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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, 2003

OR

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



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

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

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

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

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

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

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





Securities Registered Pursuant to Section 12(b) of the Securities Exchange Act of 1934:

Each of the following classes or series of securities is registered
pursuant to Section 12(b) of the Securities Exchange Act of 1934 and is
registered on the New York Stock Exchange.

Registrant Title of each class
---------- -------------------

Ameren Corporation Common Stock, $0.01 par value per share and
Preferred Share Purchase Rights; Normal Units
Union Electric Company Preferred Stock, cumulative, no par value,
Stated value $100 per share -
$4.56 Series
$4.50 Series
$4.00 Series
$3.50 Series
Central Illinois Light Company Preferred Stock, cumulative, $100 par value per share -
4 1/2% Series

Securities Registered Pursuant to Section 12(g) of the Securities Exchange Act of 1934:

Registrant Title of each class
---------- -------------------
Central Illinois Public Service Company Preferred Stock, cumulative, $100 par value per share -
6.625% Series
5.16% Series
4.92% Series
4.90% Series
4.25% Series
4.00% Series
Depository Shares, each representing one-fourth of a
share of 6.625% Preferred Stock, cumulative,
$100 par value per share


Ameren Energy Generating Company and CILCORP Inc. do not have securities
registered under either Section 12(b) or 12(g) of the Securities Exchange Act of
1934.

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

Indicate by check mark 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 each 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.
Ameren Corporation ( )
Union Electric Company ( )
Central Illinois Public Service Company ( )
Ameren Energy Generating Company (X)
CILCORP Inc. (X)
Central Illinois Light Company ( )

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



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





As of June 30, 2003, Ameren Corporation had 161,661,514 shares of its $0.01
par value common stock outstanding. The aggregate market value of these shares
of common stock (based upon the closing price of these shares on the New York
Stock Exchange on that date) held by non-affiliates was $7,129,272,767. The
shares of common stock of the other Registrants were held by affiliates as of
June 30, 2003.

The number of shares outstanding of each Registrant's classes of common
stock as of February 13, 2004 was as follows:



Ameren Corporation Common stock, $.01 par value - 182,025,564

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

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

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

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

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


DOCUMENTS INCORPORATED BY REFERENCE:

Portions of the definitive proxy statements of Ameren Corporation, Union
Electric Company, Central Illinois Public Service Company and Central Illinois
Light Company for the 2004 annual meetings of shareholders are incorporated by
reference into Part III of this Form 10-K.

OMISSION OF CERTAIN INFORMATION

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

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

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






TABLE OF CONTENTS
Page
----

GLOSSARY OF TERMS AND ABBREVIATIONS..................................................................... 5

Forward-looking Statements............................................................................. 8

PART I
Item 1 Business
General............................................................................. 9
Capital Program and Financing....................................................... 9
Rates and Regulation................................................................ 10
Supply for Electric Power........................................................... 12
Natural Gas Supply for Distribution................................................. 14
Industry Issues..................................................................... 15
Risk Factors........................................................................ 15
Operating Statistics................................................................ 22
Available Information............................................................... 23
Item 2 Properties.................................................................................. 24
Item 3 Legal Proceedings........................................................................... 27
Item 4 Submission of Matters to a Vote of Security Holders......................................... 27

Executive Officers of the Registrants (Item 401(b) of Regulation S-K)................................... 27

PART II
Item 5 Market for Registrants' Common Equity and Related
Stockholder Matters................................................................. 37
Item 6 Selected Financial Data..................................................................... 37
Item 7 Management's Discussion and Analysis of Financial Condition
and Results of Operations........................................................... 40
Item 7A Quantitative and Qualitative Disclosures About Market Risk.................................. 71
Item 8 Financial Statements and Supplementary Data................................................. 77
Item 9 Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure............................................................ 177
Item 9A Controls and Procedures..................................................................... 178

PART III
Item 10 Directors and Executive Officers of the Registrants......................................... 178
Item 11 Executive Compensation...................................................................... 179
Item 12 Security Ownership of Certain Beneficial Owners
and Management and Related Stockholder Matters...................................... 179
Item 13 Certain Relationships and Related Transactions.............................................. 179
Item 14 Principal Accountant Fees and Services...................................................... 179

PART IV
Item 15 Exhibits, Financial Statement Schedules, and Reports on Form 8-K............................ 180

SIGNATURES ............................................................................................. 183

EXHIBIT INDEX .......................................................................................... 189


This Form 10-K contains "forward-looking" statements within the meaning of
Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking
statements should be read with the cautionary statements and important factors
included at page 8 of this Form 10-K under the heading Forward-looking
Statements. Forward-looking statements are all statements other than statements
of historical fact, including those statements that are identified by the use of
the words "anticipates," "estimates," "expects," "intends," "plans," "predicts,"
"projects" and similar expressions.

4




GLOSSARY OF TERMS AND ABBREVIATIONS

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

AES - The AES Corporation.

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

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

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

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

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

APB - Accounting Principles Board.

Btu - British Thermal Unit, which is a standard unit for measuring the quantity
of heat energy required to raise the temperature of one pound of water by one
degree Fahrenheit.

CERCLA (Superfund) - Comprehensive Environmental Response Compensation Liability
Act of 1980, which is federal environmental legislation that addresses
remediation of contaminated sites.

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

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

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

CIPSCO - CIPSCO Incorporated, the former parent of CIPS.

Cooling Degree Days - The summation of positive differences between the mean
daily temperature and the 65o Fahrenheit base. This statistic is useful as an
indicator of demand for electricity for summer space cooling for residential and
commercial customers.

CT - Combustion turbine generation equipment.

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

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

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

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

5



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

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

EITF - Emerging Issues Task Force, an organization that is designed to assist
the FASB in improving financial reporting through the identification, discussion
and resolution of financial issues within the framework of existing
authoritative literature.

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

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

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

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

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

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

Fitch - Fitch Ratings, a leading global rating agency.

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

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

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

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

IBEW - International Brotherhood of Electrical Workers.

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

Illinois Customer Choice Law - Illinois Electric Service Customer Choice and
Rate Relief Law of 1997, which provides for electric utility restructuring and
introduces competition into the retail supply of electric energy in Illinois.

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

ITC - Independent Transmission Company.

IUOE - International Union of Operating Engineers.

MAIN - Mid-America Interconnected Network, Inc., one of the regional electric
reliability councils organized for coordinating the planning and operation of
the nation's bulk power supply.

6


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

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

MGP - Manufactured Gas Plant.

Midwest ISO - Midwest Independent System Operator.

MMBtu - One million Btus.

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

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

NOPR - Notice of Proposed Rulemaking issued by the FERC.

NOx - Nitrogen oxide.

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

NSR - New Source Review programs under the federal Clean Air Act.

NYMEX - New York Mercantile Exchange.

OATT - Open Access Transmission Tariff.

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

Peak Day Throughput - The maximum daily quantity of gas used during a stated
period of time, such as a year.

PGA - Purchased Gas Adjustment tariffs, which impact UE, CIPS and CILCO natural
gas utility customers.

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

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

RTO - Regional Transmission Organization.

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

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

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

SO2 - Sulfur dioxide.

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

7



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

FORWARD-LOOKING STATEMENTS

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

o the closing and timing of Ameren's acquisition of Illinois Power and the
impact of any conditions imposed by regulators in connection with their
approval thereof;
o the effects of the stipulation and agreement relating to the UE Missouri
electric excess earnings complaint case and other regulatory actions,
including changes in regulatory policy;
o changes in laws and other governmental actions, including monetary and
fiscal policy;
o the impact on the company of current regulations related to the opportunity
for customers to choose alternative energy suppliers in Illinois;
o the effects of increased competition in the future due to, among other
things, deregulation of certain aspects of the company's business at both
the state and federal levels;
o the effects of participation in a FERC-approved RTO, including activities
associated with the Midwest ISO;
o the availability of fuel for the production of electricity, such as coal
and natural gas, and purchased power and natural gas for distribution, and
the level and volatility of future market prices for such commodities,
including the ability to recover any increased costs;
o the use of financial and derivative instruments;
o average rates for electricity in the Midwest;
o business and economic conditions;
o the impact of the adoption of new accounting standards and the application
of appropriate technical accounting rules and guidance;
o interest rates and the availability of capital;
o actions of ratings agencies and the effects of such actions; weather
conditions; generation plant construction, installation and performance;
operation of nuclear power facilities and decommissioning costs;
o the effects of strategic initiatives, including acquisitions and
divestitures;
o the impact of current environmental regulations on utilities and generating
companies and the expectation that more stringent requirements will be
introduced over time, which could potentially have a negative financial
effect;
o future wages and employee benefits costs, including changes in returns on
benefit plan assets;
o disruptions of the capital markets or other events making the company's
access to necessary capital more difficult or costly;
o competition from other generating facilities, including new facilities that
may be developed;
o difficulties in integrating CILCO and Illinois Power with Ameren's other
businesses;
o changes in the coal markets, environmental laws or regulations, or other
factors adversely impacting synergy assumptions in connection with the
CILCORP and Illinois Power acquisitions;
o cost and availability of transmission capacity for the energy generated by
the company's generating facilities or required to satisfy energy sales
made by the company;
o and legal and administrative proceedings.

8


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


PART I

ITEM 1. BUSINESS.

GENERAL

Ameren, headquartered in St. Louis, Missouri, is a public utility holding
company registered with the SEC under the PUHCA. Ameren's primary asset is the
common stock of its subsidiaries. Ameren's subsidiaries operate rate-regulated
electric generation, transmission and distribution businesses, rate-regulated
natural gas distribution businesses and non rate-regulated electric generation
businesses in Missouri and Illinois. Dividends on Ameren's common stock are
dependent on distributions made to it by its subsidiaries. Ameren's principal
subsidiaries are listed below. See Note 1 - Summary of Significant Accounting
Policies to our financial statements under Part II, Item 8 of this report for a
more detailed description of the Ameren Companies.

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

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

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

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

At December 31, 2003, Ameren employed 7,650 employees, UE employed 3,996
employees, CIPS employed 764 employees, Genco employed 701 employees and CILCORP
employed 862 employees, of which 855 employees are employed by CILCO. During the
second and third quarters of 2003, we entered into new four-year labor
agreements with the IBEW and the IUOE representing eleven bargaining units
covering approximately 70% of Ameren's, UE's, CIPS' and Genco's entire
workforces. The new agreements include no wage increase for year one of the
agreements, 3.5% increases for both years two and three, and an increase of
3.25% for year four. In addition, the agreements include a pension supplement,
more flexible work rules and a change to employee medical benefits resulting in
employees paying a greater portion of future benefit cost increases. CILCO has a
labor agreement with the IBEW which will expire on July 1, 2004. Employees
covered by the agreement represent approximately 4% of Ameren's and CILCO's
entire workforce.

For additional information regarding our business operations, see
Management's Discussion and Analysis of Financial Condition and Results of
Operations under Part II, Item 7 of this report and Note 1- Summary of
Significant Accounting Policies to our financial statements under Part II, Item
8 of this report.


CAPITAL PROGRAM AND FINANCING

For information on our capital program and financing needs, see Liquidity
and Capital Resources in Management's Discussion and Analysis of Financial
Condition and Results of Operations under Part II, Item 7 of this report and
Note 5 - Short-term Borrowings and Liquidity, Note 6 - Long-term Debt and Equity
Financings, Note 10 - Stockholder Rights Plan and Preferred Stock and Note 15 -
Commitments and Contingencies to our financial statements under Part II, Item 8
of this report.

9



RATES AND REGULATION

Rates

Rates that UE, CIPS and CILCO are allowed to charge for their services are
the single most important item influencing their and Ameren's consolidated
financial position, results of operations and liquidity. The rates charged to
UE, CIPS and CILCO customers are determined by governmental organizations.
Decisions by these organizations are influenced by many factors, including the
cost of providing service, the quality of service, regulatory staff knowledge
and experience, economic conditions and social and political views. Decisions
made by these organizations regarding rates could have a material impact on the
financial position, results of operations and liquidity of UE, CIPS, CILCO and
Ameren on a consolidated basis.

UE, CIPS and CILCO are subject to regulation by the ICC, and UE is also
subject to regulation by the MoPSC, as to rates, service, issuance of equity
securities, issuance of debt having a maturity of more than twelve months,
mergers, affiliate transactions, and various other matters. Genco is not subject
to regulation by the ICC or the MoPSC. See Note 3 - Rate and Regulatory Matters
to our financial statements under Part II, Item 8 of this report for information
regarding UE's proposed discontinuance of its utility operations subject to ICC
jurisdiction by transferring its Illinois-based electric and natural gas
transmission and distribution business to CIPS.

UE, CIPS, CILCO and Genco are also subject to regulation by the FERC as to
rates and charges in connection with the wholesale sale of energy and
transmission in interstate commerce, mergers, affiliate transactions, and
certain other matters. Issuance of short-term and long-term debt by Genco is
subject to approval by the FERC.

The following table presents the approximate percentage of electric
operating revenues subject to regulation by the MoPSC, the ICC and the FERC for
each of the Ameren Companies for the year ended December 31, 2003:



- -----------------------------------------------------------------------------------------------------------------
MoPSC ICC FERC
- -----------------------------------------------------------------------------------------------------------------

Ameren(a)............................................................. 51% 33% 16%
UE.................................................................... 80 6 14
CIPS.................................................................. - 90 10
Genco................................................................. - - 100
CILCORP............................................................... - 95 5
CILCO................................................................. - 95 5
- -----------------------------------------------------------------------------------------------------------------
(a) Excludes amounts for CILCORP and CILCO prior to the acquisition date
of January 31, 2003; includes amounts for non-registrant Ameren
subsidiaries as well as intercompany eliminations.



The following table presents the approximate percentage of gas operating
revenues subject to regulation by the MoPSC and the ICC for each of the Ameren
Companies for the year ended December 31, 2003:



- -----------------------------------------------------------------------------------------------------------------
MoPSC ICC
- -----------------------------------------------------------------------------------------------------------------

Ameren(a)..................................................................... 19% 81%
UE............................................................................ 87 13
CIPS.......................................................................... - 100
CILCORP....................................................................... - 100
CILCO......................................................................... - 100
- -----------------------------------------------------------------------------------------------------------------
(a) Excludes amounts for CILCORP and CILCO prior to the acquisition date
of January 31, 2003; includes amounts for non-registrant Ameren
subsidiaries as well as intercompany eliminations.

UE's, CIPS' and CILCO's electric and gas rates may be adjusted based on
certain criteria. PGA clauses allow for prudently-incurred natural gas purchase
costs to be passed directly to the consumer in Missouri and Illinois. There is
no similar provision for regulated electric operations which would allow fuel or
purchased power costs to be passed directly to the consumer. Environmental
adjustment rate riders authorized by the ICC permit the recovery of
prudently-incurred MGP remediation and litigation costs from UE's, CIPS' and
CILCO's Illinois electric and natural gas utility customers. There are also gas
pipeline replacement cost clauses permitted by the MoPSC that allow the recovery
from gas utility customers of infrastructure replacement costs. However, UE
agreed to not seek recovery under such a clause before January 1, 2006 in
conjunction with its 2003 Missouri gas rate case settlement. For additional
information see


10


Quantitative and Qualitative Disclosures About Market Risk under Part II, Item
7A of this report and Note 3 - Rate and Regulatory Matters and Note 15 -
Commitments and Contingencies to our financial statements under Part II, Item 8
of this report.

For information on rate matters in these jurisdictions, including UE's 2002
Missouri electric rate case, see Results of Operations in Management's
Discussion and Analysis of Financial Condition and Results of Operations under
Part II, Item 7 of this report and Note 3 - Rate and Regulatory Matters to our
financial statements under Part II, Item 8 of this report.

General Regulatory Matters

As a holding company registered with the SEC under the PUHCA, Ameren is
subject to the regulatory provisions of the PUHCA, including provisions relating
to the issuance of securities, sales and acquisitions of securities and utility
assets, affiliate transactions, financial reporting requirements, the services
performed by Ameren Services and AFS, and the activities of certain other
subsidiaries. Issuance of common stock and short-term and long-term debt and
other securities by Ameren and CILCORP and issuance of debt having a maturity of
twelve months or less by UE, CIPS and CILCO are subject to approval by the SEC
under the PUHCA.

Genco is certified by the FERC as an "exempt wholesale generator" under the
Energy Policy Act of 1992 and as a result is not a "public utility company"
under the PUHCA. As an exempt wholesale generator, Genco is exempt from most of
the provisions of the PUHCA that otherwise would apply to it as a subsidiary of
a registered holding company. Issuance of securities by Genco is not subject to
approval by the SEC under the PUHCA. The SEC may impose limitations on Ameren in
connection with its financing for the purpose of investing in exempt wholesale
generators and foreign utility companies if Ameren's aggregate investment in
those activities exceeds 50% of its consolidated retained earnings. At December
31, 2003, Ameren's aggregate investment in exempt wholesale generators was 23%
of its consolidated retained earnings. Ameren has no investment in foreign
utility companies.

In many states, including Illinois, companies that sell electricity
directly to retail customers pursuant to state statutes and regulations must be
registered or licensed. Marketing Company has obtained "alternative retail
electricity supplier" status in Illinois and plans to seek comparable status in
other states where retail competition is developing. In December 2003, the IBEW
filed a complaint before the ICC challenging Marketing Company's certification
status, based on its interpretation of the reciprocity clause requirements.
Marketing Company believes the complaint should be denied, but cannot predict
how or when the complaint will be resolved. CILCO is an Illinois electric
utility, and as such, is permitted to provide power and energy on a competitive
basis to retail customers located outside its service territory. CILCO was
required to seek Integrated Distribution Company status in the first quarter of
2004 whereby, upon approval, it would cease selling power and energy on a retail
basis as prescribed by the Integrated Distribution Company rules. However, as a
result of the IBEW complaint, CILCO has filed a notice with the ICC to extend
the deadline for CILCO becoming an Integrated Distribution Company. This
extension would ensure that either Marketing Company or CILCO would be able to
sell on a competitive basis to retail customers in Illinois given the
uncertainty presented by the IBEW complaint. We cannot predict how or when the
ICC will rule on CILCO's motion.

Operation of UE's Callaway Nuclear Plant is subject to regulation by the
NRC. Its Facility Operating License expires on October 18, 2024. UE's Osage
hydroelectric plant and UE's Taum Sauk pumped-storage hydro plant, as licensed
projects under the Federal Power Act, are subject to FERC regulations affecting,
among other things, the general operation and maintenance of the projects. The
license for the Osage Plant expires on February 28, 2006, and the license for
the Taum Sauk Plant expires on June 30, 2010. In February 2004, UE filed an
application with the FERC to renew the license for its Osage hydroelectric plant
for an additional 50 year term. UE's Keokuk Plant and dam located in the
Mississippi River between Hamilton, Illinois and Keokuk, Iowa, are operated
under authority, unlimited in time, granted by an Act of Congress in 1905.

For information on regulatory matters in these jurisdictions, including the
current status of electric transmission matters pending before the FERC, see
Regulatory Matters in Management's Discussion and Analysis of Financial
Condition and Results of Operations under Part II, Item 7 of this report and
Note 3 - Rate and Regulatory Matters to our financial statements under Part II,
Item 8 of this report.

11



Environmental Matters

Certain of our operations are subject to federal, state and local
environmental regulations relating to the safety and health of personnel, the
public and the environment, including the identification, generation, storage,
handling, transportation, disposal, record-keeping, labeling, reporting of and
emergency response in connection with hazardous and toxic materials, safety and
health standards, and environmental protection requirements, including standards
and limitations relating to the discharge of air and water pollutants. Failure
to comply with those statutes or regulations could have material adverse effects
on us, including the imposition of criminal or civil liability by regulatory
agencies or civil fines and liability to private parties, and the required
expenditure of funds to bring us into compliance. We believe we are in material
compliance with existing regulations.

For additional discussion of environmental matters, including NOx credit
requirements, see Liquidity and Capital Resources in Management's Discussion and
Analysis of Financial Condition and Results of Operations under Part II, Item 7
of this report and Note 15 - Commitments and Contingencies to our financial
statements under Part II, Item 8 of this report.


SUPPLY FOR ELECTRIC POWER

During 2003, the Ameren Companies peak demand from retail and wholesale
customers was 12,860 megawatts and the peak capability to deliver power from
owned generation and power supply agreements was 15,090 megawatts. Forecasted
peak demand from retail and wholesale customers for 2004 is 13,198 megawatts
with a 15% reserve margin. Ameren-owned generation and purchased power are used
to meet the energy needs of our customers. Factors that could cause us to
purchase power include, among other things, generating plant outages, extreme
weather conditions and the availability of power for a lower cost than we could
generate it.

UE, Genco and CILCO utilize coal, nuclear, natural gas, hydro and oil to
produce electric power for sale. On October 3, 2003, CILCO transferred
substantially all its generating property and plant to AERG. See additional
information regarding this transfer in Note 1 - Summary of Significant
Accounting Policies to our financial statements under Part II, Item 8 of this
report. The following table presents the fuel supply for electric generation for
the years ended December 31, 2003, 2002 and 2001:





===================================================================================================================
Natural
Fuel Supply Coal Nuclear Gas Hydro Oil
-------------------------------------------------------------------------------------------------------------------

Ameren:(a)
2003................................... 85% 13% (b) 1% 1%
2002................................... 82 13 2% 2 1
2001................................... 77 19 2 1 1
====================================================================================================================
UE:
2003................................... 77% 21% (b) 2% (b)
2002................................... 77 20 (b) - 3%
2001................................... 75 23 (b) 2 (b)
====================================================================================================================
Genco:
2003................................... 95% - 2% - 3%
2002................................... 88 - 8 - 4
2001................................... 87 - 9 - 4
====================================================================================================================
CILCORP:(c)
2003................................... 100% - (b) - (b)
2002................................... 100 - (b) - (b)
2001................................... 100 - (b) - (b)
====================================================================================================================
CILCO:
2003................................... 100% - (b) - (b)
2002................................... 100 - (b) - (b)
2001................................... 100 - (b) - (b)
====================================================================================================================
(a) Excludes amounts for CILCORP and CILCO prior to the acquisition date
of January 31, 2003; includes amounts for non-registrant Ameren
subsidiaries as well as intercompany eliminations.
(b) Less than 1% of total fuel supply.
(c) 2002 and 2001 amounts represent predecessor information. CILCORP
consolidates CILCO and therefore includes CILCO amounts in its
balances.

12



The following table presents the cost of fuels for electric generation for
the years ended December 31, 2003, 2002, and 2001:

====================================================================================================================
Cost of Fuels
(Dollars per million Btu) 2003 2002 2001
- --------------------------------------------------------------------------------------------------------------------
Ameren:(a)
Coal..................................................... $ 1.049 $ .999 $ 1.025
Nuclear.................................................. .410 .381 .372
Natural Gas(b)........................................... 8.665 3.869 4.332
- --------------------------------------------------------------------------------------------------------------------
Average-all fuels(c)..................................... $ .999 $ .974 $ .979
====================================================================================================================
UE:
Coal..................................................... $ .913 $ .914 $ .982
Nuclear.................................................. .410 .381 .372
Natural Gas(b)........................................... 9.328 3.407 4.025
- --------------------------------------------------------------------------------------------------------------------
Average-all fuels(c)..................................... $ .822 $ .813 $ .867
====================================================================================================================
Genco:
Coal..................................................... $ 1.220 $ 1.255 $ 1.218
Natural Gas(b)........................................... 8.759 3.962 4.397
- --------------------------------------------------------------------------------------------------------------------
Average-all fuels(c)..................................... $ 1.368 $ 1.452 $ 1.421
====================================================================================================================
CILCORP:(d)
Coal..................................................... $ 1.516 $ 1.610 $ 1.873
Natural Gas(b)........................................... 6.171 3.790 5.436
- --------------------------------------------------------------------------------------------------------------------
Average-all fuels(c)..................................... $ 1.543 $ 1.627 $ 1.890
====================================================================================================================
CILCO:
Coal..................................................... $ 1.664 $ 1.610 $ 1.873
Natural Gas(b)........................................... 6.171 3.790 5.436
- --------------------------------------------------------------------------------------------------------------------
Average-all fuels(c)..................................... $ 1.690 $ 1.627 $ 1.890
====================================================================================================================
(a) Excludes amounts for CILCORP and CILCO prior to the acquisition date
of January 31, 2003.
(b) The fuel cost for natural gas represents the actual cost of natural
gas and variable costs for transportation, storage, balancing and fuel
losses for delivery to the plant. In addition, the fixed costs for
firm transportation and firm storage capacity are included to
calculate a "fully-loaded" fuel cost for the generating facilities.
(c) Represents all fuels utilized in our electric generating facilities,
to the extent applicable, including coal, nuclear, natural gas, oil,
propane, tire chips and handling.
(d) 2002 and 2001 amounts represent predecessor information. CILCORP
consolidates CILCO and therefore includes CILCO amounts in its
balances.



Coal

UE, Genco and CILCO have long-term agreements in place for the purchase of
coal to supply electric generating facilities. These agreements have terms
through 2010. Coal supply agreements typically have an initial term of five
years, with approximately 20% of the contracts expiring annually. As of December
31, 2003, nearly 100% of UE's, Genco's and CILCO's expected 2004 coal usage was
under contract, and approximately 47% of the expected coal usage for 2005 to
2008 was under contract. Ameren burned 31 million tons of coal in 2003.

UE, Genco and CILCO have a policy of maintaining coal inventory consistent
with their historical usage. Levels may be adjusted based on uncertainties of
supply due to potential work stoppages, delays in coal deliveries, equipment
breakdowns and other factors. The following table presents the number of days
supply of coal in inventory as of December 31, 2003 and 2002:

===============================================================================
2003 2002
- -------------------------------------------------------------------------------
Ameren(a)....................................... 56 59
UE.............................................. 59 63
Genco........................................... 55 46
CILCORP(b)...................................... 38 49
CILCO........................................... 38 49
===============================================================================
(a) Excludes amounts for CILCORP and CILCO prior to the acquisition date
of January 31, 2003; includes amounts for non-registrant Ameren
subsidiaries as well as intercompany eliminations.
(b) 2002 amounts represent predecessor information. CILCORP consolidates
CILCO and therefore includes CILCO amounts in its balances.

13



Nuclear

UE has agreements and/or inventories to fulfill its Callaway Nuclear Plant
needs for uranium, conversion, enrichment and fabrication services through 2006.
UE expects to enter into additional contracts from time to time in order to
supply nuclear fuel during the expected remainder of the life of the plant, at
prices which cannot now be accurately predicted. The Callaway Nuclear Plant
normally requires refueling at 18-month intervals, and the next refueling is
scheduled for the spring of 2004. The Callaway Nuclear Plant is expected to be
out of service for approximately 40 to 45 days during this refueling. See Note
16 - Callaway Nuclear Plant to our financial statements under Part II, Item 8 of
this report for additional information.

Natural Gas Supply for Power Generation

Ameren owns 2,509 megawatts of natural gas-fired generating capacity. The
gas-fired capacity is primarily CTs, and some have the capability to use natural
gas or oil. See Item 2. Properties below for additional information. Our natural
gas procurement strategy is designed to ensure reliable and immediate delivery
of natural gas to our generating units by optimizing transportation and storage
options, minimizing cost and price risk by structuring various supply and price
hedging agreements to maintain access to multiple gas pools, supply basins and
storage, and reducing the impact of price volatility. For 2004, 47% of the
estimated required natural gas supply is under contract and 38% of the required
gas supply is hedged for price risk.

Oil

The actual and prospective use of oil is minimal, and we have not
experienced and do not expect to experience difficulty in obtaining adequate
supplies.

Purchased Power

We believe we can obtain enough purchased power to meet future needs.
However, during periods of high demand, the price and availability of these
purchases may be significantly affected. The Ameren transmission system has a
minimum of 24 direct connections to other control areas allowing access to
numerous sources of supply. See Item 2. Properties under Part I of this report
for additional information. See also Note 1 - Summary of Significant Accounting
Policies to our financial statements under Part II, Item 8 of this report for a
summary of purchased power costs for the three years ended December 31, 2003.


NATURAL GAS SUPPLY FOR DISTRIBUTION

UE, CIPS and CILCO are responsible for the purchase and delivery of natural
gas to their gas utility customers. UE, CIPS and CILCO develop and manage a
portfolio of gas supply resources including firm gas supply under term
agreements with producers, interstate and intrastate firm transportation
capacity, firm storage capacity leased from interstate pipelines, and on-system
storage facilities to maintain gas deliveries to our customers throughout the
year and especially during periods of peak demand. UE, CIPS and CILCO primarily
utilize the Panhandle Eastern Pipe Line Company, Trunkline Gas Company and
Natural Gas Pipeline Company of America interstate pipeline systems for
transportation to our systems. Financial instruments, including the NYMEX
futures market and OTC financial markets in addition to physical transactions
are used to hedge the price paid for natural gas. Prudently incurred natural gas
purchase costs are passed to UE, CIPS and CILCO gas customers in Illinois and
Missouri dollar-for-dollar under PGA clauses, subject to review by the ICC and
MoPSC.

For additional information on our fuel supply, see Results of Operations,
Liquidity and Capital Resources and Effects of Inflation and Changing Prices in
Management's Discussion and Analysis of Financial Condition and Results of
Operations under Part II, Item 7 of this report, Quantitative and Qualitative
Disclosures About Market Risk under Part II, Item 7A of this report, and Note 1
- - Summary of Significant Accounting Policies, Note 9 - Derivative Financial
Instruments, Note 15 - Commitments and Contingencies and Note 16 - Callaway
Nuclear Plant to our financial statements under Part II, Item 8 of this report.

14




INDUSTRY ISSUES

We are facing issues common to the electric and gas utility industries.
These issues include:

o the potential for more intense competition in generation and supply;
o the potential for changes in the structure of regulation;
o changes in the structure of the industry as a result of changes in federal
and state laws, including the formation of non rate-regulated generating
entities and regional transmission organizations;
o weak power prices due to available capacity exceeding demand;
o numerous troubled companies within the energy sector and their impact on
energy marketing and access to the capital markets;
o on-going consideration of additional changes of the industry by federal and
state authorities;
o continually developing environmental laws, regulations and issues,
including proposed new air quality standards;
o public concern about the siting of new facilities;
o proposals for programs to encourage energy efficiency;
o public concerns about nuclear decommissioning and the disposal of nuclear
wastes; and
o global climate issues.

We are monitoring these issues and are unable to predict at this time what
impact, if any, these issues will have on our results of operations, financial
condition or liquidity. For additional information, see Outlook and Regulatory
Matters in Management's Discussion and Analysis of Financial Condition and
Results of Operations under Part II, Item 7 of this report and Note 3 - Rate and
Regulatory Matters and Note 15 - Commitments and Contingencies to our financial
statements under Part II, Item 8 of this report.


RISK FACTORS

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

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

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

If Ameren completes the acquisition of Illinois Power, it cannot assure you
that it will be able to successfully integrate Illinois Power with its other
businesses. The integration of Illinois Power with its other businesses will
present significant challenges and, as a result, Ameren may not be able to
operate the combined company as effectively as


15


expected. Ameren may also fail to achieve the anticipated benefits of the
acquisition as quickly or as cost effectively as anticipated or may not be able
to achieve those benefits at all. While Ameren expects that this acquisition
will be accretive to earnings per share in the first full year of operation
after the transaction is completed, this expectation is based on important
assumptions, including assumptions related to interest rates and market prices
for power, which may ultimately be incorrect. As a result, if Ameren is unable
to integrate its businesses effectively or achieve the benefits anticipated, our
financial position, results of operations and liquidity may be materially
adversely affected.

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

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

As a part of the settlement of UE's Missouri electric rate case in 2002, UE
is subject to a rate moratorium providing for no changes in its electric rates
in Missouri before July 1, 2006, subject to limited statutory and other
exceptions. A rate reduction of $30 million will go into effect on April 1,
2004, which is the last portion of the $110 million rate reduction included in
the stipulation entered into as part of the settlement of the Missouri electric
rate case. In addition, as a provision of the Illinois legislation related to
the restructuring of the Illinois electric industry, a rate freeze is in effect
in Illinois through January 1, 2007. This Illinois legislation also contains a
provision requiring that earnings from the Illinois jurisdiction in excess of
certain levels be shared equally with UE's, CIPS' and CILCO's Illinois customers
through 2006. This Illinois legislation is also applicable to Illinois Power.
Furthermore, as part of the settlement of UE's Missouri gas rate case, which was
approved by the MoPSC on January 13, 2004, UE agreed to a rate moratorium
providing for no changes in its gas delivery rates prior to July 1, 2006,
subject to certain exceptions (the increased rates approved as part of the
settlement became effective on February 15, 2004).

As a part of the settlement of UE's Missouri electric rate case in 2002, UE
also undertook to use commercially reasonable efforts to make critical energy
infrastructure investments of $2.25 billion to $2.75 billion from January 1,
2002 through June 30, 2006, including, among other things, the addition of more
than 700 megawatts of new generation capacity (240 megawatts of which was added
in 2002) and the replacement of steam generators at UE's Callaway Nuclear Plant.
The amount of energy infrastructure investment through June 2006 described in
the settlement is consistent with UE's previously disclosed estimate of
construction expenditures UE expects to make over the same time period. However,
UE's agreement to a rate moratorium will result in these capital expenditures
not becoming recoverable in rates, or earning a return, before July 1, 2006.
Therefore, UE's undertakings with respect to making energy infrastructure
investments and funding new programs, coupled with the rate reductions and rate
moratorium described above, could result in increased financing requirements for
UE and thus have a material impact on our liquidity.

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

Steps taken and being considered at the federal and state levels continue
to change the structure of the electric industry and utility regulation. At the
federal level, the FERC has been mandating changes in the regulatory framework
in which transmission-owning public utilities, such as UE, CIPS and CILCO
operate. In Missouri, where a majority of our retail electric revenues are
derived, restructuring bills have been introduced in the past, but no
legislation has been passed. The Illinois Customer Choice Law provides for
electric utility restructuring and retail direct access. Retail direct access,
which allows customers to choose their electric generation supplier, was first
offered to Illinois residential customers on May 1, 2002. Although retail direct
access in Illinois has not had a negative effect on our revenues or liquidity,
we expect competitive forces in the electric supply segment of our business to
continue to increase.


16


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

Increased federal and state environmental regulation could require UE,
Genco and CILCO to incur large capital expenditures and increase operating
costs.

Approximately 65% of Ameren's generating capacity is coal-fired. The
balance is nuclear, gas-fired, hydro and oil-fired. The EPA has recently issued
proposed regulations with respect to SO2, NOx and mercury emissions from
coal-fired power plants. These new rules, if adopted, would require significant
additional reductions in these emissions from our power plants in phases,
beginning in 2010. The rules are currently under a public review and comment
period, and may change before being issued as final late in 2004 or early 2005.
Preliminary estimates of capital costs based on current technology on the Ameren
systems to comply with the SO2 and NOx rules, as proposed, range from $400
million to $600 million by 2010, with an additional $500 million to $800 million
by 2015. The proposed mercury regulations contain a number of options and the
final control requirements are highly uncertain. Ameren anticipates additional
capital costs to comply with the mercury rules could be up to $100 million by
2010. Depending upon the final mercury rules, similar additional costs could be
incurred between 2010 and 2018.

In addition, Illinois has developed a NOx control regulation for utility
generating plant boilers consistent with an EPA program aimed at reducing ozone
levels in the eastern United States. In February 2002, the EPA proposed similar
rules for Missouri. Ameren currently estimates that the remaining capital
expenditures could range from $210 million to $250 million between 2004 and 2008
in order to comply with the final NOx regulations in Missouri and Illinois. This
estimate includes the assumption that these rules will require the installation
of selective catalytic reduction technology on some units, as well as additional
controls.

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

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

In December 1999, the FERC issued Order 2000 requiring all utilities
subject to FERC jurisdiction to state their intentions for joining a RTO. Since
April 2002, the GridAmerica Companies have participated in a number of filings
at the FERC in an effort to form GridAmerica LLC, or GridAmerica, as an ITC. On
December 19, 2002, the FERC issued an order conditionally approving the
formation and operation of GridAmerica as an ITC within the Midwest ISO subject
to further compliance filings, which were made by the GridAmerica Companies in
early 2003. CILCO is already a member of the Midwest ISO and has transferred
functional control of its transmission system to the Midwest ISO. Transmission
service on the CILCO transmission system is provided pursuant to the terms and
conditions of the Midwest ISO OATT on file with the FERC.

On April 30, 2003, the FERC issued an order authorizing the GridAmerica
Companies' request to transfer functional control of their transmission assets
to GridAmerica. The FERC also accepted the proposed rate amendments to the
Midwest ISO OATT, filed in early 2003 by Midwest ISO and the GridAmerica
Companies, effective upon the commencement of service over the GridAmerica
transmission facilities under the Midwest ISO OATT, suspended the proposed rates
for a nominal period, subject to refund, and established hearing and settlement
judge procedures to determine the justness and reasonableness of the proposed
rate amendments to the Midwest ISO OATT. In August 2003, the GridAmerica
Companies filed acknowledgements with the FERC to permit GridAmerica to commence
operations on October 1, 2003, on a phased basis, by assuming, with the Midwest
ISO, functional control of the transmission systems of American Transmission
Systems, Incorporated, a subsidiary of FirstEnergy Corp., and Northern Indiana
Public Service Company, a subsidiary of NiSource Inc. Pursuant to this
authorization, GridAmerica began operating on October 1, 2003.


17



Also beginning on October 1, 2003, the proposed rates filed by Midwest ISO
and the GridAmerica Companies became effective, subject to refund for
FirstEnergy Corp. and NiSource Inc. Since UE and CIPS have not transferred
functional control of their transmission assets to Midwest ISO, the proposed
rates are not effective for UE or CIPS. On December 18, 2003, the GridAmerica
Companies, the Midwest ISO and the Midwest ISO transmission owners filed a
Stipulation and Agreement with the FERC in an effort to settle the disputed rate
issues for transmission service over the transmission assets of the GridAmerica
Companies. On March 3, 2004, the FERC approved the Stipulation and Agreement.

UE also requires approval from the MoPSC to join the Midwest ISO. On
February 26, 2004, the MoPSC issued an order conditionally approving a
Stipulation and Agreement that was filed on February 6, 2004. The Order
authorizes UE's participation in the Midwest ISO through Grid America for a five
year period, but is conditioned on the FERC approving a Service Agreement that
outlines the terms and conditions under which the Midwest ISO wil provide
transmission service to UE's bundled retail load. FERC approval of this Service
Agreement is pending.

Until the tariffs and other material terms of UE's and CIPS' participation
in GridAmerica and GridAmerica's participation in the Midwest ISO are finalized
and approved by the FERC and other regulatory authorities having jurisdiction,
we are unable to predict the ultimate impact that ongoing RTO developments will
have on our financial position, results of operations or liquidity. UE and CIPS
could incur increased transmission-related costs and reduced transmission
service revenues, and may be required to expand their transmission system
according to decisions made by a RTO rather than our internal planning process
once UE and CIPS begin participating in the Midwest ISO through GridAmerica. UE
and CIPS expect to begin participating in the Midwest ISO in 2004.

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

On November 17, 2003, the FERC issued an order upholding an earlier order
issued in July 2003 that will reduce UE's and CIPS', as well as other
transmission-owning utilities', "through and out" transmission revenues
effective April 1, 2004 (the April 1 effective date was changed to May 1, 2004,
by subsequent order issued by the FERC). The revenues subject to elimination by
this order are those revenues from transmission reservations that travel through
or out of UE's and CIPS' transmission system and are also used to provide
electricity to load within the Midwest ISO or PJM Interconnection LLC systems.
The magnitude of the potential net revenue reduction resulting from this order
could be up to $20 million to $25 million annually if UE and CIPS are not in a
RTO. While it is anticipated that UE's and CIPS' transmission revenues could be
reduced by these orders, transmission expenses for Genco could be reduced.
Moreover, the FERC's final order explicitly permits companies to collect the
lost "through and out" revenues through other transitional rate mechanisms.
Until it is determined when, or if, UE and CIPS will join a RTO, or the
magnitude of lost "through and out" transmission revenue recovery UE and CIPS
will receive through other rate mechanisms, UE and CIPS are unable to predict
the ultimate impact of these orders.

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

On July 31, 2002, the FERC issued its standard market design NOPR. The NOPR
proposes a number of changes to the way the current wholesale transmission
service and energy markets are operated. Specifically, the NOPR proposes that
all jurisdictional transmission facilities be placed under the control of an
independent transmission provider (similar to a RTO), proposes a new
transmission service tariff that provides a single form of transmission service
for all users of the transmission system including bundled retail load, and
proposes a new energy market and congestion management system that uses
locational marginal pricing as its basis. In our initial comments on the NOPR,
which were filed at the FERC on November 15, 2002, we expressed our concern with
the potential impact of the proposed rules in their current form on the cost and
reliability of service to retail customers. We also proposed that certain
modifications be made to the proposed rules in order to protect transmission
owners from the possibility of trapped transmission costs that might not be
recoverable from ratepayers as a result of inconsistent regulatory policies. We
filed additional comments on the remaining sections of the NOPR during the first
quarter of 2003.

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



18



Although issuance of the final rule is uncertain and its implementation
schedule is still unknown, the Midwest ISO was in the process of implementing a
separate market design similar to the proposed market design in the NOPR. In
July 2003, the Midwest ISO filed with the FERC a revised OATT codifying the
terms and conditions under which it will implement the new market design.
Thereafter, on October 17, 2003, the Midwest ISO filed a motion to withdraw its
revised OATT. On October 29, 2003, the FERC issued a series of orders granting
the motion for withdrawal of the revised OATT and providing guidance to be
followed by the Midwest ISO in developing a new energy market design in the
future. Until the FERC issues a final rule and the Midwest ISO finalizes its new
market design, we are unable to predict the ultimate impact of the NOPR or the
Midwest ISO new market design on our future financial position, results of
operations or liquidity.

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

The Ameren Companies made cash contributions totaling $25 million and $31
million to defined benefit retirement plans during 2003 and 2002, respectively.
In addition, a minimum pension liability was recorded at December 31, 2002,
which resulted in after-tax charge to OCI and a reduction in stockholders'
equity for Ameren of $102 million. At December 31, 2003, the minimum pension
liability was reduced, resulting in OCI of $46 million and an increase in
stockholders' equity. The Ameren Companies expect to be required under the ERISA
to fund an average of approximately $115 million annually from 2005 through
2008, in order to maintain minimum funding levels for our pension plans,
assuming the passage of a law which would be retroactive to January 1, 2004 to
extend the temporary interest rate relief used to calculate pension liabilities
in 2002 and 2003, that expired on December 31, 2003. These amounts are estimates
and may change based on actual stock market performance, changes in interest
rates, and any pertinent changes in government regulations, each of which could
also result in a requirement to record an additional minimum pension liability.
Furthermore, if Ameren completes its acquisition of Illinois Power, we could
incur material funding requirements with respect to Illinois Power's existing
defined benefit retirement plans.

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

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

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

o increased prices for fuel and fuel transportation as existing contracts
expire,
o facility shutdowns due to a breakdown or failure of equipment or processes
or interruptions in fuel supply,
o disruptions in the delivery of fuel and lack of adequate inventories,
o labor disputes,
o inability to comply with regulatory or permit requirements,
o disruptions in the delivery of electricity,
o increased capital expenditures requirements, including those due to
environmental regulation,
o operator error, and
o unusual or adverse weather conditions, including catastrophic events such
as fires, explosions, floods or other similar occurrences affecting
electric generating facilities.

19




A substantial portion of Genco's and CILCO's generating capacity is
committed under affiliate contracts which expire over the next several years.

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

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

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

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

Genco participates with UE in an agreement to jointly dispatch its
generating facilities with those of UE, which thereby produces benefits and
efficiencies for both generating parties. Pending or future federal and state
regulatory proceedings and policies may evolve in ways that could impact Genco's
ability to continue to participate in these affiliate transactions on current
terms.

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

As owners of non rate-regulated electric generating facilities, Genco
(4,800 megawatts) and CILCO (1,100 megawatts) will not have any recovery of
their costs or any specified rate of return set by a regulatory body. Of these
non rate-regulated electric generating facilities, approximately 3,500 megawatts
are currently under full requirements contracts with our affiliates, including
the contracts referred to in the immediately preceding risk factor. The
remainder of the generating capacity must compete for the sale of energy and
capacity. UE is currently seeking regulatory approval of the transfer by Genco
to it of approximately 550 megawatts of CTs at Pinckneyville and Kinmundy,
Illinois, which transfer is expected to occur in 2004, with the result that
those CTs will no longer be non rate-regulated.

To the extent electric capacity generated by these facilities is not under
contract to be sold, either now or in the future, the revenues and results of
operations of these non rate-regulated subsidiaries will generally depend on the
prices that they can obtain for energy and capacity in Illinois and adjacent
markets. Among the factors that could influence such prices (all of which are
beyond our control to a significant degree) are:

o the current and future market prices for natural gas, fuel oil and coal,
o current and forward prices for the sale of electricity,
o the extent of additional supplies of electric energy from current
competitors or new market entrants,


20



o the pace of deregulation in our market area and the slowing expansion of
deregulated markets,
o the regulatory and pricing structures developed for Midwest energy markets
as they continue to evolve and the pace of development of regional markets
for energy and capacity outside of bilateral contracts,
o future pricing for, and availability of, transmission services on
transmission systems, the effect of RTOs, development and export energy
transmission constraints, which could limit the ability to sell energy in
markets adjacent to Illinois,
o the rate of growth in electricity usage as a result of population changes,
regional economic conditions and the implementation of conservation
programs, and
o climate conditions prevailing in the Midwest market from time to time.

UE's ownership and operation of a nuclear generating facility creates
business, financial and waste disposal risks.

UE owns the Callaway Nuclear Plant, which represents approximately 14% of
UE's generation capability. Therefore, UE is subject to the risks of nuclear
generation, which include the following:

o the potential harmful effects on the environment and human health resulting
from the operation of nuclear facilities and the storage, handling and
disposal of radioactive materials,
o limitations on the amounts and types of insurance commercially available to
cover losses that might arise in connection with UE's nuclear operations or
those of others in the United States,
o uncertainties with respect to contingencies and assessment amounts if
insurance coverage is inadequate,
o increased public and governmental concerns over the adequacy of security at
nuclear power plants, and
o uncertainties with respect to the technological and financial aspects of
decommissioning nuclear plants at the end of their licensed lives (UE's
facility operating license for the Callaway Nuclear Plant expires in 2024).

The NRC has broad authority under federal law to impose licensing and
safety related requirements for the operation of nuclear generation facilities.
In the event of non-compliance, the NRC has the authority to impose fines or
shut down a unit, or both, depending upon its assessment of the severity of the
situation, until compliance is achieved. Revised safety requirements promulgated
by the NRC could necessitate substantial capital expenditures at nuclear plants
such as UE's. In addition, although UE has no reason to anticipate a serious
nuclear incident at its plant, if an incident did occur, it could harm UE's
results of operations or financial position. A major incident at a nuclear
facility anywhere in the world could cause the NRC to limit or prohibit the
operation or licensing of any domestic nuclear unit.

Our energy risk management strategies may not be effective in managing fuel
and electricity pricing risks, which could result in unanticipated liabilities
to us or increased volatility of our earnings.

We are exposed to changes in market prices for natural gas, fuel,
electricity and emission credits. Prices for natural gas, fuel, electricity and
emission credits may fluctuate substantially over relatively short periods of
time and expose us to commodity price risk. We utilize derivatives such as
forward contracts, futures contracts, options and swaps to manage these risks.
We attempt to manage our exposure from these activities through enforcement of
established risk limits and risk management procedures. We cannot assure you
that these strategies will be successful in managing our pricing risk, or that
they will not result in net liabilities to us as a result of future volatility
in these markets.

In addition, although we routinely enter into contracts to offset our
positions (i.e., to hedge our exposure to the risks of demand, market effects of
weather and changes in commodity prices), we do not always hedge the entire
exposure of our operations from commodity price volatility. Furthermore, our
ability to hedge our exposure to commodity price volatility depends on liquid
commodity markets. As a result, to the extent the commodity markets are
illiquid, we may not be able to execute our risk management strategies, which
could result in greater open positions than we would prefer at a given time. To
the extent that open positions exist, fluctuating commodity prices can improve
or diminish our financial results and financial position.

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

We rely on access to short-term and long-term capital markets as a
significant source of liquidity and funding for capital requirements not
satisfied by our operating cash flows. The inability to raise capital on
favorable terms,

21


particularly during times of uncertainty in the capital markets, could
negatively impact our ability to maintain and grow our businesses. Based on our
current credit ratings, we believe that we will continue to have access to the
capital markets. However, events beyond our control may create uncertainty in
the capital markets such that our cost of capital would increase or our ability
to access the capital markets would be adversely affected.


OPERATING STATISTICS

The following tables present key electric and natural gas operating
statistics for Ameren for the last five years. CILCORP and CILCO are included
only for the period after January 31, 2003.



