Financial  Statements  for  further
information.

Other  operating  expenses  increased  $11 million,  in 1999,  compared to 1998,
primarily due to increased  postretirement  expenses  resulting  from changes in
actuarial  assumptions,  increased injuries and damages expenses based on claims
experience,  expenses associated with electric industry deregulation in Illinois
and the Year 2000 project.  These  increases were partially  offset by a reduced
workforce,  coupled with the fact that 1998 expenses included the charge for the
TSP. The $19 million increase in other operating  expenses in 1998,  compared to
1997,  were  primarily due to the charge for the TSP and  increased  information
system-related  costs. In 1997, other operating  expenses increased $15 million,
primarily due to increases in labor, various equipment purchases and rentals and
information system-related costs.

Maintenance  expenses  increased  $32 million in 1999,  compared  to 1998.  This
increase  was  primarily  due to  increased  power plant  maintenance.  In 1998,
maintenance  expenses decreased $4 million from the prior year, primarily due to
less scheduled power plant maintenance.  The 1997 maintenance  expenses increase
of $14 million from the prior year can be  attributed  to  scheduled  outages at
three power plants.

Depreciation and amortization  expense increased $6 million in 1999, compared to
1998.  This  increase was primarily due to increased  depreciable  property.  In
1998,  depreciation and amortization expense decreased $8 million from the prior
year due to the write-off of  generation-related  regulatory  assets in Illinois
during  the fourth  quarter  of 1997.  The 1997  depreciation  and  amortization
expense fluctuation relates primarily to property additions.

Taxes
Income tax expense from  operations  decreased $15 million in 1999,  compared to
1998, due to lower pretax income.  Income tax expense from operations  increased
$12 million in 1998,  compared to 1997, due to higher pretax income and a higher
effective tax rate. Income tax expense from operations  decreased $14 million in
1997, principally due to lower pretax income and a lower effective tax rate.

Other tax expense decreased $17 million in 1999, compared to 1998, primarily due
to a  decrease  in gross  receipts  taxes.  This  decrease  is the result of the
restructuring  of the Illinois  public  utility tax whereby gross receipts taxes
are no longer recorded as electric revenue and gross receipts tax expense.

Other Income and Deductions
In 1999,  miscellaneous,  net decreased $3 million,  compared to 1998, primarily
due  to  losses  on  the  disposal  of  property  realized  in  1998.  In  1998,
miscellaneous,  net decreased $3 million primarily due to higher  merger-related
expenses  incurred in the prior year.  Miscellaneous,  net  increased $2 million
between 1997 and 1996 primarily due to increased merger-related expenses.

Interest
Interest  expense  increased  $3 million in 1999,  compared  to 1998,  due to an
increase in  intercompany  notes payable  resulting from funds borrowed from the
regulated  money  pool  (see  Note 7 -  Short-Term  Borrowings  under  Notes  to
Financial  Statements  for  further   information),   partially  offset  by  the
redemption of short-term debt.  Interest  expense  increased $3 million in 1998,
compared to 1997, due to a higher amount of debt  outstanding,  partially offset
by a decrease in other interest.

Balance Sheet
The $27 million  increase in trade accounts  receivable and unbilled revenue was
due  primarily  to higher  sales and  revenues in November  and  December  1999,
compared to the same 1998 period.

The changes in accounts and wages  payable,  taxes  accrued,  other accounts and
notes  receivable,  and other current assets resulted from the timing of various
payments to taxing  authorities  and  suppliers.  The $133  million  increase in
intercompany notes payable was due to funds borrowed from a regulated money pool
(see Note 7 -  Short-Term  Borrowings  under Notes to Financial  Statements  for
further information).

                                      -10-

<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

Information  contained in this section  could be impacted by the transfer of the
Registrant's  generating facilities to AEG. See discussion in "Overview" section
above for more information.

Cash provided by operating activities totaled $166 million for 1999, compared to
$123 million for 1998 and $81 million in 1997, respectively.

Cash flows used in investing  activities  totaled $95  million,  $68 million and
$111  million,   for  the  years  ended  December  31,  1999,   1998  and  1997,
respectively.  Expenditures in 1999 for constructing  new or improving  existing
facilities and purchasing rail cars were $95 million.

Capital  expenditures  are expected to approximate  $60 million in 2000. For the
five-year  period  2000-2004,  construction  expenditures  are estimated at $264
million. This estimate assumes that the transfer of the Registrant's  generating
facilities to AEG will occur in 2000.

Title IV of the Clean Air Act  Amendments  of 1990  requires the  Registrant  to
significantly  reduce total annual sulfur dioxide (SO2) and nitrogen oxide (NOx)
emissions by the year 2000. By switching to low-sulfur  coal,  the Registrant is
meeting these requirements.

In July 1997,  the United States  Environmental  Protection  Agency (EPA) issued
regulations  revising the National  Ambient Air Quality  Standards for ozone and
particulate  matter.  In May 1999, the U.S. Court of Appeals for the District of
Columbia  remanded  the  regulations  back  to the EPA  for  review.  Litigation
regarding  appeals of these  regulations is ongoing.  New ambient  standards may
result in  significant  additional  reductions in SO2 and NOx emissions from the
Registrant's  power plants by 2007.  At this time,  the  Registrant is unable to
predict the ultimate impact of these revised air quality standards on its future
financial condition, results of operations or liquidity.

In an attempt to lower ozone levels across the eastern  United  States,  the EPA
issued  the  implementation  of  regulations  in  September  1998 to reduce  NOx
emissions  from  coal-fired  boilers and other  sources in 22 states,  including
Illinois  (where all of the  Registrant's  coal-fired  power  plant  boilers are
located).  The proposed  regulations mandate a 75% reduction from 1990 levels by
the year 2003 and require  states to develop  plans to reduce NOx  emissions  to
help  alleviate  ozone  problem  areas.  The NOx  emissions  reductions  already
achieved on several of the Registrant's coal-fired power plants will help reduce
the costs of compliance with these regulations. However, preliminary analysis of
the regulations  indicate that selective catalytic  reduction  technology may be
required  for  some of the  Registrant's  units,  as well  as  other  additional
controls.

In  March  2000,  the  U.S.  Court  of  Appeals  for the  District  of  Columbia
substantially  upheld the proposed NOx regulations but remanded portions of them
to the EPA for further consideration. The implementation date of the regulations
is uncertain and further legal challenge is possible. Assuming an implementation
date of 2003, the  Registrant  currently  estimates that its additional  capital
expenditures  to comply  with the final NOx  regulations  could  range from $125
million to $150 million.  Associated  operations  and  maintenance  expenditures
could  increase  $5 million  to $8  million  annually,  beginning  in 2003.  The
Registrant is exploring  alternatives  to comply with these new  regulations  in
order to  minimize,  to the extent  possible,  its capital  costs and  operating
expenses. The Registrant is unable to predict the outcome of the litigation, the
regulation  implementation date or the ultimate impact of these standards on its
future financial condition, results of operations or liquidity.

In November  1998,  the United  States signed an agreement  with numerous  other
countries (the Kyoto  Protocol)  containing  certain  environmental  provisions,
which would require  decreases in  greenhouse  gases in an effort to address the
"global  warming" issue.  The Kyoto Protocol has not been ratified by the United
States  Senate.  Implementation  of the Kyoto Protocol in its present form would
likely  result  in  significantly   higher  capital  costs  and  operations  and
maintenance  expenses by the Registrant.  At this time, the Registrant is unable
to determine the impact of these proposals on the Registrant's  future financial
condition, results of operations or liquidity.

Cash flows used in financing activities were $68 million for 1999. This compares
to cash flows used in financing activities of $74 million in 1998 and cash flows
provided by  financing  activities  of $48 million  for 1997.  The  Registrant's
financing  activities  during 1999  included  the  issuance  of $133  million of
intercompany notes payable, the redemption of $60 million of long-term debt, the
redemption of $47 million of short-term debt, and the payment of dividends.

                                      -11-

<PAGE>

The Registrant  plans to continue  utilizing  short-term  debt to support normal
operations and other temporary requirements. The Registrant is authorized by the
Securities and Exchange  Commission (SEC) under PUHCA to have up to $125 million
of short-term unsecured debt instruments outstanding at any one time. Short-term
borrowings  consist of bank loans  (maturities  generally on an overnight basis)
and commercial  paper  (maturities  generally within 10 to 45 days). At December
31, 1999,  the Registrant  had committed  bank lines of credit  aggregating  $30
million,  all of which  was  unused  and  available  at such  date,  which  make
available  interim  financing at various rates of interest  based on LIBOR,  the
bank  certificate  of  deposit  rate or other  options.  The lines of credit are
renewable  annually at various  dates  throughout  the year.  At  year-end,  the
Registrant had no outstanding short-term borrowings.

Also, the Registrant has the ability to borrow up to approximately  $950 million
from Ameren or AmerenUE through a regulated money pool agreement.  The regulated
money pool was established to coordinate and provide for certain short-term cash
and working capital requirements and is administered by Ameren Services Company,
another  subsidiary  of Ameren.  Interest  is  calculated  at  varying  rates of
interest  depending on the  composition  of internal  and external  funds in the
regulated  money pool. At December 31, 1999,  the Registrant had $133 million of
intercompany  borrowings  outstanding  and $520  million  available  through the
regulated  money  pool.  See  Note 7 -  Short-Term  Borrowings  under  Notes  to
Financial Statements for further information.

The Registrant,  in the ordinary course of business,  explores  opportunities to
reduce its costs in order to remain competitive in the marketplace.  Areas where
the Registrant  focuses its review include,  but are not limited to, labor costs
and fuel supply costs.  In the labor area, the  Registrant has recently  reached
agreements with all of the Registrant's major collective  bargaining units which
will permit it to manage its labor costs and practices effectively in the future
(see Note 11 - Commitments and Contingencies under Notes to Financial Statements
for  further   discussion).   The  Registrant  also  explores   alternatives  to
effectively  manage  the  size  of its  workforce.  These  alternatives  include
utilizing hiring freezes, outsourcing and offering employee separation packages.
In the fuel supply area, the  Registrant  explores  alternatives  to effectively
manage its overall fuel costs.  These  alternatives  include  diversifying  fuel
sources for use at the  Registrant's  power  plants (e.g.  utilizing  low-sulfur
versus high- sulfur coal),  as well as  restructuring  or  terminating  existing
contracts with suppliers.

Certain of these reduction  alternatives could result in additional  investments
being made at the Registrant's  power plants in order to utilize different types
of coal, or could require nonrecurring  payments of employee separation benefits
or  nonrecurring  payments to restructure  or terminate  existing fuel contracts
with a supplier.  Management  is unable to predict  which (if any),  and to what
extent,  these  alternatives  to  reduce  its  overall  cost  structure  will be
executed.  Management  is unable to determine the impact of these actions on the
Registrant's future financial position, results of operations or liquidity.

RATE MATTERS

See Note 2 -  Regulatory  Matters  under  Notes to  Financial  Statements  for a
discussion of rate matters.

ELECTRIC INDUSTRY RESTRUCTURING

Steps taken and being  considered  at the federal and state  levels  continue to
change the  structure  of the  electric  industry  and utility  regulation,  and
encourage increased competition.  At the federal level, the Energy Policy Act of
1992 reduced various  restrictions on the operation and ownership of independent
power  producers and gave the FERC the authority to order electric  utilities to
provide transmission access to third parties.

In April 1996,  the FERC issued  Order 888 and Order 889,  which are intended to
promote  competition  in  the  wholesale  electric  market.  The  FERC  requires
transmission-owning   public   utilities,   such  as   AmerenCIPS,   to  provide
transmission  access and service to others in a manner similar and comparable to
that which the utilities have by virtue of ownership.  Order 888 requires that a
single tariff be used by the utility in providing  transmission  service.  Order
888  also  provides  for  the  recovery  of  strandable  costs,   under  certain
conditions, related to the wholesale business.

Order 889 established the standards of conduct and information requirements that
transmission owners must adhere to in doing business under the open access rule.
Under Order 889, utilities must obtain transmission service for their own use in
the same manner their  customers will obtain  service,  thus  mitigating  market
power through control of transmission facilities.  In addition, under Order 889,
utilities must separate their merchant  function  (buying and selling  wholesale
power) from their transmission and reliability functions.

                                      -12-

<PAGE>

The  Registrant  believes  that  Order 888 and Order  889,  which  relate to its
wholesale  business,  will not have a material  adverse  effect on its financial
condition, results of operations or liquidity.

In 1998, the  Registrant  joined a group of companies that support the formation
of the Midwest  Independent System Operator (Midwest ISO). An ISO operates,  but
does not own, electric transmission systems and maintains system reliability and
security,  while  alleviating  pricing issues associated with the "pancaking" of
rates.   The   Midwest   ISO  would  be   regulated   by  the   FERC.   Thirteen
transmission-owning  utilities  have joined the  Midwest ISO as of December  31,
1999.  The FERC  conditionally  approved  the  formation  of the  Midwest ISO in
September  1998, and it is expected to be operational  during the year 2001. The
Illinois  Commerce  Commission  (ICC) has  authorized the Registrant to join the
Midwest  ISO and to  transfer  control  of its  transmission  facilities  to the
Midwest  ISO.  The Midwest ISO covers 14 states,  represents  portions of 60,000
miles of  transmission  line and controls $8 billion of assets.  The  Registrant
believes that the operation of the Midwest ISO will not have a material  adverse
effect on its financial condition, results of operations or liquidity.

