<PAGE>


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM 10-Q

[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
         OF THE SECURITIES EXCHANGE ACT OF 1934

         For Quarterly Period Ended June 30, 1998

[  ]     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 1-2967.

                             UNION ELECTRIC COMPANY
             (Exact name of registrant as specified in its charter)

         Missouri                                                43-0559760
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                               Identification No.)


                 1901 Chouteau Avenue, St. Louis, Missouri 63103
              (Address of principal executive offices and Zip Code)


                         Registrant's telephone number,
                       including area code: (314) 621-3222


         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       .


Shares  outstanding of each of  registrant's  classes of common stock as of July
31, 1998:
    Common Stock, $5 par value - 102,123,834





<PAGE>





                             Union Electric Company

                                      Index

                                                                  Page No.

Part I       Financial Information (Unaudited)

             Management's Discussion and Analysis                    2
  
             Balance Sheet
             - June 30, 1998 and December 31, 1997                   6

             Statement of Income
             - Three months, six months and 12 months ended
               June 30, 1998 and 1997                                7

             Statement of Cash Flows
             - Six months ended June 30, 1998 and 1997               8

             Notes to Financial Statements                           9



Part II      Other Information


<PAGE>
                    PART I. FINANCIAL INFORMATION (UNAUDITED)

     MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

OVERVIEW

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

The following  discussion and analysis  should be read in  conjunction  with the
Notes  to  Financial  Statements  beginning  on  page 9,  and  the  Management's
Discussion and Analysis of Financial Condition and Results of Operations (MD&A),
the Audited Financial Statements and the Notes to Financial Statements appearing
in the Registrant's 1997 Annual Report included in its 1997 Form 10-K.

RESULTS OF OPERATIONS

Earnings
Second quarter 1998 earnings of $64 million declined $3 million compared to 1997
second  quarter  earnings.  Earnings  for the six  months  ended  June 30,  1998
decreased $5 million from the year-ago  period to $92 million.  Earnings for the
12 months ended June 30, 1998, were $288 million, a $3 million decrease from the
preceding  12-month period.  Excluding the extraordinary  charge recorded in the
fourth quarter of 1997 to write off the generation-related regulatory assets and
liabilities of the Registrant's Illinois retail electric business,  earnings for
the 12-month period ended June 30, 1998, were $324 million.

Earnings  fluctuated  due to many  conditions,  the primary ones being:  weather
variations,  credits to electric customers,  sales growth, fluctuating operating
costs,  the  write-off  of  certain  generation-related  regulatory  assets  and
liabilities, and merger-related costs. The significant items affecting revenues,
costs and earnings during the three-month,  six-month and 12-month periods ended
June 30, 1998, and 1997 are detailed below.

Electric Operations

<TABLE>
<CAPTION>

Electric Operating Revenues        Variations for periods ended June 30, 1998
                                        from comparable prior-year periods
------------------------------ ---------------- --------------- ----------------
(Millions of Dollars)            Three Months      Six Months    Twelve Months
------------------------------ ---------------- --------------- ----------------
<S>                             <C>                <C>            <C>      
Credit to customers              $    (26)          $    (24)      $    (22)
Effect of abnormal weather             33                 22             53
Growth and other                       31                 47             63
Interchange sales                       -                (12)           (29)
------------------------------ ---------------- --------------- ----------------
                                 $     38           $     33       $     65
------------------------------ ---------------- --------------- ----------------
</TABLE>

The $38 million  increase in second quarter  electric  revenues  compared to the
year-ago  quarter was primarily due to warm weather,  a strong regional  economy
and benefits  realized from  elimination of the retail  electric fuel adjustment
clause in the Registrant's Illinois  jurisdiction  effective May 1998, partially
offset by increased  credits to Missouri  electric  customers  (see Note 5 under
Notes  to  Financial  Statements  for  further  information).  Weather-sensitive
residential kilowatthour sales increased 18 percent,  commercial sales increased
7 percent and industrial sales increased 1 percent.

Electric  revenues for the first six months of 1998  increased  $33 million over
the same period in 1997 primarily due to warm weather and benefits realized from
elimination of the retail  electric fuel adjustment  clause in the  Registrant's
Illinois  jurisdiction  in the  second  quarter  of 1998,  partially  offset  by
increased  credits to customers (see Note 5 under Notes to Financial  Statements
for further  information)  and a decrease  in  interchange  sales.  Residential,
commercial,  and industrial sales increased 7 percent, 3 percent, and 2 percent,
respectively, due to the strong regional economy. Interchange sales decreased 37
percent due to decreased sales opportunities.