===================================================================================================================
Electric Operating Statistics
Year Ended December 31, 2003 2002 2001 2000 1999
-------------------------------------------------------------------------------------------------------------------

Electric operating revenues (millions)
Residential............................. $ 1,247 $ 1,202 $ 1,133 $ 1,142 $ 1,097
Commercial.............................. 1,115 1,024 1,020 997 956
Industrial.............................. 733 511 541 505 505
Wholesale............................... 295 291 236 208 108
Other................................... 25 23 23 24 24
-------------------------------------------------------------------------------------------------------------------
Native................................ 3,415 3,051 2,953 2,876 2,690
Interchange............................. 295 200 309 477 399
EEI..................................... 134 185 110 164 177
Miscellaneous........................... 93 84 125 74 72
Credit to (from) customers.............. - - 10 (65) (38)
-------------------------------------------------------------------------------------------------------------------
Total electric operating revenues........... $ 3,937 $ 3,520 $ 3,507 $ 3,526 $ 3,300
-------------------------------------------------------------------------------------------------------------------
Kilowatthour sales (millions)
Residential............................. 17,673 16,704 15,678 15,683 14,863
Commercial.............................. 18,821 17,224 16,873 16,644 15,418
Industrial.............................. 17,685 12,442 13,175 11,914 11,549
Wholesale............................... 8,770 8,936 6,992 6,244 3,002
Other................................... 309 280 284 307 303
-------------------------------------------------------------------------------------------------------------------
Native................................ 63,258 55,586 53,002 50,792 45,135
Interchange............................. 9,268 8,165 10,130 14,679 12,371
EEI..................................... 5,255 6,588 5,824 6,914 9,270
-------------------------------------------------------------------------------------------------------------------
Total kilowatthour sales.................... 77,781 70,339 68,956 72,385 66,776
-------------------------------------------------------------------------------------------------------------------
Electric customers (end of year in thousands)
Residential............................. 1,517 1,319 1,312 1,307 1,298
Commercial.............................. 215 194 192 191 187
Industrial.............................. 7 6 6 6 6
Wholesale and other..................... 5 4 4 4 4
-------------------------------------------------------------------------------------------------------------------
Total electric customers.................... 1,744 1,523 1,514 1,508 1,495
-------------------------------------------------------------------------------------------------------------------
Residential customer data (average)
Kilowatthours used per customer......... 11,648 11,680 11,956 12,579 11,827
Annual electric bill per customer....... $ 821.84 $ 848.06 $ 869.25 $ 895.20 $ 859.53
Revenue per kilowatthour (cents)........ 7.06 7.26 7.27 7.12 7.27
Capability at time of peak, including net
purchases and sales (megawatts)
UE...................................... 9,022 9,765 9,747 9,359 9,141
Genco/CIPS(a)........................... 4,429 4,223 3,549 3,560 2,556
CILCO................................... 1,355 - - - -
Generating capability at time of peak
(megawatts)
UE...................................... 8,298 8,647 8,618 8,320 8,352
Genco/CIPS(a)........................... 4,452 4,327 3,945 3,443 3,027
CILCO................................... 1,230 - - - -
Coal burned (millions of tons).............. 31.0 27.1 24.5 25.3 23.6
Price per ton of coal (average)............. $ 19.36 $ 18.06 $ 18.88 $ 18.94 $ 20.34
-------------------------------------------------------------------------------------------------------------------

22




-------------------------------------------------------------------------------------------------------------------
Electric Operating Statistics
Year Ended December 31, 2003 2002 2001 2000 1999
-------------------------------------------------------------------------------------------------------------------
Source of energy supply
Fossil.................................. 77.5% 74.3% 72.3% 83.2% 85.4%
Nuclear................................. 11.9 12.4 11.6 18.8 17.9
Hydro................................... 0.9 1.7 1.4 1.6 3.1
Purchased and interchanged, net......... 9.7 11.6 14.7 (3.6) (6.4)
-------------------------------------------------------------------------------------------------------------------
100.0% 100.0% 100.0% 100.0% 100.0%
===================================================================================================================
(a) Genco commenced operations on May 1, 2000, when CIPS transferred its
five coal-fired power plants to Genco at historical net book value.

===================================================================================================================
Gas Operating Statistics
Year Ended December 31, 2003 2002 2001 2000 1999
-------------------------------------------------------------------------------------------------------------------
Natural gas operating revenues (millions)
Residential....................................... $ 343 $ 192 $ 187 $ 204 $ 146
Commercial........................................ 142 75 83 69 52
Industrial........................................ 123 37 40 17 18
Off-system sales.................................. 6 4 6 18 4
Other............................................. 34 7 26 16 8
-------------------------------------------------------------------------------------------------------------------
Total natural gas operating revenues.................. $ 648 $ 315 $ 342 $ 324 $ 228
-------------------------------------------------------------------------------------------------------------------
MMBtu sales (thousands of MMBtus)
Residential....................................... 35 21 19 25 21
Commercial........................................ 16 9 9 9 8
Industrial........................................ 20 8 7 3 4
Off-system sales.................................. 1 1 1 4 1
-------------------------------------------------------------------------------------------------------------------
Total MMBtu sales (thousands of MMBtus)............... 72 39 36 41 34
-------------------------------------------------------------------------------------------------------------------
Natural gas customers (end of year in thousands)
Residential....................................... 466 270 269 270 267
Commercial and industrial......................... 49 30 30 31 30
-------------------------------------------------------------------------------------------------------------------
Total natural gas customers........................... 515 300 299 301 297
-------------------------------------------------------------------------------------------------------------------
Peak day throughput (thousands of MMBtus)
UE................................................ 188 159 160 179 184
CIPS.............................................. 282 232 221 249 285
CILCO(a).......................................... 301 - - - -
-------------------------------------------------------------------------------------------------------------------
Total peak day throughput............................. 771 391 381 428 469
===================================================================================================================
(a) Represents peak day throughput since the acquisition date of January
31, 2003. CILCO's peak day throughput in January 2003 was 404.



AVAILABLE INFORMATION

The Ameren Companies make available free of charge through Ameren's
Internet website (http://www.ameren.com) their annual report on Form 10-K,
quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments
to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the
Exchange Act as soon as reasonably practicable after such reports are
electronically filed with, or furnished to, the SEC. Prior to the quarterly
report on Form 10-Q for the period ended September 30, 2003, separate filings
were made by each Registrant, except CILCORP and CILCO, which made a combined
filing. Ameren and its subsidiaries changed to a combined filing in order to
improve disclosure and to simplify administrative processes.

The Ameren Companies also make available free of charge through Ameren's
Internet website (http://www.ameren.com) the charters of the Board of Directors
Audit Committee, Human Resources Committee and Nominating and Corporate
Governance Committee and the corporate governance guidelines, shareholder
communications policy and director nomination policy which apply to the Ameren
Companies. These documents are also available in print upon written request to
Ameren Corporation, Attention: Secretary, P.O. Box 66149, St. Louis, Missouri
63166-6149.



23


ITEM 2. PROPERTIES.

For information on our principal properties, planned additions or
replacements and transfers, see the generating facilities table below and
Liquidity and Capital Resources and Regulatory Matters in Management's
Discussion and Analysis of Financial Condition and Results of Operations under
Part II, Item 7 of this report and Note 3 - Rate and Regulatory Matters, Note 6
- - Long-term Debt and Equity Financings and Note 15 - Commitments and
Contingencies to our financial statements under Part II, Item 8 of this report.

UE, CIPS and CILCO are members of MAIN, which is one of the ten regional
electric reliability councils organized for coordinating the planning and
operation of the nation's bulk power supply. MAIN operates in Illinois and
portions of Michigan, Wisconsin, Iowa, Minnesota and Missouri. UE, CIPS and
CILCO provided formal written notice to the MAIN Board of Directors on June 23,
2003 of their intent to withdraw from MAIN effective January 1, 2005. These
Ameren companies intend to join another Regional Reliability Organization prior
to their withdrawal from MAIN becoming effective. Until their withdrawal is
effective, they will continue to honor all of their obligations as members of
MAIN. If these Ameren companies do not join another Regional Reliability
Organization, they may withdraw their notice of intent to withdraw from MAIN.

The bulk power system of UE, CIPS and Genco is operated as an Ameren-wide
control area and transmission system under the FERC-approved amended joint
dispatch agreement. The amended joint dispatch agreement provides a basis upon
which UE and Genco can participate in the coordinated operation of CIPS' and
UE's transmission facilities with UE's and Genco's generating facilities in
order to achieve economies consistent with the provision of reliable electric
service and an equitable sharing of the benefits and costs of that coordinated
operation. In 2003, we had a minimum of 24 direct connections with other control
areas and the exchange of electric energy, directly and through the facilities
of others. CILCO continues to operate as a separate control area. As such, its
generating plants and those of its subsidiary, AERG, have not been jointly
dispatched with the generating plants owned by UE and Genco. CILCO is a
transmission owning member of the Midwest ISO and has transferred functional
control of its system to the Midwest ISO. Transmission service on the CILCO
transmission system is provided pursuant to the terms of the Midwest ISO OATT on
file with the FERC. For information on CIPS' and UE's participation in the
Midwest ISO, see Note 3 - Rate and Regulatory Matters to our financial
statements under Part II, Item 8 of this report.

The following table presents information with respect to our electric
generating facilities and capability at the time of our expected 2004 peak
summer electrical demand:


======================================================================================================================
Primary Name Net Kilowatt Net Heat
Fuel Source of Plant Location Capability(a) Rate(b)
- ----------------------------------------------------------------------------------------------------------------------

UE:
Coal...................... Labadie Franklin County, MO 2,421,000 9,987
Rush Island Jefferson County, MO 1,194,000 10,325
Sioux St. Charles County, MO 978,000 9,725
Meramec St. Louis County, MO 821,000 11,114
- ----------------------------------------------------------------------------------------------------------------------
Total coal................ 5,414,000
- ----------------------------------------------------------------------------------------------------------------------
Nuclear................... Callaway Callaway County, MO 1,137,000 10,461
- ----------------------------------------------------------------------------------------------------------------------
Hydro..................... Osage Lakeside, MO 226,000 n/a
Keokuk Keokuk, IA 134,000 n/a
- ----------------------------------------------------------------------------------------------------------------------
Total hydro............... 360,000
- ----------------------------------------------------------------------------------------------------------------------
Pumped-storage............ Taum Sauk Reynolds County, MO 440,000 n/a
Oil (CTs)................. Fairgrounds Jefferson City, MO 55,000 11,100
Meramec St. Louis County, MO 55,000 11,100
Mexico Mexico, MO 55,000 11,100
Moberly Moberly, MO 55,000 11,100
Moreau Jefferson City, MO 55,000 11,100
Howard Bend St. Louis County, MO 43,000 11,899
Venice Venice, IL 25,000 14,380
- ----------------------------------------------------------------------------------------------------------------------
Total oil................. 343,000
- ----------------------------------------------------------------------------------------------------------------------
24



- ----------------------------------------------------------------------------------------------------------------------
Primary Name Net Kilowatt Net Heat
Fuel Source of Plant Location Capability(a) Rate(b)
- ----------------------------------------------------------------------------------------------------------------------
Natural gas (CTs)......... Peno Creek(c) Bowling Green, MO 188,000 9,379
Meramec St. Louis County, MO 53,000 12,031
Venice(d) Venice, IL 48,000 10,765
Viaduct Cape Girardeau, MO 25,000 15,137
Kirksville Kirksville, MO 13,000 18,811
- ----------------------------------------------------------------------------------------------------------------------
Total natural gas......... 327,000
- ----------------------------------------------------------------------------------------------------------------------
Total..................... 8,021,000(e)
======================================================================================================================
EEI:
Joppa Generating
Coal...................... Station Joppa, IL 600,000 10,490
Natural gas (CTs)......... Joppa Joppa, IL 44,000 12,200
- ----------------------------------------------------------------------------------------------------------------------
Total..................... 644,000(f)
======================================================================================================================
Genco:
Coal...................... Newton Newton, IL 1,126,000 10,310
Coffeen Coffeen, IL 900,000 10,250
Meredosia Meredosia, IL 327,000 12,070
Hutsonville Hutsonville, IL 153,000 10,179
- ----------------------------------------------------------------------------------------------------------------------
Total coal................ 2,506,000
- ----------------------------------------------------------------------------------------------------------------------
Oil....................... Meredosia Meredosia, IL 186,000 10,914
Hutsonville
(Diesel) Hutsonville, IL 3,000 11,408
- ----------------------------------------------------------------------------------------------------------------------
Total oil................. 189,000
- ----------------------------------------------------------------------------------------------------------------------
Natural gas (CTs)......... Grand Tower Grand Tower, IL 516,000 7,883
Elgin Elgin, IL 452,000 11,489
Pinckneyville Pinckneyville, IL 320,000 11,511
Gibson City(d) Gibson City, IL 232,000 11,892
Kinmundy(d) Kinmundy, IL 232,000 12,053
Joppa 7B(g) Joppa, IL 162,000 11,500
Columbia(h) Columbia, MO 140,000 12,298
- --------------------------------------------------------------------------------------------------------------------
Total natural gas......... 2,054,000
- --------------------------------------------------------------------------------------------------------------------
Total..................... 4,749,000(e)
====================================================================================================================
CILCO:
Coal...................... E.D. Edwards(i) Bartonville, IL 744,000 9,932
Duck Creek(i) Canton, IL 355,000 10,092
- --------------------------------------------------------------------------------------------------------------------
Total coal................ 1,099,000
- --------------------------------------------------------------------------------------------------------------------
Oil....................... Hallock Peoria, IL 12,800 10,388
Kickapoo Lincoln, IL 12,800 10,388
- --------------------------------------------------------------------------------------------------------------------
Total oil................. 25,600
- --------------------------------------------------------------------------------------------------------------------
Natural gas............... Sterling Avenue(i) Peoria, IL 30,000 14,385
Indian Trails Pekin, IL 10,000 5,279
- --------------------------------------------------------------------------------------------------------------------
Total natural gas......... 40,000
- --------------------------------------------------------------------------------------------------------------------
Total..................... 1,164,600
====================================================================================================================
Medina Valley:
Natural gas............... Medina Valley Mossville, IL 44,000 5,990
====================================================================================================================
(a) "Net Kilowatt Capability" represents generating capacity available for
dispatch from the facility into the electric transmission grid.
(b) "Net Heat Rate" represents the amount of energy to produce a given
unit of output and is expressed as BTU per kilowatthour.
(c) For information regarding a lease arrangement applicable to these CTs,
see Note 6 - Long-term Debt and Equity Financings to our financial
statements under Part II, Item 8 of this report.
(d) CT has the capability of operating on either oil or natural gas (dual
fuel).
(e) Approximately 550 megawatts of generating capacity (Pinckneyville and
Kinmundy) are expected to be sold by Genco to UE subject to receipt of
necessary regulatory approvals.
(f) This amount represents Ameren's 60% interest in EEI. See Note 1 -
Summary of Significant Accounting Policies to our financial statements
under Part II, Item 8 of this report.


25



(g) These CTs are owned by Genco and leased to its parent, Development
Company. The operating lease is for a minimum term of 15 years
expiring September 30, 2015. Genco receives rental payments under the
lease in fixed monthly amounts that vary over the term of the lease
and range from $0.8 - $1.0 million.
(h) Genco has granted the City of Columbia, Missouri options to purchase
an undivided ownership interest in these facilities which would result
in a sale of up to 72 megawatts (about 50%) of the facilities. The
City can exercise one option for 36 megawatts at the end of 2010 for a
purchase price of $15.5 million, at the end of 2014 for a purchase
price of $9.5 million and at the end of 2020 for a purchase price of
$4 million and the other option for another 36 megawatts at the end of
2013 for a purchase price of $15.5 million, at the end of 2017 for a
purchase price of $9.5 million and at the end of 2023 for a purchase
price of $4 million. A power purchase agreement pursuant to which the
City is purchasing up to 72 megawatts of capacity and energy generated
by these facilities from Marketing Company will terminate if the City
exercises the purchase options.
(i) These facilities were contributed by CILCO to AERG in October 2003.
See Note 1 - Summary of Significant Accounting Policies to our
financial statements under Part II, Item 8 of this report.



As of December 31, 2003, UE owned approximately 3,200 circuit miles of
electric transmission lines and operated two propane-air plants and 2,950 miles
of natural gas transmission and distribution mains. As of December 31, 2003,
CIPS owned approximately 1,900 circuit miles of electric transmission lines and
operated one propane-air plant, three underground gas storage fields and
approximately 4,975 miles of natural gas transmission and distribution mains. As
of December 31, 2003, CILCO owned approximately 333 circuit miles of electric
transmission lines. CILCO operates two underground gas storage fields and
approximately 3,757 miles of gas transmission and distribution mains. Other
properties of the companies include distribution lines, underground cables,
office buildings, warehouses, garages and repair shops.

We have fee title to all principal plants and other important units of
property, and to the real property on which such facilities are located (subject
to mortgage liens securing our outstanding first mortgage bond indebtedness and
to certain permitted liens and judgment liens), except that:

o A portion of UE's Osage Plant reservoir, certain facilities at UE's Sioux
Plant, most of UE's Peno Creek CT facility, Genco's Columbia CT facility,
certain of Ameren's substations and most of our transmission and
distribution lines and gas mains are situated on lands occupied under
leases, easements, franchises, licenses or permits;
o The United States and/or the State of Missouri own, or have or may have,
paramount rights to certain lands lying in the bed of the Osage River or
located between the inner and outer harbor lines of the Mississippi River,
on which certain of UE's generating and other properties are located; and
o The United States and/or the State of Illinois and/or the State of Iowa
and/or the City of Keokuk, Iowa own or have or may have, paramount rights
with respect to certain lands lying in the bed of the Mississippi River on
which a portion of UE's Keokuk Plant is located.

Substantially all of the properties and plant of UE, CIPS and CILCO are
subject to the direct first liens of the indentures securing their first
mortgage bonds. On May 1, 2000, CIPS transferred all of its generating
facilities and related assets to Genco. As a part of this transfer, CIPS'
generating property and plant were released from the lien of the indenture
securing its first mortgage bonds, and such property and plant are presently
unencumbered. On October 3, 2003, CILCO transferred substantially all of its
generating property and plant to its non rate-regulated electric generating
subsidiary, AERG. As part of the transfer, CILCO's transferred generating
property and plant was released from the lien of the indenture securing its
first mortgage bonds. During 2004, UE plans to transfer its Illinois electric
and gas transmission and distribution properties to CIPS. As a part of the
transfer, UE's Illinois electric and gas transmission and distribution
properties will be released from the lien of the indenture securing its first
mortgage bonds and will become encumbered by the direct first lien of the
indenture securing CIPS first mortgage bonds.

In December 2002, UE conveyed most of its Peno Creek CT facility to the
City of Bowling Green, Missouri, and leased back the facility from the city for
a 20 year term. As a part of the transaction, most of UE's Peno Creek property
and plant was released from the lien of the indenture securing UE's first
mortgage bonds. Under the terms of this capital lease, UE retains all operation
and maintenance responsibilities for the facility and ownership of the facility
is returned to UE at the expiration of the lease. When ownership of the Peno
Creek facility is returned to UE by the City, the property and plant may again
become encumbered by the direct first lien of any outstanding UE first mortgage
bond indenture.

Ameren indirectly owns 60% of the common stock of EEI, which operates
electric generation and transmission facilities in Illinois. UE owns 40% of the
common stock of EEI, and Resources Company owns 20% of such stock. On April 30,
2002, CIPS transferred its 20% common stock interest in EEI to Ameren in the
form of a non-cash dividend of

26


common stock in EEI. The book value of CIPS investment in EEI was $1.8 million.
Subsequently, Ameren contributed such stock to Resources Company. This transfer
completed the process of achieving a full divestiture of all electric generating
capacity that had been owned directly or indirectly by CIPS pursuant to
restructuring of the Illinois power industry. On February 2, 2004, Ameren
entered into a definitive agreement to purchase a 20% interest in EEI from
Dynegy, which upon closing, will be registered in the name of Resources Company.
See Note 2 - Acquisitions to our financial statements under Part II, Item 8 of
this report for further information on the acquisition of Illinois Power and the
20% interest in EEI. The remaining 20% of the common stock of EEI is held by
Kentucky Utilities Company.


ITEM 3. LEGAL PROCEEDINGS.

We are 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. We believe that the final
disposition of these proceedings, except as otherwise disclosed in this report,
will not have a material adverse effect on our financial position, results of
operations or liquidity. Risk of loss is mitigated, in some cases, by insurance
or contractual or statutory indemnification. We believe we have established
appropriate reserves for potential losses.

For additional information on legal and administrative proceedings, see
Rates and Regulation under Item 1. Business above, Liquidity and Capital
Resources and Regulatory Matters in Management's Discussion and Analysis of
Financial Condition and Results of Operations under Part II, Item 7 of this
report and Note 3 - Rate and Regulatory Matters and Note 15 - Commitments and
Contingencies to our financial statements under Part II, Item 8 of this report.


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

There were no matters submitted to a vote of security holders during the
fourth quarter of 2003 with respect to any of the Ameren Companies.


EXECUTIVE OFFICERS OF THE REGISTRANTS (ITEM 401(b) OF REGULATION S-K):



Date First Elected
Age at Present Position and or Appointed to
Name 12/31/03 Business Experience Present Position
---- -------- -------------------- -----------------
Ameren:

Gary L. Rainwater 57 Chairman, Chief Executive Officer, 01/01/04
President 08/30/01
and Director 10/10/03
Mr. Rainwater began his career with UE in 1979 as an engineer. He was elected
Vice President - Corporate Planning in 1993. Mr. Rainwater was elected Executive
Vice President of CIPS in January 1997 and was named to his position as
President and Chief Executive Officer of CIPS in December 1997. He was elected
President of Resources Company in 1999 and Genco in 2000. He was elected
President and Chief Operating Officer of Ameren, UE and Ameren Services in
August 2001 at which time he relinquished his position as President of Resources
Company and Genco. In January 2003, Mr. Rainwater was named President and Chief
Executive Officer of CILCORP and CILCO upon Ameren's acquisition of those
companies. Effective January 1, 2004, Mr. Rainwater became Chairman and Chief
Executive Officer of Ameren, UE and Ameren Services, in addition to his position
of President, succeeding Charles W. Mueller who retired on December 31, 2003. At
that time, he was also elected Chairman of CILCORP and CILCO in addition to his
position as President and Chief Executive Officer.

Warner L. Baxter 42 Executive Vice President
and Chief Financial Officer 10/10/03
From 1983 to 1995, Mr. Baxter was employed by Price Waterhouse (now
PricewaterhouseCoopers LLP). Mr. Baxter joined UE in 1995 as Assistant
Controller. He was promoted to Controller of UE in 1996 and was elected Vice
President and Controller of UE and Ameren in 1998. Mr. Baxter was elected Vice
President and Controller of CIPS and Genco in 1999 and 2000, respectively. He
was elected Senior Vice President - Finance of Ameren, UE, CIPS and Genco in
2001. In January 2003, Mr. Baxter was elected Senior Vice President of CILCORP
and CILCO upon Ameren's acquisition of those companies. Mr. Baxter was elected
to his present position at Ameren, UE, CIPS, Genco, CILCORP and CILCO in October
2003.

27



Steven R. Sullivan 43 Senior Vice President
Governmental/Regulatory Policy, 10/10/03
General Counsel 07/01/98
and Secretary 09/01/98
Mr. Sullivan was elected Vice President, General Counsel and Secretary of
Ameren, UE and CIPS in 1998 and at Genco in 2000. In January 2003, Mr. Sullivan
was elected Vice President, General Counsel and Secretary of CILCORP and CILCO
upon Ameren's acquisition of those companies. He was elected to his present
position at Ameren, UE, CIPS, Genco, CILCORP and CILCO in October 2003. Mr.
Sullivan was previously employed by Anheuser Busch Companies, Inc. as an
attorney from 1995 to 1998.

Jerre E. Birdsong 49 Vice President 10/12/01
and Treasurer 04/23/96
Mr. Birdsong joined UE in 1977 as an economist. He was promoted to Assistant
Treasurer in 1984, Manager of Finance in 1989 and in 1993 was appointed as
Treasurer of UE. He was elected Treasurer of Ameren, CIPS and Genco in 1996,
1997 and 2000, respectively. In addition to being Treasurer, he was elected to
the position of Vice President in 2001 at Ameren, UE, CIPS and Genco. Mr.
Birdsong was elected Vice President and Treasurer of CILCORP and CILCO in 2003
upon Ameren's acquisition of those companies.

Martin J. Lyons 37 Vice President 02/14/03
and Controller 10/22/01
Mr. Lyons was appointed Controller of Ameren, UE, CIPS and Genco in October
2001. He was elected Controller of CILCORP and CILCO in January 2003 upon
Ameren's acquisition of those companies. In addition to being Controller, he was
elected to the position of Vice President of Ameren, UE, CIPS and Genco in
February 2003. He was previously employed by PricewaterhouseCoopers LLP for 13
years, most recently as a partner.

UE:

Gary L. Rainwater 57 Chairman, Chief Executive Officer, 01/01/04
President 08/30/01
and Director 04/28/98
(see above)

Warner L. Baxter 42 Executive Vice President, Chief
Financial Officer 10/10/03
and Director 04/22/99
(see above)

Daniel F. Cole 50 Senior Vice President 07/12/99
UE employed Mr. Cole in 1976 as an engineer. He was named UE's Manager -
Resource Planning in 1996 and General Manager--Corporate Planning in 1997. In
1998, Mr. Cole was elected as Vice President of Corporate Planning of Ameren
Services. He was elected Senior Vice President at UE and Ameren Services in 1999
and at CIPS in 2001. He was elected President of Genco in 2001 and relinquished
that position in 2003. Mr. Cole was elected Senior Vice President at CILCORP and
CILCO in 2003 upon Ameren's acquisition of those companies.


Garry L. Randolph 55 Senior Vice President 10/16/00
and Director 10/10/03
Mr. Randolph was employed by UE in 1977 as an engineer and elected Vice
President, Nuclear Operations in 1992, Vice President and Chief Nuclear Officer
in 1997 and Senior Vice President and Chief Nuclear Officer in 2000. In 2001, he
was elected Senior Vice President at CIPS and Genco. Mr. Randolph was elected
Senior Vice President of CILCORP and CILCO in 2003 upon Ameren's acquisition of
those companies.

Steven R. Sullivan 43 Senior Vice President
Governmental/Regulatory Policy, 10/10/03
General Counsel, 07/01/98
Secretary 09/01/98
and Director 01/01/04
(see above)


28


Thomas R. Voss 56 Senior Vice President 06/01/99
and Director 10/25/01
Mr. Voss began his career with UE in 1969 as an engineer. After four years of
military service, he returned to UE and from 1973 to 1998, held various
positions including district manager and distribution operating manager. Mr.
Voss was elected Vice President of CIPS in 1998 and Senior Vice President of UE
and CIPS in 1999. He was elected Senior Vice President of CILCORP and CILCO in
2003 upon Ameren's acquisition of those companies. In October 2003, Mr. Voss was
elected President of Genco, Resources Company, Marketing Company, AFS, Ameren
Energy and AERG.

David A. Whiteley 47 Senior Vice President 08/30/01
and Director 04/22/03
Mr. Whiteley began his career with UE in 1978 as an engineer and in 1993 was
named manager of transmission planning and later manager of electrical
engineering and transmission planning. In 2000, Mr. Whiteley was elected Vice
President of Ameren Services responsible for engineering and construction and
later energy delivery technical services. He was elected Senior Vice President
of UE and CIPS in August 2001 and of Genco in October 2001. He was elected
Senior Vice President of CILCORP and CILCO in January 2003 upon Ameren's
acquisition of those companies.

Ronald D. Affolter 50 Vice President - Nuclear 10/16/00
Mr. Affolter joined UE in 1981 as a systems engineer at its Callaway Nuclear
Plant. He later held the positions of Superintendent - Systems Engineering and
Manager-Callaway Plant. He was elected Vice President - Nuclear in 2000.


Jerre E. Birdsong 49 Vice President 10/12/01
and Treasurer 07/01/93
(see above)


Martin J. Lyons 37 Vice President 02/14/03
and Controller 10/22/01
(see above)

Charles D. Naslund 51 Vice President 02/01/99
Mr. Naslund joined UE in 1974 as an assistant engineer in Engineering and
Construction. He became manager, Nuclear Operations Support in 1986 and in 1991
was named manager, Nuclear Engineering. He was elected to Vice President Power
Operations at UE in 1999.


Gregory L. Nelson 46 Vice President 12/11/03
Mr. Nelson joined UE in 1995 as manager of the tax department. He was elected
Vice President of Ameren Services in 1999 and Vice President of UE, CIPS, Genco,
CILCORP and CILCO in 2003. From 1988 through 1995, Mr. Nelson was associated
with the Washington, D.C. office of the law firm Reid & Priest (now Thelen Reid
& Priest LLP), where he represented investor-owned electric utilities and the
Edison Electric Institute. From 1984 through 1988, he served as a trial attorney
with the Tax Division of the DOJ.


Ronald C. Zdellar 59 Vice President 09/01/02
Mr. Zdellar joined UE in 1971 as Assistant Engineer. In 1988, he became Vice
President, Transmission and Distribution and in 1995 he became Vice President,
Customer Services - UE. After the merger of UE and CIPSCO, in 1997, Mr. Zdellar
was elected Vice President of Ameren Services. He assumed the position of Vice
President, Energy Delivery - Distribution Services/UE in 2002.

CIPS:

Gary L. Rainwater 57 President, Chief Executive Officer
and Director 12/02/97
(see above)

29



Warner L. Baxter 42 Executive Vice President, Chief
Financial Officer 10/10/03
and Director 04/22/99
(see above)

Daniel F. Cole 50 Senior Vice President 10/12/01
and Director 10/10/03
(see above)

Garry L. Randolph 55 Senior Vice President 10/12/01
(see above)

Steven R. Sullivan 43 Senior Vice President
Governmental/Regulatory Policy, 10/10/03
General Counsel, Secretary 11/07/98
and Director 01/01/04
(see above)

Thomas R. Voss 56 Senior Vice President 06/01/99
and Director 10/12/01
(see above)

David A. Whiteley 47 Senior Vice President 10/12/01
and Director 04/22/03
(see above)

Jerre E. Birdsong 49 Vice President 10/12/01
and Treasurer 12/31/97
(see above)

J. L. Davis 56 Vice President 02/01/03
Mr. Davis joined CIPS in 1972 as Assistant Engineer in the Gas Department and
held various other positions until being named Manager of the Gas Department in
1989. In 1997, Mr. Davis was named Vice President Gas Operations and Engineering
Support for Ameren Services. In 2003, Mr. Davis was elected Vice President of
CIPS.

Martin J. Lyons 37 Vice President 02/14/03
and Controller 10/22/01
(see above)

Craig D. Nelson 50 Vice President 04/28/98
Mr. Nelson joined CIPS in 1979 as a tax accountant and was later promoted to
income tax supervisor. He assumed positions of increasing responsibility and
became Treasurer and Assistant Secretary in 1989 and Vice President, Corporate
Services in 1996, which position he later relinquished. He served as Vice
President, Merger Coordination at Ameren Services and CIPS in 1998. He was
elected Vice President, Corporate Planning, Ameren Services in 1999.

Gregory L. Nelson 46 Vice President 12/11/03
(see above)

Genco:

Thomas R. Voss 56 President
and Director 10/10/03
(see above)

Warner L. Baxter 42 Executive Vice President, Chief
Financial Officer 10/10/03
and Director 04/22/99
(see above)

30




R. Alan Kelley 51 Senior Vice President 03/02/00
Mr. Kelley began his career with UE in 1974 as an engineer. He was named UE's
Manager of Corporate Planning in 1985 and Vice President of Energy Supply in
1988. Mr. Kelley was elected Senior Vice President of Genco in 2000. He was
elected Senior Vice President at CILCO in January 2003 upon Ameren's acquisition
of that company.

Garry L. Randolph 55 Senior Vice President 10/12/01
(see above)

Steven R. Sullivan 43 Senior Vice President
Governmental/Regulatory Policy, 10/10/03
General Counsel, Secretary 03/02/00
and Director 01/01/04
(see above)

David A. Whiteley 47 Senior Vice President
and Director 10/12/01
(see above)

Jerre E. Birdsong 49 Vice President 10/12/01
and Treasurer 03/02/00
(see above)

Martin J. Lyons 37 Vice President 02/14/03
and Controller 10/22/01
(see above)

Gregory L. Nelson 46 Vice President 12/11/03
(see above)

Robert L. Powers 55 Vice President 07/05/00
Mr. Powers began his career with UE in 1976 as an engineer. He was named
Supervising Engineer in 1977, Superintendent in 1985, Assistant Manager in 1990,
and Manager in 1995. In 2000, Mr. Powers was elected Vice President of Genco.
Also in 2000, he was elected President of EEI.

Jerry L. Simpson 47 Vice President 03/02/00
Mr. Simpson began his career with CIPS in 1978 as an engineer at Newton Power
Station. He held various positions until being named Manager of Meredosia Power
Station in 1994. Mr. Simpson was elected Vice President of CIPS in 1999. In
2000, Mr. Simpson was elected Vice President of Genco with the formation of that
company.

CILCORP:

Gary L. Rainwater 57 Chairman, 01/01/04
President,
Chief Executive Officer
and Director 01/31/03
(see above)

Warner L. Baxter 42 Executive Vice President and Chief
Financial Officer 10/10/03
and Director 01/31/03
(see above)

Daniel F. Cole 50 Senior Vice President 01/31/03
and Director 10/10/03
(see above)



31


Garry L. Randolph 55 Senior Vice President 01/31/03
(see above)

Steven R. Sullivan 43 Senior Vice President
Governmental/Regulatory Policy, 10/10/03
General Counsel, Secretary 01/31/03
and Director 01/01/04
(see above)

Thomas R. Voss 56 Senior Vice President
and Director 01/31/03
(see above)

David A. Whiteley 47 Senior Vice President 01/31/03
and Director
(see above)

Jerre E. Birdsong 49 Vice President
and Treasurer 01/31/03
(see above)

Martin J. Lyons 37 Vice President 02/14/03
and Controller 01/31/03
(see above)

Gregory L. Nelson 46 Vice President 12/11/03
(see above)

CILCO:

Gary L. Rainwater 57 Chairman, 01/01/04
President,
Chief Executive Officer
and Director 01/31/03
(see above)

Warner L. Baxter 42 Executive Vice President and Chief
Financial Officer 10/10/03
and Director 01/31/03
(see above)

Daniel F. Cole 50 Senior Vice President 01/31/03
and Director 10/10/03
(see above)

R. Alan Kelley 51 Senior Vice President 01/31/03
(see above)

Garry L. Randolph 55 Senior Vice President 01/31/03
(see above)

Steven R. Sullivan 43 Senior Vice President
Governmental/Regulatory Policy, 10/10/03
General Counsel, Secretary 01/31/03
and Director 01/01/04
(see above)

32

Thomas R. Voss 56 Senior Vice President
and Director 01/31/03
(see above)

David A. Whiteley 47 Senior Vice President 01/31/03
(see above)

Jerre E. Birdsong 49 Vice President
and Treasurer 01/31/03
(see above)

Scott A. Cisel 50 Vice President and Chief Operating
Officer 01/31/03
and Director 10/18/99
Mr. Cisel is Vice President and Chief Operating Officer for CILCO, a position he
assumed in 2003 upon Ameren's acquisition of CILCO after serving as Senior Vice
President. Mr. Cisel has held various management positions at CILCO in sales,
customer services and district operations, including service as manager of
Commercial Office Operations in 1981, manager of Consumer and Energy Services in
1984, manager of Rates, Sales and Customer Service in 1988, director of
Corporate Sales in 1993 and from 1995 to 2001, Vice President, at first managing
Sales and Marketing, then Legislative and Public Affairs and later Sales,
Marketing and Trading. In April 2001, he was named senior vice president.

Martin J. Lyons 37 Vice President 02/14/03
and Controller 01/31/03
(see above)

Gregory L. Nelson 46 Vice President 12/11/03
(see above)

OTHER SIGNIFICANT AMEREN SUBSIDIARIES:

Ameren Services:

Gary L. Rainwater 57 Chairman, Chief Executive Officer, 01/01/04
President 08/30/01
and Director 04/25/00

Warner L. Baxter 42 Executive Vice President, Chief
Financial Officer 10/10/03
and Director 04/25/00

Daniel F. Cole 50 Senior Vice President 06/01/99
and Director 10/10/03

Steven R. Sullivan 43 Senior Vice President
Governmental/Regulatory Policy 10/10/03
General Counsel, 07/01/98
Secretary 09/01/98
and Director 01/01/04

Thomas R. Voss 56 Senior Vice President 06/01/99
and Director 10/25/01

David A. Whiteley 47 Senior Vice President 08/30/01

Jerre E. Birdsong 49 Vice President 10/12/01
and Treasurer 12/31/97

33



Mark C. Birk 39 Vice President 02/14/03

Charles A. Bremer 59 Vice President 12/31/97

J. L. Davis 56 Vice President 12/31/97

Martin J. Lyons 37 Vice President 02/14/03
and Controller 10/22/01

Richard J. Mark 48 Vice President 01/02/02

Donna K. Martin 56 Vice President 05/15/02

Michael L. Menne 49 Vice President 09/01/02

Michael G. Mueller 40 Vice President 09/18/00

Craig D. Nelson 50 Vice President 12/31/97

Gregory L. Nelson 46 Vice President 02/16/99

Samuel E. Willis 59 Vice President 12/31/97

Ronald C. Zdellar 59 Vice President 12/31/97

Ameren Energy:

Thomas R. Voss 56 President
and Director 10/10/03

Steven R. Sullivan 43 Senior Vice President
Governmental/Regulatory Policy 10/10/03
General Counsel, Secretary 09/15/98
and Director 01/01/04

Jerre E. Birdsong 49 Vice President 10/12/01
and Treasurer 09/15/98

Mark C. Birk 39 Vice President 09/01/03

Gregory L. Nelson 46 Vice President 12/11/03

Marketing Company:

Thomas R. Voss 56 President
and Director 10/10/03

Steven R. Sullivan 43 Senior Vice President
Governmental/Regulatory Policy, 10/10/03
General Counsel and Secretary 03/02/00

Jerre E. Birdsong 49 Vice President 10/12/01
and Treasurer 03/02/00

Gregory L. Nelson 46 Vice President 12/11/03

Andrew M. Serri 42 Vice President 03/02/00



34


Resources Company:

Thomas R. Voss 56 President
and Director 10/10/03

Steven R. Sullivan 43 Senior Vice President
Governmental/Regulatory Policy, 10/10/03
General Counsel, Secretary 09/15/99
and Director 01/01/04

Jerre E. Birdsong 49 Vice President 10/12/01
and Treasurer 09/15/99

R. Alan Kelley 51 Vice President 11/13/00

Michael L. Moehn 34 Vice President 09/01/02

Gregory L. Nelson 46 Vice President 12/11/03

AERG:

Thomas R. Voss 56 President
and Director 10/10/03

Warner L. Baxter 42 Executive Vice President,
Chief Financial Officer 10/10/03
and Director 01/31/03

R. Alan Kelley 51 Senior Vice President 01/31/03

Garry L. Randolph 55 Senior Vice President 01/31/03

Steven R. Sullivan 43 Senior Vice President
Governmental/Regulatory Policy, 10/10/03
General Counsel and Secretary 01/31/03

David A. Whiteley 47 Senior Vice President 01/31/03

Jerre E. Birdsong 49 Vice President
and Treasurer 01/31/03

Gregory L. Nelson 46 Vice President 12/11/03

Robert L. Powers 55 Vice President 01/31/03

Jerry L. Simpson 47 Vice President 01/31/03

Martin J. Lyons 37 Controller 01/31/03

AFS:

Thomas R. Voss 56 President 10/10/03
and Director

Warner L. Baxter 42 Executive Vice President,
Chief Financial Officer 10/10/03
and Director 10/25/01

35



Steven R. Sullivan 43 Senior Vice President
Governmental/Regulatory Policy, 10/10/03
General Counsel and Secretary 09/18/00

Jerre E. Birdsong 49 Vice President 10/12/01
and Treasurer 09/18/00

Martin J. Lyons 37 Vice President 02/14/03
and Controller 10/22/01

Michael G. Mueller 40 Vice President 09/18/00

Gregory L. Nelson 46 Vice President 12/11/03

Medina Valley:

Thomas R. Voss 56 President and Manager 10/10/03

Warner L. Baxter 42 Executive Vice President,
Chief Financial Officer 10/10/03
and Manager 02/04/03

R. Alan Kelley 51 Senior Vice President
and Manager 02/04/03

Steven R. Sullivan 43 Senior Vice President
Governmental/Regulatory Policy 10/10/03
Secretary, General Counsel 02/04/03
and Manager 02/04/03

Jerre E. Birdsong 49 Vice President
and Treasurer 02/04/03

Gregory L. Nelson 46 Vice President 12/11/03

Robert L. Powers 55 Vice President 02/04/03

Jerry L. Simpson 47 Vice President 02/04/03

Martin J. Lyons 37 Controller 02/04/03


Officers are generally elected or appointed annually by the respective
board of directors of each company following the election of such board at the
annual meetings of shareholders. There are no family relationships between the
foregoing officers except that Charles W. Mueller is the father of Michael G.
Mueller. Charles W. Mueller retired as an officer on December 31, 2003, but
continues as a director of Ameren. Except for Martin J. Lyons, Richard J. Mark,
Michael L. Moehn and Donna K. Martin, each of the above-named executive officers
has been employed by an Ameren company for more than five years in executive or
management positions. Mr. Lyons was previously employed as an accountant by
PricewaterhouseCoopers LLP; Mr. Mark as Chief Executive Officer of St. Mary's
Hospital by Ancilla Systems, Incorporated; Mr. Moehn as an accountant by
PricewaterhouseCoopers LLP; and Ms. Martin in human resources by Faulding
Pharmaceuticals.

36



PART II

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

Ameren's common stock is listed on the New York Stock Exchange (ticker
symbol: AEE). Ameren began trading on January 2, 1998, following the merger of
UE and CIPSCO on December 31, 1997.

Ameren common stockholders of record totaled 89,970 on January 31, 2004.
The following table presents the price ranges and dividends paid per common
share for Ameren for each quarter during 2003 and 2002.




=======================================================================================================================
AEE 2003 Dividends
Quarter Ended High Low Close Paid
- -----------------------------------------------------------------------------------------------------------------------

March 31............... $ 44.73 $ 37.43 $ 39.05 63 1/2(cent)
June 30................ 46.50 38.89 44.10 63 1/2
September 30........... 44.80 40.74 42.91 63 1/2
December 31............ 46.17 42.55 46.00 63 1/2
=======================================================================================================================
=======================================================================================================================
AEE 2002 Dividends
Quarter Ended High Low Close Paid
- -----------------------------------------------------------------------------------------------------------------------
March 31............... $ 43.85 $ 39.50 $ 42.75 63 1/2(cent)
June 30................ 45.20 40.20 43.01 63 1/2
September 30........... 45.14 34.72 41.65 63 1/2
December 31............ 42.69 38.75 41.57 63 1/2
=======================================================================================================================


There is no trading market for the common stock of UE, CIPS, Genco, CILCORP
or CILCO. Ameren holds all outstanding common stock of UE, CIPS and CILCORP;
Development Company holds all outstanding common stock of Genco; and CILCORP
holds all outstanding common stock of CILCO.

For a discussion of restrictions on the Ameren Companies payment of
dividends, see Liquidity and Capital Resources in Management's Discussion and
Analysis of Financial Condition and Results of Operations under Part II, Item 7
of this report.

ITEM 6. SELECTED FINANCIAL DATA.


======================================================================================================================
For the years ended December 31,
(In millions, except per share amounts) 2003 2002(a) 2001(b)(c) 2000(b)(c) 1999(c)
- ----------------------------------------------------------------------------------------------------------------------

Ameren:
Operating revenues(d)..................... $ 4,593 $ 3,841 $ 3,858 $ 3,856 $ 3,536
Operating income.......................... 1,090 873 965 941 821
Net income after preferred stock
dividends............................... 524 382 469 457 385
Common stock dividends.................... 410 376 350 349 349
Earnings per share - basic................ 3.25 2.61 3.41 3.33 2.81
- diluted.............. 3.25 2.60 3.40 3.33 2.81
Common stock dividends per share.......... 2.54 2.54 2.54 2.54 2.54

As of December 31,
Total assets(e)........................... $ 14,233 $ 12,151 $ 10,401 $ 9,714 $ 9,178
Long-term debt, excluding current
maturities.............................. 4,070 3,433 2,835 2,745 2,448
Preferred stock subject to mandatory
redemption.............................. 21 - - - -
Preferred stock not subject to mandatory
redemption.............................. 182 193 235 235 235
Common stockholders' equity............... 4,354 3,842 3,349 3,197 3,090
- ----------------------------------------------------------------------------------------------------------------------

37

- ----------------------------------------------------------------------------------------------------------------------
For the years ended December 31,
(In millions, except per share amounts 2003 2002(a) 2001(a) 2000(b)(c) 1999(c)
- ----------------------------------------------------------------------------------------------------------------------
UE:
Operating revenues........................ $ 2,637 $ 2,650 $ 2,786 $ 2,720 $ 2,534
Operating income.......................... 787 644 681 679 674
Net income after preferred stock
dividends............................... 441 33 365 344 340
Distribution to parent.................... 288 299 283 207 329

As of December 31,
Total assets(e)........................... $ 8,517 $ 8,103 $ 7,288 $ 7,116 $ 7,044
Long-term debt, excluding current
maturities............................. 1,758 1,687 1,599 1,760 1,883
Preferred stock not subject to mandatory
redemption............................. 113 113 155 155 155
Common stockholder's equity............... 2,810 2,632 2,654 2,571 2,434
======================================================================================================================
CIPS:
Operating revenues........................ $ 742 $ 824 $ 840 $ 894 $ 933
Operating income.......................... 45 52 69 135 125
Net income after preferred stock dividends 26 23 42 75 50
Distribution to parent.................... 62 62 33 54 90

As of December 31,
Total assets(e)........................... $ 1,742 $ 1,821 $ 1,783 $ 1,867 $ 1,782
Long-term debt, excluding current
maturities............................. 485 534 579 463 494
Preferred stock not subject to mandatory
redemption............................. 50 80 80 80 80
Common stockholder's equity............... 482 512 564 555 53
======================================================================================================================
Genco:
Operating revenues........................ $ 788 $ 743 $ 730 $ 480 $ -
Operating income.......................... 194 139 195 103 -
Net income after preferred stock dividends 75 32 76 44 -
Distribution to parent.................... 36 21 - - -

As of December 31,
Total assets.............................. $ 1,977 $ 2,010 $ 1,756 $ 1,394 $ -
Long-term debt, excluding current
maturities............................. 698 698 424 424 -
Subordinated intercompany notes........... 411 462 508 602 -
Common stockholder's equity............... 321 280 274 44 -
======================================================================================================================
CILCORP:(f)
Operating revenues........................ $ 909 $ 778 $ 786 $ 724 $ 581
Operating income.......................... 85 98 116 97 41
Net income after preferred stock
dividends.............................. 23 25 24 11 -
Distribution to parent.................... 27 - 15 9 30
- ----------------------------------------------------------------------------------------------------------------------

38


- ----------------------------------------------------------------------------------------------------------------------
For the years ended December 31,
(In millions, except per share
amounts) 2003 2002(a) 2001(a) 2000(b)(c) 1999(c)
- ----------------------------------------------------------------------------------------------------------------------
As of December 31,
Total assets(e)........................... $ 2,140 $ 1,928 $ 1,814 $ 1,949 $ 1,831
Long-term debt, excluding current
maturities............................. 669 791 718 720 730
Preferred stock subject to mandatory
redemption............................. 21 22 22 22 22
Preferred stock not subject to mandatory
redemption............................. 19 19 19 19 44
Common stockholder's equity............... 478 495 517 470 468
======================================================================================================================
CILCO:(g)
Operating revenues........................ $ 822 $ 719 $ 740 $ 636 $ 553
Operating income.......................... 53 97 47 73 44
Net income after preferred stock
dividends 43 48 12 45 16
Distribution to parent.................... 62 40 45 26 30

As of December 31,
Total assets(e)........................... $ 1,324 $ 1,250 $ 1,043 $ 1,107 $ 1,056
Long-term debt, excluding current
maturities............................. 138 316 243 245 238
Preferred stock subject to mandatory
redemption............................. 21 22 22 22 22
Preferred stock not subject to mandatory
redemption............................. 19 19 19 19 44
Common stockholder's equity............... 323 323 341 351 333
-------------------------------------------------------------------------------------------------------------------
(a) At Ameren, UE and Genco, revenues were netted with costs upon adoption
of EITF No. 02-3 and the rescission of EITF No. 98-10. See Note 1 -
Summary of Significant Accounting Policies to our financial statements
under Part II, Item 8 of this report for further information. The
amounts were netted as follows at Ameren: 2002 - $738 million, 2001 -
$648 million; at UE: 2002 - $458 million, 2001 - $392 million; and at
Genco: 2002 - $253 million, 2001 - $256 million.
(b) On May 1, 2000, CIPS transferred its electric generating assets and
related liabilities, at net book value, to Genco, in exchange for a
subordinated promissory note from Genco in the principal amount of
$552 million and 1,000 shares of Genco's common stock.
(c) Amounts for CILCORP and CILCO have not been reclassified to conform to
Ameren classifications for 2000 and 1999.
(d) Includes amounts for CILCORP since the acquisition date of January 31,
2003; includes amounts for non-registrant Ameren subsidiaries as well
as intercompany eliminations. See Note 2 - Acquisitions to our
financial statements under Part II, Item 8 of this report.
(e) Estimated future removal costs embedded in accumulated depreciation
within our regulated operations at December 31, 2002, of $652 million
at Ameren, $528 million at UE, $124 million at CIPS, $27 million at
CILCORP and $141 million at CILCO were reclassified to a regulatory
liability to conform to current period presentation. Prior periods
were not reclassified. See Note 1 - Summary of Significant Accounting
Policies to our financial statements under Part II, Item 8 of this
report for further information.
(f) CILCORP consolidates CILCO and therefore includes CILCO amounts in its
balances.
(g) CILCO's financial statements are presented on a historical basis of
accounting for all periods presented. See Note 1 - Summary of
Significant Accounting Policies to our financial statements under Part
II, Item 8 of this report for further information.






39



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

OVERVIEW

Executive Summary

As we began 2003, Ameren was faced with a weak economy and energy market,
electric rate reductions in our Missouri service territory and rising employee
benefit costs. To tackle these challenges, we initiated a voluntary retirement
program that reduced staffing levels by over 500 people, closed inefficient
generating units, took steps to reduce employee benefit costs and focused on
cost containment throughout our business. While decisions to undertake these
initiatives were difficult, management felt they were necessary to meet
investors' expectations and better position Ameren for the future so as to
benefit all of our stakeholders.

Strong operating performance at our power plants during 2003 permitted
Ameren to offset reduced sales due to milder-than-normal summer weather and to
take advantage of better-than-expected interchange power prices. In 2003, our
plants produced more electricity in a single year than ever before, resulting in
an increased contribution from interchange sales. In 2003, we also successfully
completed the acquisition and integration of CILCORP, realizing anticipated
synergies.

With the addition of CILCORP, Ameren now serves over 1.7 million electric
and over 500,000 natural gas customers in Missouri and Illinois. We are the
largest electric utility in Missouri and the second largest electric utility in
Illinois. In February 2004, we signed a definitive agreement to purchase from
Dynegy the stock of Illinois Power and an additional 20% interest in EEI. We
believe Illinois Power is an excellent strategic fit with our core transmission
and distribution business and the additional interest in EEI will bring us more
value from EEI's low cost generation plant. The acquisition of Illinois Power
will add approximately 590,000 electric customers and 415,000 gas customers.
Subject to regulatory approval, we expect to complete the acquisition by the end
of 2004.