In  December  1999,  the  FERC  issued  its  Order  2000  relating  to  Regional
Transmission  Organizations (RTOs) that would meet certain  characteristics such
as size and  independence.  Order 2000 calls on all transmission  owners to join
RTOs.  In  particular,  all  public  utilities  that own,  operate,  or  control
interstate  transmission facilities must file with the FERC by October 15, 2000,
a proposal for an RTO, or  alternatively a description of efforts by the utility
to join an RTO. The Registrant expects that its participation in the Midwest ISO
will satisfy the requirements of Order 2000.

Certain states are considering  proposals or have adopted  legislation that will
promote  competition  at the retail  level.  In December  1997,  the Governor of
Illinois signed the Electric Service Customer Choice and Rate Relief Law of 1997
(the Law)  providing  for  electric  utility  restructuring  in  Illinois.  This
legislation  introduces competition into the supply of electric energy at retail
in Illinois.

Major provisions of the Law include the phasing-in through 2002 of retail direct
access,  which allows customers to choose their electric  generation  suppliers.
The  phase-in  of retail  direct  access  began on October  1, 1999,  with large
commercial and industrial  customers  principally  comprising the initial group.
The  customers in this group  represent  approximately  24% of the  Registrant's
total sales.  As of December 31, 1999, the impact of retail direct access on the
Registrant's  financial  condition,  results  of  operations  or  liquidity  was
immaterial. Retail direct access will be offered to the remaining commercial and
industrial  customers on December 31, 2000, and to residential  customers on May
1, 2002.

In addition,  the Law included a 5% rate decrease for residential customers that
became  effective  in August  1998.  This rate  decrease  is  expected to reduce
electric  revenues by  approximately  $11 million  annually,  based on estimated
levels of sales and assuming normal weather conditions. (See Note 2 - Regulatory
Matters under Notes to Financial  Statements for further  information.) In 1998,
the Registrant eliminated its Uniform Fuel Adjustment Clause (FAC) as allowed by
the Law,  which  benefited  shareholders  in 1998 and  1999 and is  expected  to
benefit  shareholders  in the  future  (see  Note  1 -  Summary  of  Significant
Accounting   Policies   under  Notes  to   Financial   Statements   for  further
information).  The Law contains a provision  allowing for the potential recovery
of a portion  of  strandable  costs,  which  represent  costs  that would not be
recoverable in a restructured environment, through a transition charge collected
from customers who choose an alternate electric supplier.  In addition,  the Law
contains a provision  requiring a portion of excess  earnings (as defined  under
the Law) for the years 1998 through 2004 to be refunded to customers.

In  December  1997,  after  evaluating  the  impact of the Law,  the  Registrant
determined that it was necessary to write-off the generation-related  regulatory
assets  and  liabilities  of  its  Illinois  retail  electric   business.   This
extraordinary charge reduced 1997 earnings $25 million, net of income taxes. The
Registrant has also concluded that its remaining net  generation-related  assets
are not impaired for financial  reporting  purposes and that no plant writedowns
are  necessary  at this time.  See Note 2 -  Regulatory  Matters  under Notes to
Financial Statements for further information.

In conjunction  with another  provision of the Law, in July 1999, the Registrant
filed a  notice  with  the ICC  that  it  intends  to  transfer  its  generating
facilities  (all in Illinois)  to Ameren  Energy  Generating  Company  (AEG),  a
nonregulated, indirectly wholly-owned subsidiary of Ameren. The formation of the
new  generating  subsidiary,  as  well  as  the  transfer  of  the  Registrant's
generating assets and liabilities (at historical net book value of approximately
$600 million) and certain power sales contracts, in exchange for an intercompany
note receivable, was subject to regulatory approvals from the ICC, the FERC, and
the Missouri  Public Service  Commission,  all of which have been received as of
March 10, 2000. An additional  PUHCA-related  determination that will permit the
new generating

                                      -13-

<PAGE>

subsidiary to operate as an Exempt Wholesale  Generator is being sought from the
FERC. The generating  subsidiary will include most of the new combustion turbine
generators being acquired by Ameren, in addition to the Registrant's facilities.
The new  subsidiary  is scheduled to be  operational  in May 2000.  See Note 2 -
Regulatory Matters under Notes to Financial Statements for further information.

Once the transfer is completed, a power sales agreement will be in place between
the new generating  subsidiary and a  nonregulated  marketing  affiliate for all
generation.  The marketing  affiliate will have a power sales agreement with the
Registrant to supply it sufficient  generation to meet native load  requirements
over the term of the agreement.

The proposed transfer of the Registrant's  generating assets and liabilities had
no effect on the Registrant's financial statements as of December 31, 1999.

In  summary,  the  potential  negative  consequences  associated  with  electric
industry restructuring could be significant and could include the impairment and
writedown of certain assets,  including  generation-related  plant assets, lower
revenues,  reduced profit margins and increased  costs of capital and operations
expenses.  Ameren and the Registrant are actively taking steps to mitigate these
potential negative consequences.  Most importantly,  they will continue to focus
on cost control to ensure that they maintain a competitive cost structure, which
includes the recent  termination of high-cost coal supply contracts (see Note 11
- Commitments and Contingencies under Notes to Financial  Statements for further
information).   Also,  the  actions  of  Ameren  and  the   Registrant   include
establishing a nonregulated  generating  subsidiary and expanding its generation
assets,  strengthening  the  Registrant's  trading and  marketing  operation  to
maintain current customers and obtain new customers,  and enhancing  information
systems. The Registrant believes that these actions will position Ameren and the
Registrant well in the competitive Illinois marketplace.  The Registrant is also
actively  involved  in shaping  the  policies  of the Midwest ISO to protect its
shareholders'  interests.  At this time, the Registrant is unable to predict the
ultimate impact of electric  industry  restructuring on the Registrant's  future
financial condition, results of operations or liquidity.

YEAR 2000 ISSUE

The Year  2000  Issue  relates  to how  dates are  stored  and used in  computer
systems,  applications,  and  embedded  systems.  As  the  century  date  change
occurred,  certain  date-sensitive systems had to recognize the year as 2000 and
not as 1900.  This  inability to recognize  and properly  treat the year as 2000
could have caused these systems to process  critical  financial and  operational
information  incorrectly.  Management  implemented  a Year  2000  plan  covering
Ameren, including AmerenCIPS,  and briefed Ameren's Board of Directors about the
Year  2000  Issue  and  how  it  might  have  affected  the  Registrant.  Ameren
encountered  no  significant  problems  associated  with the Year 2000  Issue at
year-end.  In addressing  the Year 2000 Issue,  Ameren  incurred  internal labor
costs as well as external  consulting  and other expenses to prepare for the new
century.  As of December 31, 1999, Ameren had expended  approximately $8 million
in external costs  (consulting  fees and related costs).  The impact of the Year
2000 Issue on the  Registrant's  financial  condition,  results of operations or
liquidity was immaterial. Ameren will continue to monitor date-sensitive systems
as certain key dates occur throughout the year.

CONTINGENCIES

See Note 2 -  Regulatory  Matters and Note 11 -  Commitments  and  Contingencies
under Notes to Financial Statements for material issues existing at December 31,
1999.

MARKET RISK RELATED TO FINANCIAL INSTRUMENTS AND COMMODITY INSTRUMENTS

Market risk  represents the risk of changes in value of a financial  instrument,
derivative or non-derivative,  caused by fluctuations in market variables (e.g.,
interest rates, equity prices, commodity prices, etc.). The following discussion
of  Ameren's,   including  AmerenCIPS',   risk  management  activities  includes
"forward-looking"  statements  that  involve  risks  and  uncertainties.  Actual
results could differ  materially from those  projected in the  "forward-looking"
statements. Ameren handles market risks in accordance with established policies,
which may include entering into various derivative  transactions.  In the normal
course of  business,  Ameren also faces risks that are either  non-financial  or
non-quantifiable.  Such risks principally include business,  legal, operational,
and credit risk and are not represented in the following analysis.

                                      -14-

<PAGE>

Interest Rate Risk
The  Registrant  is exposed to market risk  through  changes in  interest  rates
through its  issuance  of both  long-term  and  short-term  variable-rate  debt,
fixed-rate  debt,  commercial  paper and auction  market  preferred  stock.  The
Registrant manages its interest rate exposure by controlling the amount of these
instruments it holds within its total capitalization portfolio and by monitoring
the effects of market changes in interest rates.

If interest rates increase one percentage point in 2000 as compared to 1999, the
Registrant's  interest  expense would  increase and net income would decrease by
approximately $1 million.  This amount has been determined using the assumptions
that the  Registrant's  outstanding  variable-rate  debt,  commercial  paper and
auction  market  preferred  stock  as of  December  31,  1999,  continued  to be
outstanding  throughout  2000,  and that the  average  interest  rates for these
instruments  increased  one  percentage  point  over  1999.  The model  does not
consider  the effects of the reduced  level of overall  economic  activity  that
would  exist in such an  environment.  In the event of a  significant  change in
interest  rates,  management  would likely take actions to further  mitigate its
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 the Registrant's financial structure.

Commodity Price Risk
The  Registrant is exposed to changes in market prices for natural gas, fuel and
electricity.  With regard to its natural gas utility business,  the Registrant's
exposure to changing  market prices is in large part  mitigated by the fact that
the  Registrant has a Purchased Gas  Adjustment  Clause (PGA) in place.  The PGA
allows the  Registrant to pass on to its customers its prudently  incurred costs
of natural gas.

Since  the  Registrant  does not  have a  provision  similar  to the PGA for its
electric operations, the Registrant has entered into several long-term contracts
with various  suppliers to purchase  coal to manage its exposure to fuel prices.
(See Note 11 - Commitments and Contingencies under Notes to Financial Statements
for further information).  With regard to the Registrant's exposure to commodity
price  risk for  purchased  power  and  excess  electricity  sales,  Ameren  has
established  a  subsidiary,  AmerenEnergy,  Inc.  (AmerenEnergy),  whose primary
responsibility  includes  managing  market  risks  associated  with the changing
market prices for electricity purchased and sold on behalf of the Registrant.

AmerenEnergy  utilizes  several  techniques  to  mitigate  its  market  risk for
electricity,  including utilizing derivative financial instruments. A derivative
is a contract  whose  value is  dependent  on or derived  from the value of some
underlying  asset. The derivative  financial  instruments  that  AmerenEnergy is
allowed to utilize (which include  forward  contracts,  futures  contracts,  and
option  contracts)  are  dictated by a risk  management  policy,  which has been
reviewed with the Auditing Committee of Ameren's Board of Directors.  Compliance
with the risk  management  policy  is the  responsibility  of a risk  management
steering  committee,  consisting  of Ameren  officers  and an  independent  risk
management officer at AmerenEnergy.

As of December  31, 1999,  the fair value of  derivative  financial  instruments
exposed to commodity  price risk was immaterial.  AmerenEnergy's  primary use of
derivatives  has been limited to  transactions  that are either  risk-neutral or
that reduce price risk exposure of the Registrant.

ACCOUNTING MATTERS

In June 1998, the Financial  Accounting  Standards  Board (FASB) issued SFAS No.
133,  "Accounting for Derivative  Instruments and Hedging  Activities." SFAS 133
establishes  accounting  and  reporting  standards for  derivative  instruments,
including certain derivative  instruments  embedded in other contracts,  and for
hedging activities and requires  recognition of all derivatives as either assets
or liabilities on the balance sheet measured at fair value.  The intended use of
the derivatives and their  designation as either a fair value hedge, a cash flow
hedge,  or a foreign  currency  hedge will determine when the gains or losses on
the  derivatives are to be reported in earnings and when they are to be reported
as a component of other comprehensive income. In June 1999, the FASB issued SFAS
No. 137, "Accounting for Derivative Instruments and Hedging Activities--Deferral
of the  Effective  Date of FASB  Statement No. 133," which delayed the effective
date of SFAS 133 to all fiscal  quarters of all fiscal  years,  beginning  after
June 15, 2000. Earlier  application is still encouraged.  The Registrant expects
to adopt SFAS 133 in the first quarter of 2001.

The  Registrant is currently  evaluating the impact of SFAS 133 on its financial
position and results of operations upon adoption.  The  Registrant's  evaluation
includes  reviewing  existing  derivative  instruments to determine whether they
fall  within  the scope of SFAS 133.  At this  time,  management  believes  that
adoption of SFAS 133 will not have

                                      -15-

<PAGE>

a  material  impact  on  the  Registrant's  financial  position  or  results  of
operations upon adoption based on the derivative instruments which existed as of
December 31, 1999.  However,  changing market  conditions,  the volume of future
transactions  which  may fall  within  the  scope  of SFAS  133,  and  potential
amendments  to SFAS 133  could  change  management's  current  assessment.  As a
result,  SFAS 133 could  increase  the  volatility  of the  Registrant's  future
earnings  and could be  material  to the  Registrant's  financial  position  and
results of operations upon adoption.

EFFECTS OF INFLATION AND CHANGING PRICES

The Registrant's rates for retail electric and gas utility service are generally
regulated by the ICC. Non-retail electric rates are regulated by the FERC.

The current  replacement  cost of the Registrant's  utility plant  substantially
exceeds its recorded historical cost. Under existing regulatory  practice,  only
the historical cost of plant is recoverable  from customers.  As a result,  cash
flows  designed to provide  recovery of historical  costs  through  depreciation
might not be adequate to replace plants in future years. Regulatory practice has
been modified for the Registrant's  generation portion of its business (see Note
2  -  Regulatory  Matters  under  Notes  to  Financial  Statements  for  further
information). In addition, the impact on common stockholders is mitigated to the
extent depreciable property is financed with debt that is repaid with dollars of
less purchasing power.