The  increase  in  electric  revenues  for the 12 months  ended  June 30,  1998,
compared to the prior  12-month  period was primarily due to favorable  weather,
partially offset by a higher estimated  Missouri customer credit recorded during
the  period  (see  Note 5  under  Notes  to  Financial  Statements  for  further
information) and a 37 percent decline in interchange  sales.  Residential  sales
                                       2
<PAGE>

increased 6 percent,  while  commercial and industrial sales increased 3 percent
and 2 percent, respectively, due to the strong regional economy.

<TABLE>
<CAPTION>

Fuel and Purchased Power              Variations for periods ended June 30, 1998
                                           from comparable prior-year periods
------------------------------------ -------------- ------------ ---------------
(Millions of Dollars)                 Three Months   Six Months   Twelve Months
------------------------------------ -------------- ------------ ---------------
<S>                                     <C>            <C>          <C>
Fuel:
  Variation in generation                $ (9)          $ (6)        $ (6)
  Price                                     4              6           (2)
  Generation efficiencies and other         2              2            2
Purchased power variation                  25             15           29
------------------------------------ -------------- ------------ ---------------
                                         $ 22           $ 17         $ 23
------------------------------------ -------------- ------------ ---------------
</TABLE>


The increase in fuel and  purchased  power costs for the three,  six, and twelve
months  ended June 30,  1998,  versus the  comparable  prior  year  periods  was
primarily due to increased sales volumes and higher purchased power prices.

While  unprecedented  prices for power  purchases  occurred  in the  marketplace
during the last week of June 1998, the Registrant was able to effectively manage
its power costs in the face of soaring wholesale  electricity  prices.  Overall,
the abnormally  high prices for power purchases in June had little impact on the
Registrant's financial results for the periods presented.

Gas Operations
Gas revenues for the six and twelve month periods ended June 30, 1998, decreased
$3 million and $4 million,  respectively,  compared to the same year-ago periods
due to an overall  decrease in  dekatherm  sales due to milder  winter  weather,
partially  offset  by the  annual  $11.5  million  Missouri  gas  rate  increase
effective February 1998.

Gas costs for the six and  twelve  months  ended  June 30,  1998,  decreased  $9
million and $12 million,  respectively,  compared to the same  year-ago  periods
primarily due to lower gas prices and a decline in dekatherm sales.

Other Operating Expenses
Other operating expense variations  reflected  recurring factors such as growth,
inflation, labor and benefit increases.

Other operations  expenses for the three,  six, and twelve months ended June 30,
1998,  increased  $21  million,  $26  million,  and $43  million,  respectively,
compared to the same year-ago  periods  primarily due to an increase in injuries
and  damages  expense  and  increased   information   system-related  costs  and
professional services expenses.

Maintenance expenses for the three and six months ended June 30, 1998, increased
$5 million  and $4  million,  respectively,  compared  to the  year-ago  periods
primarily due to the costs of refueling the Callaway  Nuclear  Plant,  partially
offset by a reduction in scheduled  fossil  plant  maintenance.  The spring 1998
scheduled  refueling  was  completed  in 31 days.  The $3  million  decrease  in
maintenance  expenses for the 12-month  period ended June 30, 1998,  compared to
the  prior  12-month  period  was  due  to  decreased   scheduled  fossil  plant
maintenance.

Depreciation  and  amortization  expense for the three,  six,  and  twelve-month
periods ended June 30, 1998,  increased $3 million, $6 million,  and $9 million,
respectively,  versus the  comparable  1997 periods,  primarily due to increased
depreciable  property and amortization of the Missouri portion of merger-related
costs which were  recorded  as a  regulatory  asset upon Merger  close under the
conditions of the Missouri Public Service Commission (MoPSC) order approving the
Merger.

In March 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 a targeted voluntary  separation plan (the Plan). In
July 1998, Ameren offered  separation  packages to employees whose positions are
to be eliminated  through the Plan.  The  Registrant  expects that the Plan will
result in a charge to earnings  in the third  quarter of 1998 once the number of
employees  that will  accept the terms of the Plan is known.  At this time,  the
Registrant is unable to estimate the expected charge to earnings  resulting from
the Plan.