We expect factors positively impacting 2004 earnings to include, among
other things, sales growth in our service territory, almost $30 million in gas
rate increases for our gas operations, incremental synergies from the CILCORP
acquisition and continued cost control. Factors negatively impacting 2004
earnings are expected to be the implementation of a $30 million reduction in
annual electric revenues in Missouri in April 2004, a Callaway Nuclear Plant
refueling outage in the spring of 2004, and rising employee benefit costs. Our
2004 earnings will also be affected by the short-term dilutive effect of the
issuance of common shares in February 2004, the proceeds of which are intended
to be ultimately used for the acquisitions of Illinois Power and the 20%
interest in EEI. However, once completed, we expect these acquisitions to
increase our earnings per share.

General

Ameren, headquartered in St. Louis, Missouri, is a public utility holding
company registered with the SEC under the PUHCA. Ameren's primary asset is the
common stock of its subsidiaries. Ameren's subsidiaries operate rate-regulated
electric generation, transmission and distribution businesses, rate-regulated
natural gas distribution businesses and non rate-regulated electric generation
businesses in Missouri and Illinois. Dividends on Ameren's common stock are
dependent on distributions made to it by its subsidiaries. Ameren's Registrants
are listed below. See Note 1 - Summary of Significant Accounting Policies to our
financial statements for a detailed description of our principal subsidiaries.
Also see the Glossary of Terms and Abbreviations.

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

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


40



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

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

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

The financial statements of Ameren are prepared on a consolidated basis and
therefore include the accounts of its majority-owned subsidiaries. Results of
CILCORP and CILCO reflected in Ameren's consolidated financial statements
include the period from the acquisition date of January 31, 2003 through
December 31, 2003. However, tabular presentation of CILCORP and CILCO's results
and other discussions specific to CILCORP and CILCO represent the full twelve
month period. See Note 2 - Acquisitions to our financial statements under Part
II, Item 8 of this report for further information. All significant intercompany
transactions have been eliminated. All tabular dollar amounts are in millions,
unless otherwise indicated.

Acquisitions

CILCORP and Medina Valley

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

Ameren acquired CILCORP to complement its existing Illinois gas and
electric operations. The purchase included CILCO's rate-regulated electric and
natural gas businesses in Illinois serving approximately 205,000 and 210,000
customers, respectively, of which approximately 150,000 are combination electric
and gas customers. CILCO's service territory is contiguous to CIPS' service
territory. CILCO also has a non rate-regulated electric and gas marketing
business principally focused in the Chicago, Illinois region. Finally, the
purchase included approximately 1,200 megawatts of largely coal-fired generating
capacity, most of which became non rate-regulated on October 3, 2003, due to
CILCO's transfer of approximately 1,100 megawatts of generating capacity to
AERG. See Note 1 - Summary of Significant Accounting Policies to our financial
statements under Part II, Item 8 of this report for further information on the
transfer to AERG.

The total acquisition cost was approximately $1.4 billion and included the
assumption by Ameren of CILCORP and Medina Valley debt and preferred stock at
closing of $895 million and consideration of $479 million in cash, net of $38
million cash acquired. The cash component of the purchase price came from
Ameren's issuance in September 2002 of 8.05 million common shares and its
issuance in early 2003 of an additional 6.325 million common shares, which
together generated aggregate net proceeds of $575 million. See Note 2 -
Acquisitions to our financial statements under Part II, Item 8 of this report
for further information.

Illinois Power

On February 2, 2004, we entered into an agreement with Dynegy to purchase
the stock of Decatur, Illinois-based Illinois Power and Dynegy's 20% ownership
interest in EEI. Illinois Power operates a rate-regulated electric and natural
gas transmission and distribution business serving approximately 590,000
electric and 415,000 gas customers in areas contiguous to our existing Illinois
utility service territories. The total transaction value is approximately $2.3
billion, including the assumption of approximately $1.8 billion of Illinois
Power debt and preferred stock, with the balance of the


41


purchase price to be paid in cash at closing. Ameren will place $100 million of
the cash portion of the purchase price in a six-year escrow pending resolution
of certain contingent environmental obligations of Illinois Power and other
Dynegy affiliates for which Ameren has been provided indemnification by Dynegy.

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

Upon completion of the acquisition, expected by the end of 2004, Illinois
Power will become an Ameren subsidiary operating as AmerenIP. The transaction is
subject to the approval of the ICC, the SEC, the FERC, the Federal
Communications Commission, the expiration of the waiting period under the
Hart-Scott-Rodino Act and other customary closing conditions.

In addition, this transaction includes a firm capacity power supply
contract for Illinois Power's annual purchase of 2,800 megawatts of electricity
from a subsidiary of Dynegy. This contract will extend through 2006 and is
expected to supply about 75% of Illinois Power's customer requirements.

For the nine months ended September 30, 2003, Illinois Power had revenues
of $1.2 billion, operating income of $130 million, and net income applicable to
its common shareholder of $88 million, and at September 30, 2003, had total
assets of $2.6 billion, excluding an intercompany note receivable from its
parent company of approximately $2.3 billion. For the year ended December 31,
2002, Illinois Power had revenues of $1.5 billion, operating income of $164
million, and net income applicable to its common shareholder of $158 million,
and at December 31, 2002, had total assets of $2.6 billion, excluding an
intercompany note receivable from its parent company of approximately $2.3
billion. See also Liquidity and Capital Resources below for the potential impact
on credit ratings that could result from the acquisition of Illinois Power.
Illinois Power also files quarterly and annual reports with the SEC.


RESULTS OF OPERATIONS

Earnings Summary

Our results of operations and financial position are affected by many
factors. Weather, economic conditions and the actions of key customers or
competitors can significantly impact the demand for our services. Our results
are also affected by seasonal fluctuations caused by winter heating and summer
cooling demand. With approximately 90% of Ameren's revenues directly subject to
regulation by various state and federal agencies, decisions by regulators can
have a material impact on the price we charge for our services. Our non
rate-regulated sales are subject to market conditions for power. We principally
utilize coal, nuclear fuel, natural gas and oil in our operations. The prices
for these commodities can fluctuate significantly due to the world economic and
political environment, weather, supply and demand levels and many other factors.
We do not have fuel or purchased power cost recovery mechanisms in Missouri or
Illinois for our electric utility businesses, but we do have gas cost recovery
mechanisms in each state for our gas utility businesses. The electric rates for
UE, CIPS and CILCO are largely set through 2006 such that cost decreases or
increases will not be immediately reflected in rates. In addition, the gas
delivery rates for UE in Missouri are set through June 2006. Fluctuations in
interest rates impact our cost of borrowing and pension and postretirement
benefits. We employ various risk management strategies in order to try to reduce
our exposure to commodity risks and other risks inherent in our business. The
reliability of our power plants, and transmission and distribution systems, and
the level of operating and administrative costs, and capital investment are key
factors that we seek to control in order to optimize our results of operations,
cash flows and financial position.

Ameren's net income for 2003, 2002 and 2001, was $524 million ($3.25 per
share before dilution), $382 million ($2.61 per share before dilution), and $469
million ($3.41 per share before dilution), respectively. In 2003, Ameren's net
income included an after-tax gain ($31 million or 19 cents per share) related to
the settlement of a dispute over mine

42


reclamation issues with a coal supplier and a net cumulative effect after-tax
gain ($18 million or 11 cents per share) associated with the adoption of SFAS
No. 143, "Accounting for Asset Retirement Obligations." The coal contract
settlement gain represented a return of coal costs plus accrued interest
previously paid to a coal supplier for future reclamation of a coal mine. The
SFAS No. 143 net gain resulted principally from the elimination of non-legal
obligation costs of removal for non rate-regulated assets from accumulated
depreciation.

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

============================================================================
Net Cumulative Effect After-Tax Gain
----------------------------------------------------------------------------
Ameren(a)................................................. $ 18
UE........................................................ -
CIPS...................................................... -
Genco..................................................... 18
CILCORP(b)................................................ 4
CILCO(c).................................................. 24
============================================================================
(a) Excludes amounts for CILCORP and CILCO prior to t January 31, 2003;
includes amounts for non-registrant Ameren subsidiaries as well as
intercompany eliminations.
(b) Represents predecessor information recorded in January 2003 prior to
the acquisition date of January 31, 2003. CILCORP consolidates CILCO
and therefore includes CILCO amounts in its balances.
(c) CILCO's financial statements are presented on a historical basis of
accounting for all periods presented. See Note 1 - Summary of
Significant Accounting Policies to our financial statements under Part
II, Item 8 of this report for further information.

In 2002, Ameren's net income included restructuring charges of $58 million,
net of taxes, or 40 cents per share, which consisted of a voluntary employee
retirement program, the retirement of UE's Venice, Illinois plant, and the
temporary suspension of operation of two coal-fired generating units at Genco's
Meredosia, Illinois plant. See Note 7 - Restructuring Charges and Other Special
Items to our financial statements under Part II, Item 8 of this report for
further information. In 2001, Ameren's net income was reduced by $7 million, net
of taxes, or 5 cents per share, due to the adoption of SFAS No. 133, "Accounting
for Derivative Instruments and Hedging Activities."

The following table presents a reconciliation of Ameren's net income to net
income excluding restructuring charges and other special items (e.g. coal
contract settlement), as well as the effect of SFAS No. 143 and SFAS No. 133
adoption, all net of taxes, for the years ended December 31, 2003, 2002, and
2001. Ameren believes this reconciliation presents results from continuing
operations on a more comparable basis. However, net income, or earnings per
share, excluding these items is not a presentation defined under GAAP and may
not be comparable to other companies or more useful than the GAAP presentation
included in Ameren's financial statements.



===================================================================================================================
2003 2002 2001
-------------------------------------------------------------------------------------------------------------------

Net income................................................................. $ 524 $ 382 $ 469
Earnings per share - basic................................................. $ 3.25 $ 2.61 $ 3.41
-------------------------------------------------------------------------------------------------------------------
Restructuring charges and other special items, net of taxes........... (31) 58 -
SFAS No. 143 adoption - gain, net of taxes............................ (18) - -
SFAS No. 133 adoption - loss, net of taxes............................ - - 7
-------------------------------------------------------------------------------------------------------------------
Total restructuring charges and other special items, effect of SFAS No.
143 and SFAS No. 133 adoption, net of taxes........................... $ (49) $ 58 $ 7
-per share................. $ (0.30) $ 0.40 $ 0.05
-------------------------------------------------------------------------------------------------------------------
Net income, excluding restructuring charges and other special items,
effect of SFAS No. 143 and SFAS No. 133 adoption...................... $ 475 $ 440 $ 476
Earnings per share, excluding restructuring charges and other special
items, and the effect of SFAS No. 143 and No. 133 adoption - basic.... $ 2.95 $ 3.01 $ 3.46
===================================================================================================================

Excluding the gains and losses discussed above, Ameren's net income
increased $35 million, and earnings per share decreased six cents, in 2003 as
compared to 2002. The change in net income was primarily due to the acquisition
of CILCORP, as discussed below, favorable interchange margins (35 cents per
share) due to improved power prices in the energy markets and greater low-cost
generation available for sale, organic growth, lower labor costs due to the
voluntary

43

employee retirement program implemented in early 2003 (11 cents per share),
lower maintenance expenses in Ameren's pre-CILCORP acquisition operations (25
cents per share), and a decrease in Other Miscellaneous Expense as a result of
the expensing of economic development and energy assistance programs in the
second quarter of 2002 related to the UE Missouri electric rate case settlement.
These benefits to Ameren's 2003 net income were partially offset by unfavorable
weather conditions (estimated to be 40 to 50 cents per share) primarily due to
cooler summer weather in Ameren's pre-CILCORP territory, an electric rate
reduction in UE's Missouri service territory that went into effect in April 2003
(11 cents per share), lower sales of emission credits (7 cents per share),
higher employee benefit costs and increased common shares outstanding.

Excluding the charges discussed above, Ameren's net income decreased $36
million (45 cents per share) in 2002 as compared to 2001, primarily due to the
impact of the settlement of our Missouri electric rate case (26 cents per
share), increased costs of employee benefits, higher depreciation (17 cents per
share), excluding the effect of the rate case that is included in the 26 cents
above, and a decline in industrial sales due to the continued soft economy.
Increased average common shares outstanding (8.8 million shares) and financing
costs also reduced Ameren's earnings per share in 2002 (29 cents per share).
Factors decreasing net income in 2002 were partially offset by favorable weather
conditions (estimated to be 20 to 30 cents per share), sales of emission credits
by EEI (10 cents per share) and organic growth.

The impact from the acquisitions of CILCORP and Medina Valley and related
financings was accretive to Ameren's earnings per share in 2003 by an estimated
four cents per share as Ameren realized synergies associated with the
acquisitions following the integration of systems and operating practices.

The amortization of non-cash purchase accounting fair value adjustments at
CILCORP increased Ameren's and CILCORP's net income by $24 million for the
eleven months ended December 31, 2003, as compared to the prior year period. The
amortization of the fair value adjustments that increased net income were
related to pension and postretirement liabilities, coal contract liabilities,
severance liabilities and long-term debt. The amortization of fair value
adjustments that decreased net income were related to electric plant in service,
purchased power and emission credits. The following table presents the favorable
(unfavorable) impact on Ameren's and CILCORP's net income related to the
amortization of purchase accounting fair value adjustments during 2003:

============================================================================
For the eleven months ended December 31, 2003:
----------------------------------------------------------------------------
Statement of Income line item:
Other operations and maintenance(a)........................... $ 39
Interest(b)................................................... 7
Fuel and purchased power(c)................................... 1
Depreciation and amortization(d).............................. (7)
Income taxes(e)............................................... (16)
-----------------------------------------------------------------------------
Impact on net income.......................................... $ 24
============================================================================
(a) Included in other operations and maintenance are the amortization of
the adjustment of the pension plan assets to fair value; the increase
in the fair value of the retail customer contracts amortized over the
remaining useful life of 10 years; the adjustment to fair value of the
investment assets amortized over the useful lives ranging from 6 to 16
years; the adjustment of severance liabilities; and the write-off of
CILCO software.
(b) The impact on interest of the amortization of purchase accounting
adjustments is due to CILCORP's 9.375% senior notes due 2029 and 8.70%
senior notes due 2009 being written up to fair value and amortized
over the average remaining life of the debt. See Note 6 - Long-term
Debt and Equity Financings to our financial statements under Part II,
Item 8 of this report for additional information.
(c) Included in fuel and purchased power are the amortization of the
adjustment of emission credits to fair value amortized over 28 years
and the amortization of the adjustment of coal contracts to fair value
amortized over the remaining useful life of 2 years.
(d) The impact on depreciation and amortization of the amortization of
purchase accounting adjustments is due to the plant assets at Duck
Creek, E. D. Edwards, and Sterling Avenue being written up to fair
value and amortized over the remaining useful lives of the plants
(Duck Creek - 34 years; E. D. Edwards - 27 years; and Sterling Avenue
- 15 years). (e) Tax effect of the above amortization adjustments.
(e) Tax effect of the above amortization adjustments.

44


As a holding company, Ameren's net income and cash flows are primarily
generated by its principal subsidiaries, UE, CIPS, Genco and CILCORP. The
following table presents the contribution by Ameren's principal subsidiaries to
Ameren's consolidated net income for the years ended December 31, 2003, 2002,
and 2001:



================================================================================================================
2003 2002 2001
----------------------------------------------------------------------------------------------------------------

Net income:
UE(a).................................................... $ 441 $ 336 $ 365
CIPS..................................................... 26 23 42
Genco(a)................................................. 75 32 76
CILCORP(b)............................................... 14 - -
Other(c)................................................. (32) (9) (14)
----------------------------------------------------------------------------------------------------------------
Ameren net income.............................................. $ 524 $ 382 $ 469
================================================================================================================
(a) Includes earnings from interchange sales by Ameren Energy that
provided approximately $58 million of UE's net income (2002 - $20
million) and approximately $30 million of Genco's net income (2002 -
$10 million) in 2003.
(b) Excludes net income prior to the acquisition date of January 31, 2003.
January 2003 predecessor amounts were $9 million. CILCORP consolidates
CILCO and therefore includes CILCO amounts in its balances.
(c) Includes corporate general and administrative expenses, transition
costs associated with the CILCORP acquisition and other non
rate-regulated operations.


Electric Operations

The following tables present the favorable (unfavorable) variations in
electric margins, defined as electric revenues less fuel and purchased power, as
compared to the prior periods for the years ended December 31, 2003 and 2002.
Although electric margin may be considered a non-GAAP measure, we believe it is
a useful measure to analyze the change in profitability of our electric
operations between periods. The variation for Ameren reflects the entire
contribution from CILCORP as a separate line item. The variations in CILCORP and
CILCO electric margins are for 2003 as compared to 2002 when Ameren did not own
these companies, and they did not contribute to Ameren's electric margins.



==================================================================================================================
2003 versus 2002 Ameren(a) UE CIPS Genco CILCORP(b) CILCO(c)
------------------------------------------------------------------------------------------------------------------

Electric revenue change:
CILCORP acquisition.................. $ 497 $ - $ - $ - $ - $ -
Effect of weather (estimate)......... (121) (96) (16) - (11) (11)
Growth and other (estimate).......... 46 39 (88) 5 39 39
Rate reductions...................... (34) (34) - - - -
Interchange revenues................. 80 62 - 40 9 9
EEI.................................. (51) - - - - -
------------------------------------------------------------------------------------------------------------------
Total .................................. $ 417 $ (29) $(104) $ 45 $ 37 $ 37
------------------------------------------------------------------------------------------------------------------
Fuel and purchased power change:
CILCORP acquisition.................. $ (261) $ - $ - $ - $ - $ -
Fuel:
Generation and other............. (28) (29) - 23 2 (3)
Price............................ 3 (5) - 8 - -
Purchased power...................... 63 36 77 (37) (52) (48)
EEI ................................. (7) - - - - -
------------------------------------------------------------------------------------------------------------------
Total .................................. $ (230) $ 2 $ 77 $ (6) $(50) $ (51)
----------------------------------------------------------------------------------------------------------------
Net change in electric margins.......... $ 187 $ (27) $ (27) $ 39 $ 13) $ (14)
------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------
2002 versus 2001 Ameren(a) UE CIPS Genco CILCORP(b) CILCO(c)
------------------------------------------------------------------------------------------------------------------
Electric revenue change:
Effect of weather (estimate)......... $ 82 $ 62 $ 14 $ - $ 5 $ 5
Growth and other (estimate).......... 22 (7) 23 5 40 40
Rate reductions...................... (47) (47) - - - -
Credit to customers.................. (10) (10) - - - -
Interchange revenues................. (109) (117) - 8 (6) (6)
EEI.................................. 75 - - - - -
------------------------------------------------------------------------------------------------------------------
Total .................................. $ 13 $(119) $ (9) $ 13 $ 39 $ 39
------------------------------------------------------------------------------------------------------------------

45



------------------------------------------------------------------------------------------------------------------
2002 versus 2001 Ameren(a) UE CIPS Genco CILCORP(b) CILCO(c)
------------------------------------------------------------------------------------------------------------------
Fuel and purchased power change:
Fuel:
Generation and other(d)............ $ (57) $ (9) $ - $(47) $(43) $ 40
Price.............................. 17 21 - (4) 5 5
Purchased power...................... 174 177 15 18 (20) (20)
EEI.................................. (45) - - - - -
------------------------------------------------------------------------------------------------------------------
Total .................................. $ 89 $ 189 $ 15 $(33) $(58) $ 25
------------------------------------------------------------------------------------------------------------------
Net change in electric margins.......... $ 102 $ 70 $ 6 $(20) $(19) $ 64
==================================================================================================================
(a) Excludes amounts for CILCORP and CILCO prior to the acquisition date
of January 31, 2003; includes amounts for non-registrant Ameren
subsidiaries as well as intercompany eliminations.
(b) Includes predecessor information for periods prior to January 31,
2003. CILCORP consolidates CILCO and therefore includes CILCO amounts
in its balances.
(c) CILCO's financial statements are presented on a historical basis of
accounting for all periods presented. See Note 1 - Summary of
Significant Accounting Policies to our financial statements under Part
II, Item 8 of this report for further information.
(d) CILCORP's generation and other line item includes $83 million of
purchase accounting adjustments related to the purchase by AES.



Ameren

2003 versus 2002

Ameren's electric margin increased $187 million in 2003 as compared to
2002. Increases in electric margin in 2003 were primarily attributable to the
acquisition of CILCORP, increased interchange margins and organic sales growth,
partially offset by unfavorable weather conditions relative to 2002, lower sales
of emission credits and rate reductions. CILCORP's electric margin for the
eleven months ended December 31, 2003, was $236 million. Interchange margins
increased $92 million in 2003 due to improved power prices in the energy markets
and increased low-cost generation availability. Average realized power prices on
interchange sales increased to approximately $32 per megawatthour in 2003 from
approximately $25 per megawatthour in 2002. Availability of coal-fired
generating plants increased to 86% in 2003 from 82% in 2002 due to fewer
scheduled and unscheduled outages. In addition, there was no refueling outage at
the Callaway Nuclear Plant in 2003.

The unfavorable weather conditions were primarily due to cooler summer
weather in the second and third quarters of 2003 versus warmer than normal
conditions in the same periods in 2002. Cooling degree days were approximately
25% less in 2003 in our service territory compared to 2002 and approximately 10%
less compared to normal conditions. Heating degree days in 2003 were comparable
to 2002 and normal conditions. In Ameren's pre-CILCORP acquisition service
territory, weather-sensitive residential and commercial electric kilowatthour
sales declined 4% and 2%, respectively, in 2003 compared to 2002. Industrial
electric kilowatthour sales increased 2% in 2003 in Ameren's pre-CILCORP
acquisition service territory due to improving economic conditions.

Annual rate reductions of $50 million and $30 million were effective April
1, 2002 and 2003, respectively, as a result of the 2002 UE electric rate case
settlement in Missouri, and negatively impacted electric revenues in 2003 and
2002. Revenues will be further reduced at UE by the 2002 UE settlement of the
Missouri electric rate case, due to an additional $30 million of annual electric
rate reduction effective April 1, 2004.

EEI's revenues decreased in 2003 compared to 2002 due to lower emission
credit sales and decreased sales to its principal customer, which also resulted
in a decrease in fuel and purchased power. EEI's sales of emission credits were
$10 million in 2003 as compared to $38 million in 2002.

Ameren's fuel and purchased power increased in 2003 compared to 2002 due to
increased kilowatthour sales related primarily to the addition of CILCORP.
Excluding CILCORP, fuel and purchased power decreased in 2003 primarily due to
the greater availability of low-cost generation.

2002 versus 2001

Ameren's electric margin increased $102 million in 2002 as compared to
2001. Increases in electric margin in 2002 were primarily attributable to more
favorable weather conditions and increased sales of emission credits. In 2002,
weather-sensitive residential electric kilowatthour sales increased by 7% and
commercial electric kilowatthour sales

46



increased by 2% as cooling degree days were approximately 10% greater in 2002
compared to 2001. However, industrial sales were approximately 5% lower in 2002
as compared to 2001 due primarily to the impact of the soft economy. Revenues
were also reduced by $47 million in 2002 due to the settlement of UE's Missouri
electric rate case.

Contribution to electric margin from EEI increased in 2002 from 2001
principally due to EEI's sale of $38 million in emission credits, which is
included in the overall $75 million increase in EEI revenues. The remaining EEI
increase was due to increased sales to its principal customer, which also
resulted in an increase in fuel and purchased power.

Interchange revenues decreased in 2002 from 2001 due to lower energy prices
and less low-cost generation available for sale, resulting primarily from
increased demand for generation from native load customers. Fuel and purchased
power decreased in 2002 from 2001 due primarily to lower energy prices,
partially offset by increased fuel and purchase power costs due to increased
kilowatthour sales and unscheduled plant outages.

During 2002, we adopted the provisions of EITF No. 02-3, "Issues Involved
in Accounting for Derivative Contracts Held for Trading Purposes and Contracts
Involved in Energy Trading and Risk Management Activities," that required
revenues and costs associated with certain energy contracts to be shown on a net
basis in the Statement of Income. See also Note 1 - Summary of Significant
Accounting Policies to our financial statements under Part II, Item 8 of this
report for further information on the impact of netting these operating revenues
and costs.

UE

UE's electric margin decreased $27 million in 2003 as compared to 2002.
Decreases in electric margin in 2003 were primarily attributable to the
unfavorable weather conditions and the rate reductions resulting from the 2002
Missouri electric rate case settlement as mentioned above. However, interchange
margins increased $64 million due to improved power prices in the energy markets
and increased low-cost generation availability as mentioned above. Fuel and
purchased power in 2003 was comparable to 2002.

UE's electric margin increased $70 million in 2002 as compared to 2001.
Increases in electric margin in 2002 were primarily attributable to more
favorable weather conditions and lower fuel and purchased power costs. Revenues
decreased due to the settlement of the 2002 Missouri electric rate case as
mentioned above. Interchange margins decreased due to lower energy prices and
less low-cost generation available for sale, resulting primarily from increased
demand for generation from native load customers. Fuel and purchased power
decreased due primarily to lower energy prices, partially offset by increased
kilowatthour sales and unscheduled plant outages.

CIPS

CIPS' electric margin decreased $27 million in 2003, as compared to 2002,
primarily due to unfavorable weather conditions as mentioned above and several
customers switching from CIPS to Marketing Company. Commencing in 2002, all of
CIPS', CILCO's and UE's Illinois residential, commercial and industrial
customers had a choice in electric suppliers as provided by the Illinois
Customer Choice Law. Several of CIPS' commercial and industrial customers
switched to Marketing Company for their energy supply resulting in a decline in
CIPS' revenues included in the growth and other line item in the table above of
approximately $95 million and a decrease of approximately $85 million in
purchased power of approximately $95 million for 2003. CIPS continues to provide
electric delivery service to these customers and charges them ICC-approved
delivery service tariff rates for that service. There was no significant
switching of customers outside the Ameren Companies in 2002 or 2003.

CIPS' electric margin increased $6 million in 2002, as compared to 2001,
primarily due to more favorable weather conditions and decreased purchased power
costs attributable to lower energy prices. Partially offsetting the favorable
weather were lower industrial and commercial sales related to the impact of the
soft economy along with certain industrial customers electing to switch to
Marketing Company as mentioned above.

Genco

Genco's electric margin increased $39 million in 2003 as compared to 2002.
Increases in electric margin in 2003 were primarily attributable to increased
interchange margins. Interchange margins increased $33 million in 2003 due to
improved power prices in the energy markets. Fuel and purchased power increased
$6 million in 2003 due to higher purchased power costs associated with higher
energy prices and lower generation. These increased costs were partially offset
by lower generation costs due to a 12% decline in megawatthour generation. The
decline in generation during 2003 was primarily attributable to the timing of
outages at Genco's power plants and unexpected downtime and unfavorable margins
associated with Genco's CTs.

47



Genco's electric margin decreased $20 million in 2002 as compared to 2001.
Decreases in electric margin in 2002 were primarily due to lower power prices
and the reduction of indirect sales to UE under the 2001 and 2002 Marketing
Company - UE power supply agreements, partially offset by increases in other
wholesale and interchange revenues and increases in the use of lower cost
generation due to better availability. See Note 14 - Related Party Transactions
to our financial statements under Part II, Item 8 of this report for discussion
of our power supply agreements. Genco's power plant availability increased 9
percentage points to 89% in 2002 compared to 80% in 2001. Revenues increased in
2002 due to an increase in the volume of interchange sales for the year,
although these sales provided lower margins due to lower electricity prices. In
addition, a net increase in new wholesale customers added by Marketing Company
and an increase in sales to existing wholesale customers increased revenues.
Fuel cost increased $51 million in 2002 due primarily to increased use of
coal-fired generation stations due to better availability and increased
wholesale demand. Purchased power costs decreased $18 million due to lower
energy prices and improved plant availability.

CILCORP

CILCORP's electric margin decreased $13 million in 2003 as compared to
2002. Decreases in electric margin in 2003 were primarily attributable to lower
margin per megawatthour sold on a non rate-regulated basis to electric customers
outside of CILCO's service territory, the switch of two large CILCO customers to
Marketing Company and unfavorable weather conditions as mentioned above. In
addition, fuel and purchased power increased due to the net effect of purchase
accounting fair value adjustments related to emission allowances and coal
contracts.

CILCORP's electric margin decreased $19 million in 2002 as compared to
2001. Decreases in electric margin in 2002 were primarily attributable to
purchase accounting adjustments of $83 million associated with coal contracts
related to the purchase of CILCORP by AES, offset by favorable weather
conditions and higher margin per megawatthour sold on a non rate-regulated basis
to electric customers outside CILCORP's service territory.

CILCO

CILCO's electric margin decreased $14 million in 2003 as compared to 2002.
Decreases in electric margin in 2003 were primarily attributable to a lower
margin per megawatthour sold on a non rate-regulated basis to electric customers
outside CILCO's service territory, the switch of two large CILCO customers to
Marketing Company and unfavorable weather conditions as mentioned above.

CILCO's electric margin increased $64 million in 2002 as compared to 2001.
Increases in electric margin in 2002 were primarily attributable to favorable
weather conditions and a higher margin per megawatthour sold on a non
rate-regulated basis to electric customers outside CILCO's service territory.
This resulted from the termination of a higher priced supply contract that was
replaced with lower-cost purchases. The termination of the supply contract was
unusual due to the bankruptcy of the supplier and therefore, the higher margins
were not expected to continue beyond 2002.

Gas Operations

The following table presents the favorable (unfavorable) variations in gas
margins, defined as gas revenues less gas purchased for resale, as compared to
the prior periods for the years ended December 31, 2003 and 2002. Although gas
margin may be considered a non-GAAP measure, we believe it is a useful measure
to analyze the change in profitability of gas operations between periods.

============================================================================
2003 2002
----------------------------------------------------------------------------
Ameren(a)............................ $ 74 $ (3)
UE................................... (2) (6)
CIPS................................. 1 4
Genco................................ - -
CILCORP(b)........................... 3 2
CILCO(c)............................. 6 1
============================================================================
(a) Excludes amounts for CILCORP and CILCO prior to the acquisition date
of January 31, 2003; includes amounts for non-registrant Ameren
subsidiaries as well as intercompany eliminations.
(b) Includes predecessor information for periods prior to January 31,
2003. CILCORP consolidates CILCO and therefore includes CILCO amounts
in its balances.
(c) CILCO's financial statements are presented on a historical basis of
accounting for all periods presented. See Note 1 - Summary of
Significant Accounting Policies to our financial statements under Part
II, Item 8 of this report for further information.

48



Ameren's gas margin increased in 2003, as compared to 2002, primarily due
to the acquisition of CILCORP (eleven months ended December 31, 2003 - $73
million). The gas margins at UE, CIPS, CILCORP and CILCO in 2003 were comparable
to 2002 as heating degree days were consistent with 2002.

Ameren's and UE's gas margins decreased in 2002, as compared to 2001,
primarily due to warmer winter weather in early 2002, partially offset by
increased gas sales due to colder than normal temperatures in late 2002. The gas
margins at CIPS, CILCORP and CILCO increased due to a decrease in gas costs
attributable to lower natural gas prices, partially offset by warmer winter
weather in early 2002 as compared to normal.

Operating Expenses and Other Statement of Income Items

The following tables present the favorable (unfavorable) variations in
operating and other expenses as compared to the prior periods for the years
ended December 31, 2003 and 2002:



===================================================================================================================
2003 versus 2002 Ameren(a) UE CIPS Genco CILCORP(b) CILCO(c)
-------------------------------------------------------------------------------------------------------------------

Other operations and maintenance........ $ (64) $ 54 $ 5 $ 21 $ (1) $ (19)
Voluntary retirement and other
restructuring charges............... 92 65 14 10 - -
Coal contract settlement............... 51 51 - - - -
Acquisition integration costs.......... - - - - - (21)
Depreciation and amortization.......... (88) (3) (1) (6) (6) 1
Taxes other than income taxes.......... (37) 5 1 (9) 3 3
Other income and deductions............ 34 20 (8) 3 (3) (4)
Interest............................... (63) (2) 7 (15) 12 5
Income taxes........................... (64) (58) 11 (18) (2) 14
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
2002 versus 2001 Ameren(a) UE CIPS Genco CILCORP(b) CILCO(c)
-------------------------------------------------------------------------------------------------------------------
Other operations and maintenance....... $ (70) $ (31) $ (7) $ (17) $ (13) $ (12)
Voluntary retirement and other
restructuring charges............... (92) (65) (14) (10) - -
Depreciation and amortization.......... (25) (1) (2) (16) 14 (2)
Taxes other than income taxes.......... (1) (4) (4) 7 (1) (1)
Other income and deductions............ (48) (40) (11) (6) (1) 1
Interest............................... (23) 5 (2) (11) 5 3
Income taxes........................... 68 37 10 27 15 (18)
===================================================================================================================
(a) Excludes amounts for CILCORP and CILCO prior to the acquisition date
of January 31, 2003. Includes amounts for non-registrant Ameren
subsidiaries as well as intercompany eliminations.
(b) Includes predecessor information for periods prior to January 31,
2003.
(c) CILCO's financial statements are presented on a historical basis of
accounting for all periods presented. See Note 1 - Summary of
Significant Accounting Policies to our financial statements under Part
II, Item 8 of this report for further information.



Other Operations and Maintenance

Ameren

Ameren's other operations and maintenance expenses increased $64 million in
2003, as compared to 2002, primarily due to the addition of CILCORP (eleven
months ended December 31, 2003 - $135 million), transition costs related to the
CILCORP acquisition, higher employee benefit costs ($17 million) and a net
increase in injuries and damages costs based on claims experience ($6 million).
These increases in other operations and maintenance expenses were partially
offset by lower labor costs resulting primarily from the voluntary employee
retirement program implemented in early 2003 and lower plant maintenance costs
primarily due to the number and timing of outages ($60 million). There was not a
refueling outage at the Callaway Nuclear Plant in 2003. See also Equity Price
Risk under Part II, Item 7A of this report for a discussion of our expectations
and plans regarding trends in employee benefit costs.


49



Ameren's other operations and maintenance expenses increased $70 million in
2002, as compared to 2001, primarily due to higher employee benefit costs ($35
million) related to increasing healthcare costs and the investment performance
of employee benefit plans' assets, higher wages and higher plant maintenance
expenses ($34 million).

UE

UE's other operations and maintenance expenses decreased $54 million in
2003, as compared to 2002, primarily due to lower labor costs related to the
voluntary employee retirement program implemented in early 2003 and lower plant
maintenance costs ($34 million) as mentioned above, partially offset by the
higher employee benefit costs ($10 million) and the net increase in injuries and
damages reserves ($3 million) as mentioned above.

UE's other operations and maintenance expenses increased $31 million in
2002, as compared to 2001, primarily due to higher employee benefit costs ($24
million), higher wages and higher plant maintenance expenses ($3 million).

CIPS

CIPS' other operations and maintenance expenses decreased $5 million in
2003, as compared to 2002, primarily due to lower labor costs related to the
voluntary employee retirement program implemented in early 2003 as mentioned
above, and a decrease in environmental costs ($3 million), partially offset by
the net increase in injuries and damages costs ($8 million) as mentioned above.

CIPS' other operations and maintenance expenses increased $7 million in
2002, as compared to 2001, primarily due to higher employee benefit costs ($5
million), higher tree trimming costs ($2 million), increased routine repair
costs ($2 million) and an increase in the environmental costs ($3 million),
partially offset by the receipt of insurance reimbursements related to
litigation settlements ($7 million).

Genco

Genco's other operations and maintenance expenses decreased $21 million in
2003, as compared to 2002, primarily due to a reduction in consulting costs at
its coal-fired generation stations, a decrease in commitment fees for the use of
UE's and CIPS' electric transmission lines ($5 million) and a net decrease in
injuries and damages reserves ($3 million).

Genco's other operations and maintenance expenses increased $17 million in
2002, as compared to 2001, primarily due to higher employee benefit costs ($4
million), higher wages, higher injuries and damages expenses based on claims
experience ($4 million), incremental increases associated with the CTs added
during 2001, costs for efficiency improvements made at the coal-fired plants and
timing of plant outages between years.

CILCORP

CILCORP's other operations and maintenance expenses increased $1 million in
2003, as compared to 2002, primarily due to higher employee benefit costs and
bad debt expense, partially offset by reduced environmental costs for
remediation of elevated boron levels at the Duck Creek power plant recycle pond
in 2002 and favorable purchase accounting adjustments.

CILCORP's other operations and maintenance expense increased $13 million in
2002, as compared to 2001, primarily due to the accrual of environmental costs
($9 million) for remediation of elevated boron levels at the Duck Creek power
plant recycle pond, higher employee benefit costs ($9 million), and power plant
operations ($1 million). These increases were partially offset by lower bad debt
expense ($3 million).

CILCO

CILCO's other operations and maintenance expenses increased $19 million in
2003, as compared to 2002, primarily due to higher employee benefit costs ($19
million) and higher bad debt expense ($5 million), partially offset by reduced
environmental costs ($9 million) for remediation of elevated boron levels at the
Duck Creek power plant recycle pond in 2002.

50



CILCO's other operations and maintenance expenses increased $12 million in
2002, as compared to 2001, primarily due to the accrual of environmental costs
($9 million) for remediation of elevated boron levels at the Duck Creek power
plant recycle pond, higher employee benefit costs ($9 million), and power plant
operations ($1 million). These increases were partially offset by lower bad debt
expense ($3 million).

Voluntary Retirement and Other Restructuring Charges and Coal Contract
Settlement

See Note 7 - Restructuring Charges and Other Special Items to our financial
statements under Part II, Item 8 of this report.

Depreciation and Amortization

2003 versus 2002

Depreciation and amortization expenses increased $88 million and $6 million
at Ameren and Genco, respectively, in 2003 as compared to 2002. The increase at
Ameren was primarily due to the inclusion of CILCORP operations in 2003 (eleven
months ended December 31, 2003 - $72 million). In addition, depreciation and
amortization expenses increased at Ameren and Genco due to new capital
additions.

Depreciation and amortization expenses increased $3 million at UE in 2003,
as compared to 2002, primarily due to capital additions, partially offset by a
reduction in depreciation rates. The decrease in depreciation rates of $5
million in 2003 was based on the updated analysis of asset values, service lives
and accumulated depreciation levels that were required by UE's 2002 Missouri
electric rate case settlement.

Depreciation and amortization expenses increased $6 million at CILCORP in
2003, as compared to 2002, primarily due to the effect of purchase accounting
adjustments that increased the book value of the Duck Creek and E.D. Edwards
power plants and Sterling Avenue peaking station ($7 million). The increase in
book value is being depreciated over the estimated remaining lives of the
generating facilities of 15 to 34 years.

Depreciation and amortization expenses at CIPS and CILCO in 2003 were
comparable to 2002.

2002 versus 2001

Ameren's depreciation and amortization expenses increased $25 million in
2002, as compared to 2001, primarily due to investment in CTs and coal-fired
power plants. The increase was partially offset by a reduction of depreciation
rates ($15 million) based on an updated analysis of asset values, service lives
and accumulated depreciation levels that were required by UE's 2002 Missouri
electric rate case settlement.

Genco's depreciation and amortization expense increased $16 million in
2002, as compared to 2001, due to Genco's investment in CTs and coal-fired power
plants.

CILCORP's depreciation and amortization expense decreased $14 million in
2002, as compared to 2001, primarily due to the adoption of SFAS No. 142,
"Goodwill and Other Intangible Assets," in 2002. With the adoption of SFAS No.
142, goodwill and other intangibles with indefinite lives are no longer subject
to amortization. Goodwill amortization was $15 million in 2001. See Note 1 -
Summary of Significant Accounting Policies to our financial statements under
Part II, Item 8 of this report for further information regarding our goodwill
policy.

Depreciation and amortization expenses at UE, CIPS and CILCO in 2002 were
comparable to 2001.

Taxes Other Than Income Taxes

At Ameren, taxes other than income taxes increased $37 million in 2003, as
compared to 2002, primarily due to the acquisition of CILCORP (eleven months
ended December 31, 2003 - $34 million). At UE, taxes other than income taxes
decreased $5 million in 2003, as compared to 2002, due to a decrease in gross
receipts taxes ($2 million) related to lower native sales resulting from milder
weather and a decrease in real estate taxes related to lower assessments in
2003. At Genco, taxes other than income taxes increased $9 million in 2003, as
compared to 2002, primarily due to adjustments related to property tax
assessments and increased property taxes associated with the four CTs added in
the third and


51



fourth quarters of 2002. CIPS', CILCORP's and CILCO's taxes other than income
taxes in 2003 were comparable to 2002.

At Ameren, taxes other than income taxes in 2002 were comparable to 2001.
At UE, taxes other than income taxes increased $4 million in 2002, as compared
to 2001, due to higher gross receipts taxes ($3 million) resulting from
increased residential and commercial electric sales and higher payroll taxes ($1
million) resulting from increased wages. At CIPS, taxes other than income taxes
increased $4 million in 2002, as compared to 2001, due to revised property tax
assessments in 2001. At Genco, taxes other than income taxes decreased $7
million in 2002, as compared to 2001, due to reduced property tax assessments,
partially offset by increased property taxes in 2002 associated with the CTs
added in 2001. Taxes other than income taxes at CILCORP and CILCO in 2002 were
comparable to 2001.

Other Income and Deductions

2003 versus 2002

Ameren's and UE's other income and deductions increased in 2003, as
compared to 2002, primarily due to the expensing of economic development and
energy assistance programs required by the UE Missouri electric rate case
settlement in 2002 ($26 million). Ameren's other income and deductions also
increased in 2003 due to a decrease in the minority interest related to EEI's
lower earnings in 2003. The increase in UE's other income and deductions was
partially offset by a net decrease in earnings from UE's ownership interest in
EEI and decreased gains on derivative contracts.

CIPS' other income and deductions decreased in 2003, as compared to 2002,
primarily due to a decline in intercompany interest ($3 million) CIPS received
on the Genco subordinated promissory note due to a lower outstanding principal
balance. In addition, CIPS' other income and deductions decreased in 2003, as
compared to 2002, due to a decrease in contributions in aid of construction ($2
million).

Genco's, CILCORP's and CILCO's other income and deductions in 2003 were
comparable to 2002.

2002 versus 2001

Ameren's other income and deductions decreased in 2002 as compared to 2001.
The decrease was primarily due to the cost of economic development and energy
assistance programs required by the settlement of UE's Missouri electric rate
case ($26 million) and an increase in the deduction for minority interest
earnings principally related to EEI's sale of emission credits ($10 million).
See Note 8 - Other Income and Deductions to our financial statements under Part
II, Item 8 of this report for further information.

UE's other income and deductions decreased in 2002 as compared to 2001. The
decrease was primarily due to the cost of economic development and energy
assistance programs mentioned above, lower intercompany interest earned in 2002
on funds loaned to the utility money pool resulting from lower average
intercompany notes receivable balances ($7 million), and decreased gains on
energy trading contracts. These decreases were partially offset by an increase
in earnings from UE's ownership interest in EEI primarily resulting from its
sale of emission credits ($10 million).

Genco's other income and deductions decreased in 2002, as compared to 2001,
primarily due to the absence of consulting fees received in 2001 ($3 million)
and less interest income from advances to the money pool ($2 million).

CILCORP's and CILCO's other income and deductions in 2002 were comparable
to 2001.

Interest

2003 versus 2002

Interest expense increased at Ameren in 2003, as compared to 2002,
primarily due to the assumption of CILCORP debt (eleven months ended December
31, 2003 - $48 million). In addition, interest expense was higher in 2003 due to
Genco's issuance of $275 million of 7.95% senior notes in June 2002 ($10
million).


52



Interest expense decreased at CIPS in 2003, as compared to 2002, primarily
due to the maturity or redemption of first mortgage bonds in the third quarter
of 2002 ($2 million) and in the second quarter of 2003 ($5 million).

Interest expense increased at Genco in 2003, as compared to 2002, primarily
due to increased borrowings from Ameren's non state-regulated subsidiary money
pool ($9 million), partially offset by a reduction in the principal amounts
outstanding on subordinated intercompany promissory notes to CIPS and Ameren in
May 2003 ($4 million). In addition, Genco's interest expense increased in 2003,
as compared to 2002, primarily due to the issuance of $275 million of 7.95%
senior notes in June 2002, as mentioned above.

Interest expense decreased at CILCORP and CILCO in 2003, as compared to
2002, primarily due to the redemption of long-term debt, partially offset by
expense associated with debt redemption. In addition, interest expense decreased
due to the effect of purchase accounting adjustments made at CILCORP ($7
million) based on market rates. The increase in the book value of long-term debt
resulting from purchase accounting is being amortized as a reduction in interest
expense over the remaining life of the debt.

UE's interest expense in 2003 was comparable to 2002.

2002 versus 2001

Interest expense increased at Ameren in 2002, as compared to 2001,
primarily due to the interest expense component associated with the $345 million
of adjustable conversion-rate equity security units Ameren issued in March 2002
($16 million) and Genco's issuance of $275 million of 7.95% senior notes in June
2002 ($12 million).

Interest expense decreased at UE in 2002, as compared to 2001, primarily
due to lower interest rates on UE's variable rate environmental debt obligations
and lower interest expense associated with a decreased balance under UE's
nuclear fuel lease, partially offset by increased short-term intercompany
interest as a result of UE's borrowings from the utility money pool in 2002.

Interest expense increased at CIPS in 2002, as compared to 2001, primarily
due to interest ($4 million) associated with the $150 million issuance of
long-term debt in 2001, partially offset by decreased short-term intercompany
interest as a result of less intercompany borrowings from the utility money pool
in 2002.

Interest expense increased at Genco in 2002, as compared to 2001, primarily
due to the issuance of $275 million of 7.95% senior notes in June 2002 ($12
million) and additional borrowings, prior to the issuance of the senior notes,
from Ameren's non state-regulated subsidiary money pool at higher interest
rates, compared to 2001. These increases were partially offset by a reduction in
the principal amounts outstanding on subordinated intercompany promissory notes
to CIPS and Ameren.

Interest expense decreased at CILCORP and CILCO in 2002, as compared to
2001, primarily due to decreased short-term borrowings.

Income Taxes

Income tax expense increased at Ameren, UE and Genco in 2003, as compared
to 2002, primarily due to higher pre-tax income, partially offset by a lower
effective tax rate at Ameren. The lower effective tax rate was primarily due to
an Illinois tax settlement ($7 million) at CIPS in the third quarter of 2003.
Income tax expense decreased at CIPS primarily due to lower pre-tax income and a
lower effective tax rate as mentioned above. Income tax expense decreased at
CILCO primarily due to lower pre-tax income. CILCORP's income tax expense in
2003 was comparable to 2002. See also Note 13 - Income Taxes to our financial
statements under Part II, Item 8 of this report for information regarding
effective tax rates.

Income tax expense decreased at Ameren, UE, CIPS, Genco and CILCORP in
2002, as compared to 2001, primarily due to lower pre-tax income. Income tax
expense increased at CILCO in 2002, as compared to 2001, primarily due to higher
pre-tax income.

53



LIQUIDITY AND CAPITAL RESOURCES

The tariff-based gross margins of Ameren's rate-regulated utility operating
companies continue to be the principal source of cash from operating activities
for Ameren and its rate-regulated subsidiaries. A diversified retail customer
mix of primarily rate-regulated residential, commercial and industrial classes
and a commodity mix of gas and electric service provide a reasonably predictable
source of cash flows. In addition, we plan to utilize short-term debt to support
normal operations and other temporary capital requirements.

The following tables present net cash provided by (used in) operating,
investing and financing activities for the years ended December 31, 2003, 2002,
and 2001:



====================================================================================================================
Net Cash Provided By Net Cash Provided By Net Cash Provided By
2003 versus Operating (Used In) Investing (Used In) Financing
2002 Activities Activities Activities
- --------------------------------------------------------------------------------------------------------------------
2003 2002 Variance 2003 2002 Variance 2003 2002 Variance
------------------------------------------------------------------------------------------------

Ameren(a)....... $1,031 $ 833 $ 198 $ (1,181) $ (803) $ (378) $ (367) $ 531 $(898)
UE.............. 639 696 (57) (503) (454) (49) (130) (248) 118
CIPS............ 56 96 (40) 12 (7) 19 (69) (98) 29
Genco........... 211 110 101 (58) (442) 384 (154) 333 (487)
CILCORP(b)...... 70 88 (18) (95) (120) 25 4 46 (42)
CILCO(c)........ 103 109 (6) (86) (123) 37 (31) 24 (55)
====================================================================================================================
(a) Excludes amounts for CILCORP and CILCO prior to the acquisition date
of January 31, 2003; includes amounts for non-registrant Ameren
subsidiaries as well as intercompany eliminations.
(b) 2002 amounts represent predecessor information. 2003 amounts include
January 2003 predecessor information. CILCORP consolidates CILCO and
therefore includes CILCO amounts in its balances.
(c) CILCO's financial statements are presented on a historical basis of
accounting for all periods presented. See Note 1 - Summary of
Significant Accounting Policies to our financial statements under Part
II, Item 8 of this report for further information.

====================================================================================================================
Net Cash Provided By Net Cash Provided By Net Cash Provided By
2002 versus Operating (Used In) Investing (Used In) Financing
2001 Activities Activities Activities
- --------------------------------------------------------------------------------------------------------------------
2002 2001 Variance 2002 2001 Variance 2002 2001 Variance
------------------------------------------------------------------------------------------------
Ameren(a)....... $ 833 $ 738 $ 95 $ (803) $(1,104) $ 301 $ 531 $ 307 $ 224
UE.............. 696 590 106 (454) (419) (35) (248) (176) (72)
CIPS............ 96 120 (24) (7) 16 (23) (98) (140) 42
Genco........... 110 130 (20) (442) (247) (195) 333 118 215
CILCORP(b)...... 88 138 (50) (120) (46) (74) 46 (86) 132
CILCO(c)........ 109 126 (17) (123) (51) (72) 24 (72) 96
====================================================================================================================
(a) Excludes amounts for CILCORP and CILCO prior to the acquisition date
of January 31, 2003; includes amounts for non-registrant Ameren
subsidiaries as well as intercompany eliminations.
(b) 2002 and 2001 amounts represent predecessor information. CILCORP
consolidates CILCO and therefore includes CILCO amounts in its
balances.
(c) CILCO's financial statements are presented on a historical basis of
accounting for all periods presented. See Note 1 - Summary of
Significant Accounting Policies to our financial statements under Part
II, Item 8 of this report for further information.