The cost of fuel for  electric  generation,  which was  previously  reflected in
billings to customers through a Uniform Fuel Adjustment  Clause,  has been added
to base rates as provided for in the Law (see Note 2 - Regulatory  Matters under
Notes to Financial Statements for further information). Changes in gas costs are
generally  reflected in billings to customers through a Purchased Gas Adjustment
Clause.

Inflation continues to be a factor affecting operations, earnings, stockholders'
equity and financial performance.

SAFE HARBOR STATEMENT

Statements  made in this report  which are not based on  historical  facts,  are
"forward-looking"  and, accordingly,  involve risks and uncertainties that could
cause actual results to differ  materially from those  discussed.  Although such
"forward-looking"  statements  have  been  made in good  faith  and are based on
reasonable assumptions,  there is no assurance that the expected results will be
achieved.  These statements include (without limitation) statements as to future
expectations,   beliefs,  plans,  strategies,  objectives,  events,  conditions,
financial  performance  and the Year 2000 Issue.  In  connection  with the "Safe
Harbor" provisions of the Private Securities  Litigation Reform Act of 1995, the
Registrant is providing this cautionary  statement to identify important factors
that could cause actual results to differ materially from those anticipated. The
following factors,  in addition to those discussed  elsewhere in this report and
in subsequent securities filings,  could cause results to differ materially from
management expectations as suggested by such "forward-looking"  statements:  the
effects of regulatory actions;  changes in laws and other governmental  actions;
the impact on the Registrant of current regulations related to the phasing-in of
the opportunity  for some customers to choose  alternative  energy  suppliers in
Illinois; the effects of increased competition in the future due to, among other
things, deregulation of certain aspects of the Registrant's business at both the
state and Federal  levels;  future market  prices for fuel and purchased  power,
electricity,  and  natural  gas,  including  the use of  financial  instruments;
average rates for electricity in the Midwest;  business and economic conditions;
interest rates;  weather  conditions;  fuel prices and availability;  generation
plant performance;  the impact of current environmental regulations on utilities
and generating  companies and the expectation  that more stringent  requirements
will be introduced over time, which could potentially have a negative  financial
effect; monetary and fiscal policies;  future wages and employee benefits costs;
and legal and administrative proceedings.


ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

     Information  required to be reported by this item is included under "Market
Risk  Related  to  Financial   Instruments   and   Commodity   Instruments"   in
"Management's  Discussion  and Analysis of Financial  Conditions  and Results of
Operations" under Item 7 herein.

                                      -16-

<PAGE>


                        REPORT OF INDEPENDENT ACCOUNTANTS
                        ---------------------------------



To the Board of Directors and Shareholders
of Central Illinois Public Service Company


In our opinion,  the financial  statements  listed in the index  appearing under
Item 14(a)(1) on Page 37 present fairly, in all material respects, the financial
position of Central  Illinois  Public  Service  Company at December 31, 1999 and
1998,  and the results of their  operations and their cash flows for each of the
two years in the period ended December 31, 1999, in conformity  with  accounting
principles  generally accepted in the United States.  These financial statements
are the  responsibility of the Company's  management;  our  responsibility is to
express  an  opinion  on these  financial  statements  based on our  audits.  We
conducted our audits of these  statements in accordance with auditing  standards
generally accepted in the United States,  which require that we plan and perform
the audit to obtain reasonable  assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence  supporting the amounts and  disclosures  in the financial  statements,
assessing the  accounting  principles  used and  significant  estimates  made by
management,  and evaluating the overall  financial  statement  presentation.  We
believe  that our audits  provide a reasonable  basis for the opinion  expressed
above.  The financial  statements of Central Illinois Public Service Company for
the year ended December 31, 1997 were audited by other  independent  accountants
whose report dated January 31, 1997  expressed an  unqualified  opinion on those
statements.



/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP
St. Louis, Missouri
February 2, 2000


                                      -17-

<PAGE>


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

                     CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
                                  BALANCE SHEET
                      (Thousands of Dollars, Except Shares)

<TABLE>
<CAPTION>


                                                                 December 31,  December 31,
ASSETS                                                               1999         1998
------                                                               ----         ----
<S>                                                               <C>          <C>
Property and plant, at original cost:
   Electric                                                       $2,422,002   $2,381,682
   Gas                                                               267,909      259,656
                                                                  ----------   ----------
                                                                   2,689,911    2,641,338
   Less accumulated depreciation and amortization                  1,260,582    1,192,108
                                                                  ----------   ----------
                                                                   1,429,329    1,449,230
Construction work in progress                                         43,435       16,220
                                                                  ----------   ----------
         Total property and plant, net                             1,472,764    1,465,450
                                                                  ----------   ----------

Other assets                                                          17,722       31,904

Current assets:
   Cash and cash equivalents                                          12,536       10,180
   Accounts receivable - trade (less allowance for doubtful
         accounts of $1,828 and $1,714, respectively)                 48,703       44,494
   Unbilled revenue                                                   75,884       53,120
   Other accounts and notes receivable                                20,875       16,486
   Materials and supplies, at average cost -
      Fossil fuel                                                     47,291       50,791
      Other                                                           33,931       36,047
   Other                                                              10,387        8,214
                                                                  ----------   ----------
         Total current assets                                        249,607      219,332
                                                                  ----------   ----------
Regulatory assets:
   Deferred income taxes                                              21,520       24,797
   Other                                                              20,141       22,914
                                                                  ----------   ----------
         Total regulatory assets                                      41,661       47,711
                                                                  ----------   ----------
TOTAL ASSETS                                                      $1,781,754   $1,764,397
                                                                  ==========   ==========

CAPITAL AND LIABILITIES
Capitalization:
   Common stock, no par value, authorized 45,000,000 shares -
     outstanding 25,452,373 shares                                $  120,033   $  120,033
   Retained earnings                                                 414,345      455,337
                                                                  ----------   ----------
         Total common stockholder's equity                           534,378      575,370
   Preferred stock not subject to mandatory redemption (Note 6)       80,000       80,000
   Long-term debt (Note 8)                                           493,625      528,446
                                                                  ----------   ----------
         Total capitalization                                      1,108,003    1,183,816
                                                                  ----------   ----------

Current liabilities:
   Current maturity of long-term debt (Note 8)                        35,000       60,000
   Short-term debt                                                      --         46,700
   Intercompany notes payable                                        132,900         --
   Accounts and wages payable                                         82,800       58,800
   Accumulated deferred income taxes                                  22,621       21,386
   Taxes accrued                                                      32,145       13,201
   Other                                                              39,619       34,454
                                                                  ----------   ----------
         Total current liabilities                                   345,085      234,541
                                                                  ----------   ----------
Commitments and Contingencies (Notes 2 and 11)
Accumulated deferred income taxes                                    216,661      234,119
Accumulated deferred investment tax credits                           32,169       34,657
Regulatory liability                                                  34,004       39,621
Other deferred credits and liabilities                                45,832       37,643
                                                                  ----------   ----------
TOTAL CAPITAL AND LIABILITIES                                     $1,781,754   $1,764,397
                                                                  ==========   ==========

</TABLE>

See Notes to Financial Statements.

                                      -18-

<PAGE>


                     CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
                               STATEMENT OF INCOME
                             (Thousands of Dollars)
<TABLE>
<CAPTION>

                                                                                December 31,    December 31,     December 31,
For the year ended                                                                 1999            1998            1997
                                                                                   ----            ----            ----

OPERATING REVENUES:
<S>                                                                             <C>          <C>          <C>
   Electric                                                                     $ 795,476       $ 721,918       $ 700,517
   Gas                                                                            132,646         125,506         151,558
                                                                                ---------       ---------       ---------
      Total operating revenues                                                    928,122         847,424         852,075

OPERATING EXPENSES:
   Operations
      Fuel and purchased power                                                    314,208         230,085         242,256
      Gas                                                                          73,352          69,350          97,226
      Other                                                                       190,622         179,477         160,201
                                                                                ---------       ---------       ---------
                                                                                  578,182         478,912         499,683
   Maintenance                                                                    103,582          71,542          75,652
   Depreciation and amortization                                                   80,557          74,323          82,689
   Income taxes                                                                    30,773          45,769          33,661
   Other taxes                                                                     40,313          56,834          57,895
                                                                                ---------       ---------       ---------
      Total operating expenses                                                    833,407         727,380         749,580

Operating Income                                                                   94,715         120,044         120,044

OTHER INCOME AND DEDUCTIONS:
   Allowance for equity funds used during
      Construction                                                                     (8)             16             783
   Miscellaneous, net                                                               2,030            (955)         (3,800)
                                                                                ---------       ---------       ---------
      Total other income and deductions                                             2,022            (939)         (3,017)

Income Before Interest Charges                                                     99,737         119,105          99,478

INTEREST CHARGES:
   Interest                                                                        42,736          40,039          36,791
   Allowance for borrowed funds used during construction                               21          (1,081)           (786)
                                                                                ---------       ---------       ---------
      Net interest charges                                                         42,757          38,958          36,005

Income Before Extraordinary Charge                                                 53,980          80,147          63,473
                                                                                ---------       ---------       ---------

Extraordinary Charge, net of income taxes (Note 2)                                   --              --           (24,853)
                                                                                ---------       ---------       ---------

NET INCOME                                                                         53,980          80,147          38,620
                                                                                ---------       ---------       ---------

Preferred Stock Dividends                                                           3,833           3,745           3,715
                                                                                ---------       ---------       ---------

NET INCOME AFTER PREFERRED
               STOCK DIVIDENDS                                                  $  50,147       $  76,402       $  34,905
                                                                                =========       =========       =========

</TABLE>

See Notes to Financial Statements.

                                      -19-

<PAGE>


                     CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
                             STATEMENT OF CASH FLOWS
                             (Thousands of Dollars)

<TABLE>
<CAPTION>

                                                            December 31,            December 31,           December 31,
For the year ended                                              1999                    1998                   1997
                                                                ----                    ----                   ----

<S>                                                           <C>                     <C>                    <C>
Cash Flows From Operating:
   Income before extraordinary charge                         $53,980                 $80,147                $63,473
   Adjustments to reconcile net income to net cash
      provided by operating activities:
        Depreciation and amortization                          80,557                  74,323                 82,689
        Allowance for funds used during
          construction                                             29                  (1,097)                (1,569)
        Deferred income taxes, net                            (18,562)                (10,801)                (1,686)
        Deferred investment tax credits, net                   (2,488)                 (5,712)                (8,516)
        Changes in assets and liabilities:
           Receivables, net                                   (31,362)                 (7,137)                (2,076)
           Materials and supplies                               5,616                 (15,310)                 2,249
           Regulatory assets - other                            2,773                   2,294                (50,693)
           Accounts and wages payable                          24,000                 (30,562)                16,840
           Taxes accrued                                       18,944                  (2,668)                 1,926
           Other, net                                          32,175                  39,867                (21,922)
                                                     --------------------    ------------------    --------------------
Net Cash Provided By Operating Activities                     165,662                 123,344                 80,715

Cash Flows From Investing:
   Construction expenditures                                  (95,302)                (68,848)              (115,551)
   Allowance for funds used during construction                   (29)                  1,097                  1,569
   Other                                                         --                      --                    3,182
                                                      --------------------    ------------------    --------------------
Net Cash Used In Investing Activities                         (95,331)                (67,751)              (110,800)

Cash Flows From Financing:
   Dividends on common stock                                  (90,342)                (72,285)               (43,300)
   Dividends on preferred stock                                (3,833)                 (4,002)                (3,638)
   Redemptions -
      Short-term debt                                         (46,700)                (18,266)                  --
      Long-term debt                                          (60,000)                (64,000)               (64,000)
   Issuances -
      Short-term debt                                            --                      --                    7,198
      Long-term debt                                             --                    85,000                152,000
      Intercompany notes payable                              132,900                    --                     --
                                                     --------------------    ------------------    --------------------
Net Cash Provided By (Used In) Financing Activities           (67,975)                (73,553)                48,260

Net Change In Cash And Cash Equivalents                         2,356                 (17,960)                18,175
Cash And Cash Equivalents At Beginning Of Year                 10,180                  28,140                  9,965
                                                     --------------------    ------------------    --------------------
Cash And Cash Equivalents At End Of Year                      $12,536                 $10,180                $28,140
=======================================================================================================================
Cash paid during the periods:
-----------------------------------------------------------------------------------------------------------------------
   Interest (net of amount capitalized)                       $39,140                 $40,269              $35,363
   Income taxes                                               $30,998                 $61,953              $36,763
-----------------------------------------------------------------------------------------------------------------------

</TABLE>


SUPPLEMENTAL DISCLOSURE OF NONCASH TRANSACTION:
An  extraordinary  charge to earnings was recorded in the fourth quarter of 1997
for the write-off of generation-related regulatory assets and liabilities of the
Registrant's   retail  electric  business  as  a  result  of  electric  industry
restructuring  legislation  enacted in Illinois in December  1997. The write-off
reduced  earnings  $25  million,  net of income  taxes.  See Note 2 - Regulatory
Matters under Notes to Financial Statements for further information.

See Notes to Financial Statements.