Other Income and Deductions
Miscellaneous,  net for the three  months  and six months  ended June 30,  1998,
increased $3 million and $4 million,  respectively,  versus the comparable  1997
periods,  primarily  due to reduced  merger-related  costs.  Miscellaneous,  net
increased $17 million for the 12-month  period ended June 30, 1998,  compared to
the  year-ago  period  primarily  due  to  the  reversal  of  the  Missouri

                                       3
<PAGE>

portion of  merger-related costs which  were recorded as a regulatory asset upon
Merger close under conditions of the MoPSC order approving the Merger.

Balance Sheet
The $82 million increase in trade accounts  receivable and unbilled revenues was
due  primarily to higher  revenues in May and June 1998 compared to November and
December 1997.

Changes in accounts and wages  payable and other taxes  accrued  result from the
timing of various payments to taxing authorities and suppliers.

LIQUIDITY AND CAPITAL RESOURCES

Cash  provided by operating  activities  totaled $158 million for the six months
ended June 30, 1998, compared to $198 million during the same 1997 period.

Cash flows used in  investing  activities  totaled $104 million and $151 million
for the six months  ended  June 30,  1998 and 1997,  respectively.  Construction
expenditures  for the six months  ended June 30,  1998 for  constructing  new or
improving  existing  facilities,  and complying with the Clean Air Act were $101
million. In addition,  the Registrant expended $9 million for the acquisition of
nuclear fuel. Capital  requirements for the remainder of 1998 are expected to be
principally for construction expenditures and the acquisition of nuclear fuel.

Cash flows used in  financing  activities  were $44  million  for the six months
ended June 30, 1998,  compared to $38 million  during the same 1997 period.  The
Registrant's  principal  financing  activities for the six months ended June 30,
1998, included the issuance of long-term debt of $149 million, the redemption of
short-term  debt and the  nuclear  fuel lease of $21  million  and $51  million,
respectively, and the payment of dividends.

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  under PUHCA to have up to $1.1 billion 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 June 30,
1998, the Registrant had committed bank lines of credit aggregating $154 million
(all of which were unused 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 June 30, 1998, the Registrant had no outstanding
short-term borrowings.

The  Registrant  also has a bank  credit  agreement  due 2000 which  permits the
borrowing  of up to $300 million on a long-term  basis,  all of which was unused
and $116 million was available at June 30, 1998.

Additionally,  the  Registrant  has a lease  agreement  which  provides  for the
financing of nuclear fuel. At June 30, 1998,  the maximum  amount which could be
financed under the agreement was $120 million.  Cash provided from financing for
the first six months of 1998  included  redemptions  under the lease for nuclear
fuel of $51  million,  offset in part by $8  million of  issuances.  At June 30,
1998, $75 million was financed under the lease.

RATE MATTERS

As a result of the Electric  Service Customer Choice and Rate Relief Law of 1997
(the Law) providing for electric  utility  restructuring  in Illinois,  AmerenUE
filed a proposal with the Illinois Commerce Commission to eliminate the electric
fuel  adjustment  clause for  Illinois  retail  customers,  thereby  including a
historical level of fuel costs in base rates. The ICC approved AmerenUE's filing
on April 28, 1998.

In June 1998, the Registrant  filed a residential rate reduction tariff with the
ICC to comply with the  requirements of the Law. Under  provisions of the Law, a
rate  decrease  of 5 percent  will become  effective  for  Illinois  residential
electric customers beginning August 1, 1998.

See Note 5 under Notes to Financial  Statements  for further  discussion of Rate
Matters.

                                       4

<PAGE>


ACCOUNTING MATTERS

In June 1998,  the  Financial  Accounting  Standards  Board issued  Statement of
Financial  Accounting  Standards  (SFAS) No.  133,  "Accounting  for  Derivative
Instruments  and  Hedging  Activities."  SFAS  133  establishes  accounting  and
reporting  standards for derivative  instruments and for hedging  activities and
requires  recognition  of all  derivatives in the balance sheet measured at fair
value.  SFAS 133 is effective  for fiscal years  beginning  after June 15, 1999.
Earlier application is encouraged, but permitted only as of the beginning of any
fiscal  quarter that begins after  issuance of the standard.  At this time,  the
Registrant  is  unable to  determine  the  impact  of SFAS 133 on its  financial
position or results of operations upon adoption.