Cash Flows from Operating Activities

2003 versus 2002

Cash flows provided by operating activities increased for Ameren and Genco
and decreased for UE, CIPS, CILCORP and CILCO in 2003 as compared to 2002. The
increase in cash flows provided by operating activities for Ameren and Genco was
primarily a result of increased net earnings discussed above under Results of
Operations. The increase at Ameren was reduced by two non-cash components of net
earnings, one associated with the gain of $18 million related to the adoption of
SFAS No. 143 and the other the $51 million pre-tax gain related to UE's
settlement of the coal mine reclamation issues, of which only $15 million was
received in cash during 2003.


54



Partially offsetting these benefits to cash flows from operating activities
were increased materials and supplies inventories resulting from increased
natural gas volumes being put into storage, principally due to the acquisition
of CILCORP, recorded at Ameren, and higher gas prices.

Cash provided by operating activities decreased for UE, CIPS, CILCORP and
CILCO in 2003 compared to 2002 primarily due to increased working capital
requirements and timing differences. UE's decrease in cash flows from operating
activities was attributable to increased tax payments and gas inventory
increases, partially offset by lower operations and maintenance expenses and the
$51 million pre-tax gain related to UE's settlement of the coal mine reclamation
issues, of which $15 million was received in cash during 2003. CIPS' decrease in
cash flows from operating activities was primarily attributable to increased tax
payments in 2003 compared to 2002.

2002 versus 2001

Cash flows provided by operating activities increased for Ameren and UE and
decreased for CIPS, Genco, CILCORP and CILCO for 2002 as compared to 2001. The
increase in cash flows from operating activities for Ameren and UE was primarily
due to higher cash earnings resulting from favorable weather conditions. In
addition, Ameren's cash flows from operations benefited from sales of emission
credits. The increase at Ameren and UE was partially offset by payments of
customer sharing credits under UE's now-expired Missouri electric alternative
regulation plan ($40 million) and the timing of payments on accounts payable and
accrued taxes. Also offseting Ameren's increase in cash flows from operations
were discretionary pension plan contributions of $31 million in 2002.

The decrease in cash flows provided by operating activities for CIPS and
Genco was primarily attributable to the timing of payments on accounts payable
and changes in working capital. CIPS' decrease in cash flows from operations was
also caused by lower contributions in aid of construction and increased pension
funding costs. The timing of payment of funds between Genco and its affiliates
contributed to Genco's decrease in cash flows. CILCORP's and CILCO's decreases
in cash flows from operations were primarily due to changes in working capital
requirements offset by increased non rate-regulated sales to electric customers
in Illinois outside CILCO's service territory.

Pension Funding

Ameren made cash contributions totaling $25 million in 2003 and $31 million
in 2002 to our defined benefit retirement plan qualified trusts. A minimum
pension liability was recorded at December 31, 2002, which resulted in an
after-tax charge to OCI and a reduction in stockholders' equity for Ameren of
$102 million. At December 31, 2003, the minimum pension liability was reduced,
resulting in OCI of $46 million and an increase in stockholders' equity. The
following table presents the minimum pension liability amounts, after taxes, as
of December 31, 2003 and 2002:

============================================================================
2003 2002
----------------------------------------------------------------------------
Ameren(a)...................................... $ 56 $ 102
UE............................................. 34 62
CIPS........................................... 7 13
Genco.......................................... 4 6
CILCORP(b)..................................... - 60
CILCO.......................................... 13 30
============================================================================
(a) Excludes amounts for CILCORP and CILCO prior to the acquisition date
of January 31, 2003; includes amounts for non-registrant Ameren
subsidiaries.
(b) 2002 amounts represent predecessor information. CILCORP consolidates
CILCO and therefore includes CILCO amounts in its balances.

As discussed above, we made cash contributions in 2003 and 2002 to our
defined benefit retirement plan qualified trusts. Based on our assumptions at
December 31, 2003, we expect to be required under ERISA to fund an average of
approximately $115 million annually from 2005 through 2008 in order to maintain
minimum funding levels for our pension plans. We expect UE's, CIPS', Genco's and
CILCO's portion of the 2005 to 2008 funding requirements to be approximately
65%, 10%, 10% and 15%, respectively. These amounts are estimates and may change
based on actual stock market performance, changes in interest rates, any
pertinent changes in government regulations and any prior voluntary
contributions. See Note 11 - Retirement Benefits to our financial statements
under Part II, Item 8 of this report for additional information.

55



Cash Flows from Investing Activities

2003 versus 2002

Cash flows used in investing activities increased for Ameren and UE and
decreased for CIPS, Genco, CILCORP and CILCO in 2003 as compared to 2002.
Ameren's increase in cash used in investing activities in 2003 as compared to
2002 was primarily related to $479 million in cash paid for the acquisitions of
CILCORP and Medina Valley in early 2003 and capital expenditures for CILCORP in
2003. These increased investing activities in 2003 were partially offset by
lower construction expenditures at the other Ameren subsidiaries and lower
nuclear fuel expenditures in 2003. The increase for UE over the prior year
period was primarily related to the 2002 receipt of $84 million UE had invested
in the utility money pool, partially offset by lower construction and nuclear
fuel expenditures in 2003. The decrease in cash flows used in investing
activities from the prior year period for Genco was primarily related to lower
construction expenditures as Genco completed construction of CTs in 2002. In
addition, Genco paid approximately $140 million in the first quarter of 2002 to
Development Company for a CT purchased, but not yet paid for, at December 31,
2001. The decrease for CILCORP and CILCO was primarily due to lower construction
expenditures related to the completed installation of pollution-control
equipment at its coal-fired power plants. The increase in cash provided by
investing activities for CIPS was primarily due to principal payments received
on its intercompany note receivable from Genco.

2002 versus 2001

Cash flows used in investing activities decreased for Ameren and increased
for UE, CIPS, Genco, CILCORP and CILCO for 2002 as compared to 2001. The
decrease in cash from investing activities at Ameren was primarily due to lower
construction expenditures in 2002. The increase in cash used in investing
activities at UE in 2002 as compared to 2001 was primarily due to the decrease
in the intercompany notes receivables related to the utility money pool
arrangements offset by a decrease in construction expenditures. CIPS' cash used
in investing activities increased due to higher construction expenditures in
2002 compared to 2001 and also due to the decrease in the intercompany note
receivable with Genco. Genco's cash used in investing activities increased due
to an increase in construction expenditures and to the 2001 receipt of $100
million Genco had invested in the non state-regulated subsidiary money pool.
Cash used in investing activities increased for both CILCORP and CILCO primarily
due to an increase in construction expenditures in 2002 as compared to 2001.

Construction Expenditures

The following table presents the capital expenditures by the Ameren
Companies for the years ended December 31, 2003, 2002, and 2001:




=================================================================================================
Capital Expenditures 2003 2002 2001
-------------------------------------------------------------------------------------------------

Ameren(a)......................................... $ 682 $ 787 $ 1,102
UE................................................ 480 520 587
CIPS.............................................. 50 57 50
Genco............................................. 58 442 347
CILCORP(b)........................................ 87 124 51
CILCO............................................. 87 124 51
Other(c).......................................... 23 (232) 118
=================================================================================================
(a) Excludes amounts for CILCORP and CILCO prior to the acquisition date
of January 31, 2003; includes amounts for non-registrant Ameren
subsidiaries as well as intercompany eliminations.
(b) 2002 and 2001 amounts represent predecessor information. 2003 amounts
include January 2003 predecessor information of $16 million. CILCORP
consolidates CILCO and therefore includes CILCO amounts in its
balances.
(c) Consists primarily of capital expenditures by Ameren Services and
includes intercompany transactions between Development Company and
Genco related to Genco's purchase of a CT in 2002.



Ameren's construction expenditures for 2003 principally related to various
upgrades at UE's and Genco's coal-fired power plants, NOx reduction equipment
expenditures at CILCO's generating plants, replacements and improvements to the
existing electric transmission and distribution and natural gas distribution
systems, and construction costs for CTs at UE. In 2002, UE placed into service
240 megawatts of CT capacity (approximately $135 million). In addition, Genco
placed into service 470 megawatts of CT capacity (approximately $215 million).
Also in 2002, Genco paid approximately $140 million to Development Company for a
CT purchased but accrued for in December 2001. In addition, selective catalytic
reduction technology was added on two units at one of Genco's coal-fired power
plants at a


56


cost of approximately $42 million. In 2001, Genco added approximately 850
megawatts of CT capacity at a total cost of approximately $530 million.

The following table presents the construction expenditures estimated to be
incurred by the Ameren Companies over the next five years through 2008,
including capitalized interest and allowance for funds used during construction
(except for Genco which has no allowance for funds used during construction):




==================================================================================================================
Estimated Construction Expenditures 2004 2005 - 2008 Total
------------------------------------------------------------------------------------------------------------------

UE................................................... $ 510 $ 1,800 - $ 2,000 $ 2,310 - $ 2,510
CIPS................................................. 40 120 - 300 160 - 340
Genco................................................ 50 100 - 200 150 - 250
CILCORP (parent only)................................ - - - - - - -
CILCO (rate-regulated)............................... 55 175 - 180 230 - 235
CILCO (non rate-regulated)(a)........................ 50 70 - 80 120 - 130
Other(b)............................................. 5 25 - 30 30 - 35
- -------------------------------------------------------------------------------------------------------------------
Total Ameren......................................... $ 710 $ 2,290 - $ 2,790 $ 3,000 - $ 3,500
===================================================================================================================
(a) AERG capital expenditures related to CILCO's non rate-regulated
generating business.
(b) Includes amounts for non-registrant Ameren subsidiaries.


UE's estimate includes capital expenditures for the replacement of steam
generators at UE's Callaway Nuclear Plant and for transmission, distribution and
other generation-related activities, as well as for compliance with new NOx
control regulations, as discussed below. Also included in the estimate is the
addition of new CTs at UE with approximately 330 megawatts of capacity at UE's
Venice, Illinois location by the end of 2005. Total costs expected to be
incurred for these units approximate $140 million, of which approximately $77
million was committed as of December 31, 2003. UE committed to make between
$2.25 billion to $2.75 billion of infrastructure investments during the period
of January 1, 2002 to June 30, 2006, as part of UE's 2002 Missouri electric rate
case settlement. In addition, commitments totaling at least $15 million for gas
infrastructure improvements between July 1, 2003 and June 30, 2006 were agreed
upon in relation to UE's 2003 Missouri gas rate case settlement.

Both federal and state laws require significant reductions in SO2 and NOx
emissions that result from burning fossil fuels. The Clean Air Act creates a
marketable commodity called an SO2 "allowance." Each allowance gives the owner
the right to emit one ton of SO2. All existing generating facilities have been
allocated allowances based on past production and the statutory emission
reduction goals. If additional allowances are needed for new generating
facilities, they can be purchased from facilities having excess allowances or
from SO2 allowance banks. Our generating facilities comply with the SO2
allowance caps through the purchase of allowances, the use of low sulfur fuels
or through the application of pollution control technology.

The EPA issued a rule in October 1998 requiring 22 eastern states and the
District of Columbia to reduce emissions of NOx in order to reduce ozone in the
eastern United States. Among other things, the EPA's rule establishes an ozone
season, which runs from May through September, and a NOx emission budget for
each state, including Illinois. The EPA rule requires states to implement
controls sufficient to meet their NOx budget by May 31, 2004. In February 2002,
the EPA proposed similar rules for Missouri. These are expected to be issued as
final rules in the spring of 2004. The compliance date for the Missouri rules is
expected to be May 1, 2007.

As a result of these requirements, Ameren generating companies have
installed a variety of NOx control technologies on their power plant boilers
over the past several years. The following table presents estimated remaining
capital expenditures to comply with the final NOx regulations in Missouri and
Illinois between 2004 and 2008:

============================================================================
Ameren................................... $210 million to $250 million
UE....................................... $160 million to $180 million
CIPS..................................... -
Genco.................................... $ 50 million to $ 70 million
CILCORP.................................. -
CILCO.................................... -
============================================================================


57



These estimates include the assumption that the regulations will require
the installation of selective catalytic reduction technology on some of our
units, as well as additional controls.

In 2004, we are seeking regulatory approval to transfer at net book value
approximately 550 megawatts (approximately $250 million) of generating capacity
from Genco to UE, to satisfy the requirements of UE's 2002 Missouri electric
rate case settlement and to meet future UE generating capacity needs. See Note 3
- - Rate and Regulatory Matters to our financial statements under Part II, Item 8
of this report for further information. This transfer is not included in our
estimated capital expenditures listed in the table above.

CIPS' and CILCO's estimates include capital expenditures for transmission
and distribution-related activities. Genco's estimate includes capital
expenditures for upgrades to existing coal and gas-fired facilities and other
generation-related activities. CILCO's estimate also includes capital
expenditures for generation-related activities, as well as for compliance with
new NOx control regulations at AERG's generating facilities.

We continually review our generation portfolio and expected power needs
and, as a result, we could modify our plan for generation capacity, which could
include the timing of when certain assets will be added to or removed from our
portfolio, the type of generation asset technology that will be employed, or
whether capacity may be purchased, among other things. Any changes that we may
plan to make for future generating needs could result in significant capital
expenditures or losses being incurred, which could be material.

Potential Future Environmental Capital Expenditure Requirements

The following environmental matters are currently pending, but have not
been included in our estimated capital expenditures for the period of 2004 to
2008.

New Source Review

On December 31, 2002, the EPA published in the Federal Register revisions
to the NSR programs under the Clean Air Act, governing pollution control
requirements for new fossil-fueled generating plants and major modifications to
existing plants. On October 27, 2003, the EPA published a set of associated
rules governing the routine maintenance, repair and replacement of equipment at
power plants. Various northeastern states, the State of Illinois and others,
have filed a petition with the United States District Court for the District of
Columbia challenging the legality of the revisions to these NSR programs. Other
states, various industries and environmental groups have filed to intervene in
this challenge. At this time, we are unable to predict the impact if this
challenge is successful on our future financial position, results of operations
or liquidity.

Interstate Air Quality and Mercury Rules

In mid-December 2003, the EPA issued proposed regulations with respect to
SO2 and NOx emissions (the "Interstate Air Quality Rule") and mercury emissions
from coal-fired power plants. These new rules, if adopted, will require
significant additional reductions in these emissions from our power plants in
phases, beginning in 2010. The rules are currently under a public review and
comment period, and may change before being issued in 2004 or 2005. The
following table presents preliminary estimates of capital costs based on current
technology on the Ameren systems to comply with the SO2 and NOx rules, as
proposed.



=================================================================================================================
2010 2015
-----------------------------------------------------------------------------------------------------------------

Ameren...................................... $400 million to $600 million $500 million to $800 million
UE.......................................... $250 million to $350 million $300 million to $500 million
CIPS........................................ - -
Genco....................................... $140 million to $220 million $150 million to $200 million
CILCORP(a).................................. $10 million to $30 million $50 million to $100 million
CILCO....................................... $10 million to $30 million $50 million to $100 million
=================================================================================================================
(a) CILCORP consolidates CILCO and therefore includes CILCO amounts in its
balances.




58



The proposed mercury regulations contain a number of options and the final
control requirements are highly uncertain. Ameren estimates additional capital
costs to comply with the mercury rules to be up to $100 million by 2010, with UE
incurring approximately two-thirds of the costs and Genco incurring most of the
remaining costs. Depending upon the final mercury rules, similar additional
costs would be incurred between 2010 and 2018.

Multi-Pollutant Legislation

The United States Congress has been working on legislation to consolidate
the numerous air pollution regulations facing the utility industry. Continued
deliberation on this "multi-pollutant" legislation is expected in 2004. The cost
to comply with such legislation, if enacted, is expected to be covered by the
modifications to our facilities required by combined Interstate Air Quality and
Mercury Rules described above.

See Note 15 - Commitments and Contingencies to our financial statements
under Part II, Item 8 of this report for further discussion of environmental
matters.

Cash Flows from Financing Activities

2003 versus 2002

Cash flows from financing activities decreased for Ameren, Genco, CILCORP
and CILCO and increased for UE and CIPS in 2003 compared to 2002. The decrease
in cash flows from financing activities for Ameren, CILCORP and CILCO was
primarily due to an increase in redemptions, repurchases and maturities of
long-term debt. The decrease in cash flows from financing activities for Ameren
was also due to the payment on the nuclear fuel lease related to UE and the
incremental payment of dividends on common stock by Ameren due to increased
shares outstanding. In addition, Ameren had decreased proceeds from the issuance
of long-term debt and common stock, which totaled $1.1 billion in 2003 compared
to $1.6 billion in 2002. Proceeds from the sale of common shares by Ameren in
2003 and 2002 were primarily used to fund the acquisition of CILCORP, which was
completed in January 2003. See Note 2 - Acquisitions to our financial statements
under Part II, Item 8 of this report for further detail. Genco's decrease in
cash flows from financing activities resulted from decreased borrowings from the
non state regulated subsidiary money pool, as well as no issuances of long-term
debt in 2003. The decreases in cash flows from financing activities at CILCORP
and CILCO were partially offset by proceeds received from intercompany borrowing
arrangements by CILCORP and CILCO in 2003.

Cash flows from financing activities increased at UE in 2003 compared to
2002 primarily due to additional proceeds received from the issuance of
long-term debt offset by increased redemptions of debt in 2003 compared to 2002.
Cash flows used in financing activities decreased at CIPS in 2003 compared to
2002 primarily due to increased proceeds from borrowings from the utility money
pool, offset by increased long-term debt payments.

2002 versus 2001

Cash flows from financing activities increased for Ameren, CIPS, Genco,
CILCORP and CILCO and decreased for UE for 2002 compared to 2001. Ameren's
increase in cash flows provided by financing activities was primarily due to the
increase in proceeds received from the issuance of long-term debt and sale of
common shares offset by an increase in redemptions of short-term and long-term
debt and an increase in dividends paid on common stock. Cash flows used in
financing activities at CIPS decreased primarily due to decreased borrowings
from the utility money pool, partially offset by decreased long-term debt
issuances. Genco's cash provided by financing activities increased in 2002
compared to 2001 due to the issuance of long-term debt and increased borrowings
under the non state-regulated subsidiary money pool arrangement, partially
offset by dividends paid to Ameren in 2002 and a cash contribution received by
Ameren in 2001. Cash flows from financing activities at CILCORP and CILCO
increased from 2002 compared to 2001 primarily due to the issuance of long-term
debt. Cash flows used in financing activities increased for UE due to increased
redemptions of long-term debt and reductions in short-term borrowings as well as
dividend payments on common stock, partially offset by the issuance of long-term
debt.

Ameren and UE are authorized by the SEC under PUHCA to have up to an
aggregate of $1.5 billion and $1 billion, respectively, of short-term unsecured
debt instruments outstanding at any time. In addition, CIPS, CILCORP and CILCO
have PUHCA authority to have up to an aggregate of $250 million each of
short-term unsecured debt

59



instruments outstanding at any time. Genco is authorized by the FERC to have up
to $300 million of short-term debt outstanding at any time.

Short-term Borrowings and Liquidity

Short-term borrowings consist of commercial paper and bank loans
(maturities generally within 1 to 45 days). Short-term borrowings at Ameren and
UE at December 31, 2003, were $161 million (2002 - $271 million) and $150
million (2002 - $250 million, respectively. CILCO had short-term borrowings of
$10 million at December 31, 2002, with no amount outstanding at December 31,
2003. The average short-term borrowings at UE were $24 million for the year
ended December 31, 2003, with a weighted-average interest rate of 1.1%(2002 -
$65 million with a weighted-average interest rate of 1.8%) Peak short-term
borrowings for UE were $228 million for the year ended December 31, 2003, with a
weighted-average interest rate of 1.2% (2002 - $173 million with a
weighted-average interest rate of 1.7%) CILCO's commercial paper outstanding at
December 31, 2002, had a weighted-average interest rate of 2.05%.

The following table presents the various committed credit facilities of the
Ameren Companies and EEI as of December 31, 2003:



=======================================================================================================
Credit Expiration Amount Amount
Facility Committed Available
-------------------------------------------------------------------------------------------------------

Ameren:(a)
364-day revolving................... July 2004 $ 235 $ 235
Multi-year revolving................ July 2005 130 130
Multi-year revolving................ July 2006 235 235
UE:
Various 364-day revolving........... through May 2004 154 4
Nuclear fuel lease(b)............... February 2004 120 53
CIPS:
Two 364-day revolving................ through July 2004 15 15
CILCO:
Three 364-day revolving............. through August 2004 60 60
EEI:
Two bank credit facilities.......... through June 2004 45 37
-------------------------------------------------------------------------------------------------------
Total ............................ $ 994 $ 769
=======================================================================================================
(a) CILCORP and Genco may access the credit facilities through
intercompany borrowing arrangements.
(b) Provided for financing of nuclear fuel. The agreement was terminated
in February 2004.



At December 31, 2003, certain of the Ameren Companies had committed bank
credit facilities totaling $829 million, excluding the EEI facilities and the
nuclear fuel lease facility, which were available for use by UE, CIPS, CILCO and
Ameren Services through a utility money pool arrangement (2002 - $695 million).
As of December 31, 2003, $679 million was available under these committed credit
facilities, excluding the EEI facilities and the nuclear fuel lease facility. In
addition, $600 million of the $829 million may be used by Ameren directly and
most of the non rate-regulated affiliates including, but not limited to,
Resources Company, Genco, Marketing Company, AFS, AERG and Ameren Energy through
a non state-regulated subsidiary money pool agreement. CILCO received final
regulatory approval to participate in the utility money pool arrangement in
September 2003. CILCORP received funds through direct loans from Ameren since it
was not part of the non state-regulated money pool agreement. The committed bank
credit facilities are used to support our commercial paper programs under which
$150 million was outstanding at December 31, 2003 (2002 - $250 million). Access
to credit facilities for all Ameren Companies is subject to reduction based on
use by affiliates. AERG received final regulatory approval to participate in the
non state-regulated subsidiary money pool arrangement and as a lender only in
the utility money pool arrangement in October 2003. See Note 14 - Related Party
Transactions to our financial statements under Part II, Item 8 of this report
for a detailed explanation of the money pool arrangements.

In July 2003, Ameren entered into two new revolving credit facilities
totaling $470 million, and in April 2003, UE entered into a new 364-day
committed credit facility totaling $75 million. See Note 5 - Short-term
Borrowings and Liquidity to our financial statements under Part II, Item 8 of
this report for a detailed explanation of these credit facilities.

EEI also has two bank credit agreements totaling $45 million that extend
through June 2004. At December 31, 2003, $37 million was available under these
committed credit facilities.



60



UE also had a lease agreement that provided for the financing of nuclear
fuel. At December 31, 2003, $67 million was financed under the lease (2002 -
$113 million). The lease agreement was terminated in February 2004. See Note 6 -
Long-term Debt and Equity Financings to our financial statements under Part II,
Item 8 of this report for further information.

The following table summarizes the amount of commitment expiration per
period as of December 31, 2003:



==========================================================================================================
Total Less than 1-3 4-5 More than
Committed 1 Year Years Years 5 Years
----------------------------------------------------------------------------------------------------------

Ameren......................... $ 600 $ 235 $ 365 $ - $ -
UE(a).......................... 274 274 - - -
CIPS........................... 15 15 - - -
CILCO.......................... 60 60 - - -
EEI............................ 45 45 - - -
---------------------------------------------------------------------------------------------------------
Total ......................... $ 994 $ 629 $ 365 $ - $ -
=========================================================================================================
(a) Includes $120 million which supported the nuclear fuel lease. This
lease was terminated in February 2004.



In addition to committed credit facilities, a further source of liquidity
for Ameren is available cash and cash equivalents. At December 31, 2003, Ameren
had $111 million of cash and cash equivalents (2002 - $628 million).

Ameren and its subsidiaries rely on access to short-term and long-term
capital markets as a significant source of funding for capital requirements not
satisfied by our operating cash flows. The inability by us to raise capital on
favorable terms, particularly during times of uncertainty in the capital
markets, could negatively impact our ability to maintain and grow our
businesses. Based on our current credit ratings (see Credit Ratings below), we
believe that we will continue to have access to the capital markets. However,
events beyond our control may create uncertainty in the capital markets such
that our cost of capital would increase or our ability to access the capital
markets would be adversely affected.

Long-term Debt and Equity

The following table presents the issuances of common stock and the
issuances, redemptions, repurchases and maturities of long-term debt and
preferred stock for the years 2003, 2002 and 2001 for the Ameren Companies. For
additional information related to the terms and uses of these issuances and the
sources of funds and terms for the redemptions, see Note 6 - Long-term Debt and
Equity Financings to our financial statements under Part II, Item 8 of this
report.



====================================================================================================================
Month Issued,
Redeemed,
Repurchased or
Matured 2003 2002 2001
- ---------------------------------------------------------------------------------------------------------------------

Issuances
Long-term debt
Ameren:
5.70% notes due 2007................................ January $ - $ 100 $ -
Senior notes due 2007(a)............................ March - 345 -
Floating Rate Notes due 2003........................ December - - 150

UE:
5.50% Senior secured notes due 2034................. March 184 - -
4.75% Senior secured notes due 2015................. April 114 - -
5.10% Senior secured notes due 2018................. July 200 - -
4.65% Senior secured notes due 2013................. October 200 - -
5.25% Senior secured notes due 2012................. August - 173 -

CIPS:
6.625% Senior secured notes due 2011................ June - - 150

Genco:
7.95% Senior notes due 2032......................... June - 275 -
- ---------------------------------------------------------------------------------------------------------------------

61


- ---------------------------------------------------------------------------------------------------------------------
Month Issued,
Redeemed,
Repurchased or
Matured 2003 2002 2001
- ---------------------------------------------------------------------------------------------------------------------
CILCO:
Secured term loan due 2004.......................... June - 100 -
Less: CILCO activity prior to acquisition................. - (100) -

- ---------------------------------------------------------------------------------------------------------------------
Total Ameren long-term debt issuances...................... $ 698 $ 893 $ 300
- ---------------------------------------------------------------------------------------------------------------------
Common stock
Ameren:
6,325,000 Shares at $40.50.......................... January $ 256 $ - $ -
5,000,000 Shares at $39.50.......................... March - 198 -
750,000 Shares at $38.865........................... March - 29 -
8,050,000 Shares at $42.00.......................... September - 338 -
DRPlus and 401(k)(b)................................ Various 105 93 33
- ---------------------------------------------------------------------------------------------------------------------
Total common stock issuances............................... $ 361 $ 658 $ 33
- ---------------------------------------------------------------------------------------------------------------------
Total Ameren long-term debt and common stock issuances..... $ 1,059 $ 1,551 $ 333
- ---------------------------------------------------------------------------------------------------------------------
Redemptions, Repurchases and Maturities
Long-term debt/capital lease
Ameren:
Floating Rate Notes due 2003........................ December $ 150 $ - $ -
UE:
8 1/4% First mortgage bonds due 2022................ April 104 - -
8.00% First mortgage bonds due 2022................. May 85 - -
7.65% First mortgage bonds due 2003................. July 100 - -
7.15% First mortgage bonds due 2023................. August 75 - -
8.75% First mortgage bonds due 2021................. September - 125 -
8.33% First mortgage bonds due 2002................. December - 75 -
Commercial paper, net............................... Various - - 19
Peno Creek CT....................................... December 3 - -
CIPS:
6.99% Series 97-1 first mortgage bonds due 2003..... March 5 - -
6 3/8 Series Z first mortgage bonds due 2003........ April 40 - -
7 1/2 Series X first mortgage bonds due 2007........ April 50 - -
6.94% Series 97-1 first mortgage bonds due 2002..... March - 5 -
6.96% Series 97-1 first mortgage bonds due 2002..... September - 5 -
6.75% Series Y first mortgage bonds due 2002........ September - 23 -
Other 6.73% - 6.89% due 2001........................ Various - - 30
CILCORP:(c)
9.375% Senior bonds due 2029........................ September 17 - -
8.70% Senior notes due 2009......................... September 31 - -
8.52% - 9.1% medium term notes...................... Various - - 18
CILCO:
6.82% First mortgage bonds due 2003................. February 25 - -
8.20% First mortgage bonds due 2022................. April 65 - -
7.80% Two series of first mortgage bonds due 2023... April 10 - -
Hallock substation power modules bank loan due
through 2004...................................... August 3 1 1
Kickapoo substation power modules bank loan due
through 2004...................................... August 2 - -
Medina Valley:
Secured term loan due 2019.......................... June 36 - -
EEI:
1991 8.60% Senior medium term notes, amortization... December 7 6 7
1994 6.61% Senior medium term notes, amortization... December 7 8 7
- ----------------------------------------------------------------------------------------------------------------------

62


- ----------------------------------------------------------------------------------------------------------------------
Month Issued,
Redeemed,
Repurchased or
Matured 2003 2002 2001
- ----------------------------------------------------------------------------------------------------------------------
Preferred Stock
UE:
1.735 Series ...................................... December - 42 -
CILCO:(c)
5.85% Series ...................................... July 1 - -
CIPS:
1993 auction preferred ............................ December 30 - -
Less: CILCORP and CILCO activity prior to
acquisition date................................... - (1) (19)
- ----------------------------------------------------------------------------------------------------------------------
Total Ameren long-term debt and preferred stock
redemptions, repurchases and maturities............ $ 846 $ 289 $ 63
======================================================================================================================
(a) A component of the adjustable conversion-rate equity security units.
See Note 6 - Long-term Debt and Equity Financings to our financial
statements under Part II, Item 8 of this report.
(b) Includes issuances of common stock of 2.5 million shares in 2003, 2.3
million shares in 2002 and 0.8 million shares in 2001 under our DRPlus
plan and in connection with our 401(k) plans.
(c) 2002 and 2001 amounts for CILCORP are predecessor information and have
been included in the total long-term debt and preferred stock
redemption and repurchases.



Ameren

Pursuant to an August 2002 shelf registration statement, Ameren issued
approximately $338 million of common stock in 2002 and issued approximately $256
million of common stock in 2003. Net proceeds from the issuances were used to
fund the cash portion of the purchase price for its acquisition of CILCORP and
for general corporate purposes. In February 2004, Ameren issued, pursuant to the
August 2002 shelf registration statement, 19.1 million shares of its common
stock at $45.90 per share. Ameren received net proceeds of $853 million, which
are expected to provide funds required to pay the cash portion of the purchase
price for our acquisition of Illinois Power and Dynegy's 20% interest in EEI and
to reduce Illinois Power debt assumed as part of this transaction and pay
related premiums. Pending such use, and/or if the acquisition is not completed,
Ameren plans to use the net proceeds to reduce present or future indebtedness
and/or repurchase securities of Ameren or its subsidiaries. A portion of the net
proceeds may also be temporarily invested in short-term instruments. As
substantially all of the capacity under the August 2002 shelf registration was
used, Ameren expects to make a new shelf registration statement filing with the
SEC in early 2004. See Note 2 - Acquisitions to our financial statements under
Part II, Item 8 of this report for further information.

The acquisitions of CILCORP on January 31, 2003, and Medina Valley on
February 4, 2003, included the assumption by Ameren of CILCORP and Medina Valley
debt and preferred stock at closing of $895 million. The assumed debt and
preferred stock consisted of $250 million 9.375% senior notes due 2029, $225
million 8.70% senior notes due 2009, a $100 million secured floating rate term
loan due 2004, other secured indebtedness totaling $279 million and preferred
stock of $41 million.

UE

In August 2002, a shelf registration statement filed by UE and its
subsidiary trust with the SEC was declared effective. This registration
statement permitted the offering from time to time of up to $750 million of
various forms of long-term debt and trust preferred securities to refinance
existing debt and preferred stock, and for general corporate purposes, including
the repayment of short-term debt incurred to finance construction expenditures
and other working capital needs. UE issued securities totaling $173 million in
2002 and $498 million in 2003 pursuant to the August 2002 shelf registration
statement with the amount of securities that remained available for issuance
totaling $79 million as of August 2003. See Note 6 - Long-term Debt and Equity
Financings to our financial statements under Part II, Item 8 of this report for
further information.

In September 2003, the SEC declared effective another shelf registration
statement filed by UE and its subsidiary trust in August 2003, covering the
offering from time to time of up to $1 billion of various forms of long-term
debt and

63



trust preferred securities. The $79 million of securities which remained
available for issuance under the August 2002 shelf registration statement is
included in the $1 billion of securities available to be issued under this shelf
registration statement. UE issued securities totaling $200 million in 2003
pursuant to the September 2003 shelf registration statement with the amount of
securities remaining available for issuance at December 31, 2003, totaling $800
million. UE may sell all, or a portion of, the currently remaining securities
registered under the September 2003 shelf registration statement if warranted by
market conditions and capital requirements. Any offer and sale will be made only
by means of a prospectus meeting the requirements of the Securities Act of 1933
and the rules and regulations thereunder.

CIPS

In May 2001, a shelf registration statement filed by CIPS with the SEC was
declared effective. This registration statement enables CIPS to offer from time
to time senior notes in one or more series with an offering price not to exceed
$250 million. In June 2001, CIPS issued, under the shelf registration statement,
$150 million of senior notes. At December 31, 2003, the amount of securities
remaining available for issuance pursuant to the shelf registration statement
was $100 million. CIPS may sell all, or a portion of, the currently remaining
securities registered under the May 2001 shelf registration statement if
warranted by market conditions and capital requirements. Any offer and sale will
be made only by means of a prospectus meeting the requirements of the Securities
Act of 1933 and the rules and regulations thereunder.

Indebtedness Provisions and Other Covenants

Bank Credit Facilities

Borrowings under Ameren's non state-regulated subsidiary money pool by
Genco, Development Company and Medina Valley, each an "exempt wholesale
generator," are considered investments for purposes of the 50% SEC aggregate
investment limitation. Based on Ameren's aggregate investment in these "exempt
wholesale generators" as of December 31, 2003, the maximum permissible
borrowings under Ameren's non state-regulated subsidiary money pool pursuant to
this limitation for these entities was $663 million in the aggregate.

Certain of the Ameren Companies' bank credit agreements contain provisions
which, among other things, place restrictions on the ability to incur liens,
sell assets, merge with other entities and restrict and encumber upstream
dividend payments of our subsidiaries. These credit agreements also contain a
provision that limits Ameren's, UE's, CIPS' and CILCO's total indebtedness to
60% of total capitalization pursuant to a calculation defined in the related
agreement. As of December 31, 2003, the ratio of total indebtedness to total
capitalization (calculated in accordance with this provision) for Ameren, UE,
CIPS and CILCO was 52%, 44%, 54% and 53%, respectively (2002 - 50%, 43%, 50%,
- -%). These credit agreement provisions were not applicable in 2002 for CILCO,
since CILCO was not a party to, nor subject to the provisions of, these
facilities during 2002. In addition, the credit agreements contain indebtedness
cross-default provisions and material adverse change clauses, which could
trigger a default under these facilities in the event that any of Ameren's
subsidiaries (subject to the definition in the underlying credit agreements),
other than certain project finance subsidiaries, defaults on indebtedness in
excess of $50 million. The credit agreements also require us to meet minimum
ERISA funding rules.

None of the Ameren Companies' credit agreements or financing arrangements
contain credit rating triggers with the exception of one of CILCO's financing
arrangements. An event of default will occur under a $100 million CILCO bank
term loan if the credit rating on CILCO's first mortgage bonds falls below any
two of the following: BBB- from S&P, Baa3 from Moody's or BBB- from Fitch. As of
December 31, 2003, CILCO's current ratings on its first mortgage bonds were A-,
A2 and A, respectively. This term loan was repaid in February 2004.

At December 31, 2003, Ameren and its subsidiaries were in compliance with
their credit agreement provisions and covenants.

Indenture Provisions and Other Covenants

UE

UE's indenture agreements and Articles of Incorporation include covenants
and provisions which must be complied with in order to issue first mortgage
bonds and preferred stock. UE must comply with earnings tests contained in its
respective mortgage indenture and Articles of Incorporation. For the issuance of
additional first mortgage bonds,


64



earnings coverage of twice the annual interest charges on first mortgage bonds
outstanding and to be issued is required. At December 31, 2003, UE had a
coverage ratio of 9.1 times the annual interest charges on the first mortgage
bonds outstanding, which would permit UE to issue an additional $4.2 billion of
first mortgage bonds. For the issuance of additional preferred stock, earnings
coverage of at least 2.5 times the annual dividend on preferred stock
outstanding and to be issued is required under UE's Articles of Incorporation.
As of December 31, 2003, UE had a coverage ratio of 74.2 times the annual
dividend on preferred stock outstanding which would permit UE to issue an
additional $2.4 billion in preferred stock. The ability to issue such securities
in the future will depend on such tests at that time.

In addition, UE's mortgage indenture contains certain provisions which
restrict the amount of common dividends that can be paid by UE. Under this
mortgage indenture, $31 million of total retained earnings was restricted
against payment of common dividends, except those payable in common stock,
leaving $1.6 billion of free and unrestricted retained earnings at December 31,
2003.

CIPS

CIPS' indenture agreements and Articles of Incorporation include covenants
which must be complied with in order to issue first mortgage bonds and preferred
stock. CIPS must comply with earnings tests contained in its respective mortgage
indenture and Articles of Incorporation. For the issuance of additional first
mortgage bonds, earnings coverage of twice the annual interest charges on first
mortgage bonds outstanding and to be issued is required. As of December 31,
2003, CIPS had a coverage ratio of 2.5 times the annual interest charges for one
year on the aggregate amount of bonds outstanding, and consequently, had the
availability to issue an additional $66 million of first mortgage bonds. For the
issuance of additional preferred stock, earnings coverage of 1.5 times annual
interest charges on all long-term debt and preferred stock dividends is required
under CIPS' Articles of Incorporation. As of December 31, 2003, CIPS had a
coverage ratio of 1.8 times the sum of the annual interest charges and dividend
requirements on all long-term debt and preferred stock outstanding as of
December 31, 2003, and consequently, had the availability to issue an additional
$109 million of preferred stock. The ability to issue such securities in the
future will depend on coverage ratios at that time.

Genco

Genco's senior note indenture includes provisions that require it to
maintain a senior debt service coverage ratio of at least 1.8 to 1 (for both the
prior four fiscal quarters and for the next succeeding four six-month periods)
in order to pay dividends to Ameren or to make payments of principal or interest
under certain subordinated indebtedness excluding amounts payable under its
intercompany note payable with CIPS. For the four quarters ended December 31,
2003, this ratio was 3.8 to 1. In addition, the indenture also restricts Genco
from incurring any additional indebtedness, with the exception of certain
permitted indebtedness as defined in the indenture, unless its senior debt
service coverage ratio equals at least 2.5 to 1 for the most recently ended four
fiscal quarters and its senior debt to total capital ratio would not exceed 60%,
both after giving effect to the additional indebtedness on a pro-forma basis.
This debt incurrence requirement is disregarded in the event certain rating
agencies reaffirm the ratings of Genco after considering the additional
indebtedness. As of December 31, 2003, Genco's senior debt to total capital was
53%.

CILCORP

Covenants in CILCORP's indenture governing its $475 million (original
issuance amount) senior notes and bonds require CILCORP to maintain a debt to
capital ratio of no greater than 0.67 to 1 and an interest coverage ratio of at
least 2.2 to 1 in order to make any payment of dividends or intercompany loans
to affiliates other than to its direct and indirect subsidiaries including
CILCO. However, in the event CILCORP is not in compliance with these tests,
CILCORP may make such payments of dividends or intercompany loans if its senior
long-term debt rating is at least BB+ from S&P, Baa2 from Moody's and BBB from
Fitch. At December 31, 2003, CILCORP's debt to capital ratio was 0.6 to 1 and
its interest coverage ratio was 3.0 to 1, calculated in accordance with related
provisions in this indenture. The common stock of CILCO is pledged as security
to the holders of these senior notes and bonds.

CILCO

CILCO must maintain investment grade ratings for its first mortgage bonds
from at least two of S&P, Moody's and Fitch. CILCO's current senior secured debt
ratings from these rating agencies is A-, A2 and A, respectively. CILCO had
restrictions on the payment of dividends and its ability to otherwise make
distributions with respect to its common stock as a result of its $100 million
bank term loan. This loan was repaid in February 2004.

65



Dividends

Common stock dividends paid by Ameren in 2003 resulted in a payout rate of
78% of Ameren's net income. The payout rate in 2002 was 98% and was 75% in 2001.
Dividends paid to common stockholders in relation to net cash provided by
operating activities for the same periods were 40%, 45% and 47%.

The amount and timing of dividends payable on Ameren's common stock are
within the sole discretion of Ameren's Board of Directors. Ameren's Board of
Directors has not set specific targets or payout parameters when declaring
common stock dividends. However, the Board considers various issues including
Ameren's historic earnings and cash flow, projected earnings, cash flow and
potential cash flow requirements, dividend payout rates at other utilities,
return on investments with similar risk characteristics, and overall business
considerations. Dividends paid by Ameren to stockholders totaled $410 million or
$2.54 per share in 2003 (2002 - $376 million or $2.54 per share, 2001 - $350
million or $2.54 per share). On February 13, 2004, Ameren's Board of Directors
declared a quarterly common stock dividend of 63.5 cents per share payable on
March 31, 2004, to stockholders of record on March 10, 2004.

Certain of our financial agreements and corporate organizational documents
contain covenants and conditions that, among other things, provide restrictions
on the Ameren Companies' payment of dividends. Ameren would experience
restrictions on dividend payments if it were to defer contract adjustment
payments on its equity security units. UE would experience restrictions on
dividend payments if it were to extend or defer interest payments on its
subordinated debentures. CIPS has provisions restricting dividend payments based
on ratios of common stock to total capitalization along with provisions related
to certain operating expenses and accumulations of earned surplus. Genco's
indenture includes restrictions which prohibit making any dividend payments if
debt service coverage ratios are below a defined threshold. CILCORP has
restrictions in the event leverage ratio and interest coverage ratio thresholds
are not met or if CILCORP's senior long-term debt does not have specified
ratings as described in its indenture. CILCO has restrictions on dividend
payments relative to the ratio of its balance of retained earnings to the annual
dividend requirement on its preferred stock and amounts to be set aside for any
sinking fund retirement of 5.85% Series Preferred Stock.

The following table presents dividends paid directly or indirectly to
Ameren by its subsidiaries for the years ended December 31, 2003, 2002, and
2001:



================================================================================================================
2003 2002 2001
----------------------------------------------------------------------------------------------------------------

UE....................................................... $ 288 $ 299 $ 283
CIPS..................................................... 62 62 33
Genco.................................................... 36 21 -
CILCORP (parent company only)(a)......................... (35) (40)(b) (30)(b)
CILCO.................................................... 62 40(b) 45(b)
Non-registrants.......................................... - 1 -
----------------------------------------------------------------------------------------------------------------
Dividends paid to Ameren................................. $ 413 $ 383 $ 316
================================================================================================================
(a) Indicates funds retained from the CILCO dividend.
(b) Prior to February 2003, CILCORP's dividends would have been paid to
AES. These amounts are excluded from the total dividends paid to
Ameren.


Contractual Obligations

The following table presents our contractual obligations as of December 31,
2003. See Note 3 - Rate and Regulatory Matters to our financial statements under
Part II, Item 8 of this report for information regarding Ameren's and UE's
capital expenditure commitments, which were agreed upon in relation to UE's 2002
Missouri electric rate case settlement and UE's 2003 Missouri gas rate case
settlement. See Note 11 - Retirement Benefits to our financial statements under
Part II, Item 8 of this report for information regarding expected minimum
funding levels for our pension plan.



==================================================================================================================
Less than 1-3 4-5 More than
Total 1 Year Years Years 5 Years
------------------------------------------------------------------------------------------------------------------

Ameren:
Long-term debt and capital lease obligations....... $ 4,575 $ 498 $ 302 $ 666 $ 3,109
Short-term debt.................................... 161 161 - - -
Operating leases(a)................................ 146 20 25 21 80
Other obligations(b)............................... 3,146 1,033 1,272 622 219
-------------------------------------------------------------------------------------------------------------------
Total cash contractual obligations(c).............. $ 8,028 $ 1,712 $ 1,599 $ 1,309 $ 3,408
-------------------------------------------------------------------------------------------------------------------

66


-------------------------------------------------------------------------------------------------------------------
Less than 1-3 4-5 More than
Total 1 Year Years Years 5 Years
-------------------------------------------------------------------------------------------------------------------
UE:
Long-term debt and capital lease obligations....... $ 2,106 $ 344 $ 6 $ 156 $ 1,600
Short-term debt.................................... 150 150 - - -
Operating leases(a)................................ 112 9 17 16 70
Other obligations(b)............................... 1,389 472 567 271 79
-------------------------------------------------------------------------------------------------------------------
Total cash contractual obligations(c).............. $ 3,757 $ 975 $ 590 $ 443 $ 1,749
===================================================================================================================
CIPS:
Long-term debt..................................... $ 486 $ - $ 40 $ 15 $ 431
Short-term debt.................................... - - - - -
Operating leases(a)................................ - - - - -
Other obligations(b)............................... 174 79 89 6 -
-------------------------------------------------------------------------------------------------------------------
Total cash contractual obligations(c).............. $ 660 $ 79 $ 129 $ 21 $ 431
===================================================================================================================
Genco:
Long-term debt..................................... $ 700 $ - $ 225 $ - $ 475
Short-term debt.................................... - - - - -
Operating leases(a)................................ 11 1 1 1 8
Other obligations(b)............................... 902 192 351 249 110
-------------------------------------------------------------------------------------------------------------------
Total cash contractual obligations(c).............. $ 1,613 $ 193 $ 577 $ 250 $ 593
===================================================================================================================
CILCORP:
Long-term debt..................................... $ 769 $ 100 $ 16 $ 50 $ 603
Short-term debt.................................... - - - - -
Operating leases(a)................................ 9 2 3 2 2
Other obligations(b)............................... 433 207 169 44 13
-------------------------------------------------------------------------------------------------------------------
Total cash contractual obligations(c).............. $ 1,211 $ 309 $ 188 $ 96 $ 618
===================================================================================================================
CILCO:
Long-term debt..................................... $ 238 $ 100 $ 16 $ 50 $ 72
Short-term debt.................................... - - - - -
Operating leases(a)................................ 9 2 3 2 2
Other obligations(b)............................... 433 207 169 44 13
-------------------------------------------------------------------------------------------------------------------
Total cash contractual obligations(c).............. $ 680 $ 309 $ 188 $ 96 $ 87
===================================================================================================================
(a) Amounts related to certain real estate leases and railroad licenses
have indefinite payment periods. The $2 million annual obligation for
these items is included in the less than 1 year, 1-3 years and 4-5
years. Amounts for more than 5 years are not included in the total
amount due to the indefinite periods.
(b) Represents purchase contracts for coal, gas, nuclear fuel and electric
capacity.
(c) Routine short-term purchase order commitments are not included.



Off-Balance Sheet Arrangements

At December 31, 2003, neither Ameren nor any of its subsidiaries, had any
off-balance sheet financing arrangements, other than operating leases entered
into in the ordinary course of business. Neither Ameren nor any of its
subsidiaries expects to engage in any significant off-balance sheet financing
arrangements in the near future.

Credit Ratings

The following table presents the current ratings by Moody's, S&P and Fitch
as of December 31, 2003:



================================================================================================================
Moody's S&P Fitch
----------------------------------------------------------------------------------------------------------------

Ameren:
Issuer/Corporate credit rating......... A3 A- A-
Unsecured debt......................... A3 BBB+ A-
Commercial paper....................... P-2 A-2 F2
----------------------------------------------------------------------------------------------------------------

67


----------------------------------------------------------------------------------------------------------------
Moody's S&P Fitch
----------------------------------------------------------------------------------------------------------------
UE:
Secured debt........................... A1 A- A+
Unsecured debt......................... A2 BBB+ A
Commercial paper....................... P-1 A-2 F1
----------------------------------------------------------------------------------------------------------------
CIPS:
Secured debt........................... A1 A- A
Unsecured debt......................... A2 BBB+ A-
----------------------------------------------------------------------------------------------------------------
Genco:
Unsecured debt......................... A3/Baa2 A- BBB+
----------------------------------------------------------------------------------------------------------------
CILCORP:
Unsecured debt......................... Baa2 BBB+ BBB+
----------------------------------------------------------------------------------------------------------------
CILCO:
Secured debt........................... A2 A- A
================================================================================================================


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

Any adverse change in the Ameren Companies' credit ratings may reduce their
access to capital and/or increase the costs of borrowings resulting in a
negative impact on earnings. At December 31, 2003, if the Ameren Companies were
to receive a sub-investment grade rating (less than BBB- or Baa3), UE, CIPS,
Genco, CILCORP and CILCO could have been required to post collateral for certain
trade obligations amounting to $6 million, $1 million, $2 million, $18 million
and $18 million, respectively. In addition, the cost of borrowing under our
credit facilities would increase or decrease based on credit ratings. A credit
rating is not a recommendation to buy, sell or hold securities and should be
evaluated independently of any other rating. Ratings are subject to revision or
withdrawal at any time by the assigning rating organization.