                                      -20-

<PAGE>




                     CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
                     ---------------------------------------


STATEMENT OF RETAINED EARNINGS
------------------------------
(Thousands of Dollars)

-------------------------------------------------------------------------------
Year Ended December 31,
                                           1999           1998           1997
-------------------------------------------------------------------------------
Balance at Beginning of Period          $455,337       $451,477       $459,942
-------------------------------------------------------------------------------
  Add:
  Net income                              53,980         80,147         38,620
-------------------------------------------------------------------------------
                                         509,317        531,624        498,562
-------------------------------------------------------------------------------
  Deduct:
  Common stock dividends                  90,342         72,285         43,300
  Preferred stock dividends                4,630          4,002          3,785
-------------------------------------------------------------------------------
                                          94,972         76,287         47,085
-------------------------------------------------------------------------------
 Balance at End of Period               $414,345       $455,337       $451,477
-------------------------------------------------------------------------------






SELECTED QUARTERLY INFORMATION  (Unaudited)
-------------------------------
(Thousands of Dollars)

--------------------------------------------------------------------------------
                               Operating   Operating    Net       Net Income
                               Revenues     Income     Income    (Loss) After
Quarter Ended                               (Loss)     (Loss)     Preferred
                                                                Stock Dividends
--------------------------------------------------------------------------------
March 31, 1999                  207,772     24,709     14,315        13,347
March 31, 1998                  199,515     21,732     12,118        11,134
June 30, 1999                   221,929     29,981     20,680        19,763
June 30, 1998                   214,829     28,429     19,349        18,468
September 30, 1999              279,327     53,845     43,283        42,326
September 30, 1998 (a)          246,675     50,623     39,672        38,736
December 31, 1999  (b)          219,094    (13,820)   (24,298)      (25,289)
December 31, 1998               186,405     19,260      9,008         8,064
--------------------------------------------------------------------------------

(a) The third  quarter of 1998  included a  nonrecurring  charge  related to the
targeted  separation  plan that  reduced  net income $4  million.  (See Note 4 -
Targeted  Separation  Plan  under  Notes to  Financial  Statements  for  further
information.)
(b) The fourth  quarter  of 1999  included  a charge  for coal  supply  contract
terminations that reduced net income $31 million. (See Note 11 - Commitments and
Contingencies under Notes to Financial Statements for further information).

Other  changes in  quarterly  earnings are due to the effect of weather on sales
and other factors that are characteristic of public utility operations.

See Notes to Financial Statements.

                                      -21-

<PAGE>

CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999

NOTE 1 - Summary of Significant Accounting Policies

Basis of Presentation

Central  Illinois  Public Service  Company  (AmerenCIPS or the  Registrant) is a
subsidiary of Ameren  Corporation  (Ameren),  which is the parent company of two
utility  operating   companies,   the  Registrant  and  Union  Electric  Company
(AmerenUE).  Ameren is a registered  holding  company  under the Public  Utility
Holding  Company Act of 1935 (PUHCA)  formed in December 1997 upon the merger of
CIPSCO  Incorporated (the Registrant's former parent) and AmerenUE (the Merger).
Both Ameren and its subsidiaries are subject to the regulatory provisions of the
PUHCA.  The  operating  companies  are engaged  principally  in the  generation,
transmission,  distribution  and  sale of  electric  energy  and  the  purchase,
distribution,  transportation  and sale of natural gas in the states of Illinois
and  Missouri.  Contracts  among the  companies--dealing  with  jointly-operated
generating facilities,  interconnecting  transmission lines, and the exchange of
electric power--are regulated by the Federal Energy Regulatory Commission (FERC)
or the Securities and Exchange Commission (SEC). Administrative support services
are provided to the Registrant by a separate Ameren subsidiary,  Ameren Services
Company.  The Registrant  serves 400,000 electric and 175,000 gas customers in a
20,000 square-mile region of central and southern Illinois.

In  conjunction  with the Illinois  Electric  Service  Customer  Choice and Rate
Relief Law of 1997 (the Law), the Registrant has received  regulatory  approvals
to transfer its generating facilities to Ameren Energy Generating Company (AEG),
a nonregulated,  indirectly  wholly-owned  subsidiary of Ameren. The transfer of
the assets and liabilities (at historical net book value of  approximately  $600
million) is currently scheduled to occur in May 2000.  Discussion below relating
to "forward-looking"  statements reflects information assuming that the transfer
will occur as scheduled.  For  additional  information on the law, its impact on
the Registrant,  and the generating facilities transfer, see Note 2 - Regulatory
Matters.

The Registrant also has a 20% interest in Electric Energy,  Inc. (EEI), which is
accounted  for under the equity method of  accounting.  EEI owns and operates an
electric generating and transmission facility in Illinois that supplies electric
power primarily to a uranium enrichment plant located in Paducah, Kentucky.

Regulation
In addition to the SEC, the  Registrant  is  regulated by the Illinois  Commerce
Commission (ICC) and the FERC. The accounting policies of the Registrant conform
to U.S. generally accepted accounting principles (GAAP). See Note 2 - Regulatory
Matters for further information.

Property and Plant
The cost of  additions  to, and  betterments  of, units of property and plant is
capitalized.  Cost includes labor, material,  applicable taxes and overheads. An
allowance for funds used during  construction is also added for the Registrant's
regulated  assets,  and  interest  incurred  during  construction  is added  for
nonregulated  assets.  Maintenance  expenditures  and the  renewal  of items not
considered units of property are charged to income,  as incurred.  When units of
depreciable  property are  retired,  the original  cost and removal  cost,  less
salvage value, are charged to accumulated depreciation.

Depreciation
Depreciation  is provided  over the  estimated  lives of the various  classes of
depreciable  property by applying composite rates on a straight-line  basis. The
provision for depreciation in 1999,  1998, and 1997 was  approximately 3% of the
average depreciable cost.

Fuel and Gas Costs
The cost of fuel for  electric  generation  is  reflected  in base rates with no
provision for changes to be made through a fuel adjustment clause. (See Note 2 -
Regulatory Matters for further information.) In 1997, changes in fuel costs were
generally  reflected in billings to electric customers through a fuel adjustment
clause.  Changes  in gas  costs  are  generally  reflected  in  billings  to gas
customers through a purchased gas adjustment clause.

                                      -22-

<PAGE>

Cash and Cash Equivalents
Cash  and  cash  equivalents  include  cash on hand  and  temporary  investments
purchased with an original maturity of three months or less.

Income Taxes
The Registrant is included in the  consolidated  federal income tax return filed
by Ameren. Income taxes are allocated to the individual companies based on their
respective  taxable  income or loss.  Deferred  tax assets and  liabilities  are
recognized  for the tax  consequences  of  transactions  that have been  treated
differently  for financial  reporting and tax return  purposes,  measured  using
statutory tax rates.

Investment  tax  credits  utilized in prior  years were  deferred  and are being
amortized over the useful lives of the related properties.

Allowance for Funds Used During Construction
Allowance  for  funds  used  during  construction  (AFC) is a  utility  industry
accounting  practice  whereby the cost of borrowed  funds and the cost of equity
funds (preferred and common stockholders' equity) applicable to the Registrant's
regulated  construction  program are capitalized as a cost of construction.  AFC
does not  represent a current  source of cash funds.  This  accounting  practice
offsets the effect on earnings of the cost of  financing  current  construction,
and treats such financing costs in the same manner as  construction  charges for
labor and materials.

Under  accepted  ratemaking  practice,  cash  recovery  of AFC, as well as other
construction  costs,  occurs when  completed  projects are placed in service and
reflected in customer  rates.  The AFC rates used were 5% during 1999, 6% during
1998 and 8% during 1997.

Unamortized Debt Discount, Premium and Expense
Discount, premium, and expense associated with long-term debt are amortized over
the lives of the related issues.

Revenue
The  Registrant  accrues an estimate of electric  and gas  revenues  for service
rendered, but unbilled, at the end of each accounting period.

Energy Contracts
The  Emerging  Issues Task Force of the  Financial  Accounting  Standards  Board
(EITF)  Issue  98-10,   "Accounting  for  Energy  Trading  and  Risk  Management
Activities" became effective on January 1, 1999. EITF 98-10 provides guidance on
the  accounting  for energy  contracts  entered into for the purchase or sale of
electricity,  natural  gas,  capacity  and  transportation.  The EITF  reached a
consensus in EITF 98-10 that sales and purchase  activities being performed need
to be classified as either trading or nontrading. Furthermore, transactions that
are determined to be trading activities would be recognized on the balance sheet
measured  at  fair  value,   with  gains  and  losses   included  in   earnings.
AmerenEnergy,  Inc.,  an energy  marketing  subsidiary  of Ameren,  enters  into
contracts  for the sale and purchase of energy on behalf of the  Registrant  and
AmerenUE. Currently, virtually all of AmerenEnergy's transactions are considered
nontrading  activities  and are  accounted  for using the accrual or  settlement
method,  which represents industry practice.  EITF 98-10 did not have a material
impact on the  Registrant's  financial  position or results of  operations  upon
adoption.

Software
Statement of Position (SOP) 98-1, "Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use" became effective on January 1, 1999. SOP
98-1  provides  guidance  on  accounting  for the  costs  of  computer  software
developed or obtained for internal  use.  Under SOP 98-1,  certain  costs may be
capitalized  and  amortized  over some  future  period.  SOP 98-1 did not have a
material impact on the Registrant's  financial position or results of operations
upon adoption.

Evaluation of Assets for Impairment
Statement of Financial  Accounting Standards (SFAS) No. 121, "Accounting for the
Impairment of  Long-Lived  Assets and for  Long-Lived  Assets to be Disposed Of"
prescribes  general  standards for the recognition and measurement of impairment
losses. The Registrant determines if long-lived assets are impaired by comparing
their  undiscounted  expected  future cash flows to their  carrying  amount.  An
impairment loss is recognized if the undiscounted expected future cash flows are
less  than the  carrying  amount  of the  asset.  SFAS 121  also  requires  that
regulatory  assets  which are no longer  probable  of  recovery  through  future
revenues be charged to  earnings  (see Note 2 -  Regulatory  Matters for further
information). As of December 31, 1999, no impairment was identified.

                                      -23-

<PAGE>

Use of Estimates
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 and disclosure of
contingent  assets and  liabilities at the date of the financial  statements and
the reported amounts of revenues and expenses during the reported period. Actual
results could differ from those estimates.

Reclassifications
Certain reclassifications have been made to prior-years' financial statements to
conform with 1999 reporting.

NOTE 2 - Regulatory Matters

Illinois Electric Restructuring
Certain states are considering  proposals or have adopted  legislation that will
promote  competition  at the retail  level.  In December  1997,  the Governor of
Illinois signed the Electric Service Customer Choice and Rate Relief Law of 1997
(the Law)  providing  for  electric  utility  restructuring  in  Illinois.  This
legislation  introduces competition into the supply of electric energy at retail
in Illinois.

Under the Law,  retail  direct  access,  which allows  customers to choose their
electric generation suppliers,  will be phased in over several years. Access for
commercial and  industrial  customers will occur over a period from October 1999
to December 2000, and access for  residential  customers will occur after May 1,
2002.

As a  requirement  of the Law,  in March 1999,  the  Registrant  filed  delivery
service tariffs with the ICC. These tariffs would be used by electric  customers
who choose to purchase their power from alternate suppliers. On August 25, 1999,
the ICC issued an order approving the delivery services tariffs, with an allowed
rate of return on equity of 10.45%.  The  Registrant  and AmerenUE filed a joint
petition for rehearing of that order requesting the ICC to alter its conclusions
on a number of issues.  On October 13,  1999,  the ICC  granted a  rehearing  on
certain  issues.  An  order  on this  reopened  proceeding  was  issued  in 2000
resolving all outstanding issues.

The Law included a 5%  residential  electric rate decrease for the  Registrant's
electric  customers,  effective  August  1,  1998.  This rate  decrease  reduced
electric  revenues by  approximately  $7 million in 1999.  The Registrant may be
subject to additional 5% residential electric rate decreases in each of 2000 and
2002, to the extent its rates exceed the Midwest  utility  average at that time.
The Registrant's rates are currently below the Midwest utility average.

As a  result  of the  Law,  the  Registrant  filed a  proposal  with  the ICC to
eliminate the electric fuel  adjustment  clause for Illinois  retail  customers,
thereby  including  historical  levels  of fuel  costs  in base  rates.  The ICC
approved the Registrant's filing in early 1998.

The Law also contains a provision  requiring  that  one-half of excess  earnings
from the Illinois jurisdiction for the years 1998 through 2004 to be refunded to
the  Registrant's  customers.  Excess earnings are defined as the portion of the
two-year average annual rate of return on common equity in excess of 1.5% of the
two-year average of an Index, as defined in the Law. The Index is defined as the
sum of the  average  for the twelve  months  ended  September  30 of the average
monthly yields of the 30-year U.S. Treasury bonds,  plus prescribed  percentages
ranging from 4% to 7%. Filings must be made with the ICC on, or before, March 31
of each year 2000 through 2005.

In conjunction  with another  provision of the Law, in July 1999, the Registrant
filed a  notice  with  the ICC  that  it  intends  to  transfer  its  generating
facilities  (all in Illinois)  to Ameren  Energy  Generating  Company  (AEG),  a
nonregulated, indirectly wholly-owned subsidiary of Ameren. The formation of the
new  generating  subsidiary,  as  well  as  the  transfer  of  the  Registrant's
generating assets and liabilities (at historical net book value of approximately
$600 million) and certain power sales  contracts in exchange for an intercompany
note receivable, was subject to regulatory approvals from the ICC, the FERC, and
the Missouri  Public Service  Commission,  all of which have been received as of
March 10, 2000. An additional  PUHCA-related  determination that will permit the
new generating  subsidiary to operate as an Exempt Wholesale  Generator is being
sought from the FERC.  The  generating  subsidiary  will include most of the new
combustion  turbine  generators  being  acquired  by Ameren in  addition  to the
Registrant's  facilities.  The new  generating  subsidiary  is  scheduled  to be
operational in May 2000. The proposed  transfer of the  Registrant's  generating
assets and liabilities had no effect on the Registrant's financial statements as
of December 31, 1999.

Once the transfer is completed, a power sales agreement will be in place between
the new generating  subsidiary and a  nonregulated  marketing  affiliate for all
generation.  The marketing  affiliate will have a power sales agreement with the
Registrant to supply it sufficient  generation to meet native load  requirements
over the term of the agreement.