In February 1998, the Financial  Accounting Standards Board issued SFAS No. 132,
"Employers' Disclosures about Pensions and Other Postretirement  Benefits." SFAS
132  revises  employers'  disclosures  about  pension  and other  postretirement
benefit plans.  SFAS 132 is effective for fiscal years  beginning after December
15, 1998, although earlier  application is encouraged.  SFAS 132 is not expected
to have a material impact on the Registrant's  financial  position or results of
operations upon adoption.

In March 1998,  the  Accounting  Standards  Executive  Committee of the American
Institute of Certified  Public  Accountants  issued  Statement of Position (SOP)
98-1,  "Accounting for the Costs of Computer Software  Developed or Obtained for
Internal  Use."  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 which are currently  expensed by the Registrant may be capitalized
and amortized  over some future  period.  SOP 98-1 is effective for fiscal years
beginning after December 15, 1998,  although earlier  application is encouraged.
At this time,  the  Registrant  is unable to determine the impact of SOP 98-1 on
its financial position or results of operations upon adoption.


SAFE HARBOR STATEMENT

Statements made in this Form 10-Q which are not based on historical  facts,  are
forward-looking  and,  accordingly,  involve risks and uncertainties  that could
cause actual results to differ  materially from those  discussed.  Although such
forward-looking  statements  have  been  made in good  faith  and are  based  on
reasonable assumptions,  there is no assurance that the expected results will be
achieved.  These statements include (without limitation) statements as to future
expectations,  beliefs, plans, strategies,  objectives,  events,  conditions and
financial  performance.  In connection with the "Safe Harbor"  provisions of the
Private  Securities  Litigation  Reform Act of 1995, the Registrant is providing
this cautionary  statement to identify important factors that could cause actual
results to differ materially from those  anticipated.  Factors include,  but are
not  limited to, the effects of  regulatory  actions;  changes in laws and other
governmental actions; competition; future market prices for electricity; average
rates for electricity in the Midwest; business and economic conditions;  weather
conditions; fuel prices and availability; generation plant performance; monetary
and fiscal policies; and legal and administrative proceedings.

                                       5
<PAGE>


                             UNION ELECTRIC COMPANY
                             ----------------------
                                  BALANCE SHEET
                                  -------------
                                    UNAUDITED
                                    ---------
                      (Thousands of Dollars, Except Shares)

<TABLE>
<CAPTION>

                                                                  June 30,  December 31,
ASSETS                                                              1998       1997
------                                                          ----------- -----------
<S>                                                             <C>         <C>
Property and plant, at original cost:
   Electric                                                      $8,919,032  $8,832,039
   Gas                                                              202,808     197,959
   Other                                                             36,023      36,023
                                                                 ----------  ----------
                                                                  9,157,863   9,066,021
   Less accumulated depreciation and amortization                 3,983,466   3,866,925
                                                                 ----------  ----------
                                                                  5,174,397   5,199,096
Construction work in progress:
   Nuclear fuel in process                                           97,088     134,804
   Other                                                             86,015      68,074
                                                                 ----------  ----------
         Total property and plant, net                            5,357,500   5,401,974
                                                                 ----------  ----------
Investments and other assets:
   Nuclear decommissioning trust fund                               148,699     122,438
   Other                                                             40,667      33,315
                                                                 ----------  ----------
         Total investments and other assets                         189,366     155,753
                                                                 ----------  ----------
Current assets:
   Cash and cash equivalents                                         12,925       3,232
   Accounts receivable - trade (less allowance for doubtful
         accounts of $5,336 and $3,645, respectively)               229,433     179,708
   Unbilled revenue                                                 103,703      71,156
   Other accounts and notes receivable                               53,552      41,028
   Materials and supplies, at average cost -
      Fossil fuel                                                    53,605      49,574
      Other                                                          95,779      97,375
   Other                                                             15,130      11,040
                                                                 ----------  ----------
         Total current assets                                       564,127     453,113
                                                                 ----------  ----------
Regulatory assets:
   Deferred income taxes                                            610,047     611,740
   Other                                                            170,589     179,705
                                                                 ----------  ----------
         Total regulatory assets                                    780,636     791,445
                                                                 ----------  ----------
Total Assets                                                     $6,891,629  $6,802,285
                                                                 ==========  ==========