OUTLOOK

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

o Economic conditions, which principally impact native load demand,
particularly from our industrial customers, have been weak for the past few
years, but improved in 2003.
o Ameren, UE and CIPS have historically achieved weather-adjusted growth in
their native electric residential and commercial load of approximately 2%
per year and expect this trend to continue for at least the next few years.
o Electric rates in UE's, CIPS' and CILCO's Illinois service territories are
legislatively fixed through January 1, 2007. An electric rate case
settlement in UE's Missouri service territory has resulted in reductions of
$50 million on April 1, 2002, and $30 million on April 1, 2003, with an
additional $30 million reduction required for April 1, 2004. In addition,
electric rates in Missouri cannot change prior to July 1, 2006, subject to
certain exclusions outlined in UE's rate settlement.
o Power prices in the Midwest impact the amount of revenues UE, Genco and
AERG can generate by marketing any excess power into the interchange
markets. Power prices in the Midwest also impact the cost of power we
purchase in the interchange markets. Long-term power prices continue to be
generally soft in the Midwest, despite a significant increase in power
prices in 2003 relative to 2002 due in part to higher prices for natural
gas.
o Increased expenses associated with rising employee benefit costs and higher
insurance and security costs associated with additional measures UE has
taken, or may have to take, at its Callaway Nuclear Plant and other
operating plants related to world events.
o UE's Callaway Nuclear Plant will have a refueling outage in the spring of
2004, which is expected to last 40-45 days, and will increase maintenance
and purchased power costs, and reduce the amount of excess power available
for sale. Refueling outages occur approximately every 18 months and have
historically reduced net earnings at Ameren and UE by $15 to $20 million in
the year when they occurred. UE's fall 2005 refueling outage is expected to
last 70 days due to the installation of new steam generator units during
the refueling.
o In January 2004, the MoPSC approved a settlement authorizing an annual gas
delivery rate increase of approximately $13 million, which went into effect
on February 15, 2004. The settlement provides that gas delivery rates
cannot change prior to July 1, 2006, subject to certain exclusions. In
October 2003, the ICC issued orders awarding CILCO an increase in annual
gas delivery rates of $9 million and awarding CIPS and UE increases in


68



annual gas delivery rates of $7 million and $2 million, respectively that
went into effect in November 2003. See Note 3 - Rate and Regulatory Matters
to our financial statements under Part II, Item 8 of this report for
additional information.
o Upon entering the Midwest ISO, UE expects to receive a refund of $13
million and CIPS expects to receive a refund of $5 million for fees
previously paid to exit the Midwest ISO; however, Ameren, UE and CIPS will
incur higher ongoing operation costs. See Note 3 - Rate and Regulatory
Matters to our financial statements under Part II, Item 8 of this report
for additional information.
o Ameren, CILCORP and CILCO expect to realize further CILCORP integration
synergies associated with reduced overhead expenses and lower fuel costs.
o In February 2004, we sold 19.1 million shares of new Ameren common stock.
Proceeds from this sale and future offerings are expected to ultimately be
used to finance the cash portion of the purchase price of Illinois Power
and to reduce Illinois Power debt assumed as part of this transaction and
pay any related premiums. However, prior to the closing of the acquisition
of Illinois Power, we expect the new common shares to be dilutive to
earnings per share.

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


REGULATORY MATTERS

See Note 3 - Rate and Regulatory Matters to our financial statements under
Part II, Item 8 of this report.


ACCOUNTING MATTERS

Critical Accounting Policies

Preparation of the financial statements and related disclosures in
compliance with GAAP requires the application of appropriate technical
accounting rules and guidance, as well as the use of estimates. Our application
of these policies involves judgments regarding many factors, which, in and of
themselves, could materially impact the financial statements and disclosures. In
the table below, we have outlined the critical accounting policies that we
believe are most difficult, subjective or complex. A future change in the
assumptions or judgments applied in determining the following matters, among
others, could have a material impact on future financial results.





Accounting Policy Uncertainties Affecting Application
----------------- -----------------------------------

Regulatory Mechanisms and Cost Recovery
All the Ameren Companies, except Genco, o Regulatory environment, external regulatory decisions
defer costs as regulatory assets and requirements
in accordance with SFAS No. 71, o Anticipated future regulatory decisions and their impact
"Accounting for the Effects of Certain o Impact of deregulation and competition on ratemaking
Types of Regulation," and make process and ability to recover costs
investments that it is assumed will be
collected in future rates.

Basis for Judgment
We determine that costs are recoverable based on previous rulings by state
regulatory authorities in jurisdictions where we operate or other factors
that lead us to believe that cost recovery is probable.



69


Accounting Policy Uncertainties Affecting Application
----------------- -----------------------------------

Environmental Costs
We accrue for all known environmental o Extent of contamination
contamination where remediation can be o Responsible party determination
reasonably estimated, but some of our o Approved methods for cleanup
operations have existed for over 100 years o Present and future legislation and governmental
and previous contamination may be regulations and standards
unknown to us. o Results of ongoing research and development
regarding environmental impacts

Basis for Judgment
We determine the proper amounts to accrue for known environmental
contamination based on internal and third party estimates of clean-up costs
in the context of current remediation standards and available technology.


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

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


Valuation of Goodwill, Long-Lived Assets and Asset Retirement Obligations
We assess the carrying value of our o Management's identification of impairment indicators
goodwill and long-lived assets to determine o Changes in business, industry, technology or economic
whether they are impaired. We also review and market conditions
for the existence of asset retirement o Valuation assumptions and conclusions
obligations. If an asset retirement o Estimated useful lives of our significant long-lived
obligation is identified, we determine the assets
fair value of the obligation and o Actions or assessments by our regulators
subsequently reassess and adjust the o Identification of an asset retirement obligation
obligation, as necessary. See Note 1 -
Summary of Significant Accounting
Policies.

Basis for Judgment
Annually or whenever events indicate a valuation may have changed, we
utilize internal models and third parties to determine fair values. We use
various methods to determine valuations, including earnings before
interest, taxes, depreciation and amortization multiples and discounted,
undiscounted and probabilistic discounted cash flow models with multiple
scenarios. The identification of asset retirement obligations is conducted
through the review of legal documents and interviews.


70

Accounting Policy Uncertainties Affecting Application
- ----------------- -----------------------------------

Benefit Plan Accounting
Based on actuarial calculations, we accrue o Future rate of return on pension and other plan assets
costs of providing future employee benefits o Interest rates used in valuing benefit obligations
in accordance with SFAS Nos. 87, 106 and o Healthcare cost trend rates
112, which provide guidance on benefit o Timing of employee retirements
plan accounting. See Note 11 - Retirement
Benefits to our financial statements under
Part II, Item 8 of this report.

Basis for Judgment
We utilize a third party consultant to assist us in evaluating and
recording the proper amount for future employee benefits. Our ultimate
selection of the discount rate, healthcare trend rate and expected rate of
return on pension assets is based on our review of available current,
historical and projected rates, as applicable.


Impact of Future Accounting Pronouncements

See Note 1 - Summary of Significant Accounting Policies to our financial
statements under Part II, Item 8 of this report.

EFFECTS OF INFLATION AND CHANGING PRICES

Our rates for retail electric and gas utility service are regulated by the
MoPSC and the ICC. Non-retail electric rates are regulated by the FERC. Our
Missouri electric and gas rates have been set through June 30, 2006, as part of
the settlement of our Missouri electric and gas rate cases and our Illinois
electric rates are legislatively fixed through January 1, 2007. Inflation
affects our operations, earnings, stockholders' equity and financial
performance.

The current replacement cost of our utility plant substantially exceeds our
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 plant in future years. Ameren's generation portion of its
business in its Illinois jurisdiction is principally non rate-regulated and
therefore does not have regulated recovery mechanisms.

In our retail electric utility jurisdictions, there are no provisions for
adjusting rates to accommodate for changes in the cost of fuel for electric
generation. In our retail gas utility jurisdictions, changes in gas costs are
generally reflected in billings to gas customers through PGA clauses. We are
impacted by changes in market prices for natural gas to the extent we must
purchase natural gas to run our CTs. We have structured various supply
agreements to maintain access to multiple gas pools and supply basins to
minimize the impact to the financial statements. See Quantitative and
Qualitative Disclosures about Market Risk - Commodity Price Risk for further
information.


ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk represents the risk of changes in value of a physical asset or
a financial instrument, derivative or non-derivative, caused by fluctuations in
market variables such as interest rates. The following discussion of our risk
management activities includes "forward-looking" statements that involve risks
and uncertainties. Actual results could differ materially from those projected
in the "forward-looking" statements. We handle market risks in accordance with
established policies, which may include entering into various derivative
transactions. In the normal course of business, we also face risks that are
either non-financial or non-quantifiable. Such risks principally include
business, legal and operational risks and are not represented in the following
discussion.

Our risk management objective is to optimize our physical generating assets
within prudent risk parameters. Our risk management policies are set by a Risk
Management Steering Committee, which is comprised of senior-level Ameren
officers.


71



Interest Rate Risk

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

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

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

The following table presents the estimated increase (decrease) in our
annual interest expense and net income if interest rates were to change by 1% on
variable rate debt outstanding at December 31, 2003:

===============================================================================
Interest Expense Net Income(a)
- -------------------------------------------------------------------------------
Ameren................................. $ 9 $ (6)
UE..................................... 7 (4)
CIPS................................... 1 (1)
Genco.................................. 1 (1)
CILCORP................................ 3 (2)
CILCO.................................. 3 (2)
===============================================================================
(a) Calculations are based on an effective tax rate of 37%.

The model does not consider the effects of the reduced level of potential
overall economic activity that would exist in such an environment. In the event
of a significant change in interest rates, management would likely take actions
to further mitigate our exposure to this market risk. However, due to the
uncertainty of the specific actions that would be taken and their possible
effects, the sensitivity analysis assumes no change in our financial structure.

Credit Risk

Credit risk represents the loss that would be recognized if counterparties
fail to perform as contracted. NYMEX-traded futures contracts are supported by
the financial and credit quality of the clearing members of the NYMEX and have
nominal credit risk. On all other transactions, we are exposed to credit risk in
the event of nonperformance by the counterparties to the transaction.

Our physical and financial instruments are subject to credit risk
consisting of trade accounts receivables, executory contracts with market risk
exposures and leverage lease investments. The risk associated with trade
receivables is mitigated by the large number of customers in a broad range of
industry groups comprising our customer base. No non-affiliated customer
represents greater than 10%, in the aggregate, of our accounts receivable. Our
revenues are primarily derived from sales of electricity and natural gas to
customers in Missouri and Illinois. UE and Genco have credit exposure associated
with accounts receivables from non-affiliated companies for interchange sales.
At December 31, 2003, UE's, Genco's and Marketing Company's combined credit
exposure to non-investment grade counterparties related to interchange sales was
$4 million, net of collateral. We establish credit limits for these
counterparties and monitor the appropriateness of these limits on an ongoing
basis through a credit risk management program which involves daily exposure
reporting to senior management, master trading and netting agreements, and
credit support such as letters of credit and parental guarantees. We also
analyze each counterparty's financial condition prior to entering into sales,
forwards, swaps, futures or option contracts and monitor counterparty exposure
associated with our leveraged leases.

Equity Price Risk

Our costs of providing non-contributory defined benefit retirement and
postretirement benefit plans are dependent upon a number of factors, such as the
rate of return on plan assets, discount rate, the rate of increase in healthcare
costs and contributions made to the plans. The market value of our plan assets
was affected by declines in the equity market for 2000 through 2002 for the
pension and postretirement plans. As a result, at December 31, 2002, we
recognized an

72



additional minimum pension liability as prescribed by SFAS No. 87, "Employers'
Accounting for Pensions," which resulted in an after-tax charge to OCI and a
reduction in stockholders' equity of $102 million. At December 31, 2003, the
minimum pension liability was reduced, resulting in OCI of $46 million and an
increase in stockholders' equity. The following table presents the minimum
pension liability amounts, after taxes, for the Ameren Companies as of December
31, 2003 and 2002:

===============================================================================
2003 2002
- -------------------------------------------------------------------------------
Ameren(a)................................... $ 56 $ 102
UE.......................................... 34 62
CIPS........................................ 7 13
Genco....................................... 4 6
CILCORP(b).................................. - 60
CILCO....................................... 13 30
===============================================================================
(a) Excludes amounts for CILCORP and CILCO prior to the acquisition date
of January 31, 2003; includes amounts for non-registrant Ameren
subsidiaries.
(b) 2002 amounts represent predecessor information. CILCORP consolidates
CILCO and therefore includes CILCO amounts in its balances.

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

UE also maintains trust funds, as required by the NRC and Missouri and
Illinois state laws, to fund certain costs of nuclear plant decommissioning. As
of December 31, 2003, these funds were invested primarily in domestic equity
securities (68%), debt securities (30%), and cash and cash equivalents (2%) and
totaled $212 million at fair value. By maintaining a portfolio that includes
long-term equity investments, UE seeks to maximize the returns to be utilized to
fund nuclear decommissioning costs. However, the equity securities included in
the portfolio are exposed to price fluctuations in equity markets and the
fixed-rate, fixed-income securities are exposed to changes in interest rates. UE
actively monitors the portfolio by benchmarking the performance of its
investments against certain indices and by maintaining, and periodically
reviewing, established target allocation percentages of the assets of the trusts
to various investment options. UE's exposure to equity price market risk is, in
large part, mitigated, due to the fact that UE is currently allowed to recover
decommissioning costs in its rates.

Commodity Price Risk

We are exposed to changes in market prices for natural gas, fuel and
electricity to the extent they cannot be recovered through rates. UE has
electric rate freezes in place in Missouri through June 30, 2006, and UE, CIPS
and CILCO have electric rate freezes in place in Illinois through January 1,
2007. We utilize several techniques to mitigate risk, 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 we use (primarily forward contracts,
futures contracts, option contracts and financial swap contracts) are dictated
by risk management policies.

With regard to UE, CIPS and CILCO's natural gas utility business, exposure
to changing market prices is in large part mitigated by the fact there are gas
cost recovery mechanisms (PGA clauses) in place in both Missouri and Illinois.
These gas cost recovery mechanisms allow UE, CIPS and CILCO to pass on to retail
customers prudently incurred costs of natural gas.

We use fixed-price forward contracts, as well as futures, options and
financial swaps to manage risks associated with fuel and natural gas prices. The
majority of our fuel supply contracts are physical forward contracts. Since we
do not have a provision similar to the PGA clause for our electric operations,
we have entered into long-term contracts with various suppliers to purchase coal
and nuclear fuel in order to manage our exposure to fuel prices. See Note 15 -
Commitments and Contingencies to our financial statements under Part II, Item 8
of this report for further information. With regard to our electric generating
operations, UE, Genco and CILCO are exposed to changes in market prices for
natural gas to the extent they must purchase natural gas to run CTs. Their
natural gas procurement strategy is designed to ensure reliable and immediate
delivery of natural gas to intermediate and peaking units by optimizing
transportation

73



and storage options and minimizing cost and price risk by structuring various
supply agreements to maintain access to multiple gas pools and supply basins.

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



===================================================================================================================
2004 2005 2006 - 2008
- -------------------------------------------------------------------------------------------------------------------

Ameren:
Coal....................................................... 96% 67% 41%
Nuclear fuel............................................... 100 100 32
Natural gas for generation................................. 38 11 2
Natural gas for distribution............................... 34 14 4
===================================================================================================================
UE:
Coal....................................................... 95% 62% 35%
Nuclear fuel............................................... 100 100 32
Natural gas for generation................................. 31 11 2
Natural gas for distribution............................... 26 13 4
===================================================================================================================
CIPS:
Natural gas for distribution............................... 29% 17% 4%
===================================================================================================================
Genco:
Coal....................................................... 100% 86% 64%
Natural gas for generation................................. 28 19 6
===================================================================================================================
CILCORP:(a)
Coal....................................................... 92% 64% 35%
Natural gas for distribution............................... 41 12 4
===================================================================================================================
CILCO:
Coal....................................................... 92% 64% 35%
Natural gas for distribution............................... 41 12 4
===================================================================================================================
(a) CILCORP consolidates CILCO and therefore includes CILCO amounts in
its balances.



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

===============================================================================
Fuel Expense Net Income(a)
- -------------------------------------------------------------------------------
Ameren.................................... $ 9 $ 5
UE........................................ 5 3
CIPS...................................... - -
Genco..................................... 2 1
CILCORP(b)................................ 1 1
CILCO..................................... 1 1
===============================================================================
(a) Calculations are based on an effective tax rate of 37%.
(b) CILCORP consolidates CILCO and therefore includes CILCO amounts in
its balances.

In the event of a significant change in coal prices, we would likely take
actions to further mitigate our exposure to this market risk. However, due to
the uncertainty of the specific actions that would be taken and their possible
effects, the sensitivity analysis assumes no change in our financial structure
or fuel sources.

See Supply for Electric Power under Part I, Item 1 of this report for the
percentages of our historical needs satisfied by coal, nuclear, natural gas,
hydro and oil.

With regard to exposure for commodity price risk for nuclear fuel, UE has
fixed-priced and base price with escalation agreements and/or inventories to
fulfill its Callaway Nuclear Plant needs for uranium, conversion, enrichment,
and fabrication services through 2006. UE expects to enter into additional
contracts from time to time in order to supply

74




nuclear fuel during the expected remainder of the life of the plant, at prices
which cannot now be accurately predicted. UE's strategy is to hedge some of its
three year requirements. This strategy permits optimum timing of new forward
contracts given the relatively long price cycles in the nuclear fuel markets and
provides security of supply to protect against unforeseen market disruptions.
Unlike electricity and natural gas markets, there are no sophisticated financial
instruments in nuclear fuel markets so most hedging is done via inventories and
forward contracts.

Although we cannot completely eliminate the effects of gas price
volatility, our strategy is designed to minimize the effect of market conditions
on our results of operations. Our gas procurement strategy includes procuring
natural gas under a portfolio of agreements with price structures, including
fixed-price, indexed-price and embedded-price hedges such as caps and collars.
Our strategy also utilizes physical assets through storage, operator and
balancing agreements to minimize price volatility. Ameren's electric marketing
strategy is to extract additional value from its generation facilities by
selling energy in excess of needs into the long-term and short-term markets for
term sales, and purchasing energy when the market price is less than the cost of
generation. Our primary use of derivatives has involved transactions that are
expected to reduce price risk exposure for us.

With regard to our exposure to commodity price risk for purchased power and
excess electricity sales, Ameren has a subsidiary, Ameren Energy, whose primary
responsibility includes managing market risks associated with changing market
prices for electricity purchased and sold on behalf of UE and Genco. In
addition, Genco has sold nearly all of its available non rate-regulated peak
generation capacity for the summer of 2004 at various prices, the majority of
which are fixed.

Fair Value of Contracts

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

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

The derivatives that we use to hedge these risks are dictated by risk
management policies and include forward contracts, futures contracts, options
and swaps. We continually assess our supply and delivery commitment positions
against forward market prices and internally-forecasted forward prices and
modify our exposure to market, credit and operational risk by entering into
various offsetting transactions. In general, we believe these transactions serve
to reduce our price risk. See Note 9 - Derivative Financial Instruments to our
financial statements under Part II, Item 8 of this report for further
information.

The following table presents the favorable (unfavorable) changes in the
fair value of all contracts marked-to-market during the year ended December 31,
2003:



======================================================================================================================
Ameren(a) UE CIPS CILCORP(b) CILCO
- ----------------------------------------------------------------------------------------------------------------------

Fair value of contracts at beginning of period, net..... $ 7 $ 6 $ - $ - $ 2
Contracts realized or otherwise settled during the (10) (10) - - (5)
period............................................
Changes in fair values attributable to changes in
valuation technique and assumptions............... - - - - -
Fair value of new contracts entered into during the
period............................................ - - - - -
Other changes in fair value........................... 15 3 1 - 9
- ----------------------------------------------------------------------------------------------------------------------
Fair value of contracts outstanding at end $ 12 $ (1) $ 1 $ - $ 6
of period, net....................................
======================================================================================================================
(a) Excludes amounts for CILCORP and CILCO prior to the acquisition date
of January 31, 2003; includes amounts for non-registrant Ameren
subsidiaries as well as intercompany eliminations.
(b) Includes January 2003 predecessor information, which was zero for
CILCORP and $2 million for CILCO.



75


The following table presents maturities of contracts as of December 31,
2003:



=====================================================================================================================
Maturity Maturity in
Less than Maturity Maturity Excess of Total
Sources of Fair Value 1 Year 1-3 Years 4-5 Years 5 Years Fair Value(a)
- --------------------------------------------------------------------------------------------------------------------

Ameren:
Prices actively quoted............... $ 4 $ - $ - $ - $ 4
Prices provided by other external
sources(b)........................ 3 - - - 3
Prices based on models and other
valuation methods(c).............. 3 5 (3) - 5
- --------------------------------------------------------------------------------------------------------------------
Total................................ $ 10 $ 5 $ (3) $ - $ 12
====================================================================================================================
UE :
Prices actively quoted............... $ - $ - $ - $ - $ -
Prices provided by other external
sources(b)........................ - - - - -
Prices based on models and other
valuation methods(c).............. (1) 1 (1) - (1)
- --------------------------------------------------------------------------------------------------------------------
Total................................ $ (1) $ 1 $ (1) $ - $ (1)
====================================================================================================================
CIPS:
Prices actively quoted............... $ 1 $ - $ - $ - $ 1
Prices provided by other external
sources(b)........................ - - - - -
Prices based on models and other
valuation methods(c).............. - - - - -
- --------------------------------------------------------------------------------------------------------------------
Total................................ $ 1 $ - $ - $ - $ 1
====================================================================================================================
CILCORP:
Prices actively quoted .............. $ - $ - $ - $ - $ -
Prices provided by other external
sources(b)........................ - - - - -
Prices based on models and other
valuation methods(c).............. - - - - -
- --------------------------------------------------------------------------------------------------------------------
Total $ - $ - $ - $ - $ -
====================================================================================================================
CILCO:
Prices actively quoted .............. $ 4 $ - $ - $ - $ 4
Prices provided by other external
sources(b)........................ 2 - - - 2
Prices based on models and other
valuation methods(c).............. - - - - -
- --------------------------------------------------------------------------------------------------------------------
Total $ 6 $ - $ - $ - $ 6
====================================================================================================================
(a) Contracts of less than $1 million were with non-investment-grade rated
counterparties.
(b) Principally power forward values based on NYMEX prices for
over-the-counter
contracts and natural gas swap values based primarily on Inside FERC.
(c) Principally coal and SO2 option values based on a Black-Scholes model
that includes information from external sources and our estimates.
Also includes power forward contract values based on our estimates.



76




ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.


REPORT OF INDEPENDENT AUDITORS



To the Board of Directors and Shareholders
of Ameren Corporation:

In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of income, common stockholders' equity and cash flows
present fairly, in all material respects, the financial position of Ameren
Corporation and its subsidiaries at December 31, 2003 and 2002, and the results
of their operations and their cash flows for each of the three years in the
period ended December 31, 2003, in conformity with accounting principles
generally accepted in the United States of America. 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 of America, 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 our opinion.

As discussed in Note 1 to the consolidated financial statements, the Company
changed the manner in which it accounts for asset retirement costs as of January
1, 2003. As discussed in Note 1 to the consolidated financial statements, the
Company changed the manner in which it accounts for derivative instruments and
hedging activities effective January 1, 2001.


/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP

St. Louis, Missouri
February 12, 2004



77





REPORT OF INDEPENDENT AUDITORS ON
FINANCIAL STATEMENT SCHEDULE



To the Board of Directors and Shareholders
of Ameren Corporation:

Our audits of the consolidated financial statements referred to in our report
dated February 12, 2004, appearing in this Annual Report on Form 10-K, also
included an audit of the financial statement schedule listed in Item 15(a)(2) of
this Form 10-K. In our opinion, this financial statement schedule presents
fairly, in all material respects, the information set forth therein when read in
conjunction with the related consolidated financial statements.


/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP

St. Louis, Missouri
February 12, 2004


78





REPORT OF INDEPENDENT AUDITORS



To the Board of Directors and Shareholder
of Union Electric Company:


In our opinion, the consolidated financial statements listed in the index
appearing under Item 15(a)(1) present fairly, in all material respects, the
financial position of Union Electric Company at December 31, 2003 and 2002, and
the results of their operations and their cash flows for each of the three years
in the period ended December 31, 2003, in conformity with accounting principles
generally accepted in the United States of America. In addition, in our opinion,
the financial statement schedule listed in the index appearing under Item
15(a)(2) presents fairly, in all material respects, the information set forth
therein when read in conjunction with the related consolidated financial
statements. These financial statements and the financial statement schedule are
the responsibility of the Company's management; our responsibility is to express
an opinion on these financial statements and the financial statement schedule
based on our audits. We conducted our audits of these statements in accordance
with auditing standards generally accepted in the United States of America,
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 our opinion.

As discussed in Note 1 to the consolidated financial statements, the Company
changed the manner in which it accounts for asset retirement costs as of January
1, 2003. As discussed in Note 1 to the consolidated financial statements, the
Company changed the manner in which it accounts for derivative instruments and
hedging activities effective January 1, 2001.


/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP

St. Louis, Missouri
February 12, 2004


79




REPORT OF INDEPENDENT AUDITORS



To the Board of Directors and Shareholder
of Central Illinois Public Service Company:


In our opinion, the financial statements listed in the index appearing under
Item 15(a)(1) present fairly, in all material respects, the financial position
of Central Illinois Public Service Company at December 31, 2003 and 2002, and
the results of their operations and their cash flows for each of the three years
in the period ended December 31, 2003, in conformity with accounting principles
generally accepted in the United States of America. In addition, in our opinion,
the financial statement schedule listed in the index appearing under Item
15(a)(2) presents fairly, in all material respects, the information set forth
therein when read in conjunction with the related financial statements. These
financial statements and the financial statement schedule are the responsibility
of the Company's management; our responsibility is to express an opinion on
these financial statements and the financial statement schedule based on our
audits. We conducted our audits of these statements in accordance with auditing
standards generally accepted in the United States of America, 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 our opinion.

As discussed in Note 1 to the financial statements, the Company changed the
manner in which it accounts for derivative instruments and hedging activities
effective January 1, 2001.


/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP

St. Louis, Missouri
February 12, 2004


80





REPORT OF INDEPENDENT AUDITORS



To the Board of Directors and Shareholder
of Ameren Energy Generating Company:



In our opinion, the financial statements listed in the index appearing under
Item 15(a)(1) present fairly, in all material respects, the financial position
of Ameren Energy Generating Company at December 31, 2003 and 2002, and the
results of their operations and their cash flows for each of the three years in
the period ended December 31, 2003, in conformity with accounting principles
generally accepted in the United States of America. In addition, in our opinion,
the financial statement schedule listed in the index appearing under Item
15(a)(2) presents fairly, in all material respects, the information set forth
therein when read in conjunction with the related financial statements. These
financial statements and the financial statement schedule are the responsibility
of the Company's management; our responsibility is to express an opinion on
these financial statements and the financial statement schedule based on our
audits. We conducted our audits of these statements in accordance with auditing
standards generally accepted in the United States of America, 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 our opinion.

As discussed in Note 1 to the financial statements, the Company changed the
manner in which it accounts for asset retirement costs as of January 1, 2003. As
discussed in Note 1 to the financial statements, the Company changed the manner
in which it accounts for derivative instruments and hedging activities effective
January 1, 2001.


/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP

St. Louis, Missouri
February 12, 2004


81





REPORT OF INDEPENDENT AUDITORS



To the Board of Directors and
Shareholder of CILCORP Inc.:


In our opinion, the consolidated financial statements listed in the index
appearing under Item 15(a)(1) present fairly, in all material respects, the
financial position of CILCORP Inc. and its subsidiaries at December 31, 2003
(successor), and the results of their operations and their cash flows for the
periods February 1, 2003 to December 31, 2003 (successor) and January 1, 2003 to
January 31, 2003 (predecessor), in conformity with accounting principles
generally accepted in the United States of America. In addition, in our opinion,
the financial statement schedule for the year ended December 31, 2003, listed in
the index appearing under Item 15(a)(2) presents fairly, in all material
respects, the information set forth therein when read in conjunction with the
related consolidated financial statements. These financial statements and the
financial statement schedule are the responsibility of the Company's management;
our responsibility is to express an opinion on these financial statements and
the financial statement schedule based on our audit. We conducted our audit of
these statements in accordance with auditing standards generally accepted in the
United States of America, 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
audit provides a reasonable basis for our opinion. The predecessor financial
statements of the Company as of December 31, 2002, and for each of the two years
in the period then ended and the financial statement schedule for the two years
in the period ended December 31, 2002, were audited by other auditors whose
report dated April 11, 2003, expressed an unqualified opinion on those
statements.

As discussed in Note 1 to the consolidated financial statements, the Company
changed the manner in which it accounts for asset retirement costs as of January
1, 2003.


/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP

St. Louis, Missouri
February 12, 2004


82



REPORT OF INDEPENDENT AUDITORS



To the Board of Directors and
Shareholder of Central Illinois Light Company:


In our opinion, the consolidated financial statements listed in the index
appearing under Item 15(a)(1) present fairly, in all material respects, the
financial position of Central Illinois Light Company at December 31, 2003, and
the results of their operations and their cash flows for the year then ended in
conformity with accounting principles generally accepted in the United States of
America. In addition, in our opinion, the financial statement schedule for the
year ended December 31, 2003, listed in the index appearing under Item 15(a)(2)
presents fairly, in all material respects, the information set forth therein
when read in conjunction with the related consolidated financial statements.
These financial statements and the financial statement schedule are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements and the financial statement schedule based
on our audit. We conducted our audit of these statements in accordance with
auditing standards generally accepted in the United States of America, 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 audit provides a
reasonable basis for our opinion. The predecessor financial statements of the
Company as of December 31, 2002, and for each of the two years in the period
then ended and the financial statement schedule for the two years in the period
ended December 31, 2002, were audited by other auditors whose report dated April
11, 2003, expressed an unqualified opinion on those statements.

As discussed in Note 1 to the consolidated financial statements, the Company
changed the manner in which it accounts for asset retirement costs as of January
1, 2003.


/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP

St. Louis, Missouri
February 12, 2004


83



REPORT OF INDEPENDENT AUDITORS



To the Board of Directors and Stockholder of CILCORP Inc.
Peoria, Illinois

We have audited the accompanying consolidated balance sheet of CILCORP Inc. and
subsidiaries as of December 31, 2002, and the related consolidated statements of
income and comprehensive income, stockholder's equity, and cash flows for the
years ended December 31, 2002 and 2001. Our audits also included the 2002 and
2001 financial statement schedules listed in the Index at Item 15. These
financial statements and financial statement schedules are the responsibility of
the Company's management. Our responsibility is to express an opinion on the
financial statements and financial statement schedules based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards 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. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, such 2002 and 2001 consolidated financial statements present
fairly, in all material respects, the financial position of CILCORP Inc. and
subsidiaries as of December 31, 2002, and the results of their operations and
their cash flows the years ended December 31, 2002 and 2001, in conformity with
accounting principles generally accepted in the United States of America. Also,
in our opinion, such 2002 and 2001 financial statement schedules, when
considered in relation to the basic 2002 and 2001 consolidated financial
statements taken as a whole, present fairly in all material respects the
information set forth therein.

As discussed in Note 1, effective January 1, 2001, CILCORP Inc. and subsidiaries
changed its method of accounting for derivative instruments to conform to
Statement of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities." As discussed in Note 1, effective January
1, 2002, CILCORP Inc. and subsidiaries changed its method of accounting for
goodwill and intangible assets to conform to Statement of Financial Accounting
Standards No. 142, "Goodwill and Intangible Assets."


/s/ DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
Indianapolis, IN
April 11, 2003

84




REPORT OF INDEPENDENT AUDITORS



To the Board of Directors and Stockholder of Central Illinois Light Company
Peoria, Illinois

We have audited the accompanying consolidated balance sheet of Central Illinois
Light Company and subsidiaries as of December 31, 2002, and the related
consolidated statements of income and comprehensive income, stockholder's
equity, and cash flows for the years ended December 31, 2002 and 2001. Our
audits also included the 2002 and 2001 financial statement schedules listed in
the Index at Item 15. These financial statements and financial statement
schedules are the responsibility of the Company's management. Our responsibility
is to express an opinion on the financial statements and financial statement
schedules based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards 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. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, such 2002 and 2001 consolidated financial statements present
fairly, in all material respects, the financial position of Central Illinois
Light Company and subsidiaries as of December 31, 2002, and the results of their
operations and their cash flows for the years ended December 31, 2002 and 2001,
in conformity with accounting principles generally accepted in the United States
of America. Also, in our opinion, such 2002 and 2001 financial statement
schedules, when considered in relation to the basic 2002 and 2001 consolidated
financial statements taken as a whole, present fairly in all material respects
the information set forth therein.

As discussed in Note 1, effective January 1, 2001, Central Illinois Light
Company and subsidiaries changed its method of accounting for derivative
instruments to conform to Statement of Financial Accounting Standards No. 133,
"Accounting for Derivative Instruments and Hedging Activities."


/s/ DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
Indianapolis, IN
April 11, 2003



85






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


Year Ended December 31,
-------------------------------------
2003 2002 2001
-------- -------- ---------

Operating Revenues:
Electric $ 3,937 $ 3,520 $ 3,507
Gas 648 315 342
Other 8 6 9
-------- -------- ---------
Total operating revenues 4,593 3,841 3,858
-------- -------- ---------
Operating Expenses:
Fuel and purchased power 1,055 825 914
Gas purchased for resale 457 198 222
Other operations and maintenance 1,224 1,160 1,090
Voluntary retirement and other restructuring charges (Note 7) - 92 -
Coal contract settlement (Note 7) (51) - -
Depreciation and amortization 519 431 406
Taxes other than income taxes 299 262 261
-------- -------- ---------
Total operating expenses 3,503 2,968 2,893
-------- -------- ---------
Operating Income 1,090 873 965

Other Income and (Deductions):
Miscellaneous income (Note 8) 27 21 35
Miscellaneous expense (Note 8) (22) (50) (16)
-------- -------- ---------
Total other income and (deductions) 5 (29) 19
-------- -------- ---------
Interest Charges and Preferred Dividends:
Interest 277 214 191
Preferred dividends of subsidiaries 11 11 12
-------- -------- ---------
Net interest charges and preferred dividends 288 225 203
-------- -------- ---------
Income Before Income Taxes and Cumulative Effect of Change
in Accounting Principle 807 619 781

Income Taxes 301 237 305
-------- -------- ---------
Income Before Cumulative Effect of Change in Accounting
Principle 506 382 476

Cumulative Effect of Change in Accounting Principle,
Net of Income Taxes (Benefit) of $12, $- and $(4) 18 - (7)
-------- -------- ---------
Net Income $ 524 $ 382 $ 469
======== ======== =========
Earnings per Common Share - Basic:
Income before cumulative effect of change
in accounting principle $ 3.14 $ 2.61 $ 3.46
Cumulative effect of change in accounting
principle, net of income taxes 0.11 - (0.05)
-------- -------- ---------
Earnings per common share - basic $ 3.25 $ 2.61 $ 3.41
======== ======== =========
Earnings per Common Share - Diluted:
Income before cumulative effect of change
in accounting principle $ 3.14 $ 2.60 $ 3.45
Cumulative effect of change in accounting
principle, net of income taxes 0.11 - (0.05)
-------- -------- ---------
Earnings per common share - diluted $ 3.25 $ 2.60 $ 3.40
======== ======== =========

Dividends per Common Share $ 2.54 $ 2.54 $ 2.54
Average Common Shares Outstanding (Note 1) 161.1 146.1 137.3

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



86




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

December 31, December 31,
2003 2002
------------ ------------

ASSETS
Current Assets:
Cash and cash equivalents $ 111 $ 628
Accounts receivable - trade (less allowance for doubtful
accounts of $13 and $7, respectively) 326 266
Unbilled revenue 221 176
Miscellaneous accounts and notes receivable 126 44
Materials and supplies, at average cost 487 299
Other current assets 46 39
------------ ------------
Total current assets 1,317 1,452
------------ ------------
Property and Plant, Net (Note 4) 10,917 9,492
Investments and Other Non-Current Assets:
Investments in leveraged leases 164 38
Nuclear decommissioning trust fund 212 172
Goodwill and other intangibles, net 574 -
Other assets 320 307
------------ ------------
Total investments and other non-current assets 1,270 517
------------ ------------
Regulatory Assets 729 690
------------ ------------
TOTAL ASSETS $ 14,233 $ 12,151
============ ============


LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current maturities of long-term debt (Note 6) $ 498 $ 339
Short-term debt (Note 5) 161 271
Accounts and wages payable 480 369
Taxes accrued 103 45
Other current liabilities 215 177
------------ ------------
Total current liabilities 1,457 1,201
------------ ------------
Long-term Debt, Net (Note 6) 4,070 3,433
Preferred Stock of Subsidiary Subject to Mandatory Redemption (Note 10) 21 -
Deferred Credits and Other Non-Current Liabilities:
Accumulated deferred income taxes, net 1,853 1,707
Accumulated deferred investment tax credits 151 149
Regulatory liabilities 821 788
Asset retirement obligations 413 174
Accrued pension and other postretirement benefits 699 476
Other deferred credits and liabilities 190 173
------------ ------------
Total deferred credits and other non-current liabilities 4,127 3,467
------------ ------------
Commitments and Contingencies (Notes 1, 3, 15 and 16)
Preferred Stock of Subsidiaries Not Subject to Mandatory Redemption (Note 10) 182 193
Minority Interest in Consolidated Subsidiaries 22 15
Stockholders' Equity:
Common stock, $.01 par value, 400.0 shares authorized -
shares outstanding of 162.9 and 154.1, respectively (Notes 1, 6 and 10) 2 2
Other paid-in capital, principally premium on common stock 2,552 2,203
Retained earnings 1,853 1,739
Accumulated other comprehensive income (loss) (44) (93)
Other (9) (9)
------------ ------------
Total stockholders' equity 4,354 3,842
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 14,233 $ 12,151
============ ============


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


87





AMEREN CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(In millions)


Year Ended December 31,
-------------------------------------
2003 2002 2001
--------- --------- ---------

Cash Flows From Operating Activities:
Net income $ 524 $ 382 $ 469
Adjustments to reconcile net income to net cash
provided by operating activities:
Cumulative effect of change in accounting principle (18) - 7
Depreciation and amortization 519 431 406
Amortization of nuclear fuel 33 30 29
Amortization of debt issuance costs and premium/discounts 10 8 5
Deferred income taxes, net 12 74 28
Deferred investment tax credits, net (11) (9) (6)
Coal contract settlement (36) - -
Voluntary retirement and other restructuring charges (5) 92 -
Other 5 8 (1)
Changes in assets and liabilities, excluding the effects of the acquisitions:
Receivables, net 6 (26) 70
Materials and supplies (47) (4) (68)
Accounts and wages payable (7) (80) (71)
Taxes accrued 39 38 8
Assets, other (15) (12) (75)
Liabilities, other 22 (99) (63)
--------- --------- ---------
Net cash provided by operating activities 1,031 833 738
--------- --------- ---------

Cash Flows From Investing Activities:
Construction expenditures (682) (787) (1,102)
Acquisitions, net of cash acquired (479) - -
Nuclear fuel expenditures (23) (28) (24)
Other 3 12 22
--------- --------- ---------
Net cash used in investing activities (1,181) (803) (1,104)
--------- --------- ---------

Cash Flows From Financing Activities:
Dividends on common stock (410) (376) (350)
Capital issuance costs (14) (35) -
Redemptions, repurchases, and maturities:
Nuclear fuel lease (46) - (64)
Short-term debt (110) (370) -
Long-term debt (815) (247) (63)
Preferred stock (31) (42) -
Issuances:
Common stock 361 658 33
Nuclear fuel lease - 50 13
Short-term debt - - 438
Long-term debt 698 893 300
--------- --------- ---------
Net cash provided by (used in) financing activities (367) 531 307
--------- --------- ---------

Net change in cash and cash equivalents (517) 561 (59)
Cash and cash equivalents at beginning of year 628 67 126
--------- --------- ---------
Cash and cash equivalents at end of year $ 111 $ 628 $ 67
========= ========= =========

Cash Paid During the Periods:
Interest $ 286 $ 221 $ 187
Income taxes, net 266 140 266


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



88





AMEREN CORPORATION
CONSOLIDATED STATEMENT OF COMMON STOCKHOLDERS' EQUITY
(In millions)


December 31,
-------------------------------------------
2003 2002 2001
----------- ----------- -----------

Common stock:
Beginning balance $ 2 $ 1 $ 1
Shares issued - 1 -
----------- ----------- -----------
2 2 1
----------- ----------- -----------

Other paid-in capital:
Beginning balance 2,203 1,614 1,581
Shares issued (less issuance costs of $8, $20 and $-, respectively) 353 637 33
Contracted stock purchase payment obligations - (46) -
Employee stock awards (4) (2) -
----------- ----------- -----------
2,552 2,203 1,614
----------- ----------- -----------

Retained earnings:
Beginning balance 1,739 1,733 1,614
Net income 524 382 469
Dividends (410) (376) (350)
----------- ----------- -----------
1,853 1,739 1,733
----------- ----------- -----------

Accumulated other comprehensive income:
Beginning balance - derivative financial instruments 9 5 -
Change in derivative financial instruments 3 4 5
----------- ----------- -----------
12 9 5
----------- ----------- -----------
Beginning balance - minimum pension liability (102) - -
Change in minimum pension liability 46 (102) -
----------- ----------- -----------
(56) (102) -
----------- ----------- -----------

(44) (93) 5
----------- ----------- -----------

Other:
Beginning balance (9) (4) -
Restricted stock compensation awards (5) (7) (5)
Compensation amortized and mark-to-market adjustments 5 2 1
----------- ----------- -----------
(9) (9) (4)
----------- ----------- -----------

Total stockholders' equity $ 4,354 $ 3,842 $ 3,349
=========== =========== ===========


Comprehensive income, net of taxes:
Net income $ 524 $ 382 $ 469
Unrealized net gain on derivative hedging instruments,
net of income taxes of $2, $3 and $3, respectively 5 6 5
Reclassification adjustments for gains (losses) included in net income,
net of income taxes (benefit) of $(1), $(1) and $7, respectively (2) (2) 11
Cumulative effect of accounting change, net of income taxes (benefit) of
$-, $- and $(7), respectively - - (11)
Minimum pension liability adjustment, net of income taxes (benefit) of
$27, $(62) and $-, respectively 46 (102) -
----------- ----------- -----------
Total comprehensive income, net of taxes $ 573 $ 284 $ 474
=========== =========== ===========

- ----------------------------------------------------------------------------------------------------------------------------------
Common stock shares at beginning of period 154.1 138.0 137.2
Shares issued 8.8 16.1 0.8
----------- ----------- -----------
Common stock shares at end of period 162.9 154.1 138.0
=========== =========== ===========

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



89






UNION ELECTRIC COMPANY
CONSOLIDATED STATEMENT OF INCOME
(In millions)


Year Ended December 31,
--------------------------------------
2003 2002 2001
----------- ---------- ----------

Operating Revenues:
Electric (Note 14) $ 2,492 $ 2,521 $ 2,640
Gas 145 129 146
----------- ---------- ----------
Total operating revenues 2,637 2,650 2,786
----------- ---------- ----------

Operating Expenses:
Fuel and purchased power (Note 14) 548 550 739
Gas purchased for resale 91 73 84
Other operations and maintenance (Note 14) 765 819 788
Coal contract settlement (Note 7) (51) - -
Voluntary retirement and other restructuring charges (Note 7) - 65 -
Depreciation and amortization 284 281 280
Taxes other than income taxes 213 218 214
----------- ---------- ----------
Total operating expenses 1,850 2,006 2,105
----------- --------- ----------

Operating Income 787 644 681

Other Income and (Deductions):
Miscellaneous income (Note 8) 23 31 44
Miscellaneous expense (Note 8) (7) (35) (8)
----------- ---------- ----------
Total other income and (deductions) 16 (4) 36
----------- ---------- ----------

Interest Charges 105 103 108
----------- ---------- ----------

Income Before Income Taxes and Cumulative Effect of Change
in Accounting Principle 698 537 609

Income Taxes 251 193 230
----------- ---------- ----------

Income Before Cumulative Effect of Change in Accounting
Principle 447 344 379

Cumulative Effect of Change in Accounting Principle,
Net of Income Taxes (Benefit) of $-, $- and $(3) - - (5)
----------- ---------- -----------

Net Income 447 344 374

Preferred Stock Dividends 6 8 9
----------- ---------- ----------

Net Income Available to Common Stockholder $ 441 $ 336 $ 365
=========== ========== ==========


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



90






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

December 31, December 31,
2003 2002
------------ ------------
ASSETS

Current Assets:
Cash and cash equivalents $ 15 $ 9
Accounts receivable - trade (less allowance for doubtful
accounts of $6 and $6, respectively) 172 171
Unbilled revenue 111 101
Miscellaneous accounts and notes receivable (Note 14) 117 49
Materials and supplies, at average cost 175 162
Other current assets 26 26
------------ ------------
Total current assets 616 518
------------ ------------
Property and Plant, Net (Note 4) 6,758 6,519
Investments and Other Non-Current Assets:
Nuclear decommissioning trust fund 212 172
Other assets 246 235
------------ ------------
Total investments and other non-current assets 458 407
------------ ------------
Regulatory Assets 685 659
------------ ------------
TOTAL ASSETS $ 8,517 $ 8,103
============ ============


LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities:
Current maturities of long-term debt (Note 6) $ 344 $ 130
Short-term debt (Note 5) 150 250
Borrowings from money pool (Note 14) - 15
Accounts and wages payable (Note 14) 314 348
Taxes accrued 66 118
Other current liabilities 102 96
------------ ------------
Total current liabilities 976 957
------------ ------------
Long-term Debt, Net (Note 6) 1,758 1,687
Deferred Credits and Other Non-Current Liabilities:
Accumulated deferred income taxes, net 1,289 1,344
Accumulated deferred investment tax credits 114 121
Regulatory liabilities 652 649
Asset retirement obligations 408 174
Accrued pension and other postretirement benefits 317 343
Other deferred credits and liabilities 80 83
------------ ------------
Total deferred credits and other non-current liabilities 2,860 2,714
------------ ------------
Commitments and Contingencies (Notes 1, 3, 15 and 16)
Stockholder's Equity:
Common stock, $5 par value, 150.0 shares authorized - 102.1 shares outstanding 511 511
Preferred stock not subject to mandatory redemption (Note 10) 113 113
Other paid-in capital, principally premium on common stock 702 702
Retained earnings 1,630 1,477
Accumulated other comprehensive income (loss) (33) (58)
------------ ------------
Total stockholder's equity 2,923 2,745
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 8,517 $ 8,103
============ ============

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


91





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



Year Ended December 31,
---------------------------------------
2003 2002 2001
-------- -------- --------

Cash Flows From Operating Activities:
Net income $ 447 $ 344 $ 374
Adjustments to reconcile net income to net cash
provided by operating activities:
Cumulative effect of change in accounting principle - - 5
Depreciation and amortization 284 281 280
Amortization of nuclear fuel 33 30 29
Amortization of debt issuance costs and premium/discounts 4 4 3
Deferred income taxes, net 4 29 15
Deferred investment tax credits, net 33 (8) (4)
Coal contract settlement (36) - -
Voluntary retirement and other restructuring charges (2) 65 -
Other (5) 3 2
Changes in assets and liabilities:
Receivables, net (4) (14) (1)
Materials and supplies (13) (6) (22)
Accounts and wages payable (15) (16) 11
Taxes accrued (52) 68 18
Assets, other (41) (30) (43)
Liabilities, other 2 (54) (77)
-------- -------- --------
Net cash provided by operating activities 639 696 590
-------- -------- --------

Cash Flows From Investing Activities:
Construction expenditures (480) (520) (587)
Nuclear fuel expenditures (23) (28) (24)
Advances to money pool - 84 171
Other - 10 21
-------- -------- --------
Net cash used in investing activities (503) (454) (419)
-------- -------- --------
Cash Flows From Financing Activities:
Dividends on common stock (288) (299) (283)
Dividends on preferred stock (6) (8) (9)
Capital issuance costs (6) (1) -
Redemptions, repurchases, and maturities:
Nuclear fuel lease (46) - (64)
Short-term debt (100) - -
Long-term debt (367) (200) (19)
Preferred stock - (42) -
Borrowings from money pool (15) - -
Issuances:
Nuclear fuel lease - 50 13
Short-term debt - 64 186
Long-term debt 698 173 -
Borrowings from money pool - 15 -
-------- -------- --------
Net cash used in financing activities (130) (248) (176)
-------- -------- --------

Net change in cash and cash equivalents 6 (6) (5)
Cash and cash equivalents at beginning of year 9 15 20
-------- -------- --------
Cash and cash equivalents at end of year $ 15 $ 9 $ 15
======== ======== ========

Cash Paid During the Periods:
Interest $ 100 $ 95 $ 104
Income taxes, net 306 106 192


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





92





UNION ELECTRIC COMPANY
STATEMENT OF STOCKHOLDER'S EQUITY
(In millions)
December 31,
------------------------------
2003 2002 2001
-------- -------- --------


Common stock $ 511 $ 511 $ 511

Preferred stock not subject to mandatory redemption:
Beginning balance 113 155 155
Redemptions - (42) -
-------- -------- --------
113 113 155
-------- -------- --------

Other paid-in capital 702 702 702

Retained earnings:
Beginning balance 1,477 1,440 1,358
Net income 447 344 374
Common stock dividends (288) (299) (283)
Preferred stock dividends (6) (8) (9)
-------- -------- --------
1,630 1,477 1,440
-------- -------- --------

Accumulated other comprehensive income:
Beginning balance - derivative financial instruments 4 1 -
Change in derivative financial instruments (3) 3 1
-------- -------- --------
1 4 1
-------- -------- --------
Beginning balance - minimum pension liability (62) - -
Change in minimum pension liability 28 (62) -
-------- -------- --------
(34) (62) -
-------- -------- --------

(33) (58) 1
-------- ------- --------

Total stockholder's equity $ 2,923 $ 2,745 $ 2,809
-------- -------- --------

Comprehensive income, net of taxes:
Net income $ 447 $ 344 $ 374
Unrealized net gain (loss) on derivative hedging instruments,
net of income taxes (benefit) of $(1), $3 and $1, respectively (3) 4 1
Reclassification adjustments for gains (losses) included in net income,
net of income taxes (benefit) of $-, $(1) and $5, respectively - (1) 8
Cumulative effect of accounting change, net of income taxes (benefit)
of $-, $- and $(5), respectively - - (8)
Minimum pension liability adjustment, net of income taxes (benefit)
of $16, $(37) and $-, respectively 28 (62) -
-------- -------- --------
Total comprehensive income, net of taxes $ 472 $ 285 $ 375
======== ========= =========



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


93





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


Year Ended December 31,
----------------------------------------
2003 2002 2001
---------- ---------- ----------

Operating Revenues:
Electric (Note 14) $ 557 $ 661 $ 670
Gas 185 163 170
---------- ---------- ----------
Total operating revenues 742 824 840
---------- ---------- ----------