                                      -24-

<PAGE>

Other  provisions  of the Law  include  (1)  potential  recovery of a portion of
strandable  costs,  which  represent  costs which would not be  recoverable in a
restructured  environment,  through a transition charge collected from customers
who choose  another  electric  supplier;  (2) a mechanism to securitize  certain
future revenues; and (3) a provision relieving the Registrant of the requirement
to file  electric  rate cases or  alternative  regulatory  plans,  following the
consummation of the Merger to reflect the effects of net merger savings.

The Registrant's  accounting  policies and financial  statements conform to GAAP
applicable  to  rate-regulated  enterprises  and  reflect  the  effects  of  the
ratemaking  process in accordance  with SFAS 71,  "Accounting for the Effects of
Certain  Types of  Regulation."  Such effects  concern  mainly the time at which
various items enter into the  determination of net income in order to follow the
principle  of  matching  costs and  revenues.  For  example,  SFAS 71 allows the
Registrant  to record  certain  assets and  liabilities  (regulatory  assets and
regulatory  liabilities)  that are expected to be recovered or settled in future
rates  and  would not be  recorded  under  GAAP for  nonregulated  entities.  In
addition, reporting under SFAS 71 allows companies whose service obligations and
prices are  regulated to maintain  assets on their balance  sheets  representing
costs they  reasonably  expect to recover from customers,  through  inclusion of
such costs in future rates.  SFAS 101,  "Accounting  for the  Discontinuance  of
Application of FASB  Statement No. 71," specifies how an enterprise  that ceases
to  meet  the  criteria  for  application  of  SFAS  71 for  all or  part of its
operations  should  report that event in its financial  statements.  In general,
SFAS 101 requires that the enterprise  report the  discontinuance  of SFAS 71 by
eliminating from its balance sheet all regulatory assets and liabilities related
to the applicable portion of the business that no longer meets SFAS 71 criteria.
The  EITF  has  concluded  that  application  of SFAS 71  accounting  should  be
discontinued once sufficiently detailed deregulation legislation is issued for a
separable  portion  of a  business  for  which a plan of  deregulation  has been
established.   However,  the  EITF  further  concluded  that  regulatory  assets
associated with the deregulated portion of the business, which will be recovered
through  tariffs  charged to customers of a regulated  portion of the  business,
should be  associated  with the  regulated  portion of the  business  from which
future cash recovery is expected (not the portion of the business from which the
costs  originated).  Those  assets can  therefore  continue to be carried on the
regulated  entity's balance sheet to the extent such assets are recoverable.  In
addition,  SFAS 121  establishes  accounting  standards  for the  impairment  of
long-lived assets.

Due to the  enactment  of the Law,  prices  for the  retail  supply of  electric
generation are expected to transition from cost-based,  regulated rates to rates
determined in large part by competitive  market forces in the state of Illinois.
As a result, the Registrant  discontinued  application of SFAS 71 for the retail
portion of its  generating  business  (i.e.,  the  portion  of the  Registrant's
business  related to the  supply of  electric  energy) in the fourth  quarter of
1997.   The   Registrant   evaluated  the  impact  of  the  Law  on  the  future
recoverability  of  its  regulatory  assets  and  liabilities   related  to  the
generation  portion of its business and determined that it was not probable that
such  assets and  liabilities  would be  recovered  through  cash flows from the
regulated   portion   of   its   business.    Accordingly,    the   Registrant's
generation-related  regulatory  assets and  liabilities  of its retail  electric
business  were  written  off in the  fourth  quarter  of 1997,  resulting  in an
extraordinary  charge to earnings of $25  million,  net of income  taxes.  These
regulatory assets and liabilities  included previously incurred costs originally
expected to be  collected/refunded  in future  revenues,  such as coal  contract
restructuring costs, costs associated with an abandoned scrubber at a generating
plant, and income  tax-related  regulatory assets and liabilities.  In addition,
the Registrant has evaluated whether the  recoverability of the costs associated
with its  remaining net  generation-related  assets has been impaired as defined
under SFAS 121. The Registrant has concluded that  impairment,  as defined under
SFAS 121,  does not exist and that no plant  writedowns  are  necessary  at this
time.  At December 31, 1999,  the  Registrant's  net  investment  in  generation
facilities related to its retail jurisdiction  approximated $647 million and was
included in electric plant in-service on the Registrant's balance sheet.

In August 1999,  the Registrant  filed a transmission  system rate case with the
FERC.  This  filing  was  primarily  designed  to  implement,  rates,  terms and
conditions for transmission  service for those retail customers who choose other
suppliers  as allowed  under the Law.  On October 14,  1999,  the FERC issued an
order  suspending  the proposed  rates until March 25, 2000.  In January 2000, a
settlement  in  principle  was  reached  with the FERC  trial  staff  and  other
interested  parties.  The  settlement  establishes  the rates  for  transmission
service that are to go into effect in the first quarter of 2000.  The settlement
is subject to approval by the FERC.  The  Registrant  expects that the FERC will
approve the settlement in 2000.

The  provisions of the Law could also result in lower  revenues,  reduced profit
margins and increased costs of capital and operations expense. At this time, the
Registrant is unable to determine the impact of the Law on its future  financial
condition, results of operations or liquidity.

                                      -25-

<PAGE>

Gas
In February  1999,  the ICC  approved an $8 million  annual  rate  increase  for
natural gas service. The increase became effective in February 1999.

Midwest ISO
In 1998, the  Registrant  joined a group of companies that support the formation
of the Midwest  Independent System Operator (Midwest ISO). An ISO operates,  but
does not own, electric transmission systems and maintains system reliability and
security while  alleviating  pricing issues  associated  with the "pancaking" of
rates. The Midwest ISO would be regulated by FERC. Thirteen  transmission-owning
utilities  have  joined the  Midwest  ISO, as of  December  31,  1999.  The FERC
conditionally  approved the formation of the Midwest ISO in September  1998, and
it is expected to be  operational  during the year 2001.  The ICC has authorized
the  Registrant  to  join  the  Midwest  ISO  and  to  transfer  control  of its
transmission  facilities  to the Midwest  ISO. The Midwest ISO covers 14 states,
represents portions of 60,000 miles of transmission line and controls $8 billion
in assets.  The  Registrant  believes that the operation of the Midwest ISO will
not have a  material  adverse  effect on its  financial  condition,  results  of
operations or liquidity.

In  December  1999,  the  FERC  issued  its  Order  2000  relating  to  Regional
Transmission  Organizations (RTOs) that would meet certain  characteristics such
as size and  independence.  Order 2000 calls on all transmission  owners to join
RTOs.  In  particular,  all  public  utilities  that own,  operate,  or  control
interstate  transmission facilities must file with the FERC by October 15, 2000,
a proposal for an RTO, or  alternatively a description of efforts by the utility
to join an RTO. The Registrant expects that its participation in the Midwest ISO
will satisfy the requirements of Order 2000.

Regulatory Assets and Liabilities
In accordance  with SFAS 71, the Registrant has deferred  certain costs pursuant
to actions of its regulators, and is currently recovering such costs in electric
rates charged to customers.

At December 31, the Registrant had recorded the following  regulatory assets and
regulatory liability:
-------------------------------------------------------------------------
(In Millions)
                                                     1999           1998
-------------------------------------------------------------------------
Regulatory Assets:
  Income taxes                                       $22            $25
  Unamortized loss on reacquired debt                  7              8
  Other                                               13             15
-------------------------------------------------------------------------
Regulatory Assets                                    $42            $48
-------------------------------------------------------------------------
Regulatory Liability:
  Income taxes                                       $34            $40
-------------------------------------------------------------------------
Regulatory Liability                                 $34            $40
-------------------------------------------------------------------------

Income Taxes:  See Note 9 - Income Taxes.
Unamortized Loss on Reacquired Debt: Represents losses related to refunded debt.
These amounts are being  amortized over the lives of the related new debt issues
or the remaining lives of the old debt issues if no new debt was issued.

The Registrant continually assesses the recoverability of its regulatory assets.
Under  current  accounting  standards,  regulatory  assets  are  written  off to
earnings  when it is no longer  probable  that such  amounts  will be  recovered
through future revenues.

NOTE 3 - Related Party Transactions

The  Registrant  has  transactions  in the normal  course of business with other
Ameren  subsidiaries.  These  transactions  are  primarily  comprised  of  power
purchases and sales and services received or rendered.  Intercompany receivables
included in other accounts and notes receivable were  approximately  $12 million
and $2 million,  respectively,  as of December  31, 1999 and 1998.  Intercompany
payables  included in  accounts  and wages  payable  totaled  approximately  $35
million and $12 million, respectively, as of December 31, 1999 and 1998.

In  addition,  the  Registrant  has the  ability to borrow  funds from Ameren or
AmerenUE or invest funds through a regulated money pool  agreement.  At December
31, 1999, the Registrant had outstanding intercompany borrowings of $133 million
through the regulated money pool. See Note 7 - Short-Term Borrowings for further
information.

                                      -26-

<PAGE>

NOTE 4 - Targeted Separation Plan

In July 1998,  Ameren offered  separation  packages to employees whose positions
were  eliminated  through a targeted  separation  plan  (TSP).  During the third
quarter of 1998, a nonrecurring, pretax charge of $7 million was recorded, which
reduced  earnings  $4  million,  representing  the  Registrant's  share of costs
incurred to implement the TSP.

NOTE 5 - Concentration of Risk

Market Risk
The  Registrant   engages  in  price  risk  management   activities  related  to
electricity and fuel. In addition to buying and selling these  commodities,  the
Registrant  uses  derivative  financial  instruments  to manage market risks and
reduce exposure  resulting from fluctuations in interest rates and the prices of
electricity  and fuel.  Derivative  instruments  used include  futures,  forward
contracts and options. The use of these types of contracts allows the Registrant
to manage and hedge its contractual  commitments and reduce exposure  related to
the volatility of commodity market prices.

Credit Risk
Credit risk represents the loss that would be recognized if counterparties  fail
to perform as contracted.  New York Mercantile  Exchange  (NYMEX) traded futures
contracts  are  guaranteed  by NYMEX and have nominal  credit risk. On all other
transactions,  the  Registrant  is  exposed  to  credit  risk  in the  event  of
nonperformance by the counterparties in the transaction.

The Registrant's  financial instruments subject to credit risk consist primarily
of trade accounts  receivable and forward  contracts.  The risk  associated with
trade receivables is mitigated by the large number of customers in a broad range
of industry groups  comprising the Registrant's  customer base. The Registrant's
revenues  are  primarily  derived from sales of  electricity  and natural gas to
customers  in  Illinois.  For  each  counterparty  in  forward  contracts,   the
Registrant  analyzes the  counterparty's  financial  condition prior to entering
into an agreement, establishes credit limits and monitors the appropriateness of
these limits on an ongoing basis through a credit risk management program.

NOTE 6 - Preferred Stock

At December 31, 1999 and 1998,  AmerenCIPS  had 4.6 million shares of authorized
preferred  stock.  There were 2 million  shares of cumulative  preferred and 2.6
million  shares of preferred  without par value  (aggregate  stated value not to
exceed $65 million) authorized.

Outstanding   preferred  stock  is  entitled  to  cumulative  dividends  and  is
redeemable at the prices shown in the following table:
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Preferred Stock Not Subject to Mandatory Redemption:
( Dollars in Millions)
--------------------------------------------------------------------------------
                                      Redemption Price          December 31,
                                        (per share)           1999       1998
Par value $100 Series--
4.00% Series - 150,000 shares           $101.00                $15        $15
4.25% Series - 50,000 shares             102.00                  5          5
4.90% Series - 75,000 shares             102.00                  8          8
4.92% Series - 50,000 shares             103.50                  5          5
5.16% Series - 50,000 shares             102.00                  5          5
1993 Auction  - 300,000 shares           100.00 - note(a)       30         30
6.625% Series - 125,000 shares           100.00                 12         12
--------------------------------------------------------------------------------
TOTAL PREFERRED STOCK
OUTSTANDING NOT SUBJECT TO
MANDATORY REDEMPTION                                           $80        $80
--------------------------------------------------------------------------------

(a) Dividend rates, and periods during which such rates apply, vary depending on
the  Registrant's  selection of certain defined  dividend  period  lengths.  The
average dividend rate during 1999 was 3.89%.

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

                                      -27-

<PAGE>

NOTE 7 - Short-Term Borrowings

Short-term  borrowings  of the  Registrant  consist  of bank  loans  (maturities
generally on an overnight  basis) and  commercial  paper  (maturities  generally
within 10-45 days). No short-term  borrowings  were  outstanding at December 31,
1999.  At  December  31,  1998,   short-term  borrowings  of  $47  million  were
outstanding with weighted average interest rates of 4.9%.

At  December  31,  1999,  the  Registrant  had  committed  bank  lines of credit
aggregating  $30 million  (all of which was unused and  available  at such date)
which make  available  interim  financing at various rates of interest  based on
LIBOR,  the bank  certificate of deposit rate, or other options.  These lines of
credit are renewable annually at various dates throughout the year.

Also, the Registrant has the ability to borrow up to approximately  $950 million
from Ameren or AmerenUE through a regulated money pool agreement.  The regulated
money pool was established to coordinate and provide for certain short-term cash
and working capital requirements and is administered by Ameren Services Company.
Interest is calculated at varying rates of interest depending on the composition
of internal  and external  funds in the  regulated  money pool.  At December 31,
1999, the Registrant had $133 million of intercompany borrowings outstanding and
$520 million available through the regulated money pool.