CAPITAL AND LIABILITIES
Capitalization:
   Common stock, $5 par value, authorized 150,000,000 shares -
      outstanding 102,123,834 shares                             $  510,619  $  510,619
   Other paid-in capital, principally premium on
     common stock                                                   701,896     716,879
   Retained earnings                                              1,128,939   1,159,956
                                                                 ----------  ----------
         Total common stockholders' equity                        2,341,454   2,387,454
   Preferred stock not subject to mandatory redemption              155,197     155,197
   Long-term debt                                                 1,967,807   1,846,482
                                                                 ----------  ----------
         Total capitalization                                     4,464,458   4,389,133
                                                                 ----------  ----------
Current liabilities:
   Current maturity of long-term debt                                12,740      28,797
   Short-term debt                                                     --        21,300
   Accounts and wages payable                                       146,036     188,014
   Accumulated deferred income taxes                                 43,517      35,809
   Taxes accrued                                                    151,758      94,167
   Other                                                            158,858     142,859
                                                                 ----------  ----------
         Total current liabilities                                  512,909     510,946
                                                                 ----------  ----------
Accumulated deferred income taxes                                 1,259,467   1,264,800
Accumulated deferred investment tax credits                         147,034     149,891
Regulatory liability                                                166,111     175,638
Other deferred credits and liabilities                              341,650     311,877
                                                                 ----------  ----------
Total Capital and Liabilities                                    $6,891,629  $6,802,285
                                                                 ==========  ==========

</TABLE>

                                       6

<PAGE>


                             UNION ELECTRIC COMPANY
                             ----------------------
                               STATEMENT OF INCOME
                               -------------------
                                    UNAUDITED
                                    ---------
                             (Thousands of Dollars)


<TABLE>
<CAPTION>

                                                Three Months Ended             Six Months Ended             Twelve Months Ended
                                                     June 30,                      June 30,                      June 30,
                                                1998           1997           1998           1997           1998           1997
                                                ----           ----           ----           ----           ----           ----

<S>                                       <C>            <C>            <C>            <C>            <C>            <C>
 OPERATING REVENUES:
    Electric                               $   574,962    $   537,494    $ 1,011,279    $   978,461    $ 2,221,389    $ 2,157,000
    Gas                                         13,621         12,359         55,715         58,469         95,505         99,055
    Other                                           93            101            267            282            488            508
                                           -----------    -----------    -----------    -----------    -----------    -----------
       Total operating revenues                588,676        549,954      1,067,261      1,037,212      2,317,382      2,256,563

 OPERATING EXPENSES:
    Operations
       Fuel and purchased power                135,847        114,329        247,624        230,520        517,099        494,331
       Gas                                       8,456          9,453         28,435         36,962         54,926         66,938
       Other                                   120,188         98,966        220,297        194,443        430,810        387,346
                                           -----------    -----------    -----------    -----------    -----------    -----------
                                               264,491        222,748        496,356        461,925      1,002,835        948,615
    Maintenance                                 66,830         61,722        114,875        110,920        221,381        224,090
    Depreciation and amortization               64,254         61,220        128,775        122,664        254,072        244,677
    Income taxes                                45,831         48,293         70,263         69,628        193,401        194,132
    Other taxes                                 54,443         51,887        102,045        102,404        211,590        212,463
                                           -----------    -----------    -----------    -----------    -----------    -----------
       Total operating expenses                495,849        445,870        912,314        867,541      1,883,279      1,823,977

 OPERATING INCOME                               92,827        104,084        154,947        169,671        434,103        432,586

 OTHER INCOME AND DEDUCTIONS:
    Allowance for equity funds used
       during construction                       1,201            953          2,218          1,830          4,849          4,499
    Miscellaneous, net                           1,409         (1,760)           890         (2,841)        11,065         (5,549)
                                           -----------    -----------    -----------    -----------    -----------    -----------
       Total other income and deductions         2,610           (807)         3,108         (1,011)        15,914
                                                                                                                           (1,050)

 INCOME BEFORE
    INTEREST CHARGES                            95,437        103,277        158,055        168,660        450,017        431,536

 INTEREST CHARGES:
    Interest                                    30,660         35,453         64,820         70,633        132,863        135,749
    Allowance for borrowed funds
       used during construction                 (1,474)        (1,818)        (3,318)        (3,245)        (6,749)        (6,274)
                                           -----------    -----------    -----------    -----------    -----------    -----------
    Net interest charges                        29,186         33,635         61,502         67,388        126,114        129,475