Operating Expenses:
Purchased power (Note 14) 341 418 433
Gas purchased for resale 121 100 111
Other operations and maintenance (Note 14) 156 161 154
Voluntary retirement and other restructuring charges (Note 7) - 14 -
Depreciation and amortization 52 51 49
Taxes other than income taxes 27 28 24
---------- ---------- ----------
Total operating expenses 697 772 771
---------- ---------- ----------

Operating Income 45 52 69

Other Income and (Deductions):
Miscellaneous income (Notes 8 and 14) 27 34 44
Miscellaneous expense (Note 8) (3) (2) (1)
---------- ---------- ----------
Total other income and (deductions) 24 32 43
---------- ---------- ----------

Interest Charges 34 41 39
---------- ---------- ----------

Income Before Income Taxes 35 43 73

Income Taxes 6 17 27
---------- ---------- ----------

Net Income 29 26 46

Preferred Stock Dividends 3 3 4
---------- ---------- ----------

Net Income Available to Common Stockholder $ 26 $ 23 $ 42
========== ========== ==========

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



94




CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
BALANCE SHEET
(In millions)

December 31, December 31,
2003 2002
------------ ------------
ASSETS

Current Assets:
Cash and cash equivalents $ 16 $ 17
Accounts receivable - trade (less allowance for doubtful
accounts of $1 and $1, respectively) 48 53
Unbilled revenue 64 74
Advances to money pool (Note 14) - 16
Miscellaneous accounts and notes receivable (Note 14) 22 22
Current portion of intercompany note receivable - Genco (Note 14) 49 46
Current portion of intercompany tax receivable - Genco (Note 14) 12 13
Materials and supplies, at average cost 51 41
Other current assets 6 7
----------- ------------
Total current assets 268 289
----------- ------------
Property and Plant, Net (Note 4) 955 949
Investments and Other Non-Current Assets:
Intercompany note receivable - Genco (Note 14) 324 373
Intercompany tax receivable - Genco (Note 14) 150 162
Other assets 17 17
----------- ------------
Total investments and other non-current assets 491 552
----------- ------------
Regulatory Assets 28 31
----------- ------------
TOTAL ASSETS $ 1,742 $ 1,821
=========== ============


LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities:
Current maturities of long-term debt (Note 6) $ - $ 45
Accounts and wages payable (Note 14) 71 87
Borrowings from money pool (Note 14) 121 -
Taxes accrued 19 32
Other current liabilities 27 26
----------- ------------
Total current liabilities 238 190
----------- ------------
Long-term Debt, Net (Note 6) 485 534
Deferred Credits and Other Non-Current Liabilities:
Accumulated deferred income taxes, net (Note 14) 269 282
Accumulated deferred investment tax credits 11 13
Regulatory liabilities 145 139
Other deferred credits and liabilities 62 71
----------- ------------
Total deferred credits and other non-current liabilities 487 505
----------- ------------
Commitments and Contingencies (Notes 1, 3, and 15)
Stockholder's Equity:
Common stock, no par value, 45.0 shares authorized - 25.5 shares outstanding 120 120
Preferred stock not subject to mandatory redemption (Note 10) 50 80
Retained earnings 369 405
Accumulated other comprehensive income (loss) (7) (13)
----------- ------------
Total stockholder's equity 532 592
----------- ------------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 1,742 $ 1,821
=========== ============


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



95





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

Year Ended December 31,
-----------------------------
2003 2002 2001
------ ------ ------

Cash Flows From Operating Activities:
Net income $ 29 $ 26 $ 46
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 52 51 49
Amortization of debt issuance costs and premium/discounts 1 1 1
Deferred income taxes, net (17) (15) (17)
Deferred investment tax credits, net (2) 1 (1)
Voluntary retirement and other restrucuturing charges - 14 -
Changes in assets and liabilities:
Receivables, net 15 7 30
Materials and supplies (10) 1 (10)
Accounts and wages payable (16) (33) 7
Taxes accrued (13) 25 9
Assets, other 16 34 (6)
Liabilities, other 1 (16) 12
------ ------ ------
Net cash provided by operating activities 56 96 120
------ ------ ------

Cash Flows From Investing Activities:
Construction expenditures (50) (57) (50)
Advances to money pool 16 7 (24)
Intercompany notes receivable - Genco 46 43 90
------ ------ ------
Net cash provided by (used in) investing activities 12 (7) 16
------ ------ ------

Cash Flows From Financing Activities:
Dividends on common stock (62) (62) (33)
Dividends on preferred stock (3) (3) (4)
Redemptions, repurchases, and maturities:
Long-term debt (95) (33) (30)
Preferred stock (30) - -
Borrowings from money pool - - (223)
Issuances:
Long-term debt - - 150
Borrowings from money pool 121 - -
------ ------ ------
Net cash used in financing activities (69) (98) (140)
------ ------ ------

Net change in cash and cash equivalents (1) (9) (4)
Cash and cash equivalents at beginning of year 17 26 30
------ ------ ------
Cash and cash equivalents at end of year $ 16 $ 17 $ 26
====== ====== ======

Cash Paid During the Periods:
Interest $ 36 $ 40 $ 38
Income taxes, net 38 14 33


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



96




CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
STATEMENT OF STOCKHOLDER'S EQUITY
(In millions)
December 31,
-----------------------------------------------
2003 2002 2001
---------- ---------- ----------

Common stock $ 120 $ 120 $ 120

Preferred stock not subject to mandatory redemption:
Beginning balance 80 80 80
Redemptions (30) - -
---------- ---------- ----------
50 80 80
---------- ---------- ----------

Retained earnings:
Beginning balance 405 444 435
Net income 29 26 46
Common stock dividends (62) (62) (33)
Preferred stock dividends (3) (3) (4)
---------- ---------- -----------
369 405 444
---------- ---------- -----------

Beginning balance - minimum pension liability (13) - -
Change in minimum pension liability 6 (13) -
---------- ---------- -----------
(7) (13) -
---------- ---------- -----------

Total stockholder's equity $ 532 $ 592 $ 644
========== ========== ===========
Comprehensive income, net of taxes:
Net income $ 29 $ 26 $ 46
Minimum pension liability adjustment, net of income taxes
(benefit) of $4, $(9) and $-, respectively 6 (13) -
---------- ---------- -----------
Total comprehensive income, net of taxes $ 35 $ 13 $ 46
========== ========== ===========


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


97




AMEREN ENERGY GENERATING COMPANY
STATEMENT OF INCOME
(In millions)



Year Ended December 31,
----------------------------------------------
2003 2002 2001
------------- ------------- -------------

Operating Revenues:
Electric (Note 14) $ 788 $ 743 $ 730
------------- ------------- -------------
Total operating revenues 788 743 730
------------- ------------- -------------

Operating Expenses:
Fuel and purchased power (Note 14) 345 339 306
Other operations and maintenance (Note 14) 153 174 157
Voluntary retirement and other restructuring charges (Note 7) - 10 -
Depreciation and amortization 75 69 53
Taxes other than income taxes 21 12 19
------------- ------------- -------------
Total operating expenses 594 604 535
------------- ------------- -------------

Operating Income 194 139 195

Other Income and (Deductions):
Miscellaneous income (Note 8) 3 - 5
Miscellaneous expense (Note 8) (1) (1) -
------------- ------------- -------------
Total other income and (deductions) 2 (1) 5
------------- ------------- -------------

Interest Charges 101 86 75
------------- ------------- -------------

Income Before Income Taxes and Cumulative Effect of Change
in Accounting Principle 95 52 125

Income Taxes 38 20 47
------------- ------------- -------------

Income Before Cumulative Effect of Change in Accounting
Principle 57 32 78

Cumulative Effect of Change in Accounting Principle,
Net of Income Taxes (Benefit) of $12, $- and $(1) 18 - (2)
------------- ------------- -------------

Net Income $ 75 $ 32 $ 76
============= ============= =============


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




98








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

December 31, December 31,
2003 2002
------------ -----------
ASSETS

Current Assets:
Cash and cash equivalents $ 2 $ 3
Accounts receivable 88 78
Miscellaneous accounts and notes receivable (Note 14) - 71
Materials and supplies, at average cost 90 77
Other current assets 4 2
------------ -----------
Total current assets 184 231
Property and Plant, Net (Note 4) 1,774 1,763
Other Non-Current Assets 19 16
------------ -----------
TOTAL ASSETS $ 1,977 $ 2,010
============ ===========


LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities:
Accounts and wages payable $ 75 $ 87
Borrowings from money pool (Note 14) 124 191
Current portion of intercompany notes payable - CIPS and Ameren (Note 14) 53 51
Current portion of intercompany tax payable - CIPS (Note 14) 12 13
Other current liabilities 53 17
------------ -----------
Total current liabilities 317 359
------------ -----------
Long-term Debt, Net (Note 6) 698 698
Intercompany Notes Payable - CIPS and Ameren (Note 14) 358 411
Deferred Credits and Other Non-Current Liabilities:
Accumulated deferred income taxes, net 99 66
Accumulated deferred investment tax credits 13 15
Intercompany tax payable - CIPS (Note 14) 150 162
Accrued pension and other postretirement benefits 19 18
Other deferred credits and liabilities 2 1
------------ -----------
Total deferred credits and other non-current liabilities 283 262
------------ -----------
Commitments and Contingencies (Notes 1, 3 and 15)
Stockholder's Equity:
Common stock, no par value, 10,000 shares authorized - 2,000 shares outstanding - -
Other paid-in capital 150 150
Retained earnings 170 131
Accumulated other comprehensive income (loss) 1 (1)
------------ -----------
Total stockholder's equity 321 280
------------ -----------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 1,977 $ 2,010
============ ===========


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



99






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



Year Ended December 31,
-------------------------------------------
2003 2002 2001
------------- ------------- -----------

Cash Flows From Operating Activities:
Net income $ 75 $ 32 $ 76
Adjustments to reconcile net income to net cash
provided by operating activities:
Cumulative effect of change in accounting principle (18) - 2
Amortization of debt issuance costs and discounts 1 1 -
Depreciation and amortization 75 69 53
Deferred income taxes, net 30 63 29
Deferred investment tax credits, net (2) (2) (1)
Voluntary retirement and other restructuring charges (2) 10 -
Other - - 1
Changes in assets and liabilities:
Accounts receivable (10) 49 (35)
Materials and supplies (13) (17) (16)
Taxes accrued, net 89 (39) (14)
Accounts and wages payable (9) (35) 50
Assets, other (2) (6) (8)
Liabilities, other (3) (15) (7)
----------- ---------- ---------
Net cash provided by operating activities 211 110 130
----------- ---------- ---------

Cash Flows From Investing Activities:
Construction expenditures (58) (442) (347)
Advances to money pool - - 100
----------- ---------- ---------
Net cash used in investing activities (58) (442) (247)
----------- ---------- ---------

Cash Flows From Financing Activities:
Paid in capital - - 150
Dividends on common stock (36) (21) -
Debt issuance costs - (4) -
Redemptions, repurchases, and maturities:
Borrowings from money pool (67) - -
Intercompany notes payable - CIPS and Ameren (51) (46) (94)
Issuances:
Borrowings from money pool - 129 62
Long-term debt - 275 -
----------- ---------- --------
Net cash provided by (used in) financing activities (154) 333 118
----------- ---------- ---------

Net change in cash and cash equivalents (1) 1 1
Cash and cash equivalents at beginning of year 3 2 1
----------- ---------- ---------
Cash and cash equivalents at end of year $ 2 $ 3 $ 2
=========== ========== =========
Cash Paid During the Periods:
Interest $ 99 $ 83 $ 73
Income taxes (refunded) paid (76) 1 36


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




100





AMEREN ENERGY GENERATING COMPANY
STATEMENT OF STOCKHOLDER'S EQUITY
(In millions)



December 31,
----------------------------------------------------
2003 2002 2001
------------ ------------ -------------

Common stock $ - $ - $ -

Other paid-in capital:
Beginning balance 150 150 -
Equity contribution from Ameren - - 150
------------ ------------ -----------
150 150 150
------------ ------------ -----------

Retained earnings:
Beginning balance 131 120 44
Net income 75 32 76
Dividends paid to Ameren (36) (21) -
------------ ------------ ------------
170 131 120
------------ ------------ ------------

Accumulated other comprehensive income:
Beginning balance 5 4 -
Change in derivative financial instruments - 1 4
------------ ------------ ------------
5 5 4
------------ ------------ ------------

Beginning balance - minimum pension liability (6) - -
Change in minimum pension liability 2 (6) -
------------ ------------ ------------
(4) (6) -
------------ ------------ ------------

1 (1) 4
------------ ------------ ------------

Total stockholder's equity $ 321 $ 280 $ 274
============ ============ ============


Comprehensive income, net of taxes:
Net income $ 75 $ 32 $ 76
Unrealized net gain on derivative hedging instruments,
net of income taxes of $-, $- and $3, respectively - - 4
Reclassification adjustments for gains included in net income,
net of income taxes of $-, $1 and $2, respectively - 1 3
Cumulative effect of accounting change, net of income taxes
(benefit) of $-, $- and $(2), respectively - - (3)
Minimum pension liability adjustment, net of income taxes
(benefit) of $1, $(3) and $-, respectively 2 (6) -
------------ ------------ ------------
Total comprehensive income, net of taxes $ 77 $ 27 $ 80
============ ============ ============

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




101





CILCORP INC.
CONSOLIDATED STATEMENT OF INCOME
(In millions)

----Successor------ ---------------------Predecessor-------------------
Eleven
Months Ended Twelve Months Ended
December 31, January December 31,
----------------- ------------ -----------------------------------
2003 2003 2002 2001
----------------- ------------ --------------- ----------------

Operating Revenues:
Electric (Note 14) $ 497 $ 47 $ 507 $ 468
Gas 303 58 268 314
Other 4 - 3 4
----------------- ------------ --------------- ----------------
Total operating revenues 804 105 778 786
----------------- ------------ --------------- ----------------

Operating Expenses:
Fuel and purchased power (Note 14) 261 24 235 177
Gas purchased for resale 230 44 184 232
Other operations and maintenance (Note 14) 135 14 148 135
Depreciation and amortization 72 6 72 86
Taxes other than income taxes 34 4 41 40
----------------- ------------ --------------- ----------------
Total operating expenses 732 92 680 670
----------------- ------------ --------------- ----------------

Operating Income 72 13 98 116

Other Income and (Deductions):
Miscellaneous income (Note 8) 1 - 3 5
Miscellaneous expense (Note 8) (3) - (2) (3)
----------------- ------------ --------------- ----------------
Total other income and (deductions) (2) - 1 2
----------------- ------------ --------------- ----------------

Interest Charges and Preferred Dividends:
Interest 48 5 65 70
Preferred dividends of subsidiaries 2 - 2 2
----------------- ------------ --------------- ----------------
Net interest charges and preferred dividends 50 5 67 72
----------------- ------------ --------------- ----------------

Income Before Income Taxes and Cumulative Effect of
Change in Accounting Principle 20 8 32 46

Income Taxes 6 3 7 22
----------------- ------------ --------------- ----------------

Income Before Cumulative Effect of Change in
Accounting Principle 14 5 25 24

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

Net Income $ 14 $ 9 $ 25 $ 24
================= ============ =============== ================



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



102





CILCORP INC.
CONSOLIDATED BALANCE SHEET
(In millions)
Successor Predecessor
December 31, December 31,
2003 2002
------------ --------------

ASSETS

Current Assets:
Cash and cash equivalents $ 11 $ 32
Accounts receivable - trade (less allowance for doubtful
accounts of $6 and $2, respectively) 59 53
Unbilled revenue 40 37
Miscellaneous accounts and notes receivable (Note 14) 20 8
Materials and supplies, at average cost 154 61
Other current assets 5 24
------------ --------------
Total current assets 289 215
------------ --------------
Property and Plant, Net (Note 4) 1,127 941
Investments and Other Non-Current Assets:
Investments in leveraged leases 130 133
Goodwill and other intangibles, net 567 581
Other assets 11 50
------------ --------------
Total investments and other non-current assets 708 764
------------ --------------
Regulatory Assets 16 8
------------ --------------
TOTAL ASSETS $ 2,140 $ 1,928
============ ==============


LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities:
Current maturities of long-term debt (Note 6) $ 100 $ 27
Short-term debt (Note 5) - 10
Borrowings from money pool (Note 14) 149 -
Intercompany note payable - Ameren (Note 14) 46 -
Accounts and wages payable (Note 14) 108 76
Taxes accrued - 8
Other current liabilities 38 40
------------ --------------
Total current liabilities 441 161
------------ --------------
Long-term Debt, Net (Note 6) 669 791
Preferred Stock of Subsidiary Subject to Mandatory Redemption (Note 10) 21 -
Deferred Credits and Other Non-Current Liabilities:
Accumulated deferred income taxes, net 181 190
Accumulated deferred investment tax credits 11 13
Regulatory liabilities 24 46
Accrued pension and other postretirement benefits 259 168
Other deferred credits and liabilities 37 23
------------ --------------
Total deferred credits and other non-current liabilities 512 440
------------ --------------
Commitments and Contingencies (Notes 1, 3, and 15)
Preferred Stock of Subsidiary Subject to Mandatory Redemption (Note 10) - 22
Preferred Stock of Subsidiary Not Subject to Mandatory Redemption (Note 10) 19 19
Stockholder's Equity:
Common Stock, no par value, 10,000 shares authorized - 1,000 shares outstanding - -
Other paid-in capital 490 519
Retained earnings (13) 35
Accumulated other comprehensive income (loss) 1 (59)
------------ --------------
Total stockholder's equity 478 495
------------ --------------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 2,140 $ 1,928
============ ==============


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




103





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

----Successor--- -------------Predecessor-----------------
Eleven
Months Ended Twelve Months Ended
December 31, January December 31,
-------------- ----------- ---------------------------
2003 2003 2002 2001
-------------- ----------- ----------- -------------

Cash Flows From Operating Activities:
Net income $ 14 $ 9 $ 25 $ 24
Adjustments to reconcile net income to net cash
provided by operating activities:
Cumulative effect of change in accounting principle - (4) - -
Depreciation and amortization 72 6 72 86
Amortization of debt issuance costs and premium/discounts 1 - 1 1
Deferred income taxes, net 4 (5) 3 11
Deferred investment tax credits, net (2) - (2) (1)
Other (3) - (47) 38
Changes in assets and liabilities:
Receivables, net (4) (20) (4) 75
Materials and supplies (15) 13 - (3)
Accounts and wages payable (25) 20 (1) (36)
Taxes accrued (5) 11 (6) (6)
Assets, other 17 6 (21) 26
Liabilities, other (15) (5) 68 (77)
-------------- ----------- ----------- ------------
Net cash provided by operating activities 39 31 88 138
-------------- ----------- ----------- ------------

Cash Flows From Investing Activities:
Construction expenditures (71) (16) (124) (51)
Other (9) 1 4 5
-------------- ----------- ----------- ------------
Net cash used in investing activities (80) (15) (120) (46)
-------------- ----------- ----------- ------------

Cash Flows From Financing Activities:
Dividends on common stock (27) - - (15)
Redemptions, repurchases, and maturities:
Short-term debt - (10) (53) (52)
Long-term debt (153) - (1) (19)
Preferred stock (1) - - -
Issuances:
Long-term debt - - 100 -
Borrowings from money pool 149 - - -
Intercompany note payable - Ameren 46 - - -
-------------- ----------- ----------- ------------
Net cash provided by (used in) financing activities 14 (10) 46 (86)
-------------- ----------- ----------- ------------

Net change in cash and cash equivalents (27) 6 14 6
Cash and cash equivalents at beginning of year 38 32 18 12
-------------- ----------- ----------- ------------
Cash and cash equivalents at end of year $ 11 $ 38 $ 32 $ 18
============== =========== =========== ============

Cash Paid During the Periods:
Interest $ 35 $ 5 $ 71 $ 74
Income taxes, net 15 - 21 9


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




104





CILCORP INC.
CONSOLIDATED STATEMENT OF STOCKHOLDER'S EQUITY
(In millions)


----Successor----- ----------------Predecessor------------------
Eleven
Months Ended Twelve Months Ended
December 31, January December 31,
---------------- --------------- ----------------------------
2003 2003 2002 2001
---------------- --------------- ------------ ------------

Common Stock $ - $ - $ - $ -

Other paid-in capital:
Beginning balance 519 519 519 469
Purchase accounting adjustments (29) - - -
Equity contributions from parent - - - 50
---------------- --------------- ------------ ------------
490 519 519 519
---------------- --------------- ------------ ------------

Retained earnings:
Beginning balance 44 35 10 1
Purchase accounting adjustments (44) - - -
Net income 14 9 25 24
Dividends (27) - - (15)
---------------- --------------- ------------ ------------
(13) 44 35 10
---------------- --------------- ------------ ------------

Accumulated other comprehensive income:
Beginning balance - derivative financial instruments 1 1 (2) -
Purchase accounting adjustments (1) - - -
Change in derivative financial instruments 1 - 3 (2)
---------------- --------------- ------------ ------------
1 1 1 (2)
---------------- --------------- ------------ ------------
Beginning balance - minimum pension liability (60) (60) (10) -
Purchase accounting adjustments 60 - - -
Change in minimum pension liability - - (50) (10)
---------------- --------------- ------------ ------------
- (60) (60) (10)
---------------- --------------- ------------ ------------

1 (59) (59) (12)
---------------- --------------- ------------ ------------
Total stockholder's equity $ 478 $ 504 $ 495 $ 517
================ =============== ============ ============



Comprehensive income, net of taxes:
Net income $ 14 $ 9 $ 25 $ 24
Unrealized net gain (loss) on derivative hedging
instruments, net of income taxes (benefit) of
$1, $-, $2 and $(1), respectively 1 - 3 (2)
Minimum pension liability adjustment, net of income taxes
(benefit) of $-, $-, $(34) and $(6), respectively - - (50) (10)
---------------- --------------- ------------ ------------
Total comprehensive income, net of taxes $ 15 $ 9 $ (22) $ 12
================ =============== ============ ============




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



105






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


Year Ended December 31,
----------------------------------------------
2003 2002 2001
------------- ------------- -------------

Operating Revenues:
Electric (Note 14) $ 544 $ 507 $ 468
Gas 278 212 272
------------- ------------- -------------
Total operating revenues 822 719 740
------------- ------------- -------------

Operating Expenses:
Fuel and purchased power (Note 14) 286 235 260
Gas purchased for resale 189 129 190
Other operations and maintenance (Note 14) 165 146 134
Acquisition integration costs 21 - -
Depreciation and amortization 70 71 69
Taxes other than income taxes 38 41 40
------------- ------------- -------------
Total operating expenses 769 622 693
------------- ------------- -------------

Operating Income 53 97 47

Other Income and (Deductions):
Miscellaneous income (Note 8) - 2 1
Miscellaneous expense (Note 8) (4) (2) (2)
------------- ------------- -------------
Total other income and (deductions) (4) - (1)
------------- ------------- -------------

Interest Charges 16 21 24
------------- ------------- -------------

Income Before Income Taxes and Cumulative Effect of Change
in Accounting Principle 33 76 22

Income Taxes 12 26 8
------------- ------------- -------------

Income Before Cumulative Effect of Change in Accounting
Principle 21 50 14

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

Net Income 45 50 14

Preferred Stock Dividends 2 2 2
------------- ------------- -------------

Net Income Available to Common Stockholder $ 43 $ 48 $ 12
============= ============= =============


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



106






CENTRAL ILLINOIS LIGHT COMPANY
CONSOLIDATED BALANCE SHEET
(In millions)

December 31, December 31,
2003 2002
------------- --------------
ASSETS

Current Assets:
Cash and cash equivalents $ 8 $ 22
Accounts receivable - trade (less allowance for doubtful
accounts of $6 and $2, respectively) 57 47
Unbilled revenue 35 32
Miscellaneous accounts and notes receivable (Note 14) 14 7
Materials and supplies, at average cost 69 61
Other current assets 5 24
------------- --------------
Total current assets 188 193
------------- --------------
Property and Plant, Net (Note 4) 1,101 1,031
Other Non-Current Assets 19 18
Regulatory Assets 16 8
------------- --------------
TOTAL ASSETS $ 1,324 $ 1,250
============= ==============


LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities:
Current maturities of long-term debt (Note 6) $ 100 $ 27
Short-term debt (Note 5) - 10
Borrowings from money pool (Note 14) 149 -
Accounts and wages payable (Note 14) 101 68
Taxes accrued 13 18
Other current liabilities 30 31
------------- --------------
Total current liabilities 393 154
------------- --------------
Long-term Debt, Net (Note 6) 138 316
Preferred Stock Subject to Mandatory Redemption (Note 10) 21 -
Deferred Credits and Other Non-Current Liabilities:
Accumulated deferred income taxes, net 101 95
Accumulated deferred investment tax credits 11 13
Regulatory liabilities 167 160
Accrued pension and other postretirement benefits 128 126
Other deferred credits and liabilities 23 22
------------- --------------
Total deferred credits and other non-current liabilities 430 416
------------- --------------
Commitments and Contingencies (Notes 1, 3, and 15)
Preferred Stock Subject to Mandatory Redemption (Note 10) - 22
Stockholder's Equity:
Common stock, no par value, 20.0 shares authorized - 13.6 shares outstanding 186 186
Preferred stock not subject to mandatory redemption (Note 10) 19 19
Other paid-in capital 52 52
Retained earnings 95 114
Accumulated other comprehensive income (loss) (10) (29)
------------- --------------
Total stockholder's equity 342 342
------------- --------------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 1,324 $ 1,250
============= ==============


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



107






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

Year Ended December 31,
-----------------------------------------
2003 2002 2001
------------ ------------ -----------


Cash Flows From Operating Activities:
Net income $ 45 $ 50 $ 14
Adjustments to reconcile net income to net cash
provided by operating activities:
Cumulative effect of change in accounting principle (24) - -
Depreciation and amortization 70 71 69
Amortization of debt issuance costs and premium/discounts 1 1 -
Deferred income taxes, net (22) 6 (21)
Deferred investment tax credits, net (2) (2) (1)
Acquisition integration costs 16 - -
Other 2 (26) 23
Changes in assets and liabilities:
Receivables, net (20) (5) 43
Materials and supplies (8) (1) (2)
Accounts and wages payable 24 (14) (14)
Taxes accrued (5) (10) 2
Assets, other 1 2 7
Liabilities, other 25 37 6
------------- ------------- -------------
Net cash provided by operating activities 103 109 126
------------- ------------- -------------

Cash Flows From Investing Activities:
Construction expenditures (87) (124) (51)
Other 1 1 -
------------- ------------- -------------
Net cash used in investing activities (86) (123) (51)
------------- ------------- -------------

Cash Flows From Financing Activities:
Dividends on common stock (62) (40) (45)
Dividends on preferred stock (2) (2) (2)
Redemptions, repurchases, and maturities:
Short-term debt (10) (33) (24)
Long-term debt (105) (1) (1)
Preferred stock (1) - -
Issuances:
Long-term debt - 100 -
Borrowings from money pool 149 - -
------------- ------------- -------------
Net cash provided by (used in) financing activities (31) 24 (72)
------------- ------------- -------------

Net change in cash and cash equivalents (14) 10 3
Cash and cash equivalents at beginning of year 22 12 9
------------- ------------- -------------
Cash and cash equivalents at end of year $ 8 $ 22 $ 12
============= ============= =============

Cash Paid During the Periods:
Interest $ 19 $ 28 $ 27
Income taxes, net 22 36 27


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



108






CENTRAL ILLINOIS LIGHT COMPANY
CONSOLIDATED STATEMENT OF STOCKHOLDER'S EQUITY
(In millions)


December 31,
--------------------------------------------
2003 2002 2001
------------ ------------ ------------

Common stock $ 186 $ 186 $ 186

Preferred stock not subject to mandatory redemption 19 19 19

Other paid-in capital:
Beginning balance 52 52 27
Equity contributions from parent - - 25
------------ ------------ ------------
52 52 52
------------ ------------ ------------

Retained earnings:
Beginning balance 114 106 139
Net income 45 50 14
Common stock dividends (62) (40) (45)
Preferred stock dividends (2) (2) (2)
------------ ------------ ------------
95 114 106
------------ ------------ ------------

Accumulated other comprehensive income:
Beginning balance - derivative financial instruments 1 (2) -
Change in derivative financial instruments 2 3 (2)
------------ ------------ ------------
3 1 (2)
------------ ------------ ------------
Beginning balance - minimum pension liability (30) (1) (1)
Change in minimum pension liability 17 (29) -
------------ ------------ ------------
(13) (30) (1)
------------ ------------ ------------

(10) (29) (3)
------------ ------------ ------------

Total stockholder's equity $ 342 $ 342 $ 360
============ ============ ============


Comprehensive income, net of taxes:
Net income $ 45 $ 50 $ 14
Unrealized net gain (loss) on derivative hedging instruments,
net of income taxes (benefit) of $1, $2 and $(1), respectively 2 3 (2)
Minimum pension liability adjustment, net of income taxes
(benefit) of $11, $(19) and $-, respectively 17 (29) -
------------ ------------ ------------
Total comprehensive income, net of taxes $ 64 $ 24 $ 12
============ ============ ============


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



109



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

COMBINED NOTES TO FINANCIAL STATEMENTS
December 31, 2003

NOTE 1 - Summary of Significant Accounting Policies

General

Ameren, headquartered in St. Louis, Missouri, is a public utility holding
company registered with the SEC under the PUHCA. Ameren's primary asset is the
common stock of its subsidiaries. Ameren's subsidiaries operate rate-regulated
electric generation, transmission and distribution businesses, rate-regulated
natural gas distribution businesses and non rate-regulated electric generation
businesses in Missouri and Illinois. Dividends on Ameren's common stock are
dependent on distributions made to it by its subsidiaries. Ameren's principal
subsidiaries are listed below. Also see Glossary of Terms and Abbreviations.

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

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

o Genco, also known as Ameren Energy Generating Company, operates a non
rate-regulated electric generation business. Genco was incorporated in
Illinois in March 2000, in conjunction with the Illinois Customer Choice
Law. Genco commenced operations on May 1, 2000, when CIPS transferred its
five coal-fired power plants representing in the aggregate approximately
2,860 megawatts of capacity and related liabilities to Genco at historical
net book value. The transfer was made in exchange for a subordinated
promissory note from Genco in the amount of $552 million and shares of
Genco's common stock. Since Genco commenced operations, it has acquired 25
CTs providing it a total installed generating capacity of approximately
4,749 megawatts as of December 31, 2003. Genco currently has no plans to
develop additional capacity. Genco is a subsidiary of Development Company,
a subsidiary of Ameren Energy Resources, which is a subsidiary of Ameren.
See Note 3 - Rate and Regulatory Matters for information regarding the
proposed transfer in 2004 of Genco's CTs located in Pinckneyville and
Kinmundy, Illinois to UE.

o CILCO, also known as Central Illinois Light Company, is a subsidiary of
CILCORP (a holding company) and operates a rate-regulated electric
transmission and distribution business, a primarily non rate-regulated
electric generation business and a rate-regulated natural gas distribution
business in Illinois. CILCO was incorporated in Illinois in 1913. It
supplies electric and gas utility service to portions of central and east
central Illinois in areas of approximately 3,700 and 4,500 square miles,
respectively, with an estimated population of 1 million. CILCO supplies
electric service to approximately 205,000 customers and natural gas service
to approximately 210,000 customers. In October 2003, CILCO transferred its
coal-fired plants and a CT facility, representing in the aggregate

110



approximately 1,100 megawatts of electric generating capacity, to a wholly
owned subsidiary, known as AERG, as a contribution in respect of all the
outstanding stock of AERG and AERG's assumption of certain liabilities. The
net book value of the transferred assets was approximately $378 million and
no gain or loss was recognized as the transaction was accounted for as a
transfer between entities under common control. The transfer was made in
conjunction with the Illinois Customer Choice Law. CILCORP was incorporated
in Illinois in 1985.

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

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

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

In order to be more consistent with industry reporting trends, our
Statements of Income have been reclassified to present all income taxes as one
line item. Previously, we reported a portion of our income taxes in Operating
Expenses and a portion in Other Income and Deductions. This change results in
our calculation of Operating Income now being on a pre-tax basis with no effect
on net income. Additionally, our Balance Sheet presentations have been
reformatted to change the order in which current and non-current items appear,
with no effect on total assets, total liabilities or any sub-categories included
on our Balance Sheets.

Our accounting policies conform to GAAP. Our financial statements reflect
all adjustments (which include normal, recurring adjustments) necessary, in our
opinion, for a fair presentation of our results. The preparation of financial
statements in conformity with GAAP requires management to make certain estimates
and assumptions. Such estimates and assumptions affect reported amounts of
assets and liabilities, the disclosure of contingent assets and liabilities at
the dates of financial statements and the reported amounts of revenues and
expenses during the reported periods. Actual results could differ from those
estimates. Certain reclassifications have been made to prior years' financial
statements to conform to 2003 reporting. See Accounting Changes and Other
Matters relating to SFAS No. 143, "Accounting for Asset Retirement Obligations,"
below and Note 4 - Property and Plant, Net for further information.

Regulation

Ameren is subject to regulation by the SEC. Certain of Ameren's
subsidiaries are also regulated by the MoPSC, ICC, NRC and the FERC. In
accordance with SFAS No. 71, "Accounting for the Effects of Certain Types of
Regulation," UE, CIPS and CILCO defer certain costs pursuant to actions of our
rate regulators and are currently recovering such costs in rates charged to
customers. See Note 3 - Rate and Regulatory Matters for further information.

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.

111



The following table presents the restricted cash amounts as of December 31,
2003 and 2002:

================================================================================
2003 2002
- --------------------------------------------------------------------------------
Ameren(a)............................... $ 5 $ 5
UE...................................... 3 3
CIPS.................................... 1 2
Genco................................... - -
CILCORP(b).............................. 1 -
CILCO................................... 1 -
================================================================================
(a) Excludes amounts for CILCORP and CILCO prior to the acquisition date
of January 31, 2003.
(b) 2002 amounts represent predecessor information. CILCORP consolidates
CILCO and therefore includes CILCO amounts in its balances.

Property and Plant

We capitalize the cost of additions to, and betterments of, units of
property and plant. The cost includes labor, material, applicable taxes and
overhead. An allowance for funds used during construction, or the cost of
borrowed funds and the cost of equity funds (preferred and common stockholders'
equity) applicable to rate-regulated construction expenditures, is also added
for our rate-regulated assets, and interest during construction is added for non
rate-regulated assets. Maintenance expenditures and the renewal of items not
considered units of property are expensed as incurred. When units of depreciable
property are retired, the original costs, less salvage value, are charged to
accumulated depreciation. Asset removal costs incurred by our non rate-regulated
operations, which do not constitute legal obligations, were expensed as incurred
beginning in 2003. Asset removal costs accrued by our rate-regulated operations,
which do not constitute legal obligations, are classified as a regulatory
liability. See Accounting Changes and Other Matters relating to SFAS No. 143
below and Note 4 - Property and Plant, Net for further information.

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 for the Ameren Companies in 2003, 2002 and 2001
ranged from 3% to 4% of the average depreciable cost. Beginning in January 2003,
with the adoption of SFAS No. 143, depreciation rates for our non rate-regulated
assets were reduced to reflect the discontinuation of the accrual of dismantling
and removal costs. See Accounting Changes and Other Matters relating to SFAS No.
143 below for further information.

Allowance for Funds Used During Construction

In our rate-regulated operations, we capitalize the allowance for funds
used during construction, which is a utility industry accounting practice.
Allowance for funds used during construction 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 allowance for funds
used during construction, as well as other construction costs, occurs when
completed projects are placed in service and reflected in customer rates. The
following table presents the allowance for funds used during construction ranges
of rates that were used during 2003, 2002 and 2001:

================================================================================
2003 2002 2001
- --------------------------------------------------------------------------------
Ameren.................. 3% - 4% 5% - 9% 4% - 10%
UE...................... 4 5 10
CIPS.................... 3 9 4
Genco................... - - -
CILCORP................. 3 6 5
CILCO................... 3 6 5
================================================================================

112



Goodwill

Goodwill is the excess of the purchase price of an acquisition over the
fair value of the net assets acquired. Under the provisions of SFAS No. 142,
"Goodwill and Other Intangible Assets," goodwill and other intangibles with
indefinite lives are no longer subject to amortization. As required by SFAS No.
142, we evaluate goodwill for impairment in the fourth quarter annually or more
frequently if events and circumstances indicate that the asset might be
impaired. Ameren and CILCORP's goodwill relates to the acquisitions of CILCORP
and Medina Valley in 2003. See Note 2 - Acquisitions for additional information
regarding the acquisitions.

Leveraged Leases

Certain Ameren subsidiaries own interests in assets which have been
financed as a leveraged lease. Ameren's investment in these leveraged leases
represents the equity portion, generally 20% of the total investment, either as
an undivided interest in the equipment or as a part owner through a
partnership. In accordance with SFAS No. 13, "Accounting for Leases," at the
time of lease inception a debit for rents receivable and estimated residual
value is recorded with a credit to unearned income. These amounts are then
adjusted over time as rents are received, income is realized and the asset is
eventually sold. Ameren and CILCORP account for these investments as a net
investment in these assets and do not include the amount of outstanding debt
since the third party debt is non-recourse to the Ameren subsidiaries.

Impairment of Long-Lived Assets

We evaluate long-lived assets for impairment when events or changes in
circumstances indicate that the carrying value of such assets may not be
recoverable. The determination of whether impairment has occurred is based on an
estimate of undiscounted cash flows attributable to the assets, as compared with
the carrying value of the assets. If impairment has occurred, the amount of the
impairment recognized is determined by estimating the fair value of the assets
and recording a provision for loss if the carrying value is greater than the
fair value.

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

We accrue an estimate of electric and gas revenues for service rendered,
but unbilled, at the end of each accounting period.

Interchange Revenues

The following table presents the interchange revenues included in Operating
Revenues - Electric for the years ended December 31, 2003, 2002, and 2001:

================================================================================
2003 2002 2001
- --------------------------------------------------------------------------------
Ameren(a)............ $ 351 $ 259 $ 364
UE................... 320 257 375
CIPS................. 37 35 35
Genco................ 140 99 91
CILCORP(b)........... 19 10 16
CILCO(c)............. 19 10 16
================================================================================
(a) Excludes amounts for CILCORP and CILCO prior to the acquisition date
of January 31, 2003; includes amounts for non-registrant Ameren
subsidiaries as well as intercompany eliminations. Includes
interchange revenues at EEI of $56 million for the year ended December
31, 2003 (2002 - $59 million; 2001 - $55 million).
(b) 2002 and 2001 amounts represent predecessor information. 2003 amounts
include January 2003 predecessor information, which was $3 million.
CILCORP consolidates CILCO and therefore includes CILCO amounts in its
balances.
(c) CILCO's financial statements are presented on a historical basis of
accounting for all periods presented. See further information within
this Note.

See EITF No. 02-3 discussion under Accounting Changes and Other Matters
below for further information.


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Purchased Power

The following table presents the purchased power expenses included in
Operating Expenses - Fuel and Purchased Power for the years ended December 31,
2003, 2002, and 2001. See Note 14 - Related Party Transactions for further
information on affiliate purchased power transactions.

================================================================================
2003 2002 2001
- --------------------------------------------------------------------------------
Ameren(a)............... $ 256 $ 167 $ 298
UE...................... 161 206 384
CIPS.................... 341 418 433
Genco................... 144 107 125
CILCORP(b).............. 157 143 123
CILCO................... 157 143 123
================================================================================
(a) Excludes amounts for CILCORP and CILCO prior to the acquisition date
of January 31, 2003; includes amounts for non-registrant Ameren
subsidiaries as well as intercompany eliminations.
(b) 2002 and 2001 amounts represent predecessor information. 2003 amounts
include January 2003 predecessor information, which was $12 million.
CILCORP consolidates CILCO and therefore includes CILCO amounts in its
balances.

See EITF No. 02-3 discussion under Accounting Changes and Other Matters
below for further information.

Fuel and Gas Costs

In UE's, CIPS' and CILCO's retail electric utility jurisdictions, there are
no provisions for adjusting rates for changes in the cost of fuel for electric
generation. In UE's, CIPS' and CILCO's retail gas utility jurisdictions, changes
in gas costs are generally reflected in billings to gas customers through PGA
clauses.

UE's cost of nuclear fuel is amortized to fuel expense on a
unit-of-production basis. Spent fuel disposal cost is charged to expense, based
on net kilowatthours generated and sold.

Excise Taxes

Excise taxes reflected on Missouri electric and gas, and Illinois gas,
customer bills are imposed on us and are recorded gross in Operating Revenues
and Other Taxes. Excise taxes reflected on Illinois electric customer bills are
imposed on the consumer and are recorded as tax collections payable and included
in Taxes Accrued. The following table presents excise taxes recorded in
Operating Revenues and Taxes Other than Income Taxes for the years ended 2003,
2002 and 2001:

================================================================================
2003 2002 2001
- --------------------------------------------------------------------------------
Ameren(a)......................... $ 137 $ 116 $ 113
UE................................ 101 103 101
CIPS.............................. 14 13 12
Genco............................. - - -
CILCORP(b)........................ 24 16 16
CILCO(c).......................... 24 16 16
================================================================================
(a) Excludes amounts for CILCORP and CILCO prior to the acquisition date
of January 31, 2003.
(b) 2002 and 2001 amounts represent predecessor information. 2003 amounts
include January 2003 predecessor information which was $2 million.
CILCORP consolidates CILCO and therefore includes CILCO amounts in its
balances.
(c) With the exception of taxes reflected on CILCO customer bills issued
prior to October 27, 2003, excise taxes at CILCO are recorded as tax
collections payable and are included on the Balance Sheet as Taxes
Accrued.

Income Taxes

We file a consolidated federal tax return. 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.

114



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

Earnings Per Share

There were no differences between the basic and diluted earnings per share
amounts for Ameren in 2003. The inclusion of assumed stock option conversions in
the calculation of earnings per share resulted in dilution of $0.01 for 2002 and
2001. The assumed stock option conversions increased the number of shares
outstanding in the diluted earnings per share calculation by 289,244 in 2003,
332,909 shares in 2002 and 331,813 shares in 2001. Ameren's equity security
units have no dilutive effect on earnings per share, except during periods when
the average market price of Ameren's common stock is above $46.61. As only the
Ameren parent company has publicly held common stock, earnings per share
calculations are not relevant and are not presented for any of the subsidiary
companies.

Accounting Changes and Other Matters

SFAS No. 133 - "Accounting for Derivative Instruments and Hedging Activities"

In January 2001, we adopted SFAS No. 133. The following table presents the
impact of that adoption, which resulted in cumulative effect charges, net of
taxes:

================================================================================
Ameren(a).................................................... $ 7
UE........................................................... 5
CIPS......................................................... -
Genco........................................................ 2
CILCORP...................................................... -
CILCO........................................................ -
================================================================================
(a) Excludes amounts for CILCORP and CILCO prior to the acquisition date
of January 31, 2003; includes amounts for non-registrant Ameren
subsidiaries as well as intercompany eliminations.

In addition, the following table presents the impact of the 2001 adoption's
cumulative effect adjustment, net of taxes, to OCI, which increased (reduced)
common stockholders' equity:

================================================================================
Ameren(a).................................................... $ (11)
UE........................................................... (8)
CIPS......................................................... -
Genco........................................................ (3)
CILCORP(b)................................................... 2
CILCO........................................................ 2
================================================================================
(a) Excludes amounts for CILCORP and CILCO prior to the acquisition date
of January 31, 2003; includes amounts for non-registrant Ameren
subsidiaries as well as intercompany eliminations.
(b) Represents predecessor information. CILCORP consolidates CILCO and
therefore includes CILCO amounts in its balances.

See Note 9 - Derivative Financial Instruments for further information.

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

We adopted the provisions of SFAS No. 143, effective January 1, 2003. SFAS
No. 143 provides the accounting requirements for asset retirement obligations
associated with tangible, long-lived assets. SFAS No. 143 requires us to record
the estimated fair value of legal obligations associated with the retirement of
tangible long-lived assets in the period in which the liabilities are incurred
and to capitalize a corresponding amount as part of the book value of the
related long-lived asset. In subsequent periods, we are required to adjust asset
retirement obligations based on changes in estimated fair value. Corresponding
increases in asset book values are depreciated over the remaining useful life of
the related asset. Uncertainties as to the probability, timing or amount of cash
flows associated with an asset retirement obligation affect our estimates of
fair value.


115



Upon adoption of this standard, Ameren and UE recognized additional asset
retirement obligations of approximately $213 million and a net increase in net
property and plant of approximately $77 million related primarily to UE's
Callaway Nuclear Plant decommissioning costs and retirement costs for a UE river
structure. The difference between the net asset and the liability recorded upon
adoption of SFAS No. 143 related to rate-regulated assets was recorded as an
additional regulatory asset of approximately $136 million as Ameren and UE
expect to continue to recover in electric rates the cost of Callaway Nuclear
Plant decommissioning and other costs of removal. These asset retirement
obligations and associated assets are in addition to assets and liabilities of
$174 million that UE had recorded prior to the adoption of SFAS No. 143, related
to the future obligations and funds accumulated to decommission the Callaway
Nuclear Plant.

Also upon adoption of this standard, Ameren and Genco recognized an asset
retirement obligation of approximately $4 million and a net increase in net
property and plant of approximately $34 million. The asset retirement obligation
relates to retirement costs for a Genco power plant ash pond. The net increase
in property and plant, as well as the majority of the net after-tax gain of $18
million recognized upon adoption, resulted from the elimination of costs of
removal for non rate-regulated assets previously accrued as a component of
accumulated depreciation that were not legal obligations ($20 million). Ameren
and Genco also recognized a loss for the difference between the net asset and
liability for the retirement obligation recorded upon adoption related to
Genco's assets ($2 million).

As a result of the acquisition of CILCORP on January 31, 2003, Ameren's
asset retirement obligations increased due to the assumption of asset retirement
obligations of approximately $6 million related to CILCO's power plant ash ponds
(now owned by AERG). Prior to the acquisition, predecessor CILCORP and CILCO
recognized a net after-tax gain upon adoption of SFAS No. 143 of $4 million and
$24 million, respectively, due to the elimination of costs of removal for non
rate-regulated assets previously accrued as a component of accumulated
depreciation that were not a legal obligation. Similar to the treatment applied
by Ameren in the acquisition of CILCORP, AES recorded purchase accounting at the
CILCORP parent level following its 1999 acquisition of CILCORP, but did not
"push down" the purchase accounting to any of CILCORP's subsidiaries, including
CILCO. Accordingly, accumulated depreciation, including the embedded cost of
removal liabilities, was reset to zero in purchase accounting for the CILCORP
parent while CILCO continued to carry property and plant and the related
accumulated depreciation on a historical basis. As a result, the gain upon
adoption of SFAS No. 143 recognized by CILCO exceeded the gain recognized by
CILCORP because the cost of removal liabilities reversed by CILCORP upon
adoption of SFAS No. 143 included only those liabilities recorded since the 1999
AES acquisition.

Asset retirement obligations at Ameren and UE increased by $22 million
during the year ended December 31, 2003, to reflect the accretion of obligations
to their present value. Increases to Genco's, CILCORP's and CILCO's asset
retirement obligations were immaterial during these periods. Substantially all
of this accretion was recorded as an increase to regulatory assets.

In addition to those obligations that were identified and valued, we
determined that certain other asset retirement obligations exist. However, we
were unable to estimate the fair value of those obligations because the
probability, timing or cash flows associated with the obligations were
indeterminable. We do not believe that these obligations, when incurred, will
have a material adverse impact on our financial position, results of operations
or liquidity.

The fair value of the nuclear decommissioning trust fund for UE's Callaway
Nuclear Plant is reported in Nuclear Decommissioning Trust Fund in Ameren's and
UE's Consolidated Balance Sheet. This amount is legally restricted to fund the
costs of nuclear decommissioning. Changes in the fair value of the trust fund
are recorded as an increase or decrease to the regulatory asset recorded in
connection with the adoption of SFAS No. 143.

SFAS No. 143 required a change in the depreciation methodology we
historically utilized for our non rate-regulated operations. Historically, we
included an estimated cost of dismantling and removing plant from service upon
retirement in the basis upon which our depreciation rates were determined. SFAS
No. 143 required us to exclude costs of dismantling and removal upon retirement
from the depreciation rates applied to non rate-regulated plant balances.
Further, we were required to remove accumulated provisions for dismantling and
removal costs from accumulated depreciation, where they were embedded, and to
reflect such adjustment as a gain upon adoption of this standard, to the extent
such dismantling and removal activities were not considered legal asset
retirement obligations as defined by SFAS No. 143. The elimination of costs of
removal from accumulated depreciation resulted in a gain for a change in
accounting principle at Ameren and Genco, as noted above, of $20 million, net of
taxes. At CILCO, the elimination of costs of removal from accumulated
depreciation resulted in a gain of $24 million, net of taxes, due to a change in

116




accounting principle. As noted above, the gain for predecessor CILCORP on a
consolidated basis was only $4 million, net of taxes, due to the reset of
accumulated depreciation at the time of AES' acquisition of CILCORP in 1999.
Beginning in January 2003, depreciation rates for non rate-regulated assets were
reduced to reflect the discontinuation of the accrual of dismantling and removal
costs. In addition, non rate-regulated asset removal costs will prospectively be
expensed as incurred. The impact of this change in accounting results in a
decrease in depreciation expense and an increase in operations and maintenance
expense, the net impact of which is indeterminable, but not expected to be
material.

Like the methodology employed by our non rate-regulated operations, the
depreciation methodology historically utilized by our rate-regulated operations
has included an estimated cost of dismantling and removing plant from service
upon retirement. Because these estimated costs of removal have been included in
the cost of service upon which our present utility rates are based, and with the
expectation that this practice will continue in the jurisdictions in which we
operate, adoption of SFAS No. 143 did not result in any change in the
depreciation accounting practices of our rate-regulated operations and,
therefore, had no impact on net income from rate-regulated operations. However,
in accordance with SFAS No. 143, estimated future removal costs previously
embedded in accumulated depreciation were classified as a regulatory liability
at December 31, 2003. A corresponding reclassification was made to conform the
December 31, 2002, balance sheets to the current year presentation.
These reclassifications had no impact on our results of operations or cash
flows. The following table presents the estimated future removal costs
recognized as a regulatory liability at December 31, 2003 and 2002:

================================================================================
2003 2002
- --------------------------------------------------------------------------------
Ameren........................... $ 694(a) $ 652(b)
UE............................... 556 528
CIPS............................. 131 124
Genco............................ - -
CILCORP.......................... 7 27
CILCO............................ 150 141
================================================================================
(a) Excludes amount for CILCO, as the elimination of accumulated
depreciation in purchase accounting was recorded at the CILCORP parent
level.
(b) Excludes amounts for CILCORP and CILCO prior to the acquisition date
of January 31, 2003.