NOTE 8 - Long-Term Debt

Long-term debt outstanding at December 31, was:
------------------------------------------------------------------------------
(In Millions)                                       1999            1998
------------------------------------------------------------------------------
First Mortgage Bonds  - note (a)
------------------------------------------------------------------------------
 7 1/8% Series W paid in 1999                      $   -              50
 6.00% Series Z due 2000                              25              25
 6.73% Series 1997-2 due 2001                         20              20
 6 3/4% Series Y due 2002                             23              23
 6 3/8% Series Z due 2003                             40              40
 6.49% Series 1995-1 due 2005                         20              20
 7.05% Series 1997-2 due 2006                         20              20
 7 1/2% Series X due 2007                             50              50
 7.61% Series 1997-2 due 2017                         40              40
 6.125% Series due 2028                               60              60
 Other  5.375% - 6.99% due 2000 through 2008          50              60
------------------------------------------------------------------------------
                                                     348             408
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Pollution Control Loan Obligations
------------------------------------------------------------------------------
  1990 Series B 7.60% due 2013                        32              32
  1990 Series A 7.60% due 2014                        20              20
  1993 Series C-1 due 2026 - note (b)                 35              35
  1993 Series C-2  5.70% due 2026                     25              25
  1993 Series A 6 3/8% due 2028                       35              35
  Other  5.40% - 5.90% due 2028                       35              35
------------------------------------------------------------------------------
                                                     182             182
------------------------------------------------------------------------------
Unamortized Discount and Premium on Debt              (1)             (2)
------------------------------------------------------------------------------
Maturities Due Within One Year                       (35)            (60)
------------------------------------------------------------------------------
Total Long-Term Debt                                $494            $528
------------------------------------------------------------------------------
(a) At  December  31,  1999,  substantially  all of the  property  and plant was
mortgaged under, and subject to liens of, the respective  indentures pursuant to
which the bonds were issued.  (b) The interest rate for the year 1999 was 3.34%.
Since  August  15,  1998,  the  actual  interest  rates vary since the bonds are
currently in the weekly  interest rate mode.  Interest rate modes can be changed
by the Registrant at the end of any interest rate mode period.

Maturities of long-term debt through 2004 are as follows:
------------------------------------------------------------------------
(In Millions)                                            Principal Amount
------------------------------------------------------------------------
                                      2000                      $35
                                      2001                       30
                                      2002                       33
                                      2003                       45
                                      2004                        -
------------------------------------------------------------------------

                                      -28-

<PAGE>

NOTE 9 - Income Taxes

Total income tax expense for 1999  resulted in an  effective  tax rate of 36% on
earnings before income taxes (36% in 1998 and 35% in 1997).

Principal reasons such rates differ from the statutory federal rate:
--------------------------------------------------------------------------------
                                                 1999        1998      1997
--------------------------------------------------------------------------------
Statutory federal income                          35%         35%       35%
  tax rate
Increases (decreases) from:
  Depreciation differences                        -           (3)        -
  Amortization of investment tax credit           (3)         (2)       (3)
  State income tax                                 5           5         5
  Other                                           (1)          1        (2)
--------------------------------------------------------------------------------
Effective income tax rate                         36%         36%       35%
--------------------------------------------------------------------------------

Income tax expense components:
--------------------------------------------------------------------------------
(In Millions)                                    1999        1998      1997
--------------------------------------------------------------------------------
Taxes currently payable (principally
  federal):
Included in operating expenses                   $52         $60       $39
--------------------------------------------------------------------------------
                                                 $52         $60       $39
--------------------------------------------------------------------------------

Deferred taxes (principally federal):
Included in operating expenses--
     Depreciation differences                   $ (7)       $(10)      $(4)
     Other                                       (12)         (1)        2
--------------------------------------------------------------------------------
                                                $(19)       $(11)      $(2)
--------------------------------------------------------------------------------

Deferred investment tax credits,
  Amortization
Included in operating expenses                  $ (2)       $ (3)     $ (3)
--------------------------------------------------------------------------------
Total income tax expense                        $ 31         $46       $34
--------------------------------------------------------------------------------

In accordance with SFAS 109,  "Accounting for Income Taxes," a regulatory asset,
representing the probable recovery from customers of future income taxes,  which
is expected to occur when temporary differences reverse, was recorded along with
a  corresponding   deferred  tax  liability.   Also,  a  regulatory   liability,
recognizing  the lower  expected  revenue  resulting  from reduced  income taxes
associated  with amortizing  accumulated  deferred  investment tax credits,  was
recorded.  Investment  tax credits have been  deferred  and will  continue to be
credited to income over the lives of the related property.

The Registrant  adjusts its deferred tax  liabilities for changes enacted in tax
laws or rates.  Recognizing that regulators will probably reduce future revenues
for  deferred  tax  liabilities  initially  recorded  at rates in  excess of the
current  statutory rate,  reductions in the deferred tax liability were credited
to the regulatory liability.

Temporary  differences  gave  rise to the  following  deferred  tax  assets  and
deferred tax liabilities at December 31:
--------------------------------------------------------------------------------
(In Millions)                                               1999         1998
--------------------------------------------------------------------------------
Accumulated Deferred Income Taxes:
  Accelerated depreciation                                  $216         $228
  Capitalized taxes and expenses                              78           87
  Regulatory liabilities, net                                (29)         (32)
  Prepayments                                                (15)         (27)
  Deferred benefit costs                                     (11)           -
--------------------------------------------------------------------------------
Total net accumulated deferred income tax liabilities       $239         $256
--------------------------------------------------------------------------------

                                      -29-

<PAGE>

NOTE 10 - Retirement Benefits

On January 1, 1999,  the AmerenUE  and the  AmerenCIPS  defined-benefit  pension
plans  combined  to form the Ameren  Retirement  Plan.  The Ameren  plan  covers
qualified  employees of the  Registrant.  Benefits  are based on the  employees'
years of service and compensation.  The Ameren plan is funded in compliance with
income tax regulations and federal funding requirements.  The Registrant,  along
with other  subsidiaries  of Ameren,  is a participant in the Ameren plan and is
responsible  for  its  proportional  share  of  the  costs  and  the  assets  or
liabilities. The Registrant's share of the pension costs in 1999 was $6 million,
of which approximately 20% was charged to construction  accounts. The AmerenCIPS
pension plan information for 1998 and 1997 is presented separately.

Pension  costs  for the  years  1998 and 1997 were $9  million  and $5  million,
respectively,  of which approximately 19% in 1998 and 15% in 1997 was charged to
construction accounts.

In 1998,  the  Registrant  changed its  measurement  date for  valuation of plan
assets and liabilities to December 31.

Funded Status of Pension Plan:
------------------------------------------------------------------------
 (In Millions)                                                 1998
------------------------------------------------------------------------
Change in benefit obligation
  Net benefit obligation at beginning of year                  $249
  Service cost                                                    8
  Interest cost                                                  17
  Amendments                                                      5
  Actuarial loss                                                  8
  Special termination benefit charge                              5
  Benefits paid                                                 (31)
------------------------------------------------------------------------
  Net benefit obligation at end of year                         261

Change in plan assets *
  Fair value of plan assets at beginning of year                319
  Actual return on plan assets                                   38
  Employer contributions                                          5
  Benefits paid                                                 (31)
------------------------------------------------------------------------
  Fair value of plan assets at end of year                      331

Funded status - excess                                          (70)
Unrecognized net actuarial gain                                  73
Unrecognized prior service cost                                 (13)
Unrecognized net transition asset                                 2
------------------------------------------------------------------------
Prepaid pension cost at December 31                           $  (8)
------------------------------------------------------------------------
* Plan assets consist  principally of common and preferred stocks,  bonds, money
market instruments and real estate.

Components of Net Periodic Benefit Cost:
------------------------------------------------------------------------
(In Millions)                                1998             1997
------------------------------------------------------------------------
Service cost                                 $  8            $   7
Interest cost                                  17               16
Expected return on plan assets                (22)             (19)
Amortization of prior service cost              1                1
Special termination benefit charge              5                -
------------------------------------------------------------------------
Net periodic benefit cost                    $  9             $  5
------------------------------------------------------------------------

Weighted-average  Assumptions for Actuarial  Present Value of Projected  Benefit
Obligations:
------------------------------------------------------
                                             1998
------------------------------------------------------
Discount rate at measurement date            6.75%
Expected return on plan assets               8.5%
Increase in future compensation              4%
------------------------------------------------------

In addition to providing  pension  benefits,  the  Registrant  provides  certain
health care and life insurance benefits for retired employees.  The Registrant's
postretirement  benefit plans cover substantially all employees of AmerenCIPS as
well as certain employees of Ameren Services Company. The Registrant accrues the
expected  postretirement

                                      -30-

<PAGE>

benefit costs during  employees' years of service.  The following is information
related to the Registrant's postretirement benefit plans as of December 31.

The Registrant's  funding policy is to fund two Voluntary  Employee  Beneficiary
Association  trusts  (VEBAs)  and the  401(h)  account  established  within  the
Registrant's retirement income trust with the lesser of the net periodic cost or
the amount  deductible for federal income tax purposes.  In 1998, the Registrant
changed its  measurement  date for valuation of plan assets and  liabilities  to
December 31.  Postretirement  benefit costs were $3 million for 1999, $6 million
for 1998 and $12 million  for 1997,  of which  approximately  10% was charged to
construction  accounts  in  1999,  20% in  1998  and  17% in  1997.  AmerenCIPS'
transition  obligation at December 31, 1999 is being  amortized over the next 13
years.

The ICC allows the  recovery  of  postretirement  benefit  costs in rates to the
extent that such costs are funded.

Funded Status of Postretirement Benefit Plans:
-----------------------------------------------------------------------------
 (In Millions)                                         1999          1998
-----------------------------------------------------------------------------
Change in benefit obligation
  Net benefit obligation at beginning of year          $152          $140
  Service cost                                            3             3
  Interest cost                                           9            10
  Actuarial (gain)/loss                                 (22)            4
  Benefits paid                                          (4)           (5)
-----------------------------------------------------------------------------
  Net benefit obligation at end of year                 138           152

Change in plan assets *
  Fair value of plan assets at beginning of year        128           115
  Actual return on plan assets                           10            16
  Employer contributions                                  1             4
  401(h) transfer                                         -            (2)
  Benefits paid                                          (4)           (5)
-----------------------------------------------------------------------------
  Fair value of plan assets at end of year              135           128

Funded status - deficiency                                3            24
Unrecognized net actuarial gain                          75            58
Unrecognized net transition obligation                  (71)          (76)
-----------------------------------------------------------------------------
Postretirement benefit liability at December 31       $   7        $   6
-----------------------------------------------------------------------------
* Plan assets consist  principally of common and preferred stocks,  bonds, money
market instruments and real estate.

Components of Net Periodic Benefit Cost:
------------------------------------------------------------------------------
(In Millions)                               1999        1998          1997
------------------------------------------------------------------------------
Service cost                                  $3          $3            $4
Interest cost                                  9          10            10
Expected return on plan assets                (9)         (8)           (5)
Amortization of:
      Transition obligation                    6           5             5
      Actuarial gain                          (6)         (4)           (2)
------------------------------------------------------------------------------
Net periodic benefit cost                     $3          $6           $12
------------------------------------------------------------------------------


Assumptions for the Obligation Measurements:
------------------------------------------------------------------------------
                                                       1999          1998
------------------------------------------------------------------------------
Discount rate at measurement date                      7.75%         6.75%
Expected return on plan assets                         8.5%          8.5%
Medical cost trend rate - initial                        -           5.75%
                        - ultimate                     5.25%         4.75%
Ultimate medical cost trend rate expected in year      2000          2000
------------------------------------------------------------------------------

A one  percentage  point increase in the medical cost trend rate is estimated to
increase  the net  periodic  cost  and the  accumulated  postretirement  benefit
obligation  approximately  $2  million  and  $20  million,  respectively.  A one

                                      -31-

<PAGE>

percentage  point  decrease  in the  medical  cost  trend rate is  estimated  to
decrease  the net  periodic  cost  and the  accumulated  postretirement  benefit
obligation approximately $2 million and $20 million, respectively.

NOTE 11 - Commitments and Contingencies

Information  contained in this section  could be impacted by the transfer of the
Registrant's generating facilities to AEG. See discussion in Note 1 - Summary of
Significant Accounting Policies for more information.

The  Registrant  is  engaged  in a  capital  program  under  which  expenditures
averaging approximately $62 million,  including AFC, are anticipated during each
of the next five years.  This estimate  assumes the transfer of the Registrant's
generating facilities to AEG will occur in 2000.

The  Registrant  has  commitments  for  the  purchase  of coal  under  long-term
contracts.  Coal contract commitments,  including transportation costs, for 2000
through  2004 are  estimated  to  total  $761  million.  Total  coal  purchases,
including  transportation costs, for 1999, 1998 and 1997 were $216 million, $189
million and $209, respectively.  The Registrant also has existing contracts with
pipeline and natural gas  suppliers to provide,  transport and store natural gas
for distribution and electric generation.  Gas-related contract cost commitments
for 2000  through  2004 are  estimated  to total $54  million.  Total  delivered
natural  gas costs were $73 million  for 1999,  $69  million  for 1998,  and $97
million for 1997.

In the fourth  quarter of 1999,  the  Registrant  and two of its coal  suppliers
executed agreements to terminate their existing coal supply contracts, effective
December 31, 1999. Under these  agreements,  the Registrant has made termination
payments to the suppliers totaling  approximately $52 million. These termination
payments were recorded as a  nonrecurring  charge in the fourth quarter of 1999,
equivalent to $31 million,  after income  taxes.  Total pretax fuel cost savings
from these  termination  agreements  are  estimated  to be $183 million (or $131
million net of the  termination  payments)  through  2010,  which is the maximum
period that would have remained on any of the terminated coal supply  contracts.
Approximately $66 million of pretax fuel cost savings is expected to be realized
over the next three years.