 INCOME BEFORE
    EXTRAORDINARY CHARGE                        66,251         69,642         96,553        101,272        323,903        302,061
                                           -----------    -----------    -----------    -----------    -----------    -----------

 EXTRAORDINARY CHARGE
    (NET OF INCOME TAXES)                         --             --             --             --          (26,967)          --
                                           -----------    -----------    -----------    -----------    -----------    -----------

 NET INCOME                                     66,251         69,642         96,553        101,272        296,936        302,061
                                           -----------    -----------    -----------    -----------    -----------    -----------

 PREFERRED STOCK DIVIDENDS                       2,205          2,205          4,409          4,409          8,817         11,033
                                           -----------    -----------    -----------    -----------    -----------    -----------

NET INCOME AFTER PREFERRED
    STOCK DIVIDENDS                        $    64,046    $    67,437    $    92,144    $    96,863    $   288,119    $   291,028
                                           ===========    ===========    ===========    ===========    ===========    ===========

</TABLE>
                                       7
<PAGE>


                             UNION ELECTRIC COMPANY
                             ----------------------
                             STATEMENT OF CASH FLOWS
                             -----------------------
                                    UNAUDITED
                                    ---------
                             (Thousands of Dollars)


<TABLE>
<CAPTION>

                                                            Six Months Ended
                                                               June 30,
                                                           -----------------
                                                           1998         1997
                                                           ----         ----
<S>                                                   <C>          <C> 
Cash Flows From Operating:
   Net income                                          $  96,553    $ 101,272
   Adjustments to reconcile net income to net cash
      provided by operating activities:
        Depreciation and amortization                    123,981      118,107
        Amortization of nuclear fuel                      16,182       19,901
        Allowance for funds used during construction      (5,536)      (5,075)
        Deferred income taxes, net                        (5,511)        (728)
        Deferred investment tax credits, net              (2,857)      (3,085)
        Changes in assets and liabilities:
           Receivables, net                              (94,796)     (13,623)
           Materials and supplies                         (2,435)      11,847
           Accounts and wages payable                    (41,978)     (96,619)
           Taxes accrued                                  57,591       74,364
           Other, net                                     16,742       (8,549)
                                                       ---------    ---------
Net cash provided by operating activities                157,936      197,812

Cash Flows From Investing:
   Construction expenditures                            (100,525)    (146,079)
   Allowance for funds used during construction            5,536        5,075
   Nuclear fuel expenditures                              (9,352)     (10,401)
                                                       ---------    ---------
Net cash used in investing activities                   (104,341)    (151,405)

Cash Flows From Financing:
   Dividends on common stock                            (123,161)    (129,697)
   Dividends on preferred stock                           (4,409)      (4,409)
   Redemptions -
      Nuclear fuel lease                                 (51,152)     (12,717)
      Short-term debt                                    (21,300)        --
      Long-term debt                                        --        (45,000)
      Preferred stock                                       --        (63,924)
   Issuances -
      Nuclear fuel lease                                   7,620       20,703
      Short-term debt                                       --         56,700
      Long-term debt                                     148,500      140,000
                                                       ---------    ---------
Net cash used in financing activities                    (43,902)     (38,344)

Net increase in cash and cash equivalents                  9,693        8,063
Cash and cash equivalents at beginning of year             3,232        4,897
                                                       ---------    ---------
Cash and cash equivalents at end of period             $  12,925    $  12,960
                                                       =========    =========

Cash paid during the periods:
   Interest (net of amount capitalized)                $  63,904    $  62,799
   Income taxes, net                                   $  62,138    $  45,536


</TABLE>

                                       8
<PAGE>


UNION ELECTRIC COMPANY
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
JUNE 30, 1998

Note 1 - Effective  December  31,  1997,  following  the receipt of all required
state and federal regulatory approvals,  Union Electric Company (AmerenUE or the
Registrant) and CIPSCO Incorporated (CIPSCO) combined to form Ameren Corporation
(Ameren)(the Merger).

Note 2 - Financial  statement note  disclosures,  normally included in financial
statements prepared in conformity with generally accepted accounting principles,
have been omitted in this Form 10-Q pursuant to the Rules and Regulations of the
Securities and Exchange  Commission.  However, in the opinion of the Registrant,
the disclosures contained in this Form 10-Q are adequate to make the information
presented not misleading. See Notes to Financial Statements included in the 1997
Form 10-K for information relevant to the financial statements contained in this
Form 10-Q,  including  information as to the significant  accounting policies of
the Registrant.