The following table presents the asset retirement obligation as though SFAS
No. 143 had been in effect for 2001 and 2002:




=================================================================================================================
Pro Forma Asset Retirement Obligation
- -----------------------------------------------------------------------------------------------------------------

Ameren(a) UE CIPS Genco CILCORP(b) CILCO
--------------------------------------------------------------------------
January 1, 2001.................. $ 350 $ 346 $ - $ 4 $ - $ -
December 31, 2001................ 370 366 - 4 - -
December 31, 2002................ 391 387 - 4 6 6
=================================================================================================================

(a) Excludes amounts for CILCORP and CILCO.
(b) Represents predecessor information.

Pro forma net income, as well as pro forma earnings per share for Ameren,
has not been presented for the years ended December 31, 2002 and 2001 because
the pro forma application of SFAS No. 143 to prior periods would result in pro
forma net income not materially different from the actual amounts reported for
these periods.

EITF Issue No. 02-3, EITF Issue No. 98-10 and EITF Issue No. 03-11

During 2002, we adopted the provisions of EITF No. 02-3, "Issues Involved
in Accounting for Derivative Contracts Held for Trading Purposes and Contracts
Involved in Energy Trading and Risk Management Activities," that required
revenues and costs associated with certain energy contracts to be shown on a net
basis in the Statement of Income. Prior to adopting EITF No. 02-3 and the
rescission of EITF No. 98-10, "Accounting for Contracts Involved in Energy
Trading and Risk Management Activities," our accounting practice was to present
all settled energy purchase or sale contracts within our power risk management
program on a gross basis in Operating Revenues - Electric and Other and in
Operating Expenses - Fuel and Purchased Power and Other Operations and
Maintenance. This meant that revenues were

117





recorded for the sum of the notional amounts of the power sales contracts with a
corresponding charge to income for the costs of the energy that was generated,
or for the sum of the notional amounts of a purchased power contract.

In October 2002, the EITF reached a consensus to rescind EITF No. 98-10.
The effective date for the full rescission of EITF No. 98-10 was for fiscal
periods beginning after December 15, 2002, with early adoption permitted. In
addition, the EITF reached a consensus in October 2002, that all SFAS No. 133
trading derivatives (subsequent to the rescission of EITF No. 98-10) should be
shown net in the income statement, whether or not physically settled. This
consensus applies to all energy and non-energy related trading derivatives that
meet the definition of a derivative pursuant to SFAS No. 133. The following
table presents the operating revenues and costs that were netted for the years
ended December 31, 2002 and 2001, which reduced Operating Revenues - Electric
and Other, and Operating Expenses - Fuel and Purchased Power and Other
Operations and Maintenance, by equal amounts:

================================================================================
2002 2001
- --------------------------------------------------------------------------------
Ameren(a)...................... $ 738 $ 648
UE............................. 458 392
CIPS........................... - -
Genco.......................... 253 256
CILCORP........................ - -
CILCO.......................... - -
================================================================================
(a) Excludes amounts for CILCORP and CILCO prior to the acquisition date
of January 31, 2003; includes amounts for non-registrant Ameren
subsidiaries as well as intercompany eliminations.

The adoption of EITF No. 02-3, the rescission of EITF No. 98-10 and the
related transition guidance resulted in the netting of energy contracts for
financial reporting purposes, which lowered our reported revenues and costs with
no impact on earnings.

In July 2003, the EITF reached a consensus on EITF No. 03-11, "Reporting
Realized Gains and Losses on Derivative Instruments That Are Subject to FASB
Statement No. 133, 'Accounting for Derivative Instruments and Hedging
Activities,' and Not Held for Trading Purposes as Defined in EITF No. 02-3,
'Issues Involved in Accounting for Derivative Contracts Held for Trading
Purposes and Contracts Involved in Energy Trading and Risk Management
Activities,' " that was ratified by the FASB in August 2003. The EITF concluded
that determining whether realized gains and losses on physically settled
derivative contracts not held for trading purposes should be reported in the
income statement on a gross or net basis is a matter of judgment that depends on
the relevant facts and circumstances. The adoption of EITF No. 03-11 will have
no impact on our results of operations.

SFAS No. 148 - "Accounting for Stock-based Compensation - Transition and
Disclosure"

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

Prior to 2003, Ameren and CILCORP accounted for stock options granted under
long-term incentive plans under the recognition and measurement provisions of
APB Opinion No. 25, "Accounting for Stock Issued to Employees." No stock-based
employee compensation cost was recognized for options under either Ameren's plan
or CILCORP's plan under the AES Stock Option Plan in 2002 and 2001, as all
options granted under the plans had an exercise price equal to the market value
of the underlying common stock on the date of grant. The pre-tax cost based on
the weighted-average grant-date fair value of options for Ameren would have been
approximately $2 million in each of the years ended 2002 and 2001 and $4 million
and $2 million, respectively, for predecessor CILCORP, had the fair value method
under SFAS No. 123 been used for options granted. Effective January 1, 2003, we
adopted the fair value recognition provisions of SFAS No. 123 by using the
prospective method of adoption under SFAS No. 148. As stock options have not
been granted since 2000 at Ameren, SFAS No. 148 did not have any effect on
Ameren's financial position, results of operations or liquidity since adoption.
As stock options at CILCORP were granted under the AES Stock Option Plan, prior
to our acquisition of CILCORP in January 2003, and no options were granted since
2001 under the AES Stock

118




Option Plan, SFAS No. 148 did not have any effect on Ameren's or CILCORP's
financial position, results of operations or liquidity since adoption. See also
Note 12 - Stock-based Compensation for further information.

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

In April 2003, the FASB issued SFAS No. 149. SFAS No. 149 further clarifies
and amends accounting and reporting for derivative instruments. The statement
amends SFAS No. 133 for decisions made by the Derivative Implementation Group,
as well as issues raised in connection with other FASB projects and
implementation issues. The statement is effective for contracts entered into or
modified after June 30, 2003 except for implementation issues that have been
effective for reporting periods beginning before June 15, 2003, which continue
to be applied based on their original effective dates. SFAS No. 149 did not have
any effect on our financial position, results of operations or liquidity upon
adoption in the third quarter of 2003.

SFAS No. 150 - "Accounting for Certain Financial Instruments with
Characteristics of Both Liabilities and Equity"

In May 2003, the FASB issued SFAS No. 150 that established standards for
how an issuer classifies and measures certain financial instruments with
characteristics of both liabilities and equity. Among other things, SFAS No. 150
requires financial instruments that were issued in the form of shares, with an
unconditional obligation to redeem the instrument by transferring assets on a
specified date, to be classified as liabilities. Accordingly, SFAS No. 150
requires issuers to classify mandatorily redeemable financial instruments as
liabilities. SFAS No. 150 also requires such financial instruments to be
measured at fair value and a cumulative effect adjustment to be recognized in
the Statement of Income for any difference between the carrying amount and fair
value. SFAS No. 150 became effective July 1, 2003. At July 1, 2003, CILCO had
$21 million of preferred stock subject to mandatory redemption, which was
reclassified to the liability section of Ameren's, CILCORP's and CILCO's
Consolidated Balance Sheets. In accordance with the requirements of SFAS No.
150, no reclassification was made to the presentation on the December 31, 2002
Consolidated Balance Sheets of Ameren, CILCORP and CILCO. This preferred stock
is redeemable at par at any time, and therefore, it was estimated there was no
difference between book value and fair value.

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

In January 2003, the FASB issued FIN No. 46, which significantly changed
the consolidation requirements for traditional special purpose entities (SPE)
and certain other entities and addressed the consolidation of variable-interest
entities (VIEs). The primary objective of FIN No. 46 was to provide guidance on
the identification of, and financial reporting for, entities over which control
is achieved through means other than voting rights. If an entity absorbs the
majority of the VIEs' expected losses or receives a majority of the VIEs'
expected residual returns, or both, it must consolidate the VIE.

Initially, FIN No. 46 was effective no later than the beginning of the
first interim period after June 15, 2003, for VIEs created before February 1,
2003. For VIEs created after January 31, 2003, FIN No. 46 was effective
immediately. In September 2003, the FASB deferred the effective date of FIN No.
46 until the end of the first interim or annual period ending after December 15,
2003 for VIEs created prior to January 31, 2003. In December 2003, the FASB
further deferred this effective date of FIN No. 46 for non-SPEs until the end of
the first interim or annual period ending after March 15, 2004. During these
deferral periods, the FASB has continued to clarify and amend several
provisions, much of which will assist in the application of FIN No. 46 to
operating entities. Ameren does not have any interests in entities that are
considered SPEs. In addition, FIN No. 46 requires the deconsolidation of certain
trust-preferred arrangements; however, Ameren does not have any trust-preferred
arrangements.

Ameren is continuing to evaluate the impact of FIN No. 46 for non-SPEs.
Ameren has a 60% ownership interest in EEI through UE, which owns 40%, and
Resources Company, which owns 20%. Ameren consolidates EEI for financial
reporting purposes. Ameren has several leveraged leases and other investments
that we currently do not consolidate. We are still evaluating the impact of
adopting FIN No. 46 in our first quarter ended March 31, 2004.

SFAS No. 132 (revised 2003) - "Employers' Disclosures about Pensions and Other
Postretirement Benefits"

In December 2003, the FASB issued SFAS No. 132 (revised) to improve
financial statement disclosures for defined benefit plans. The standard requires
more details about plan assets, benefit obligations, cash flows, benefit costs
and

119




other relevant information. SFAS No. 132 (revised) became effective for fiscal
years ending after December 15, 2003. See Note 11 - Retirement Benefits for
further information.

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

Through its postretirement benefit plans, Ameren provides retirees with
prescription drug coverage. On December 8, 2003, the Medicare Prescription
Drug, Improvement and Modernization Act of 2003 (the Prescription Drug Act) was
enacted. The Prescription Drug Act introduced a prescription drug benefit under
Medicare as well as a federal subsidy to sponsors of retiree healthcare benefit
plans that provide a benefit that is at least actuarially equivalent to the
Medicare prescription drug benefit. In response to the enactment of the
Prescription Drug Act, the FASB issued FASB Staff Position SFAS No. 106-1 in
January 2004, which permits a plan sponsor of a postretirement healthcare plan
that provides a prescription drug benefit to make a one-time election to defer
the accounting for the effects of the Prescription Drug Act. Ameren has made
this one-time election allowed by FASB Staff Position SFAS No. 106-1. Thus, any
measures of the accumulated projected benefit obligation or net periodic
postretirement benefit costs in Ameren's financial statements and included in
Note 11 - Retirement Benefits do not reflect the effects of the Prescription
Drug Act on Ameren's postretirement plans. Ameren is evaluating what impact the
Prescription Drug Act will have on its postretirement benefit plans and whether
it will be eligible for a federal subsidy beginning in 2006. Specific
authoritative guidance on the accounting for the federal subsidy is pending.


NOTE 2 - Acquisitions

CILCORP and Medina Valley

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

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

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

The following table presents the estimated fair values of the assets
acquired and liabilities assumed at the dates of our acquisitions of CILCORP and
Medina Valley. A third party valuation of acquired property and plant and
intangible assets is substantially complete; however, the allocation of the
purchase price is subject to refinement until the valuation is finalized.

120



=============================================================================
Current assets.......................................... $ 315
Property and plant...................................... 1,169
Investments and other non-current assets................ 154
Specifically-identifiable intangible assets............. 6
Goodwill................................................ 568
-----------------------------------------------------------------------------
Total assets acquired................................ 2,212
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
Current liabilities..................................... 196
Long-term debt, including current maturities............ 937
Other non-current liabilities........................... 521
-----------------------------------------------------------------------------
Total liabilities assumed............................ 1,654
-----------------------------------------------------------------------------
Preferred stock assumed................................. 41
-----------------------------------------------------------------------------
Net assets acquired.................................. $ 517
=============================================================================

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

Goodwill of $568 million (CILCORP - $561 million; Medina Valley - $7
million) was recognized in connection with the CILCORP and Medina Valley
acquisitions. None of this goodwill is expected to be deductible for tax
purposes.

The following unaudited pro forma financial information presents a summary
of Ameren's consolidated results of operations for the years ended December 31,
2003 and 2002, assuming the acquisitions of CILCORP and Medina Valley had been
completed at the beginning of fiscal year 2002, including pro forma adjustments,
which are based upon preliminary estimates, to reflect the allocation of the
purchase price to the acquired net assets.




===================================================================================================================
2003 2002
-------------------------------------------------------------------------------------------------------------------

Operating revenues................................................................ $ 4,694 $ 4,605
Income before cumulative effect of change in accounting principle................. 510 410
Cumulative effect of change in accounting principle, net of taxes................. 22 -
Net income........................................................................ 532 410

Earnings per share - basic........................................................ $ 3.29 $ 2.60
- diluted...................................................... 3.29 2.59
===================================================================================================================



This pro forma information is not necessarily indicative of the results of
operations as they would have been had the transactions been effected on the
assumed date, nor is it an indication of trends in future results.

The amortization of non-cash purchase accounting adjustments at CILCORP
increased Ameren's and CILCORP's net income by $24 million for the eleven months
ended December 31, 2003. The amortization of the fair value adjustments that
increased net income were related to pension and postretirement liabilities,
coal contract liabilities, severance liabilities and long-term debt. The
amortization of fair value adjustments that decreased net income were related to
electric plant in service, purchased power and emission credits. The following
table presents the favorable (unfavorable) impact on Ameren's and CILCORP's net
income related to the amortization of purchase accounting fair value adjustments
during 2003:




===================================================================================================================
For the eleven months ended December 31, 2003:
-------------------------------------------------------------------------------------------------------------------

Statement of Income line item:
Other operations and maintenance(a)....................................... $ 39
Interest(b)............................................................... 7
Fuel and purchased power(c)............................................... 1
Depreciation and amortization(d).......................................... (7)
Income taxes(e)........................................................... (16)
-------------------------------------------------------------------------------------------------------------------
Impact on net income...................................................... $ 24
===================================================================================================================

(a) Included in other operations and maintenance are the amortization of a
purchase accounting liability associated with pension and
postretirement benefit plan obligation; a purchase accounting asset
associated with customer retail contracts amortized over the

121




remaining useful life of 10 years; a purchase accounting adjustment
associated with investment assets being amortized over useful lives
ranging from 6 - 16 years; a purchase accounting accrual for severance
liabilities; and a purchase accounting accrual for abandoned CILCO
software.
(b) The impact on interest of the amortization of purchase accounting
adjustments is due to CILCORP's 9.375% senior notes due 2029 and 8.70%
senior notes due 2009 being written up to fair value with the
adjustment being amortized over the average remaining life of the
debt. See Note 6 - Long-term Debt and Equity Financings to our
financial statements for additional information.
(c) Included in fuel and purchased power are the amortization of emission
allowance assets amortized over 28 years and the amortization of
purchase accounting liabilities associated with coal contracts being
amortized over the remaining life of 2 years.
(d) The impact on depreciation and amortization of the amortization of
purchase accounting adjustments is due to the plant assets at Duck
Creek, E. D. Edwards, and Sterling Avenue being written up to fair
value with the adjustment being amortized over the remaining useful
lives of the plants (Duck Creek - 34 years; E. D. Edwards - 27 years;
and Sterling Avenue - 15 years).
(e) Tax effect of the above amortization adjustments.

Illinois Power

On February 2, 2004, we entered into an agreement with Dynegy to purchase
the stock of Decatur, Illinois-based Illinois Power and Dynegy's 20% ownership
interest in EEI. Illinois Power operates a rate-regulated electric and natural
gas transmission and distribution business serving approximately 590,000
electric and 415,000 gas customers in areas contiguous to our existing Illinois
utility service territories. The total transaction value is approximately $2.3
billion, including the assumption of approximately $1.8 billion of Illinois
Power debt and preferred stock, with the balance of the purchase price to be
paid in cash at closing. Ameren will place $100 million of the cash portion of
the purchase price in a six-year escrow pending resolution of certain contingent
environmental obligations of Illinois Power and other Dynegy affiliates for
which Ameren has been provided indemnification by Dynegy.

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

Upon completion of the acquisition, expected by the end of 2004, Illinois
Power will become an Ameren subsidiary operating as AmerenIP. The transaction is
subject to the approval of the ICC, the SEC, the FERC, the Federal
Communications Commission, the expiration of the waiting period under the
Hart-Scott-Rodino Act and other customary closing conditions.

In addition, this transaction includes a firm capacity power supply
contract for Illinois Power's annual purchase of 2,800 megawatts of electricity
from a subsidiary of Dynegy. This contract will extend through 2006 and is
expected to supply about 75% of Illinois Power's customer requirements.

For the nine months ended September 30, 2003, Illinois Power had revenues
of $1.2 billion, operating income of $130 million, and net income applicable to
common shareholder of $88 million, and at September 30, 2003, had total assets
of $2.6 billion, excluding an intercompany note receivable from its parent
company of approximately $2.3 billion. For the year ended December 31, 2002,
Illinois Power had revenues of $1.5 billion, operating income of $164 million,
and net income applicable to common shareholder of $158 million, and at December
31, 2002, had total assets of $2.6 billion, excluding an intercompany note
receivable from its parent company of approximately $2.3 billion. Illinois Power
also files quarterly and annual reports with the SEC.

NOTE 3 - Rate and Regulatory Matters

Intercompany Transfer of Electric Generating Facilities and Illinois Service
Territory

As a part of the settlement of the Missouri electric rate case in 2002, UE
committed to making certain infrastructure investments from January 1, 2002
through June 30, 2006, including the addition of 700 megawatts of generation
capacity. The new capacity requirement is expected to be satisfied by the
additions in 2002 of 240 megawatts and the proposed transfer from Genco to UE,
at net book value (approximately $250 million), of approximately 550 megawatts
of CTs at Pinckneyville and Kinmundy, Illinois. The transfer is subject to
receipt of FERC and SEC approval. Approval by the MoPSC is not required in order
for this transfer to occur. However, the MoPSC has jurisdiction over UE's
ability to recover the cost of the transferred generating facilities from its
electric customers in its rates. As part of the settlement

122



of the Missouri electric rate case in 2002, UE is subject to a rate moratorium
providing for no changes in its electric ratesbefore June 30, 2006, subject to
certain statutory and other exceptions. Approval of the ICC is not required
contingent upon prior approval and execution of UE's transfer of its Illinois
public utility operations to CIPS as discussed below.

In February 2003, UE sought approval from the FERC to transfer
approximately 550 megawatts of generating assets from Genco to UE. Certain
independent power producers objected to UE's request based on a claim that the
transfer may harm competition for the sale of electricity at wholesale and the
FERC set the matter for hearing. In February 2004, the Administrative Law Judge
hearing the case issued a preliminary order supporting the transfer. However,
the full commission must approve the order for it to become effective.

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

A filing seeking approval of both the transfer of UE's Illinois-based
utility business and Genco's CTs was made with the SEC in October 2003. If
completed, the transfers will be accounted for at book value with no gain or
loss recognition, which is appropriate treatment for transactions of this type
by two entities under common control. In January 2004, the MoPSC staff and the
Missouri Office of Public Counsel filed rebuttal testimony with the MoPSC
expressing concerns that the transfer may be detrimental to the public in
Missouri and recommended that the transfer be denied. On March 1, 2004, UE filed
surrebuttal testimony, which responded to these concerns. Hearings are scheduled
to occur in March 2004.

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

Missouri Electric

MoPSC Rate Case

From July 1, 1995 through June 30, 2001, UE operated under experimental
alternative regulation plans in Missouri that provided for the sharing of
earnings with customers if its regulatory return on equity exceeded defined
threshold levels. After UE's experimental alternative regulation plan for its
Missouri retail electric customers expired, the MoPSC Staff and others sought to
reduce UE's annual Missouri electric revenues by over $300 million through a
complaint case proceeding. The MoPSC Staff's recommendation was based on a
return to traditional cost of service ratemaking, a lowered return on equity, a
reduction in UE's depreciation rates and other cost of service adjustments.

In August 2002, a stipulation and agreement resolving this case became
effective following agreement by all parties to the case and approval by the
MoPSC. The stipulation and agreement includes the following principal features:

o The phase-in of $110 million of electric rate reductions through April
2004, $50 million of which was retroactively effective as of April 1, 2002,
$30 million of which became effective on April 1, 2003, and $30 million of
which will become effective on April 1, 2004.
o A rate moratorium providing for no changes in rates before July 1, 2006,
subject to certain statutory and other exceptions.

123



o A commitment to contribute $14 million to programs for low income energy
assistance and weatherization, promotion of energy efficiency and economic
development in UE's service territory in 2002, with additional
payments of $3 million made annually on June 30, 2003 through June 30,
2006. This entire obligation was expensed in 2002.
o A commitment to make $2.25 billion to $2.75 billion in critical energy
infrastructure investments from January 1, 2002 through June 30, 2006,
including, among other things, the addition of more than 700 megawatts of
new generation capacity and the replacement of steam generators at UE's
Callaway Nuclear Plant. The 700 megawatts of new generation is expected to
be satisfied by 240 megawatts that were added by UE in 2002 and the
proposed transfer at net book value to UE of approximately 550 megawatts of
generation assets from Genco, which is subject to receipt of necessary
regulatory approvals. See Intercompany Transfer of Electric Generating
Facilities and Illinois Service Territory within this Note for additional
information on the proposed transfer.
o An annual reduction in UE's depreciation rates by $20 million, retroactive
to April 1, 2002, based on an updated analysis of asset values, service
lives and accumulated depreciation levels.
o A one-time credit of $40 million which was accrued during the plan period.
The entire amount was paid to UE's Missouri retail electric customers in
2002 for settlement of the final sharing period under the alternative
regulation plan that expired June 30, 2001.

Marketing Company - UE Power Supply Agreements

In order to satisfy UE's regulatory load requirements for 2001, UE
purchased, under a one year contract, 450 megawatts of capacity and energy from
Marketing Company. For 2002, UE similarly entered into a one year contract with
Marketing Company for the purchase of 200 megawatts of capacity and energy. The
MoPSC objected to these contracts before the SEC under the PUHCA and the FERC.
In 2002 and 2003, respectively, the FERC approved a settlement modifying future
procedures for entering into affiliate contracts and the MoPSC withdrew its
complaint at the SEC. As a result, no additional action by the FERC or the SEC
is expected in this matter.

Federal - Electric Transmission

Regional Transmission Organization

In December 1999, the FERC issued Order 2000 requiring all utilities
subject to FERC jurisdiction to state their intentions for joining a RTO. Since
April 2002, the GridAmerica Companies have participated in a number of filings
at the FERC in an effort to form GridAmerica LLC, or GridAmerica, as an ITC. On
December 19, 2002, the FERC issued an order conditionally approving the
formation and operation of GridAmerica as an ITC within the Midwest ISO subject
to further compliance filings, which were made by the GridAmerica Companies in
early 2003. CILCO is already a member of the Midwest ISO and has transferred
functional control of its transmission system to the Midwest ISO. Transmission
service on the CILCO transmission system is provided pursuant to the terms and
conditions of the Midwest ISO OATT on file with the FERC.

On April 30, 2003, the FERC issued an order authorizing the GridAmerica
Companies' request to transfer functional control of their transmission assets
to GridAmerica. The FERC also accepted the proposed rate amendments to the
Midwest ISO OATT, filed in early 2003 by Midwest ISO and the GridAmerica
Companies, effective upon the commencement of service over the GridAmerica
transmission facilities under the Midwest ISO OATT, suspended the proposed rates
for a nominal period, subject to refund, and established hearing and settlement
judge procedures to determine the justness and reasonableness of the proposed
rate amendments to the Midwest ISO OATT. In August 2003, the GridAmerica
Companies filed acknowledgements with the FERC to permit GridAmerica to commence
operations on October 1, 2003, on a phased basis, by assuming, with the Midwest
ISO, functional control of the transmission systems of American Transmission
Systems, Incorporated, a subsidiary of FirstEnergy Corp., and Northern Indiana
Public Service Company, a subsidiary of NiSource Inc. Pursuant to this
authorization, GridAmerica began operating on October 1, 2003.

Also beginning on October 1, 2003, the proposed rates filed by Midwest ISO
and the GridAmerica Companies became effective, subject to refund for
FirstEnergy Corp. and NiSource Inc. Since UE and CIPS have not transferred
functional control of their transmission assets to Midwest ISO, the proposed
rates are not effective for UE or CIPS. On December 18, 2003, the GridAmerica
Companies, the Midwest ISO and the Midwest ISO transmission owners filed a
Stipulation and Agreement with the FERC in an effort to settle the disputed rate
issues for transmission service over the transmission assets of the GridAmerica
Companies. On March 3, 2004, the FERC approved the Stipulation and Agreement.

124



UE also requires approval from the MoPSC to join the Midwest ISO. On
February 26, 2004, the MoPSC issued an order conditionally approving a
Stipulation and Agreement that was filed on February 6, 2004. The Order
authorizes UE's participation in the Midwest ISO through GridAmerica for a five
year period, but is conditioned on the FERC approving a Service Agreement that
outlines the terms and conditions under which the Midwest ISO will provide
transmission service to UE's bundled retail load. FERC approval of this Service
Agreement is pending.

Upon the transfer of functional control by UE and CIPS of their
transmission systems to GridAmerica, the FERC has ordered the return, with
interest, of the $13 million exit fee paid by UE and the $5 million exit fee
paid by CIPS when they previously left the Midwest ISO.

Genco does not own transmission assets, but pays UE and CIPS for the use of
their transmission systems to transmit power from the Genco generating plants.
Until the tariffs and other material terms of UE's and CIPS' participation in
GridAmerica and GridAmerica's participation in the Midwest ISO are finalized and
approved by the FERC and other regulatory authorities having jurisdiction, we
are unable to predict the ultimate impact that ongoing RTO developments will
have on our financial position, results of operations or liquidity. UE and CIPS
expect to begin participating in the Midwest ISO in 2004.

On November 17, 2003, the FERC issued a final order upholding an earlier
order issued in July 2003 (July Order), that will reduce UE's and CIPS', as well
as other transmission-owning utilities', "through and out" transmission revenues
effective April 1, 2004, subject to certain conditions (the April 1 effective
date was changed to May 1, 2004, by subsequent order issued by the FERC). The
revenues subject to elimination by this order are those revenues from
transmission reservations that travel through or out of UE's and CIPS'
transmission systems and are also used to provide electricity to load within the
Midwest ISO or PJM Interconnection LLC systems. The magnitude of the potential
net revenue reduction resulting from this order could be up to $20 to $25
million annually if UE and CIPS are not in a RTO. UE and CIPS would incur
approximately 60% and 40%, respectively, of the potential net revenue reduction.
While it is anticipated that UE's and CIPS' transmission revenues could be
reduced by these orders, transmission expenses for Genco could be reduced.
Moreover, the FERC's final Order explicitly permits companies to collect the
lost "through and out" revenues through other transitional rate mechanisms.
Until it is determined when, or if, UE and CIPS will join a RTO, or the
magnitude of lost "through and out" transmission revenue recovery UE and CIPS
will receive through other rate mechanisms, UE and CIPS are unable to predict
the ultimate impact of these orders.

Standard Market Design Notice of Proposed Rulemaking

In July 2002, the FERC issued its Standard Market Design NOPR. The NOPR
proposes a number of changes to the way the current wholesale transmission
service and energy markets are operated. Specifically, the NOPR proposes that
all jurisdictional transmission facilities be placed under the control of an
independent transmission provider (similar to a RTO), proposes a new
transmission service tariff that provides a single form of transmission service
for all users of the transmission system including bundled retail load, and
proposes a new energy market and congestion management system that uses
locational marginal pricing as its basis. In our initial comments on the NOPR,
which were filed at the FERC on November 15, 2002, we expressed our concern with
the potential impact of the proposed rules in their current form on the cost and
reliability of service to retail customers. We also proposed that certain
modifications be made to the proposed rules in order to protect transmission
owners from the possibility of trapped transmission costs that might not be
recoverable from ratepayers as a result of inconsistent regulatory policies. We
filed additional comments on the remaining sections of the NOPR during the first
quarter of 2003.

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

Although issuance of the Standard Market Design final rule is uncertain and
the implementation schedule is still unknown, the Midwest ISO is already in the
process of implementing a separate market design similar to the proposed market
design in the NOPR. In July 2003, the Midwest ISO filed with the FERC a revised
OATT codifying the terms and conditions under which it would implement the new
market design. Thereafter, on October 17, 2003, the Midwest ISO filed a motion
for withdrawal of their revised OATT to ensure that effective reliability tools
are in place and operating correctly before moving forward with the new market
design. UE and CIPS will continue monitoring the status of the Midwest ISO's
market design and the potential impact of the market design on the cost and
reliability of

125



service to retail customers and providing guidance to be followed by the Midwest
ISO in developing a new energy market design in the future. Until the FERC
issues a final rule and the Midwest ISO finalizes its new market design, we are
unable to predict the ultimate impact of the NOPR or the Midwest ISO new market
design on our future financial position, results of operations or liquidity.

Federal - Hydroelectric

In February 2004, UE filed an application with the FERC to renew the
license for its Osage hydroelectric plant for an additional 50 year term. The
current FERC license expires on February 28, 2006. The license application
proposes to continue operations at the Osage plant as a peaking facility,
upgrade four turbine units and to maximize the hydroelectric capacity of the
plant.

Illinois Electric

In 2002, all of the Illinois residential, commercial and industrial
customers of UE, CIPS and CILCO had a choice in electric suppliers under the
provisions of 1997 Illinois legislation related to the restructuring of the
Illinois electric industry (the Illinois Customer Choice Law). Under the
Illinois Customer Choice Law, UE, CIPS and CILCO rates initially were frozen
through January 1, 2005, subject to residential electric rate decreases of up to
5% in 2002 to the extent rates exceeded the Midwest utility average. In 2002,
the Illinois electric rates of UE, CIPS and CILCO were below the Midwest utility
average.

As the result of an amendment to the Illinois Customer Choice Law, the rate
freeze was extended through January 1, 2007. As a result of this extension, CIPS
and Marketing Company expect to seek to renew or extend their power supply
agreement and CILCO and AERG expect to seek to renew or extend their power
supply agreement through January 1, 2007. A renewal or extension of the power
supply agreements will depend on compliance with regulatory requirements in
effect at the time.

The Illinois Customer Choice Law allows a utility to collect transition
charges from customers that elect to move from bundled retail rates to
market-based power and energy. Utilities have the right to collect applicable
transition charges throughout the transition period that ends January 1, 2007,
from customers that elect market-based power and energy. In the order
authorizing the acquisition of CILCO by Ameren, the ICC required UE, CIPS and
CILCO to eliminate transition charges in the period commencing June 2003 through
at least May 2005. The non-recovery of transition charges is not expected to
have a material impact on UE, CIPS or CILCO.

The Illinois Customer Choice Law also contains a provision requiring that
one-half of excess earnings from the Illinois jurisdiction for the years 1998
through 2006 be refunded to UE, CIPS and CILCO's Illinois 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 the Index,
as defined in the Illinois Customer Choice 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 Treasury long-term average (25 years and above), plus 7% for both
UE's and CIPS' and 11% for CILCO. Estimated refunds totaling less than $1
million to UE's Illinois customers are expected to be made during the period
from April 1, 2004, through March 31, 2005. No refunds to CIPS' or CILCO's
Illinois customers are expected to be made during the period from April 1, 2004
through March 31, 2005, resulting from excess earnings during the year ended
December 31, 2003. UE made excess earnings refunds of $2.1 million during the
period April 1, 2000 through March 31, 2001, resulting from excess earnings
during the year ended December 31, 1999. Additionally, UE made excess earnings
refunds of $1.5 million during the period April 1, 2001 through March 31, 2002,
resulting from excess earnings during the year ended December 31, 2000. These
refunds were recorded as a reduction to Operating Revenues - Electric.

Illinois Gas

In October 2003, the ICC issued orders awarding CILCO, CIPS and UE
increases in annual natural gas delivery rates of approximately $9 million, $7
million and $2 million, respectively. These new rates went into effect in
November 2003.

126



Missouri Gas

In January 2004, a stipulation and agreement resolving a request by UE to
increase annual natural gas rates became effective following agreement by all
parties to the case and approval by the MoPSC. The stipulation and agreement
authorized an increase in annual gas delivery rates of approximately $13
million, effective February 15, 2004. Other principal features of the
stipulation and agreement include:

o A rate moratorium providing for no changes in gas delivery rates before
July 1, 2006, absent the occurrence of a significant, unusual event that
has a major impact on UE.
o An agreement not to request a PGA increase prior to April 1, 2004.
o A commitment to make $15 million to $25 million in infrastructure
improvement investments from July 1, 2003 through December 31, 2006,
including replacement of cast iron main and unprotected steel service
lines. UE agreed not to propose rate adjustments to recover infrastructure
costs through a statutory infrastructure system replacement surcharge prior
to January 1, 2006.
o Commitments to contribute an aggregate of $310,000 annually to programs for
low income weatherization, energy assistance and energy efficient equipment
in UE's service territory.

Regulatory Assets and Liabilities

In accordance with SFAS No. 71, UE, CIPS and CILCO defer certain costs
pursuant to actions of regulators and are currently recovering such costs in
rates charged to customers.




The following table presents our regulatory assets and regulatory liabilities at December 31, 2003 and 2002:

===================================================================================================================
Ameren(a) UE CIPS Genco CILCORP(b) CILCO
-------------------------------------------------------------------------------------------------------------------

2003:
Regulatory assets:
Income taxes(c)(d)....................... $ 431 $ 425 $ - $ - $ 6 $ 6
Asset retirement obligation(d)(e)........ 122 122 - - - -
Callaway costs(f)........................ 77 77 - - - -
Unamortized loss on reacquired debt(d)(g) 46 36 5 - 5 5
Recoverable costs - contaminated
facilities(d)(h)....................... 27 - 23 - 4 4
Other(d)(i).............................. 26 25 - - 1 1
-------------------------------------------------------------------------------------------------------------------
Total regulatory assets.................... $ 729 $ 685 $ 28 $ - $ 16 $ 16
-------------------------------------------------------------------------------------------------------------------
Regulatory liabilities:
Income taxes(j).......................... $ 127 $ 96 $ 14 $ - $ 17 $ 17
Removal costs(k)......................... 694 556 131 - 7 150
-------------------------------------------------------------------------------------------------------------------
Total regulatory liabilities $ 821 $ 652 $ 145 $ - $ 24 $ 167
===================================================================================================================
2002:
Regulatory assets:
Income taxes(c)(d)....................... $ 526 $ 526 $ - $ - $ 5 $ 5
Callaway costs(f)........................ 81 81 - - - -
Unamortized loss on reacquired debt(d)(g) 32 27 5 - 2 2
Recoverable costs - contaminated
facilities(d)(h)....................... 26 - 26 - - -
Other(d)(i).............................. 25 25 - - 1 1
-------------------------------------------------------------------------------------------------------------------
Total regulatory assets.................... $ 690 $ 659 $ 31 $ - $ 8 $ 8
-------------------------------------------------------------------------------------------------------------------
Regulatory liabilities:
Income taxes(j).......................... $ 136 $ 121 $ 15 $ - $ 19 $ 19
Removal costs(k)......................... 652 528 124 - 27 141
-------------------------------------------------------------------------------------------------------------------
Total regulatory liabilities............... $ 788 $ 649 $ 139 $ - $ 46 $ 160
===================================================================================================================

(a) Excludes amounts for CILCORP and CILCO prior to the acquisition date
of January 31, 2003.
(b) 2002 amounts represent predecessor information. CILCORP consolidates
CILCO and therefore includes CILCO amounts in its balances.
(c) Amount represents SFAS No. 109 deferred tax asset. See Note 13 -
Income Taxes for amortization period.


127



(d) These assets do not earn a return.
(e) Represents recoverable costs for asset retirement obligations at our
rate-regulated operations. See SFAS No. 143 discussion in Note 1 -
Summary of Significant Accounting Policies.
(f) Represents UE's Callaway Nuclear Plant operations and maintenance
expenses, property taxes and carrying costs incurred between the plant
in-service date and the date the plant was reflected in rates. These
costs are being amortized over the remaining life of the plant's
current operating license through 2024.
(g) Represents losses related to repaid 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.
(h) Represents the recoverable portion of accrued environmental site
liabilities which is primarily collected from electric and gas
customers through ICC approved revenue riders in Illinois.
(i) Represents Y2K expenses being amortized over 6 years starting in 2002
in conjunction with the settlement of UE's Missouri electric rate case
and a DOE decommissioning assessment being amortized over 14 years
through 2007. In addition, amount includes the portion of
merger-related expenses applicable to the Missouri retail
jurisdiction, which are being amortized through 2007 based on a MoPSC
order.
(j) Represents unamortized portion of investment tax credit and federal
excess taxes. See Note 13 - Income Taxes for amortization period.
(k) Represents estimated funds collected for the eventual dismantling and
removing plant from service upon retirement related to our
rate-regulated operations. See SFAS No. 143 discussion in Note 1 -
Summary of Significant Accounting Policies.

UE, CIPS and CILCO continually assess the recoverability of their
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. Electric industry restructuring legislation
may impact the recoverability of regulatory assets in the future.


NOTE 4 - Property and Plant, Net




The following table presents property and plant, net for each of the Ameren Companies at December 31, 2003 and 2002:

===================================================================================================================
2003 2002
-------------------------------------------------------------------------------------------------------------------

Ameren:(a)
Property and plant, at original cost:
Electric................................................................. $ 16,050 $ 14,421
Gas...................................................................... 743 557
Other.................................................................... 211 219
------------------- ------------------
17,004 15,197
Less accumulated depreciation and amortization........................ 6,594 6,179
------------------- ------------------
10,410 9,018
Construction work in progress:
Nuclear fuel in process.................................................. 66 81
Other.................................................................... 441 393
---------------------------------------------------------------------------- ------------------- ------------------
Property and plant, net.................................................... $ 10,917 $ 9,492
===================================================================================================================
UE:
Property and plant, at original cost:
Electric................................................................. $ 10,715 $ 10,249
Gas...................................................................... 282 268
Other.................................................................... 37 81
------------------- ------------------
11,034 10,598
Less accumulated depreciation and amortization........................ 4,688 4,440
------------------- ------------------
6,346 6,158
Construction work in progress:
Nuclear fuel in process.................................................. 66 81
Other.................................................................... 346 280
---------------------------------------------------------------------------- ------------------- ------------------
Property and plant, net.................................................... $ 6,758 $ 6,519
-------------------------------------------------------------------------------------------------------------------



128





-------------------------------------------------------------------------------------------------------------------
2003 2002
-------------------------------------------------------------------------------------------------------------------

CIPS:
Property and plant, at original cost:
Electric................................................................. $ 1,289 $ 1,238
Gas...................................................................... 295 290
Other.................................................................... 5 15
------------------- ------------------
1,589 1,543
Less accumulated depreciation and amortization........................ 642 608
------------------- ------------------
947 935
Construction work in progress - other...................................... 8 14
-------------------------------------------------------------------------------------------------------------------
Property and plant, net.................................................... $ 955 $ 949
===================================================================================================================
Genco:
Property and plant, at original cost:
Electric................................................................. $ 2,530 $ 2,458
Less accumulated depreciation and amortization........................ 777 745
------------------- ------------------
1,753 1,713
Construction work in progress - other...................................... 21 50
---------------------------------------------------------------------------- ------------------- ------------------
Property and plant, net.................................................... $ 1,774 $ 1,763
===================================================================================================================
CILCORP:(b)
Property and plant, at original cost:
Electric................................................................. $ 981 $ 740
Gas...................................................................... 166 246
Other.................................................................... 2 -
------------------- ------------------
1,149 986
Less accumulated depreciation and amortization........................ 58 149
------------------- ------------------
1,091 837
Construction work in progress - other...................................... 36 104
---------------------------------------------------------------------------- ------------------- ------------------
Property and plant, net.................................................... $ 1,127 $ 941
===================================================================================================================
CILCO:
Property and plant, at original cost:
Electric................................................................. $ 1,475 $ 1,349
Gas...................................................................... 445 470
Other.................................................................... 2 -
------------------- ------------------
1,922 1,819
Less accumulated depreciation and amortization........................ 857 892
------------------- ------------------
1,065 927
Construction work in progress - other...................................... 36 104
---------------------------------------------------------------------------- ------------------- ------------------
Property and plant, net.................................................... $ 1,101 $ 1,031
===================================================================================================================

(a) 2002 amounts exclude amounts for CILCORP and CILCO; includes amounts
for non-registrant Ameren subsidiaries as well as intercompany
eliminations.
(b) 2002 amounts represent predecessor information.

NOTE 5 - Short-term Borrowings and Liquidity

Short-term borrowings consist of commercial paper and bank loans
(maturities generally within 1 to 45 days). Short-term borrowings at Ameren and
UE at December 31, 2003 were $161 million (2002 - $271 million) and $150 million
(2002 - $250 million), respectively. CILCO had short-term borrowings of $10
million at December 31, 2002, with no amount outstanding at December 31, 2003.
The average short-term borrowings at UE were $24 million for the year ended
December 31, 2003, with a weighted-average interest rate of 1.1% (2002 - $65
million with a weighted-average interest rate of 1.8%). Peak short-term
borrowings for UE were $228 million for the year ended December 31, 2003 with a
weighted-average interest rate of 1.2% (2002 - $173 million with a
weighted-average interest rate of 1.7%). CILCO's commercial paper outstanding at
December 31, 2002 had a weighted-average interest rate of 2.05%.

129



At December 31, 2003, certain of the Ameren Companies had committed bank
credit facilities totaling $829 million, excluding the EEI facilities and the
nuclear fuel lease facility, which were available for use by UE, CIPS, CILCO and
Ameren Services through a utility money pool arrangement. As of December 31,
2003, $679 million was available under these committed credit facilities,
excluding the EEI facilities and the nuclear fuel lease. In addition, $600
million of the $829 million may be used by Ameren directly and most of the non
rate-regulated affiliates including, but not limited to, Resources Company,
Genco, Marketing Company, AFS, AERG and Ameren Energy through a non
state-regulated subsidiary money pool agreement. CILCO received final regulatory
approval to participate in the utility money pool arrangement in September 2003.
CILCORP received funds through direct loans from Ameren since it was not part of
the non state-regulated money pool agreement. The committed bank credit
facilities are used to support our commercial paper programs under which $150
million was outstanding at December 31, 2003 (2002 - $250 million). Access to
our credit facilities for all Ameren Companies is subject to reduction based on
use by affiliates. AERG received final regulatory approval to participate in our
non state-regulated subsidiary money pool arrangement and as a lender only in
our utility money pool arrangement in October 2003. See Note 14 - Related Party
Transactions report for a detailed explanation of the money pool arrangements.

In July 2003, Ameren entered into two new revolving credit facilities
totaling $470 million to be used for general corporate purposes including
support of our commercial paper programs. The $470 million in new facilities
includes a $235 million 364-day revolving credit facility and a $235 million
three-year revolving credit facility. These new credit facilities replaced
Ameren's existing $270 million 364-day revolving credit facility, which matured
in July 2003, and a $200 million facility, which would have matured in December
2003. In July 2003, Ameren also amended covenants in its $130 million multi-year
credit facility.

In April 2003, UE entered into a 364-day committed credit facility totaling
$75 million to be used for general corporate purposes including support of its
commercial paper program. This facility makes borrowings available at various
interest rates based on London Interbank Offered Rate, agreed rates and
other options. CIPS and CILCO can access this facility through the utility money
pool.

EEI also has two bank credit agreements totaling $45 million that extend
through June 2004. At December 31, 2003, $37 million was available under these
committed credit facilities.

UE also had a lease agreement that provided for the financing of nuclear
fuel. At December 31, 2003, the maximum amount that could be financed under the
agreement was $120 million. At December 31, 2003, $67 million was financed under
the lease. UE terminated the nuclear lease agreement in February 2004.

We have money pool agreements with and among our subsidiaries to coordinate
and provide for certain short-term cash and working capital requirements.
Separate money pools are maintained between rate-regulated and non
rate-regulated businesses. See Note 14 - Related Party Transactions for a
detailed explanation of the money pool arrangements.

Borrowings under Ameren's non state-regulated subsidiary money pool by
Genco, Development Company and Medina Valley, each an "exempt wholesale
generator," are considered investments for purposes of the 50% SEC aggregate
investment limitation. Based on Ameren's aggregate investment in these "exempt
wholesale generators" as of December 31, 2003, the maximum permissible
borrowings under Ameren's non state-regulated subsidiary money pool pursuant to
this limitation for these entities was $663 million in the aggregate.

Certain of the Ameren Companies' bank credit agreements contain provisions
which, among other things, place restrictions on the ability to incur liens,
sell assets, merge with other entities and restrict and encumber upstream
dividend payments of our subsidiaries. These credit agreements also contain a
provision that limits Ameren's, UE's, CIPS' and CILCO's total indebtedness to
60% of total capitalization pursuant to a calculation defined in the related
agreement. As of December 31, 2003, the ratio of total indebtedness to total
capitalization (calculated in accordance with this provision) for Ameren, UE,
CIPS and CILCO was 52%, 44%, 54% and 53%, respectively (2002 - 50%, 43%, 50%,
- -%). These credit agreement provisions were not applicable in 2002 for CILCO,
since CILCO was not a party to, nor subject to the provisions of, these
facilities during 2002. In addition, the credit agreements contain indebtedness
cross-default provisions and material adverse change clauses, which could
trigger a default under these facilities in the event that any of Ameren's
subsidiaries (subject to the definition in the underlying credit agreements),
other than certain project finance subsidiaries, defaults in indebtedness in
excess of $50 million. The credit agreements also require us to meet minimum
ERISA funding rules.

None of the Ameren Companies' credit agreements or financing arrangements
contain credit rating triggers with the exception of one of CILCO's financing
arrangements. An event of default will occur under a $100 million CILCO bank

130



term loan if the credit rating on CILCO's first mortgage bonds falls below any
two of the following: BBB- from S&P, Baa3 from Moody's or BBB- from Fitch. As of
December 31, 2003, CILCO's current ratings on its first mortgage bonds were A-,
A2 and A, respectively. This term loan was repaid in February 2004.

At December 31, 2003, Ameren and its subsidiaries were in compliance with
their credit agreement provisions and covenants.