During 1996, the Registrant restructured its contract with one of its major coal
suppliers.  In 1997, the Registrant paid a $70 million  restructuring payment to
the  supplier,  which  allowed  it to  purchase  at  market  prices  low-sulfur,
non-Illinois  coal  through the supplier (in  substitution  for the  high-sulfur
Illinois  coal the  Registrant  was  obligated  to purchase  under the  original
contract).  Under the restructuring,  the Registrant received options for future
purchases of low-sulfur, non-Illinois coal from the supplier through 1999 at set
negotiated prices.

By  switching  to  low-sulfur  coal,  the  Registrant  was  able to  discontinue
operating a generating plant scrubber. The benefits of the restructuring include
lower cost coal,  avoidance of significant capital  expenditures to renovate the
scrubber, and elimination of scrubber operating and maintenance costs (offset by
scrubber retirement expenses). The net benefits of restructuring are expected to
exceed $100 million  through  2007. In December  1996,  the ICC entered an order
approving the switch to non-Illinois coal, recovery of the restructuring payment
plus associated carrying costs  (Restructuring  Charges) through the retail Fuel
Adjustment  Clause (FAC) over six years, and continued  recovery in rates of the
undepreciated scrubber investment, plus costs of removal.  Additionally,  in May
1997 the FERC approved  recovery of the wholesale  portion of the  Restructuring
Charges  through the wholesale FAC. As a result of the ICC and FERC orders,  the
Registrant  classified  the  $72  million  of  the  Restructuring  Charges  as a
regulatory asset and, through December 1997, recovered approximately $10 million
of  the  Restructuring  Charges  through  the  retail  FAC  and  from  wholesale
customers.  In  November  1997,  the ICC  order  was  reversed  on appeal by the
Illinois Third District  Appellate  Court.  The Illinois  Supreme Court issued a
final  decision in December 1998  reversing the  Appellate  Court's  opinion and
affirming  the ICC's order  allowing the recovery of the  Restructuring  Charges
through the retail FAC.

The recoverability of the Restructuring Charges under the retail FAC in Illinois
was impacted by the Law. Among other things, the Law provides utilities with the
option to eliminate the retail FAC and limits the ability of utilities to file a
full rate case for its aggregate  revenue  requirements.  After  evaluating  the
impact of the Law on the future recoverability of the Registrant's Restructuring
Charges through future rates, the Registrant  wrote off the unamortized  balance
of the Illinois retail portion of its  Restructuring  Charges as of December 31,
1997 ($34 million,  net of income  taxes).  See Note 2 - Regulatory  Matters for
further information.

Under  Title IV of the Clean  Air Act  Amendments  of 1990,  the  Registrant  is
required to significantly  reduce total annual sulfur dioxide (SO2) and nitrogen
oxide (NOx)  emissions by the year 2000.  By switching to low-sulfur  coal,  the
Registrant is meeting these requirements.

                                      -32-

<PAGE>

In July 1997,  the United States  Environmental  Protection  Agency (EPA) issued
regulations  revising the National  Ambient Air Quality  Standards for ozone and
particulate  matter.  In May 1999, the U.S. Court of Appeals for the District of
Columbia  remanded  the  regulations  back  to the EPA  for  review.  Litigation
regarding  appeals of these  regulations is ongoing.  New ambient  standards may
result in additional  significant  reductions in SO2 and NOx emissions  from the
Registrant's  power plants by 2007.  At this time,  the  Registrant is unable to
predict the ultimate impact of these revised air quality standards on its future
financial condition, results of operations or liquidity.

In an attempt to lower ozone levels across the eastern  United  States,  the EPA
issued  the  implementation  of  regulations  in  September  1998 to reduce  NOx
emissions  from  coal-fired  boilers and other  sources in 22 states,  including
Illinois  (where all of the  Registrant's  coal-fired  power  plant  boilers are
located).  The proposed  regulations mandate a 75% reduction from 1990 levels by
the year 2003 and require  states to develop  plans to reduce NOx  emissions  to
help  alleviate  ozone  problem  areas.  The NOx  emissions  reductions  already
achieved on several of the  Registrant's  coal-fired  power  plants will help to
reduce  the costs of  compliance  with  this  regulation.  However,  preliminary
analysis  of  the  regulations   indicate  that  selective  catalytic  reduction
technology will be required for some of the Registrant's units, as well as other
additional controls.

In  March  2000,  the  U.S.  Court  of  Appeals  for the  District  of  Columbia
substantially  upheld the proposed NOx regulations but remanded portions of them
to the EPA for further consideration. The implementation date of the regulations
is uncertain and further legal challenge is possible. Assuming an implementation
date of 2003, the  Registrant  currently  estimates that its additional  capital
expenditures  to comply with the final NOx could range from $125 million to $150
million.  Associated  operations and maintenance  expenditures could increase $5
million to $8 million  annually,  beginning in 2003. The Registrant will explore
alternatives to comply with these new  regulations in order to minimize,  to the
extent  possible,  its capital costs and operating  expenses.  The Registrant is
unable to predict the outcome of the litigation,  the regulation  implementation
date  or  the  ultimate  impact  of  these  standards  on its  future  financial
condition, results of operations or liquidity.

In November  1998,  the United  States signed an agreement  with numerous  other
countries (the Kyoto  Protocol)  containing  certain  environmental  provisions,
which would require  decreases in  greenhouse  gases in an effort to address the
"global  warming" issue.  The Kyoto Protocol has not been ratified by the United
States  Senate.  Implementation  of the Kyoto Protocol in its present form would
likely  result  in  significantly   higher  capital  costs  and  operations  and
maintenance  expenses by the Registrant.  At this time, the Registrant is unable
to determine the impact of these proposals on the Registrant's  future financial
condition, results of operations or liquidity.

As of  December  31,  1999,  the  Registrant  was  designated  as a  potentially
responsible party (PRP) by federal and state  environmental  protection agencies
at five hazardous waste sites.  Other hazardous waste sites have been identified
for which the Registrant may be responsible but has not been designated a PRP.

Costs relating to studies and  remediation  and associated  legal and litigation
expenses  at the former  manufactured  gas plant sites  located in Illinois  are
being accrued and deferred  rather than  expensed  currently,  pending  recovery
through environmental adjustment clause rate riders approved by the ICC. Through
December 31,  1999,  the total of the costs  deferred,  net of  recoveries  from
insurers  and  through  environmental  adjustment  clause rate  riders,  was $13
million.

The ICC has instituted  reconciliation  proceedings  to review the  Registrant's
environmental remediation activities to determine whether the revenues collected
from  customers  under its  environmental  adjustment  clause  rate  riders were
consistent with the amount of remediation costs prudently and properly incurred.
Amounts  found to have  been  incorrectly  included  under the  riders  would be
subject  to  refund.  Rulings  from the ICC are  pending  with  respect to these
proceedings  applicable  to the years  1993  through  1998.  The  reconciliation
proceedings   relating  to  the  Registrant's  1999  environmental   remediation
activities will commence by the ICC in 2000.

The Registrant  continually  reviews  remediation costs that may be required for
all of these sites. Any unrecovered environmental costs are not expected to have
a material adverse effect on the  Registrant's  financial  position,  results of
operations or liquidity.

The International  Union of Operating  Engineers Local 148 and the International
Brotherhood of Electrical  Workers Local 702 filed unfair labor practice charges
with the National Labor Relations Board (NLRB),  relating to the legality of the
1993  lockout  of both  unions by the  Registrant.  The NLRB  issued  complaints
against the Registrant  concerning its lockout.  Both unions sought, among other
things, back pay and other benefits for the period of the lockout. At that time,
the  Registrant  estimated  the amount of back pay and other  benefits  for both
unions to be

                                      -33-

<PAGE>

approximately  $17 million.  In August 1998,  a  three-member  panel of the NLRB
reversed  the May 1996  decision  of its  administrative  law judge and ruled in
favor of the Registrant  holding that the lockout was lawful. In April 1999, the
unions  filed  petitions  for  review  with the U.S.  Court of  Appeals  for the
District of Columbia Circuit of the NLRB's August 1998 decision.  This appeal is
pending.  The  Registrant  continues to believe that the lockout was both lawful
and  reasonable  and that the final  resolution  of the dispute  will not have a
material  adverse  effect on its  financial  position,  results of operations or
liquidity.

Certain employees of the Registrant and its affiliated companies are represented
by  the  International   Brotherhood  of  Electrical   Workers  (IBEW)  and  the
International   Union  of  Operating   Engineers.   These   employees   comprise
approximately 70% of Ameren's workforce. Labor agreements covering substantially
all represented employees of the Registrant expired in 1999 and were renewed for
a term expiring in 2002.  Labor  agreements  which expired in 1999 have not been
renewed with IBEW Locals 1439,  309, 649 and 1455,  who  collectively  represent
approximately 2,000 AmerenUE and Ameren Services Company employees. Negotiations
with  Local  1455 are  still  ongoing.  However,  after  engaging  in  extensive
good-faith  bargaining with IBEW Locals 1439, 309 and 649, AmerenUE  submitted a
last, best and final offer to these  collective  bargaining units on February 2,
2000.  The offer was rejected and AmerenUE  informed  these locals that it would
implement the  noneconomic  portion of its offer  effective  March 6, 2000.  The
employees are  currently  working  under the  noneconomic  portion of AmerenUE's
last,  best and final offer.  The  Registrant  is unable to predict what further
action,  if any, these collective  bargaining units will take or the response of
the Registrant's  union  represented  employees to any action by its affiliates'
employees.  The  Registrant is unable to determine  what,  if any,  impact these
labor  matters  could  have  on  its  future  financial  condition,  results  of
operations or cash flows.

Regulatory  changes enacted and being considered at the federal and state levels
continue to change the structure of the utility industry and utility regulation,
as well as encourage  increased  competition.  At this time,  the  Registrant is
unable  to  predict  the  impact of these  changes  on the  Registrant's  future
financial condition, results of operations or liquidity. See Note 2 - Regulatory
Matters for further information.

The Registrant is involved in other legal and administrative  proceedings before
various  courts and  agencies  with  respect to matters  arising in the ordinary
course of business,  some of which involve substantial  amounts.  The Registrant
believes  that  the  final  disposition  of  these  proceedings  will not have a
material  adverse  effect on its  financial  position,  results of operations or
liquidity.

NOTE 12  - Fair Value of Financial Instruments

The following  methods and  assumptions  were used to estimate the fair value of
each class of financial instruments for which it is practicable to estimate that
value:

Cash and Temporary Investments/Short-Term Borrowings
The carrying amounts  approximate fair value because of the short-term  maturity
of these instruments.

Preferred Stock
The fair value is estimated  based on the quoted  market  prices for the same or
similar issues.

Long-Term Debt
The fair  value is  estimated  based on the  quoted  market  prices  for same or
similar  issues or on the current  rates offered to the  Registrant  for debt of
comparable maturities.

Derivative Financial Instruments
Market prices used to determine fair value are based on management's  estimates,
which  take  into   consideration   factors   like  closing   exchange   prices,
over-the-counter prices, time value of money and volatility factors.

Carrying  amounts  and  estimated  fair  values  of the  Registrant's  financial
instruments at December 31:


                                                   1999                1998
--------------------------------------------------------------------------------
(In Millions)                               Carrying   Fair     Carrying   Fair
                                             Amount    Value     Amount    Value
--------------------------------------------------------------------------------
Preferred stock                               $ 80     $ 66      $ 80     $ 75
Long-term debt (including current portion)     529      528       588      636
--------------------------------------------------------------------------------

                                      -34-

<PAGE>

NOTE 13 - Segment Information

In 1998,  the  Registrant  adopted SFAS 131,  "Disclosures  about Segments of an
Enterprise  and Related  Information."  AmerenCIPS'  business  segments  provide
electric and gas service in portions of Illinois.

The accounting  policies of the segments are the same as those described in Note
1 - Summary of Significant  Accounting Policies.  Segment data includes a charge
allocating  costs of  administrative  support  services to each of the segments.
These costs are  accumulated in a separate  Ameren  subsidiary,  Ameren Services
Company,  which provides a variety of support  services to the  Registrant.  The
Registrant  evaluates the performance of its segments and allocates resources to
them, based on revenues and operating income.

The table below presents  information  about the reported revenues and operating
income of the Registrant for the years ended December 31:

--------------------------------------------------------------------
(In Millions)             Electric           Gas            Total
--------------------------------------------------------------------

--------------------------------------------------------------------
1999
--------------------------------------------------------------------
Revenues                  $   795           $133           $   928
Operating income               86              9                95
--------------------------------------------------------------------

--------------------------------------------------------------------
1998
--------------------------------------------------------------------
Revenues                  $   722           $125           $   847
Operating income              115              5               120
--------------------------------------------------------------------

--------------------------------------------------------------------
1997
--------------------------------------------------------------------
Revenues                  $   700           $152           $   852
Operating income               95              7               102
--------------------------------------------------------------------

Specified items included in segment profit/loss for the year ended December 31:

------------------------------------------------------------------------------
(In Millions)                   Electric           Gas             Total
------------------------------------------------------------------------------

------------------------------------------------------------------------------
1999
------------------------------------------------------------------------------
Depreciation, depletion
    and amortization expense      $  73           $   8            $  81
------------------------------------------------------------------------------

------------------------------------------------------------------------------
1998
------------------------------------------------------------------------------
Depreciation, depletion
    and amortization expense      $  66           $   8            $  74
------------------------------------------------------------------------------

------------------------------------------------------------------------------
1997
------------------------------------------------------------------------------
Depreciation, depletion
    and amortization expense      $  76           $   7            $  83
Extraordinary items                 (25)              -              (25)
------------------------------------------------------------------------------

                                      -35-

<PAGE>



Specified item related to segment assets as of December 31:

-----------------------------------------------------------------------------
(In                             Electric           Gas             Total
Millions)
-----------------------------------------------------------------------------

-----------------------------------------------------------------------------
1999
-----------------------------------------------------------------------------
Expenditures for additions
   to long-lived assets           $  86           $   9            $  95
-----------------------------------------------------------------------------

-----------------------------------------------------------------------------
1998
-----------------------------------------------------------------------------
Expenditures for additions
   to long-lived assets           $  60           $   9            $  69
-----------------------------------------------------------------------------

-----------------------------------------------------------------------------
1997
-----------------------------------------------------------------------------
Expenditures for additions
   To long-lived assets           $ 105           $  11            $ 116
-----------------------------------------------------------------------------


ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
         ACCOUNTING AND FINANCIAL DISCLOSURE.