Note 3 - In the opinion of the Registrant the interim financial statements filed
as part of this Form 10-Q  reflect all  adjustments,  consisting  only of normal
recurring  adjustments,  necessary  for a fair  statement of the results for the
periods presented. Registrant's financial statements were prepared to permit the
information  required in the Financial  Data Schedule  (FDS),  Exhibit 27, to be
directly  extracted from the filed statements.  The FDS amounts correspond to or
are calculable  from the amounts  reported in the financial  statements or notes
thereto.

Note 4 - Due to the  effect of  weather  on sales and  other  factors  which are
characteristic of public utility  operations,  financial results for the periods
ended June 30, 1998 and 1997, are not  necessarily  indicative of trends for any
three-month, six-month, or twelve-month period.

Note 5 - On July 21,  1995,  the  Missouri  Public  Service  Commission  (MoPSC)
approved an agreement  involving the Registrant's  Missouri  electric rates. The
Agreement included a three-year  experimental  alternative  regulation plan that
provides that earnings in excess of a 12.61 percent  regulatory return on equity
(ROE) will be shared equally  between  customers and  shareholders  and earnings
above 14 percent ROE will be credited to  customers.  The formula for  computing
the credit uses  twelve-month  results ending June 30, rather than calendar year
earnings.  During the six months ended June 30, 1998, the Registrant recorded an
estimated  $43 million  credit for the third year of the plan  compared to a $20
million credit recorded for 1997. This credit,  which the Registrant  expects to
pay to Missouri  customers  later this year,  was  reflected  as a reduction  in
electric revenues.

A new three-year  experimental  alternative  regulation plan was included in the
joint  agreement  approved by the MoPSC in its February 1997 order approving the
Merger.  Like the current plan, the new plan requires that earnings over a 12.61
percent ROE up to a 14 percent ROE will be shared equally between  customers and
stockholders.  The new three-year  plan will also return to customers 90 percent
of all earnings above a 14 percent ROE up to a 16 percent ROE. Earnings above 16
percent ROE will be credited  entirely to customers.  The joint  agreement  also
provides for a Missouri  electric rate  decrease,  effective  September 1, 1998,
based on the  weather-adjusted  average  annual  credits to customers  under the
current experimental alternative regulation plan.

Note 6 - Statement of Financial  Accounting Standards (SFAS) No. 130, "Reporting
Comprehensive  Income"  became  effective on January 1, 1998.  SFAS 130 requires
that all items that are required to be recognized under accounting  standards as
components of comprehensive  income be reported in the financial statements with
the same prominence as other financial  statement  components.  Adoption of SFAS
130 did not  have a  material  effect  on the  financial  position,  results  of
operations,   liquidity  or  presentation   of  financial   information  of  the
Registrant.

                                       9
 
<PAGE>                                                      

                           PART II. OTHER INFORMATION


ITEM 5.        OTHER INFORMATION

         Any stockholder  proposal  intended for inclusion in the proxy material
for the  Registrant's  1999 annual meeting of  stockholders  must be received by
December 1, 1998.

         In addition, under the Registrant's By-Laws, shareholders who intend to
submit a proposal  in person at an Annual  Meeting,  or who intend to nominate a
director at a Meeting,  must  provide  advance  written  notice along with other
prescribed  information.  In  general,  said  notice  must  be  received  by the
Secretary of the  Registrant not later than 60 nor earlier than 90 days prior to
the Meeting.  For the Registrant's  1999 annual meeting of stockholders,  such a
proposal  should be received  not later than  February 27, 1999 nor earlier than
January 28, 1999.




ITEM 6.        EXHIBITS AND REPORTS ON FORM 8-K

               (a)    Exhibits.

                      Exhibit 12  -   Computation of Ratio of Earnings to
                                      Fixed Charges and Preferred Stock
                                      Dividend Requirements, 12 Months
                                      Ended June 30, 1998.

                      Exhibit 27  -   Financial Data Schedule.

               (b)    Reports on Form 8-K.  None



                                   SIGNATURES

               Pursuant to the  requirements  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.


                                                UNION ELECTRIC COMPANY
                                                      (Registrant)



August 13, 1998                           By        /s/ Donald E. Brandt
                                                  -----------------------
                                                        Donald E. Brandt
                                                     Senior Vice President
                                                Finance and Corporate Services



                                       10