     On June 12,  1998,  the  Board of  Directors  of the  Registrant's  parent,
Ameren,  approved  the  recommendation  of the Board's  Auditing  Committee  and
appointed  PricewaterhouseCoopers  LLP as auditors  for the year 1998.  Ameren's
appointment of  PricewaterhouseCoopers  LLP also covered  auditing  services for
Ameren's  subsidiaries,   which  meant  that  Registrant's  previous  certifying
accountant, Arthur Andersen LLP (Andersen), was, in effect, dismissed.

     Andersen's  report of the  Registrant's  financial  statements for the year
1997 did not contain an adverse opinion or a disclaimer of opinion,  and was not
qualified or modified as to uncertainty,  audit scope, or accounting principles.
Further,  during such period,  and through the date of dismissal,  there were no
disagreements with Andersen on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure.  Also, there was
no occurrence of any kind of event set out in paragraphs (a) (1) (v) (A) through
(D) of Item 304 of Regulation S-K.

     PricewaterhouseCoopers  LLP was also  appointed  as  auditors  for the year
1999.


                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

     Any information  concerning  directors required to be reported by this item
is included  under "Item (1):  Election of  Directors" in the  AmerenCIPS'  2000
definitive  proxy statement filed pursuant to Regulation 14A and is incorporated
herein by reference.

     Information concerning executive officers required by this item is reported
in Part I of this Form 10-K.


ITEM 11.  EXECUTIVE COMPENSATION.

     Any  information  required to be  reported  by this item is included  under
"Compensation"  in AmerenCIPS' 2000 definitive proxy statement filed pursuant to
Regulation 14A and is incorporated herein by reference.

                                      -36-

<PAGE>

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

     Any  information  required to be  reported  by this item is included  under
"Security   Ownership  of  Management"  in  AmerenCIPS'  2000  definitive  proxy
statement  filed  pursuant  to  Regulation  14A and is  incorporated  herein  by
reference.


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

     Any  information  required to be  reported  by this item is included  under
"Item (1): Election of Directors" in AmerenCIPS' 2000 definitive proxy statement
filed pursuant to Regulation 14A and is incorporated herein by reference.


                                     PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

    (a) The following documents are filed as a part of this report:

    1.  Financial Statements and Financial Statement Schedule Covered by
        Report of Independent Accountants

                                                                    Pages Herein

        Report of Independent Accountants.................................17
        Balance Sheet - December 31, 1999 and 1998........................18
        Statement of Income - Years 1999, 1998, and 1997..................19
        Statement of Cash Flows - Years 1999, 1998, and 1997..............20
        Statement of Retained Earnings - Years 1999, 1998, and 1997.......21
        Notes to Financial Statements.....................................22
        Valuation and Qualifying Accounts (Schedule II)
          Years 1999, 1998, and 1997......................................38


    2.  Exhibits:  See EXHIBITS beginning on Page 40

    (b) Reports  on Form 8-K.  The  Registrant  filed a report on Form 8-K
        dated December 20, 1999  reporting the  termination of coal supply
        contracts,  the resulting  estimated  pretax fuel cost savings and
        the recording of a nonrecurring charge.

                                      -37-

<PAGE>


                     CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
              FOR THE YEARS ENDED DECEMBER 31, 1999, 1998 AND 1997

<TABLE>
<CAPTION>


              Col. A                                Col. B                      Col. C                    Col. D          Col. E
              ------                                ------                      ------                    ------          ------

                                                                              Additions
                                                                    ------------------------------
                                                                       (1)             (2)
                                                   Balance at       Charged to                                           Balance at
                                                    beginning        costs and       Charged to                            end of
           Description                              of period        expenses      other accounts        Deductions        period
           -----------                              ---------        --------      --------------        ----------        ------
                                                                                                           (Note)
Year ended December 31, 1999

<S>                                                 <C>              <C>             <C>                 <C>             <C>
Reserves deducted in the balance sheet from
 assets to which they apply:

    Allowance for doubtful accounts                 $1,714,232       $3,400,000                          $3,286,354      $1,827,878
                                                    ==========       ==========                          ==========      ==========




Year ended December 31, 1998

Reserves deducted in the balance sheet from
 assets to which they apply:

    Allowance for doubtful accounts                 $1,200,000       $4,267,000                          $3,752,768      $1,714,232
                                                    ==========       ==========                          ==========      ==========




Year ended December 31, 1997

Reserves deducted in the balance sheet from
 assets to which they apply:

    Allowance for doubtful accounts                 $  600,000       $1,788,812                          $1,188,812      $1,200,000
                                                    ==========       ==========                          ==========      ==========


</TABLE>


Note:  Uncollectible accounts charged off, less recoveries.

                                      -38-

<PAGE>

                                   SIGNATURES

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

                                        CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
                                                     (Registrant)

                                        G. L. RAINWATER
                                        President and Chief Executive Officer

Date March 29, 2000                     By   /s/ Steven R. Sullivan
     --------------                        ------------------------------------
                                          (Steven R. Sullivan, Attorney-in-Fact)

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
registrant and in the capacities and on the date indicated.

        Signature                                                 Title

/s/ G. L. Rainwater              President, Chief Executive Officer and Director
------------------------------                     (Principal Executive Offcer)
G. L. RAINWATER

/s/ Jerre E. Birdsong                                                  Treasurer
------------------------------                     (Principal Financial Officer)
JERRE E. BIRDSONG

/s/ Warner L. Baxter                     Vice President, Controller and Director
------------------------------                    (Principal Accounting Officer)
WARNER L. BAXTER

/s/ Paul A. Agathen                                                     Director
------------------------------
PAUL A. AGATHEN

/s/ Donald E. Brandt                                                    Director
------------------------------
DONALD E. BRANDT

/s/ Charles W. Mueller                                                  Director
------------------------------
CHARLES W. MUELLER



                               By /s/ Steven R. Sullivan       March 29, 2000
                                  ---------------------------
                                 (Steven R. Sullivan, Attorney-in Fact)

                                      -39-

<PAGE>


                                    EXHIBITS

                             Exhibits Filed Herewith

Exhibit No.                                    Description

12   -  Statement  re  Computation  of Ratio of  Earnings  to Fixed  Charges and
        Preferred Stock Dividend Requirements.

23   - Consent of Independent Accountants.

24   - Powers of Attorney.

27   - Financial Data Schedule.

                                      -40-

<PAGE>


                       Exhibits Incorporated By Reference

     The following  exhibits  heretofore have been filed with the Securities and
Exchange  Commission  pursuant to requirements  of the Acts  administered by the
Commission. Such exhibits are identified by the references following the listing
of each such exhibit, and they are hereby incorporated herein by reference.

Exhibit No.                             Description
-----------                             ------------
2    - Agreement  and Plan of Merger,  dated as of August 11, 1995, by and among
       CIPSCO Incorporated, Union Electric Company,  Ameren Corporation and Arch
       Merger Inc. (Exhibit  2(a) filed  with  CIPSCO's  and CIPS'  Form  10-Q/A
       (Amendment No. 1) for the quarter ended June 30, 1995.)

3.01 - Restated  Articles of  Incorporation  of CIPS.  (Exhibit  3(b) filed with
       CIPS' Form 10-Q for the quarter ended March 31, 1994.)

3.02 - By-Laws of the Company as amended  effective August 26, 1999.  (September
       30, 1999 Form 10-Q, Exhibit 3(ii).)

4    - Indenture of Mortgage or Deed of Trust dated  October 1, 1941,  from CIPS
       to Continental Illinois  National  Bank and Trust  Company of Chicago and
       Edmond B. Stofft,  as  Trustees.  (Exhibit  2.01  in File  No.  2-60232.)
       Supplemental Indentures dated, respectively September 1, 1947, January 1,
       1949, February 1, 1952, September 1, 1952, June 1, 1954, February 1, 1958
       , January 1, 1959, May 1, 1963,  May 1, 1964, June 1, 1965,  May 1, 1967,
       April 1, 1970, April 1, 1971, September 1, 1971, May 1, 1972, December 1,
       1973,  March 1, 1974,  April 1, 1975,  October 1, 1976, November 1, 1976,
       October 1, 1978, August 1, 1979, February 1, 1980, February 1, 1986,  May
       15, 1992, July 1, 1992,  September 15, 1992,  April 1, 1993,  and June 1,
       1995 between CIPS and the  Trustees  under the  Indenture of  Mortgage or
       Deed of Trust referred to above (Amended Exhibit 7(b) in File No. 2-7341;
       Second Amended Exhibit 7.03 in File No. 2-7795;  Second  Amended  Exhibit
       4.07 in File No.2-9353; Amended  Exhibit 4.05 in file No. 2-9802; Amended
       Exhibit  4.02 in  File  No. 2-10944;  Amended  Exhibit 2.02  in  File No.
       2-13866; Amended Exhibit 2.02 in File No. 2-14656;  Amended  Exhibit 2.02
       in File No.2-21345;  Amended  Exhibit 2.02 in  File No. 2-22326;  Amended
       Exhibit  2.02 in  File No. 2-23569;  Amended  Exhibit 2.02  in  File  No.
       2-26284;  Amended Exhibit 2.02 in File No. 2-36388;  Amended Exhibit 2.02
       in File No. 2-39587;  Amended Exhibit 2.02 in  File No. 2-41468;  Amended
       Exhibit 2.02  in  File No. 2-43912;  Exhibit 2.03  in  File  No. 2-60232;
       Amended  Exhibit 2.02 in File No. 2-50146;  Amended  Exhibit 2.02 in File
       No. 2-52886;  Second  Amended  Exhibit 2.04 in File No. 2-57141;  Amended
       Exhibit 2.04 in  File No. 2-57557;  Amended  Exhibit 2.06 in  File No. 2-
       62564;  Exhibit 2.02(a) in File No.  2-65914;  Amended Exhibit 2.02(a) in
       File No. 2-66380; and Amended  Exhibit 4.02 in File No.  33-3188; Exhibit
       4.02 to Form 8-K dated May 15, 1992; Exhibit 4.02 to Form 8-K  dated July
       1, 1992;  Exhibit 4.02 to Form 8-K dated September 15, 1992; Exhibit 4.02
       to Form 8-K dated March 30, 1993; Exhibit 4.03 to Form 8-K dated  June 5,
       1995;  Exhibit  4.03 to Form 8-K dated March 15,  1997;  Exhibit  4.03 to
       Form 8-K dated June 1, 1997; and Exhibit 4.02,  Post-Effective  Amendment
       No. 1 in File No. 333-18473.)

4.01 - Indenture  dated as of December 1, 1998 from CIPS to the Bank of New York
       relating  to CIPS' Senior Notes,  5.375%  due 2008 and  6.125%  due 2028.
       (Exhibit 4.03, Post-Effective Amendment No. 1 to File No. 333-18473.)

                                      -41-

<PAGE>

Exhibit No.                                    Description

10.01- Form of  Director's  Retirement  Income Plan.  (Exhibit  10.04 filed with
       1990 Annual Report on Form 10-K.)

10.02- Form of Excess  Benefit  Plan.  (Exhibit  10.10 filed with  CIPSCO's  and
       CIPS' 1994 Annual Report on Form 10-K.)

10.03- Amendment  to Form of Excess  Benefit  Plan.  (Exhibit  10.07 filed with
       CIPSCO's and CIPS' 1995 Annual Report on Form 10-K.)

10.04- Form of Special  Executive  Retirement  Plan.  (Exhibit  10.11 filed with
       CIPSCO's and CIPS' 1994 Annual Report on Form 10-K.)

10.05- Amendment to Form of Special  Executive  Retirement Plan.  (Exhibit 10.09
       filed with CIPSCO's and CIPS' 1995 Annual Report on Form 10-K.)

10.06- Ameren  Long-Term  Incentive  Plan of 1998.  (Ameren's  1998  Form  10-K,
       Exhibit 10.1.)

10.07- Ameren  Change of  Control  Severance  Plan.  ((Ameren's  1998 Form 10-K,
       Exhibit 10.2.)

10.08- Ameren Deferred  Compensation  Plan for Members of the Ameren  Leadership
       Team. (Ameren's 1998 Form 10-K, Exhibit 10.3.)

10.09- Ameren Deferred  Compensation Plan for Members of the Board of Directors.
       (Ameren's 1998 Form 10-K, Exhibit 10.4.)

Note:  Reports of the Company on Forms 8-K,  10-Q and 10-K are on file  with the
       SEC under File Number 1-3672.

       Reports of Ameren on Form 10-K are on file with the SEC under File Number
       1-14756.

                                      -42-