NOTE 6 - Long-term Debt and Equity Financings

The following table presents long-term debt outstanding for the Ameren
Companies and EEI as of December 31, 2003 and 2002:




===================================================================================================================
2003 2002
--------------------------------------------------------------------------------- --------------- -----------------

Ameren Corporation (parent only):
2001 Floating Rate Notes due 2003.......................................... $ - $ 150
2002 5.70% notes due 2007.................................................. 100 100
Senior note, due 2007...................................................... 345 345
--------------- -----------------
Total long-term debt, gross.............................................. 445 595
Less: Maturities due within one year.................................... - 150
--------------------------------------------------------------------------------- --------------- -----------------
Long-term debt, net(1)................................................. $ 445 $ 445
===================================================================================================================
UE:
First mortgage bonds:(a)
7.65% Series due 2003...................................................... $ - $ 100
6 7/8% Series due 2004..................................................... 188 188
7 3/8% Series due 2004..................................................... 85 85
6 3/4% Series due 2008..................................................... 148 148
5.25% Senior secured notes due 2012....................................... 173 173
4.65% Senior secured notes due 2013....................................... 200 -
4.75% Senior secured notes due 2015....................................... 114 -
5.10% Senior secured notes due 2018....................................... 200 -
8 1/4% Series due 2022..................................................... - 104
8.00% Series due 2022..................................................... - 85
7.15% Series due 2023..................................................... - 75
7.00% Series due 2024..................................................... 100 100
5.45% Series due 2028(b).................................................. 44 44
5.50% Senior secured notes due 2034....................................... 184 -
Environmental improvement and pollution control revenue bonds:
1991 Series due 2020(c).................................................... 43 43
1992 Series due 2022(c).................................................... 47 47
1998 Series A due 2033(c).................................................. 60 60
1998 Series B due 2033(c).................................................. 50 50
1998 Series C due 2033(c).................................................. 50 50
2000 Series A due 2035(c).................................................. 64 64
2000 Series B due 2035(c).................................................. 63 63
2000 Series C due 2035(c).................................................. 60 60
Subordinated deferrable interest debentures:
7.69% Series A due 2036(d)................................................. 66 66
Capital lease obligations:
Nuclear fuel lease......................................................... 67 113
City of Bowling Green lease (Peno Creek CT)................................ 100 103
--------------- -----------------
Total long-term debt, gross.............................................. 2,106 1,821
Less: Unamortized discount and premium.................................. 4 4
Less: Maturities due within one year.................................... 344 130
--------------------------------------------------------------------------------- --------------- -----------------
Long-term debt, net(2)................................................. $ 1,758 $ 1,687
-------------------------------------------------------------------------------------------------------------------


131





-------------------------------------------------------------------------------------------------------------------
2003 2002
--------------------------------------------------------------------------------- --------------- -----------------

CIPS:
First mortgage bonds:(a)
6 3/8% Series Z due 2003................................................... $ - $ 40
6.99% Series 97-1 due 2003................................................. - 5
6.49% Series 95-1 due 2005................................................. 20 20
7.05% Series 97-2 due 2006................................................. 20 20
7 1/2% Series X due 2007................................................... - 50
5.375% Series due 2008..................................................... 15 15
6.625% Series due 2011..................................................... 150 150
7.61% Series 97-2 due 2017................................................. 40 40
6.125% Series due 2028..................................................... 60 60
Pollution control revenue bonds:
2000 Series A 5.5% due 2014(e)............................................. 51 51
1993 Series C-1 5.95% due 2026(e) ......................................... 35 35
1993 Series C-2 5.70% due 2026............................................. 25 25
1993 Series A 6 3/8% due 2028.............................................. 35 35
1993 Series B-1 5% due 2028(e)............................................. 17 17
1993 Series B-2 5.90% due 2028............................................. 18 18
--------------- -----------------
Total long-term debt, gross.............................................. 486 581
Less: Unamortized discount and premium.................................. 1 2
Less: Maturities due within one year.................................... - 45
--------------------------------------------------------------------------------- --------------- -----------------
Long-term debt, net(3)................................................. $ 485 $ 534
===================================================================================================================
Genco:
Unsecured notes:
2000 Senior notes Series C 7 3/4% due 2005................................. $ 225 $ 225
2000 Senior notes Series D 8.35% due 2010.................................. 200 200
2002 Senior notes Series F 7.95% due 2032.................................. 275 275
--------------- -----------------
Total long-term debt, gross.............................................. 700 700
Less: Unamortized discount and premium.................................. 2 2
--------------------------------------------------------------------------------- --------------- -----------------
Long-term debt, net(4)................................................. $ 698 $ 698
===================================================================================================================
CILCO:
First mortgage bonds:(a)
7 1/2% Series due 2007..................................................... $ 50 $ 50
8 1/5% Series due 2022..................................................... - 65
Medium-term notes:(a)
6.82% Series due 2003...................................................... - 26
6.13% Series due 2005...................................................... 16 16
7.80% Series due 2023...................................................... - 10
7.73% Series due 2025...................................................... 20 20
Pollution control refunding bonds:(a) (b)
6.50% Series F due 2010.................................................... 5 5
6.20% Series G due 2012.................................................... 1 1
6.50% Series E due 2018.................................................... 14 14
5.90% Series H due 2023.................................................... 32 32
Bank term loans:
Hallock substation power modules due 2004.................................. - 3
Kickapoo substation power modules due 2004................................. - 2
Secured bank term loan due 2004............................................ 100 100
--------------- -----------------
Total long-term debt, gross.............................................. 238 344
Less: Unamortized discount and premium.................................. - 1
Less: Maturities due within one year.................................... 100 27
--------------------------------------------------------------------------------- --------------- -----------------
Long-term debt, net.................................................... $ 138 $ 316
-------------------------------------------------------------------------------------------------------------------


132





-------------------------------------------------------------------------------------------------------------------
2003 2002
-------------------------------------------------------------------------------------------------------------------

CILCORP (parent only):
8.70% Senior notes due 2009(f)............................................. $ 229 $ 225
9.375% Senior notes due 2029(f)............................................ 302 250
--------------------------------------------------------------------------------- --------------- -----------------
Long-term debt, net...................................................... 531 475
--------------------------------------------------------------------------------- --------------- -----------------
CILCORP consolidated long-term debt, net(5)............................ $ 669 $ 791
===================================================================================================================
EEI:
2000 Bank term loan, 7.61% due 2004........................................ $ 40 $ 40
1991 Senior medium term notes 8.60% due through 2005....................... 13 20
1994 Senior medium term notes 6.61% due through 2005....................... 16 23
--------------- -----------------
Total long-term debt, gross.............................................. 69 83
Less: Maturities due within one year.................................... 54 14
--------------- -----------------
Long-term debt, net(6)................................................. $ 15 $ 69
--------------------------------------------------------------------------------- --------------- -----------------
Less: CILCORP and CILCO debt prior to acquisition date......................... - 791
--------------------------------------------------------------------------------- --------------- -----------------
Ameren consolidated long-term debt, net......................................... $ 4,070 $ 3,433
===================================================================================================================

(a) At December 31, 2003, a majority of property and plant was mortgaged
under, and subject to liens of, the respective indentures pursuant to
which the bonds were issued. CILCO's long-term debt is secured by a
lien on substantially all of its property and franchises.
(b) Environmental Improvement or Pollution Control Series secured by first
mortgage bonds.
(c) Interest rates, and the periods during which such rates apply, vary
depending on our selection of certain defined rate modes. The average
interest rates for the years 2003 and 2002 were as follows:
2003 2002
---- ----
1991 Series 1.60% 1.64%
1992 Series 1.64% 1.60%
1998 Series A 1.75% 1.53%
1998 Series B 1.75% 1.53%
1998 Series C 1.77% 1.53%
2000 Series A 1.80% 1.56%
2000 Series B 1.77% 1.52%
2000 Series C 1.75% 1.56%
(d) Under the terms of the subordinated debentures, UE may, under certain
circumstances, defer the payment of interest for up to five years.
Upon the election to defer interest payments, UE dividend payments to
Ameren are prohibited.
(e) Variable rate tax-exempt pollution control indebtedness that was
converted to long-term fixed rates.
(f) CILCORP's long-term debt is secured by a pledge of all of the common
stock of CILCO. The amount of debt outstanding at CILCORP includes a
purchase accounting fair market value adjustment of approximately $96
million.

The following table presents the aggregate stated maturities of long-term
debt for the Ameren Companies and EEI at December 31, 2003:




===================================================================================================================
Ameren CILCORP
(parent) UE CIPS Genco (parent only) CILCO EEI TOTAL
-------------------------------------------------------------------------------------------------------------------

2004........... $ - $ 344 $ - $ - $ - $ 100 $ 54 $ 498
2005........... - 3 20 225 - 16 15 279
2006........... - 3 20 - - - - 23
2007........... 445 4 - - - 50 - 499
2008........... - 152 15 - - - - 167
Thereafter..... - 1,600 431 475 531 72 - 3,109
-------------------------------------------------------------------------------------------------------------------
Total.......... $ 445 $ 2,106 $ 486 $ 700 $ 531 $ 238 $ 69 $ 4,575
===================================================================================================================


All the Ameren Companies expect to fund maturities of long-term debt and
contractual obligations through a combination of cash flow from operations and
external financing.

Ameren

Pursuant to an August 2002 shelf registration statement, Ameren issued
approximately $338 million of common stock in 2002 and issued approximately $256
million of common stock in 2003. Net proceeds from the issuances were used to
fund the cash portion of the purchase price for its acquisition of CILCORP and
for general corporate purposes. In February 2004, Ameren issued, pursuant to the
August 2002 shelf registration statement, 19.1 million shares of its

133



common stock at $45.90 per share. Ameren received net proceeds of $853 million,
which are expected to provide funds required to pay the cash portion of the
purchase price for our acquisition of Illinois Power and Dynegy's 20% interest
in EEI and to reduce Illinois Power debt assumed as part of this transaction and
pay related premiums. Pending such use, and/or if the acquisition is not
completed, we plan to use the net proceeds to reduce present or future
indebtedness and/or repurchase securities of Ameren or its subsidiaries. A
portion of the net proceeds may also be temporarily invested in short-term
instruments. As substantially all of the capacity under the August 2002 shelf
registration was used, we expect to make a new shelf registration statement
filing with the SEC in early 2004. See Note 2 - Acquisitions for further
information.

The acquisitions of CILCORP on January 31, 2003, and Medina Valley on
February 4, 2003, included the assumption by Ameren of CILCORP and Medina Valley
debt and preferred stock at closing of $895 million. The assumed debt and
preferred stock consisted of $250 million 9.375% senior notes due 2029, $225
million 8.70% senior notes due 2009, a $100 million secured floating rate term
loan due 2004, other secured indebtedness totaling $279 million and preferred
stock of $41 million.

In December 2003, Ameren repaid its 2001 Floating Rate Notes totaling $150
million. These notes were repaid with available cash on hand.

In March 2002, Ameren issued $345 million of adjustable conversion-rate
equity security units and $227 million of common stock (five million shares at
$39.50 per share and 750,000 shares, pursuant to the exercise of an option
granted to the underwriters, at $38.865 per share). The $25 adjustable
conversion-rate equity security units each consisted of an Ameren senior
unsecured note with a principal amount of $25 and a contract to purchase, for
$25, a fraction of a share of Ameren common stock on May 15, 2005. The senior
unsecured notes were recorded at their fair value of $345 million and will
mature on May 15, 2007. Total distributions on the equity security units will be
at an annual rate of 9.75%, consisting of quarterly interest payments on the
senior unsecured notes at the initial annual rate of 5.20% and adjustment
payments under the stock purchase contracts at the annual rate of 4.55%. The
stock purchase contracts require holders to purchase between 8.7 million and 7.4
million shares of Ameren common stock on May 15, 2005, at the market price at
that time, subject to a minimum share purchase price of $39.50 and a maximum of
$46.61. The stock purchase contracts include a pledge of the related senior
unsecured notes as collateral for the stock purchase obligation. The interest
rate on the outstanding senior unsecured notes is subject to being reset by a
remarketing agent for quarterly payments after May 15, 2005, until maturity. We
recorded the net present value of the contracted stock purchase payments of $46
million as an increase in Other Deferred Credits and Liabilities to reflect our
obligation and a decrease in Other Paid-in Capital to reflect the fair value of
the stock purchase contract. The liability for the contracted stock purchase
adjustment payments (December 31, 2003 - $21 million) will be reduced as such
payments are made through May 15, 2005. We used the net proceeds from these
offerings to repay short-term indebtedness and for general corporate purposes.

In September 2001, we began issuing new shares of common stock to satisfy
dividend reinvestments and direct purchases under our DRPlus plan and in
December 2001, we began issuing new shares of common stock in connection with
our 401(k) plans. Previously, these requirements were met by purchasing
outstanding shares. Under these plans, we issued 2.5 million, 2.3 million and
0.8 million shares of common stock in 2003, 2002 and 2001, respectively, that
were valued at $105 million, $93 million and $33 million for the respective
years.

UE

In August 2002, a shelf registration statement filed by UE and its
subsidiary trust with the SEC was declared effective. This registration
statement permitted the offering from time to time of up to $750 million of
various forms of long-term debt and trust preferred securities to refinance
existing debt and preferred stock, and for general corporate purposes, including
the repayment of short-term debt incurred to finance construction expenditures
and other working capital needs. In 2002, UE issued $173 million of 5.25% senior
secured notes due September 1, 2012, under the shelf registration statement.

In March 2003, UE issued, pursuant to the August 2002 shelf registration
statement, $184 million of 5.50% senior secured notes due March 15, 2034, with
interest payable semi-annually on March 15 and September 15 of each year
beginning in September 2003. UE received net proceeds of $180 million, which
along with other funds were used in April 2003, to redeem $104 million principal
amount of outstanding 8 1/4% first mortgage bonds due October 15, 2022,

134



at a redemption price of 103.61% of par, plus accrued interest, and to repay
short-term debt incurred to pay at maturity $75 million principal amount of
8.33% first mortgage bonds that matured in December 2002.

In April 2003, UE issued, pursuant to the August 2002 shelf registration
statement, $114 million of 4.75% senior secured notes due April 1, 2015, with
interest payable semi-annually on April 1 and October 1 of each year beginning
in October 2003. UE received net proceeds of $113 million, which along with
other funds were used in May 2003, to redeem $85 million principal amount of
outstanding 8.00% first mortgage bonds due December 15, 2022, at a redemption
price of 103.38% of par, plus accrued interest, and to reduce short-term debt.

In July 2003, UE issued, pursuant to the August 2002 shelf registration
statement, $200 million of 5.10% senior secured notes due August 1, 2018, with
interest payable semi-annually on August 1 and February 1 of each year beginning
in February 2004. UE received net proceeds of $198 million, which along with
other funds were used to repay short-term debt incurred to fund the maturity of
$100 million principal amount 7.65% first mortgage bonds due July 15, 2003, and
to repay $21 million of short-term debt. The remaining proceeds were used in
August 2003, to redeem $75 million principal amount of outstanding 7.15% first
mortgage bonds due August 1, 2023, at a redemption price of 103.01% of par, plus
accrued interest. The amount of securities remaining available for issuance
pursuant to the 2002 shelf registration statement was $79 million as of August
2003.

In September 2003, the SEC declared effective another shelf registration
statement filed by UE and its subsidiary trust in August 2003, covering the
offering from time to time of up to $1 billion of various forms of long-term
debt and trust preferred securities. The $79 million of securities which
remained available for issuance under the August 2002 shelf registration is
included in the $1 billion of securities available to be issued under this shelf
registration statement. In October 2003, UE issued, pursuant to the
September 2003 shelf registration statement, $200 million of 4.65% senior
secured notes due October 1, 2013, with interest payable semi-annually on April
1 and October 1 of each year beginning in April 2004. UE received net proceeds
of $198 million, which were used to repay outstanding short-term debt. The
amount of securities remaining available for issuance totaled $800 million as of
December 31, 2003. UE may sell all, or a portion of, the currently remaining
securities registered under the September 2003 shelf registration statement if
warranted by market conditions and capital requirements. Any offer and sale will
be made only by means of a prospectus meeting the requirements of the Securities
Act of 1933 and the rules and regulations thereunder.

In December 2002, upon receipt of all necessary federal and state
regulatory approvals, UE, pursuant to Missouri economic development statutes,
conveyed most of its Peno Creek CT facility to the City of Bowling Green,
Missouri in exchange for the issuance by the City of a taxable industrial
development revenue bond in the amount of $103 million. Concurrently, the City
leased back the facility to UE for a term of 20 years. The lease term is the
same as the final maturity of the bond purchased by UE. While the lease is a
capital lease, no capital was raised in the transaction. UE is responsible for
making rental payments under the lease in an amount sufficient to pay the debt
service of the bond. The City's ownership of the facility during the term of the
bond and the lease is expected to result in property tax savings to UE. Under
the terms of the lease, UE retains all operation and maintenance
responsibilities for the facility and ownership of the facility is returned to
UE at the expiration of the lease.

Nuclear Fuel Lease

UE had a lease agreement, which was scheduled to expire on August 31, 2031,
that provided for the financing of a portion of its nuclear fuel that was
processed for use or was consumed at UE's Callaway Nuclear Plant. The lease
agreement had variable interest rates based on short-term commercial paper
interest rates. In February 2004, UE terminated this lease.

UE capitalized the cost of the leased nuclear fuel incurred by the lessor,
plus certain interest costs, and recorded the related lease obligation. Total
interest charges under the lease were $2 million in 2003, $2 million in 2002 and
$4 million in 2001. Interest charges for these years were based on average
interest rates of approximately 2% for 2003, 2% for 2002 and 5% for 2001.
Interest charges of $1 million in 2003, $2 million in 2002 and $4 million in
2001 were capitalized.

135





CIPS

In March 2003, CIPS repaid its $5 million principal amount 6.99% Series
97-1 first mortgage bonds on their maturity date. In April 2003, CIPS repaid its
$40 million principal amount 6 3/8% Series Z first mortgage bonds on their
maturity date and also redeemed prior to maturity and at par, its $50 million 7
1/2% Series X first mortgage bonds due July 1, 2007. In December 2003, CIPS
redeemed its $30 million auction preferred stock at par. All redemptions and
repayments were made with available cash and borrowings from the utility money
pool.

In May 2001, a shelf registration statement filed by CIPS with the SEC was
declared effective. This registration statement enables CIPS to offer from time
to time senior notes in one or more series with an offering price not to exceed
$250 million. In June 2001, CIPS issued, under the shelf registration statement,
$150 million of senior notes due in June 2011, with an interest rate of 6.625%.
Until the release date as described in the senior secured note indenture, the
senior notes will be secured by a related series of CIPS' first mortgage bonds.
The proceeds of these senior notes were used to repay short-term debt and first
mortgage bonds maturing in June 2001. At December 31, 2003, the amount of
securities remaining available for issuance pursuant to the shelf registration
statement was $100 million. CIPS may sell all, or a portion of, the currently
remaining securities registered under the May 2001 shelf registration statement
if warranted by market conditions and capital requirements. Any offer and sale
will be made only by means of a prospectus meeting the requirements of the
Securities Act of 1933 and the rules and regulations thereunder.

Genco

In January 2003, all holders completed an exchange of Genco's $275 million
7.95% Series E senior notes, due 2032, originally issued under private placement
to qualified investors under Rule 144A, for new Series F senior notes. The
Series F senior notes are identical in all material respects to the Series E
senior notes, except that the new series of notes were registered with the SEC
and do not contain transfer restrictions. Interest is payable semi-annually on
June 1 and December 1 of each year, beginning December 1, 2002. Genco received
net proceeds of $271 million from the original issuance of the Series E senior
notes in June 2002 that were used to reduce short-term borrowings incurred to
finance previous generating capacity additions and for general corporate
purposes.

CILCORP

In conjunction with Ameren's acquisition of CILCORP, CILCORP's long-term
debt was recorded at fair value. This resulted in recognition of fair value
related adjustment increases of $71 million related to CILCORP's 9.375% senior
bonds due 2029 and $40 million related to its 8.70% senior notes due 2009.
Amortization related to these fair value adjustments was approximately $7
million for the year ended December 31, 2003, and was included in interest
expense in the Consolidated Statements of Income for Ameren and CILCORP.

In September 2003, CILCORP repurchased, prior to maturity, $13 million in
principal amount of its 9.375% senior bonds and $27 million in principal amount
of its 8.70% senior notes. Premiums paid to repurchase these bonds, and bonds
retired by CILCO as described below, resulted in an aggregate reduction of the
fair value adjustments recorded upon acquisition of $8 million. CILCORP
repurchased these senior bonds and notes through a direct loan from Ameren.

CILCO

In February 2003, CILCO repaid $25 million in principal amount of its 6.82%
Series medium-term notes on their maturity date. In April 2003, three series of
CILCO's first mortgage bonds were redeemed prior to maturity. These redemptions
included CILCO's $65 million principal amount 8 1/5% Series due January 15,
2022, at a redemption price of 103.29%, and two 7.80% Series totaling $10
million in principal amount due February 9, 2023, at a redemption price of
103.90%. In August 2003, CILCO repaid two bank loans totaling $5 million prior
to their scheduled maturity dates. In July 2003, a series of CILCO preferred
stock was reduced by $1 million as a result of a mandatory sinking fund
provision. CILCO repaid its $100 million term loan facility in February 2004.
All redemptions and repayments were made with available cash, direct borrowings
from Ameren, and borrowings from the utility money pool.

136



Medina Valley

In June 2003, Medina Valley repaid, prior to maturity, with funds borrowed
from the non state-regulated subsidiary money pool, a $36 million secured term
loan with an effective interest rate of 7.65% and terminated two related
interest rate swaps at a total redemption cost of $44 million. This repayment
eliminated the outstanding bank debt at Medina Valley.

Amortization of Debt Issuance Costs and Associated Premiums and Discounts

The following table presents the amortization of debt issuance costs and
any premium or discounts included in interest expense for the Ameren Companies
for the three years ended December 31, 2003, 2002, and 2001, respectively:




===================================================================================================================
2003 2002 2001
-------------------------------------------------------------------------------------------------------------------

Ameren(a)..................................... $ 10 $ 8 $ 5
UE............................................ 4 4 3
CIPS.......................................... 1 1 1
Genco......................................... 1 1 1
CILCORP(b) ................................... 1 1 1
CILCO(c)...................................... 1 1 -
===================================================================================================================

(a) Excludes amounts for CILCORP and CILCO prior to the acquisition date
of January 31, 2003; includes amounts for non-registrant Ameren
subsidiaries as well as intercompany eliminations.
(b) 2002 and 2001 amounts represent predecessor information. January 2003
predecessor amounts were zero. CILCORP consolidates CILCO and
therefore includes CILCO amounts in its balances.
(c) CILCO's financial statements are presented on a historical basis of
accounting for all periods presented. See Note 1 - Summary of
Significant Accounting Policies for further information.

Indenture Provisions and Other Covenants

UE

UE's indenture agreements and Articles of Incorporation include covenants
and provisions which must be complied with in order to issue first mortgage
bonds and preferred stock. UE must comply with earnings tests contained in its
respective mortgage indenture and Articles of Incorporation. For the issuance
of additional first mortgage bonds, earnings coverage of twice the annual
interest charges on first mortgage bonds outstanding and to be issued is
required. At December 31, 2003, UE had a coverage ratio of 9.1 times the annual
interest charges on the first mortgage bonds outstanding, which would permit UE
to issue an additional $4.2 billion of first mortgage bonds. For the issuance of
additional preferred stock, earnings coverage of at least 2.5 times the annual
dividend on preferred stock outstanding and to be issued is required under UE's
Articles of Incorporation. As of December 31, 2003, UE had a coverage ratio of
74.2 times the annual dividend on preferred stock outstanding which would permit
UE to issue an additional $2.4 billion in preferred stock. The ability to issue
such securities in the future will depend on such tests at that time.

In addition, UE's mortgage indenture contains certain provisions which
restrict the amount of common dividends that can be paid by UE. Under this
mortgage indenture, $31 million of total retained earnings was restricted
against payment of common dividends, except those payable in common stock,
leaving $1.6 billion of free and unrestricted retained earnings at December 31,
2003.

CIPS

CIPS' indenture agreements and Articles of Incorporation include covenants
which must be complied with in order to issue first mortgage bonds and preferred
stock. CIPS must comply with earnings tests contained in its respective
mortgage indenture and Articles of Incorporation. For the issuance of
additional first mortgage bonds, earnings coverage of twice the annual interest
charges on first mortgage bonds outstanding and to be issued is required. As of
December 31, 2003, CIPS had a coverage ratio of 2.5 times the annual interest
charges for one year on the aggregate amount of bonds outstanding, and
subsequently, had the availability to issue an additional $66 million of first
mortgage bonds. For the issuance of additional preferred stock, earnings
coverage of 1.5 times annual interest charges on all long-term debt and
preferred stock dividends is required under CIPS' Articles of Incorporation. As
of December 31, 2003, CIPS had a coverage ratio of 1.8 times the sum of the
annual interest charges and dividend requirements on all long-term debt and

137




preferred stock outstanding as of December 31, 2003, and consequently had the
availability to issue an additional $109 million of preferred stock. The ability
to issue such securities in the future will depend on coverage ratios at that
time.

Genco

Genco's senior note indenture includes provisions that require it to
maintain a senior debt service coverage ratio of at least 1.8 to 1 (for both the
prior four fiscal quarters and for the next succeeding four six-month periods)
in order to pay dividends to Ameren or to make payments of principal or interest
under certain subordinated indebtedness excluding amounts payable under its
intercompany note payable with CIPS. For the four quarters ended December 31,
2003, this ratio was 3.8 to 1. In addition, the indenture also restricts Genco
from incurring any additional indebtedness, with the exception of certain
permitted indebtedness as defined in the indenture, unless its senior debt
service coverage ratio equals at least 2.5 to 1 for the most recently ended four
fiscal quarters and its senior debt to total capital ratio would not exceed 60%,
both after giving effect to the additional indebtedness on a pro-forma basis.
This debt incurrence requirement is disregarded in the event certain rating
agencies reaffirm the ratings of Genco after considering the additional
indebtedness. As of December 31, 2003, Genco's senior debt to total capital was
53%.

CILCORP

Covenants in CILCORP's indenture governing its $475 million (original
issuance amount) senior notes and bonds require CILCORP to maintain a debt to
capital ratio of no greater than 0.67 to 1 and an interest coverage ratio of at
least 2.2 to 1 in order to make any payment of dividends or intercompany loans
to affiliates other than to its direct and indirect subsidiaries including
CILCO. However, in the event CILCORP is not in compliance with these tests,
CILCORP may make such payments of dividends or intercompany loans if its senior
long-term debt rating is at least BB+ from S&P, Baa2 from Moody's and BBB from
Fitch. At December 31, 2003, CILCORP's debt to capital ratio was 0.6 to 1 and
its interest coverage ratio was 3.0 to 1, calculated in accordance with related
provisions in this indenture. The common stock of CILCO is pledged as security
to the holders of these senior notes and bonds.

CILCO

CILCO must maintain investment grade ratings for its first mortgage bonds
from at least two of S&P, Moody's and Fitch. CILCO's current senior secured debt
ratings from these rating agencies is A-, A2 and A, respectively. CILCO had
restrictions on the payment of dividends and its ability to otherwise make
distributions with respect to its common stock as a result of its $100 million
bank term loan. This loan was repaid in February 2004.

Off-Balance Sheet Arrangements

At December 31, 2003, neither Ameren nor any of its subsidiaries had any
off-balance sheet financing arrangements, other than operating leases entered
into in the ordinary course of business. Neither Ameren nor any of its
subsidiaries expects to engage in any significant off-balance sheet financing
arrangements in the near future.

NOTE 7 - Restructuring Charges and Other Special Items

2003

Ameren and UE recorded a pre-tax coal contract settlement gain of $51
million in 2003. This gain represented a return of coal costs plus accrued
interest accumulated by a coal supplier for reclamation of a coal mine that
supplied a UE power plant. UE entered into a settlement agreement with the coal
supplier to return the accumulated reclamation funds, which will be paid to UE
ratably through December 2004. Ameren's and UE's accounts receivable balance
related to this settlement at December 31, 2003 was $36 million.

CILCO recorded $21 million in acquisition integration costs in 2003. These
costs represented write-offs of software deemed of no ongoing benefit as of the
acquisition date ($13 million), severance and relocation costs ($5 million), and
an increase in the bad debt reserve ($3 million) related to one customer for
which there was significant concern from a collection standpoint at the
acquisition date. These amounts were offset against goodwill at CILCORP through
purchase accounting and, therefore, there was no impact to Ameren's Consolidated
Statement of Income.

138



2002

Ameren recorded voluntary employee retirement and other restructuring
charges of $92 million in 2002. These charges included a voluntary retirement
program charge of $75 million based on voluntary retirements of approximately
550 employees. Of the $75 million charge, UE recorded $51 million, CIPS recorded
$14 million, Genco recorded $8 million and other Ameren companies recorded $2
million. These charges primarily related to special termination benefits
associated with our pension and postretirement benefit plans. Most of the
employees who voluntarily retired accepted retirement in 2002 and left Ameren in
early 2003.

In addition, in 2002, Ameren recorded a charge of approximately $17 million
primarily associated with the retirement of 343 megawatts of rate-regulated
generating capacity at UE's Venice, Illinois plant and temporary suspension of
operations of two coal-fired generating units (126 megawatts) at Genco's
Meredosia, Illinois plant.


NOTE 8 - Other Income and Deductions

The following table presents Other Income and Deductions for each of the
Ameren Companies for the years ended December 31, 2003, 2002, and 2001:




===================================================================================================================
2003 2002 2001
-------------------------------------------------------------------------------------------------------------------

Ameren:(a)
Miscellaneous income:
Interest and dividend income............................. $ 10 $ 8 $ 4
Gain on disposition of property ......................... - 3 5
Contribution in aid of construction...................... 1 1 7
Allowance for equity funds used during construction...... 4 6 13
Other.................................................... 12 3 6
-------------------------------------------------------------------------------------------------------------------
Total miscellaneous income................................. $ 27 $ 21 $ 35
-------------------------------------------------------------------------------------------------------------------
Miscellaneous expense:
Minority interest in subsidiary.......................... $ (7) $ (14) $ (4)
Loss on disposition of property.......................... (1) - (2)
Donations, including 2002 UE electric rate settlement.... (5) (26) (1)
Other.................................................... (9) (10) (9)
-------------------------------------------------------------------------------------------------------------------
Total miscellaneous expense................................ $ (22) $ (50) $ (16)
===================================================================================================================
UE:
Miscellaneous income:
Interest and dividend income............................. $ 7 $ 2 $ 8
Equity in earnings of subsidiary......................... 7 14 4
Gain on disposition of property.......................... - 3 2
Contribution in aid of construction...................... - - 3
Allowance for equity funds used during construction...... 4 5 13
Other.................................................... 5 7 14
-------------------------------------------------------------------------------------------------------------------
Total miscellaneous income................................. $ 23 $ 31 $ 44
-------------------------------------------------------------------------------------------------------------------
Miscellaneous expense:
Donations, including 2002 electric rate settlement....... $ (2) $ (26) $ (1)
Other.................................................... (5) (9) (7)
-------------------------------------------------------------------------------------------------------------------
Total miscellaneous expense................................ $ (7) $ (35) $ (8)
===================================================================================================================
CIPS:
Miscellaneous income:
Interest and dividend income............................. $ 27 $ 31 $ 37
Equity in earnings of subsidiary......................... - 1 2
Contribution in aid of construction...................... - 1 4
Allowance for equity funds used during construction...... - 1 -
Other.................................................... - - 1
-------------------------------------------------------------------------------------------------------------------
Total miscellaneous income................................. $ 27 $ 34 $ 44
-------------------------------------------------------------------------------------------------------------------
Miscellaneous expense:
Other.................................................... $ (3) $ (2) $ (1)
-------------------------------------------------------------------------------------------------------------------
Total miscellaneous expense................................ $ (3) $ (2) $ (1)
-------------------------------------------------------------------------------------------------------------------

139





-------------------------------------------------------------------------------------------------------------------
2003 2002 2001
-------------------------------------------------------------------------------------------------------------------

Genco:
Miscellaneous income:
Other.................................................... $ 3 $ - $ 5
-------------------------------------------------------------------------------------------------------------------
Total miscellaneous income................................. $ 3 $ - $ 5
-------------------------------------------------------------------------------------------------------------------
Miscellaneous expense:
Other.................................................... $ (1) $ (1) $ -
-------------------------------------------------------------------------------------------------------------------
Total miscellaneous expense................................ $ (1) $ (1) $ -
===================================================================================================================
CILCORP:(b)
Miscellaneous income:
Interest and dividend income............................. $ 1 $ - $ -
Other.................................................... - 3 5
-------------------------------------------------------------------------------------------------------------------
Total miscellaneous income................................. $ 1 $ 3 $ 5
-------------------------------------------------------------------------------------------------------------------
Miscellaneous expense:
Company-owned life insurance............................. $ (2) $ (1) $ (1)
Other.................................................... (1) (1) (2)
-------------------------------------------------------------------------------------------------------------------
Total miscellaneous expense................................ $ (3) $ (2) $ (3)
===================================================================================================================
CILCO:(c)
Miscellaneous income:
Other.................................................... $ - $ 2 $ 1
-------------------------------------------------------------------------------------------------------------------
Total miscellaneous income................................. $ - $ 2 $ 1
-------------------------------------------------------------------------------------------------------------------
Miscellaneous expense:
Company-owned life insurance............................. $ (2) $ (1) $ (1)
Other.................................................... (2) (1) (1)
-------------------------------------------------------------------------------------------------------------------
Total miscellaneous expense................................ $ (4) $ (2) $ (2)
===================================================================================================================

(a) Excludes amounts for CILCORP and CILCO prior to the acquisition date
of January 31, 2003; includes amounts for non-registrant Ameren
subsidiaries as well as intercompany eliminations.
(b) 2002 amounts represent predecessor information. January 2003
predecessor amounts were zero. CILCORP consolidates CILCO and
therefore includes CILCO amounts in its balances.
(c) CILCO's financial statements are presented on a historical basis of
accounting for all periods presented. See Note 1 - Summary of
Significant Accounting Policies for further information.

NOTE 9 - Derivative Financial Instruments

We utilize derivatives principally to manage the risk of changes in market
prices for natural gas, fuel, electricity and emission credits. Price
fluctuations in natural gas, fuel and electricity cause:

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

The derivatives that we use to hedge these risks are dictated by risk
management policies and include forward contracts, futures contracts, options
and swaps. We continually assess our supply and delivery commitment positions
against forward market prices and internally forecast forward prices and modify
our exposure to market, credit and operational risk by entering into various
offsetting transactions. In general, we believe these transactions serve to
reduce our price risk.

In addition, we may purchase additional power, again within risk management
guidelines, in anticipation of power requirements and future price changes.
Certain derivative contracts we enter into on a regular basis as part of our
power risk management program do not qualify for hedge accounting or the normal
purchase and sale exceptions under SFAS No. 133. Accordingly, these contracts
are recorded at fair value with changes in the fair value charged or credited to
the income statement in the period in which the change occurred. Contracts we
enter into as part of our power risk management program may be settled by either
physical delivery or net settled with the counterparty.

140



Cash Flow Hedges

We routinely enter into forward purchase and sales contracts for
electricity based on forecasted levels of economic generation and customer
requirements. The relative balance between customer requirements and economic
generation varies throughout the year. The contracts typically cover a period of
12 months or less. The purpose of these contracts is to hedge against possible
price fluctuations in the spot market for the period covered under the
contracts. We formally document all relationships between hedging instruments
and hedged items, as well as our risk management objective and strategy for
undertaking various hedge transactions. The mark-to-market value of cash flow
hedges will continue to fluctuate with changes in market prices up to contract
expiration.

The following table presents balances in certain accounts for cash flow
hedges as of December 31, 2003 and 2002:




===================================================================================================================
Ameren(a) UE CIPS Genco CILCORP CILCO
-------------------------------------------------------------------------------------------------------------------

2003:
Balance Sheet:
Other assets............................. $ 16 $ 2 $ 1 $ 6 $ - $ 6
Other deferred credits and liabilities... 4 3 - 1 - -
Accumulated OCI:
Power forwards(b)........................ 3 - - 3 - -
Interest rate swaps(c)................... 5 - - 5 - -
Gas swaps and futures contracts(d)....... 6 - 1 - - 5
Call options(e).......................... 2 2 - - - -
===================================================================================================================
2002:
Balance Sheet:
Other assets............................. $ 8 $ 7 $ - $ 1 $ - $ 2
Other deferred credits and liabilities... 1 1 - - - 1
Accumulated OCI:
Power forwards(b)........................ 1 1 - - - -
Interest rate swaps(c)................... 5 - - 5 - -
Gas swaps and future contracts(d)........ 2 1 - - - 1
Call options(e).......................... 6 6 - - - -
===================================================================================================================

(a) Excludes amounts for CILCORP and CILCO prior to the acquisition date
of January 31, 2003; includes amounts for non-registrant Ameren
subsidiaries as well as intercompany eliminations.
(b) Represents the mark-to-market value for the hedged portion of
electricity price exposure for periods generally less than one year.
Certain contracts designated as hedges of electricity price exposure
have terms up to five years.
(c) Represents a gain associated with interest rate swaps at Genco that
were a partial hedge of the interest rate on debt issued in June 2002.
The swaps cover the first 10 years of debt that has a 30-year maturity
and the gain in OCI is amortized over a 10-year period that began in
June 2002.
(d) Represents a gain associated with natural gas swaps and futures
contracts. The swaps are a partial hedge of our natural gas
requirements through October 2006. CILCORP and CILCO amounts represent
a gain associated with a partial hedge of natural gas requirements
through March 2007.
(e) Represents the mark-to-market gain of two call options accounted for
as cash flow hedges for coal held with two suppliers. One of these
options to purchase coal expired in October 2003 and the other option
expires in July 2005. The final value of the options will be
recognized as a reduction in fuel costs as the hedged coal is burned.

The pre-tax net gain or loss on power forward derivative instruments
included in Other Income and Deductions at UE and Genco, which represented the
impact of discontinued cash flow hedges, the ineffective portion of cash flow
hedges, as well as the reversal of amounts previously recorded in OCI due to
transactions going to delivery or settlement, was less than a $1 million loss
for both UE and Genco for the year ended December 31, 2003 (2002 - $2 million
loss for UE, $1 million loss for Genco).

Other Derivatives

The following table represents the net change in market value of option
transactions, which are used to manage our positions in SO2 allowances, coal,
heating oil and electricity or power. Certain of these transactions are treated
as non-hedge transactions under SFAS No. 133. The net change in the market value
of SO2 options is recorded in Operating Revenues - Electric, while the net
change in the market value of coal, heating oil and electricity or power options
is recorded as Operating Expenses - Fuel and Purchased Power.

141






===================================================================================================================
Gains (Losses)(a) 2003 2002 2001
-------------------------------------------------------------------------------------------------------------------

SO2 options:
Ameren(b).................................................. $ 1 $ 2 $ (1)
UE......................................................... (2) 3 (1)
CIPS....................................................... - - -
Genco...................................................... 3 (1) -
CILCORP(c)................................................. - - -
CILCO(c)(d)................................................ - - -
-------------------------------------------------------------------------------------------------------------------
Coal options:
Ameren(b).................................................. 1 1 -
UE......................................................... 2 1 (2)
CIPS....................................................... - - -
Genco...................................................... - - -
CILCORP(c)................................................. - - -
CILCO(c)(d)................................................ - - -
-------------------------------------------------------------------------------------------------------------------
Power options:
Ameren(b).................................................. - 2 -
UE......................................................... - 1 -
CIPS....................................................... - - -
Genco...................................................... - 1 -
CILCORP(c)................................................. - - -
CILCO(c)(d)................................................ - - -
===================================================================================================================

(a) Heating oil option gains and losses were less than $1 million for all
periods shown above.
(b) Excludes amounts for CILCORP and CILCO prior to the acquisition date
of January 31, 2003; includes amounts for non-registrant Ameren
subsidiaries as well as intercompany eliminations.
(c) 2002 and 2001 amounts represent predecessor information. January 2003
predecessor amounts were zero.
(d) CILCO's financial statements are presented on a historical basis of
accounting for all periods presented. See Note 1 - Summary of
Significant Accounting Policies for further information.

NOTE 10 - Stockholder Rights Plan and Preferred Stock

Stockholder Rights Plan

In October 1998, Ameren's Board of Directors approved a share purchase
rights plan designed to assure stockholders of fair and equal treatment in the
event of a proposed takeover. The rights will be exercisable only if a person or
group acquires 15% or more of Ameren's common stock or announces a tender offer,
the consummation of which would result in ownership by a person or group of 15%
or more of the common stock. Each right will entitle the holder to purchase one
one-hundredth of a newly issued preferred stock at an exercise price of $180. If
a person or group acquires 15% or more of Ameren's outstanding common stock,
each right will entitle its holder (other than such person or members of such
group) to purchase, at the right's then-current exercise price, a number of
Ameren's common shares having a market value of twice such price. In addition,
if Ameren is acquired in a merger or other business combination transaction
after a person or group has acquired 15% or more of our outstanding common
stock, each right will entitle its holder to purchase, at the right's
then-current exercise price, a number of the acquiring company's common shares
having a market value of twice such price. The acquiring person or group will
not be entitled to exercise these rights. The SEC approved the plan under the
PUHCA in December 1998. The rights were issued as a dividend payable January 8,
1999, to stockholders of record on that date. These rights expire in 2008. One
right will accompany each new share of Ameren common stock issued prior to such
expiration date.

Preferred Stock

All classes of UE's, CIPS' and CILCO's preferred stock are entitled to
cumulative dividends and have voting rights. Ameren has 100 million shares of
$0.01 par value preferred stock authorized, with no shares outstanding. CIPS has
2.6 million shares of no par value preferred stock authorized, with no shares
outstanding. UE has 7.5 million shares authorized of $1 par value preference
stock and CILCO has 2.0 million shares authorized of no par value preference
stock. No shares of preference stock have been issued.

142



The following table presents the outstanding preferred stock of UE, CIPS
and CILCO that is not subject to mandatory redemption and is entitled to
cumulative dividends and is redeemable, at the option of the issuer, at the
prices presented as of December 31, 2003 and 2002:




===================================================================================================================
Redemption Price 2003 2002
(per share)
-------------------------------------------------------------------------------------------------------------------

UE:
Without par value and stated value of $100 per
share, 25 million shares authorized
$7.64 Series 330,000 shares.............. $ 103.82(a) $ 33 $ 33
$5.50 Series A 14,000 shares.............. 110.00 1 1
$4.75 Series 20,000 shares.............. 102.176 2 2
$4.56 Series 200,000 shares.............. 102.47 20 20
$4.50 Series 213,595 shares.............. 110.00(b) 21 21
$4.30 Series 40,000 shares.............. 105.00 4 4
$4.00 Series 150,000 shares.............. 105.625 15 15
$3.70 Series 40,000 shares.............. 104.75 4 4
$3.50 Series 130,000 shares.............. 110.00 13 13
-------------------------------------------------------------------------------------------------------------------
Total............................................... $ 113 $ 113
===================================================================================================================
CIPS:
With par value of $100 per share, 2 million shares
authorized
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 - 30
6.625% Series 125,000 shares.............. 100.00 12 12
-------------------------------------------------------------------------------------------------------------------
Total............................................... $ 50 $ 80
===================================================================================================================
CILCO:(c)
With par value of $100 per share, 1.5 million
shares authorized
4.50% Series 111,264 shares.............. $ 110.00 $ 11 $ 11
4.64% Series 79,940 shares.............. 102.00 8 8
-------------------------------------------------------------------------------------------------------------------
Total........................................... $ 19 $ 19
Less: CILCO balances prior to acquisition date..... $ - $ (19)
===================================================================================================================
Total Ameren........................................ $ 182 $ 193
===================================================================================================================

(a) Beginning February 15, 2003, declining to $100 per share in 2012.
(b) In the event of voluntary liquidation, $105.50.
(c) Prior to the acquisition date of CILCORP on January 31, 2003, the
4.50% Series was $11 million and the 4.64% Series was $8 million.

The following table presents the outstanding preferred stock of CILCO that
is subject to mandatory redemption, is entitled to cumulative dividends and is
redeemable, at a determinable price on a fixed date or dates, at the prices
presented as of December 31, 2003 and 2002, respectively:




===================================================================================================================
Redemption Price
(per share) 2003 2002
-------------------------------------------------------------------------------------------------------------------

CILCO:(a)(b)
Without par value and stated value of $100 per
share, 3.5 million shares authorized
5.85% Series 220,000 shares............. $ 100.00(c) $ 21 $ 22
===================================================================================================================

(a) Beginning July 1, 2003, this preferred stock became redeemable, at the
option of CILCO, at $100 per share. A mandatory redemption fund was
established on July 1, 2003. The fund provides for the redemption of
11,000 shares for $1.1 million on July 1 of each year through July 1,
2007. On July 1, 2008, the remaining shares outstanding will be
retired for $16.5 million.
(b) Prior to the acquisition of CILCORP on January 31, 2003, the 5.85%
Series was $22 million.
(c) In the event of voluntary or involuntary liquidation, the stockholder
receives $100 per share plus accrued dividends.

143




NOTE 11 - Retirement Benefits

We have defined benefit and postretirement benefit plans covering
substantially all employees of UE, CIPS, CILCORP, CILCO and Ameren Services and
certain employees of Resources Company and its subsidiaries, including Genco.
Ameren uses a measurement date of December 31 for its pension and postretirement
benefit plans.

Investment Strategy and Return on Asset Assumption

The primary objective of the Ameren Retirement Plan and postretirement
benefit plans is to provide eligible employees with pension and postretirement
healthcare benefits. Ameren manages plan assets in accordance with the "prudent
investor" guidelines contained in the ERISA. Ameren's goal is to earn the
highest possible return on plan assets consistent with its tolerance for risk.
Ameren delegates investment management to specialists in each asset class and
where appropriate, provides the investment manager with specific guidelines
which include allowable and/or prohibited investment types. Ameren regularly
monitors manager performance and compliance with investment guidelines.

The expected return on plan assets is based on historical and projected
rates of return for current and planned asset classes in the investment
portfolio. Assumed projected rates of return for each asset class were selected
after analyzing historical experience and future expectations of the returns and
volatility of the various asset classes. Based on the target asset allocation
for each asset class, the overall expected rate of return for the portfolio was
developed and adjusted for historical and expected experience of active
portfolio management results compared to benchmark returns and for the effect of
expenses paid from plan assets.

Pension

Pension benefits are based on the employees' years of service and
compensation. Our plans are funded in compliance with income tax regulations and
federal funding requirements.

The following table presents the cash contributions made to our defined
benefit retirement plan qualified trusts during 2003 and 2002.




===================================================================================================================
2003 2002
-------------------------------------------------------------------------------------------------------------------

Ameren(a).......................................................... $ 25 $ 31
UE................................................................. 18 23
CIPS............................................................... 4 4
Genco.............................................................. 3 4
CILCORP(b)......................................................... - 1
CILCO.............................................................. - 1
===================================================================================================================

(a) Excludes amounts for CILCORP and CILCO prior to the acquisition date
of January 31, 2003; includes amounts for non-registrant Ameren
subsidiaries.
(b) 2002 amounts represent predecessor information. CILCORP consolidates
CILCO and therefore includes CILCO amounts in its balances.

A minimum pension liability was recorded at December 31, 2002, which
resulted in an after-tax charge to OCI and a reduction in stockholders' equity
of $102 million. At December 31, 2003, the minimum pension liability was
reduced, resulting in OCI of $46 million and an increase in stockholders'
equity. The following table presents the minimum pension liability amounts,
after taxes, as of December 31, 2003 and 2002:




===================================================================================================================
2003 2002
-------------------------------------------------------------------------------------------------------------------

Ameren(a).......................................................... $ 56 $ 102
UE................................................................. 34 62
CIPS............................................................... 7 13
Genco.............................................................. 4 6
CILCORP(b)......................................................... - 60
CILCO.............................................................. 13 30
===================================================================================================================

(a) Excludes amounts for CILCORP and CILCO prior to the acquisition date
of January 31, 2003; includes amounts for non-registrant Ameren
subsidiaries.
(b) 2002 amounts represent predecessor information. CILCORP consolidates
CILCO and therefore includes CILCO amounts in its balances. CILCORP's
2002 minimum pension liability was reduced to zero in 2003 as a result
of purchase accounting adjustments.

144



The following tables present the funded status of our pension plans for the
years ended December 31, 2003 and 2002:




===================================================================================================================
2003: Ameren(a)
-------------------------------------------------------------------------------------------------------------------

Change in benefit obligation:
Projected benefit obligation at beginning of year................................... $ 1,587
Service cost........................................................................ 37
Interest cost....................................................................... 128
Plan amendments..................................................................... 20
Actuarial loss...................................................................... 123
Addition from CILCO................................................................. 355
Special termination benefits........................................................ 2
Benefits paid....................................................................... (163)
-------------------------------------------------------------------------------------------------------------------
Projected benefit obligation at end of year............................................. 2,089
-------------------------------------------------------------------------------------------------------------------
Change in plan assets:
Fair value of plan assets at beginning of year...................................... 1,059
Actual return on plan assets........................................................ 283
Addition from CILCO................................................................. 236
Employer contributions.............................................................. 25
Benefits paid(b).................................................................... (160)
-------------------------------------------------------------------------------------------------------------------
Fair value of plan assets at end of year................................................ 1,443
-------------------------------------------------------------------------------------------------------------------
Funded status - deficiency.............................................................. 646
Unrecognized net actuarial loss......................................................... (267)
Unrecognized prior service cost......................................................... (80)
Unrecognized net transition asset....................................................... 2
-------------------------------------------------------------------------------------------------------------------
Accrued pension cost at December 31, 2003............................................... $ 301
===================================================================================================================





===================================================================================================================
2002: Ameren(a) CILCORP(c) CILCO
-------------------------------------------------------------------------------------------------------------------

Change in benefit obligation:
Projected benefit obligation at beginning of year..... $ 1,418 $ 320 $ 320
Service cost.......................................... 33 4 4
Interest cost......................................... 103 22 22
Actuarial loss........................................ 64 31 31
Special termination benefits(d)....................... 65 - -
Benefits paid......................................... (96) (24) (24)
-------------------------------------------------------------------------------------------------------------------
Projected benefit obligation at end of year............... 1,587 353 353
-------------------------------------------------------------------------------------------------------------------
Change in plan assets:
Fair value of plan assets at beginning of year........ 1,225 284 284
Actual return on plan assets.......................... (101) (19) (19)
Employer contributions................................ 31 1 1
Benefits paid......................................... (96) (24) (24)
-------------------------------------------------------------------------------------------------------------------
Fair value of plan assets at end of year.................. 1,059 242 242
-------------------------------------------------------------------------------------------------------------------
Funded status - deficiency................................ 528 111 111
Unrecognized net actuarial loss........................... (324) (130) (80)
Unrecognized prior service cost........................... (68) - -
Unrecognized net transition asset......................... 3 - (3)
-------------------------------------------------------------------------------------------------------------------
Accrued pension cost at December 31, 2002................. $ 139 $ (19) $ 28
===================================================================================================================

(a) Excludes amounts for CILCORP and CILCO prior to the acquisition date
of January 31, 2003.

(b) Excludes amounts paid from company funds.
(c) Represents predecessor information.
(d) Special termination benefits for 2002 represent the enhanced
improvement in benefits provided to the approximate 550 employees who
voluntarily retired in 2002. See also Note 7 - Restructuring Charges
and Other Special Items for further information.

145



The following table presents the assumptions used to determine benefit
obligations at December 31, 2003 and 2002:




===================================================================================================================
2003 2002
--------------------------------------------------------------------------------- ---------------- ----------------

Ameren, UE, CIPS and Genco:
Discount rate at measurement date............................................... 6.25% 6.75%
Increase in future compensation................................................. 3.25 3.75
===================================================================================================================
CILCORP(a) and CILCO:
Discount rate at measurement date............................................... - 6.25%
Increase in future compensation................................................. - 3.50
===================================================================================================================


(a) Represents predecessor information for 2002.

Based on our assumptions at December 31, 2003, and in order to maintain
minimum funding levels for our pension plan, we expect to be required under
ERISA to fund an average of approximately $115 million annually from 2005
through 2008 assuming the passage of a law which would be retroactive to January
1, 2004, to extend the temporary interest rate relief. We expect UE's, CIPS',
Genco's and CILCO's portion of the 2005 to 2008 funding requirements to be
approximately 65%, 10%, 10% and 15%, respectively. These amounts are estimates
and may change based on actual stock market performance, changes in interest
rates, any pertinent changes in government regulations and any prior voluntary
contributions.

The following tables present the amounts recorded in the Consolidated
Balance Sheets as of December 31, 2003 and 2002:




===================================================================================================================
2003: Ameren(a)
------------------------------------------------------------------------------------------------------------------

Accrued pension liability................................................. $ 477
Prepaid benefit cost...................................................... -
Intangible asset.......................................................... (85)
Accumulated OCI........................................................... (91)
------------------------------------------------------------------------------------------------------------------
Accrued pension cost at December 31, 2003................................. $ 301
===================================================================================================================



===================================================================================================================
2002: Ameren(a) CILCORP(b) CILCO
------------------------------------------------------------------------------------------------------------------

Accrued pension liability........................... $ 377 $ 107 $ 85
Prepaid benefit cost................................ - (25) (3)
Intangible asset.................................... (74) - (4)
Accumulated OCI..................................... (164) (101) (50)
------------------------------------------------------------------------------------------------------------------
Accrued pension cost at December 31, 2002........... $ 139 $ (19) $ 28
===================================================================================================================

(a) Excludes amounts for CILCORP and CILCO prior to the acquisition date
of January 31, 2003.
(b) Represents predecessor information.

The following table presents our pension plan asset categories as of
December 31, 2003 and 2002 and our target allocations for 2004:




===================================================================================================================
Percentage of Plan Assets at
Target December 31,
Asset Allocation ----------------------------------
Category 2004 2003 2002
-------------------------------------------------------------------------------------------------------------------

Equity securities........................... 40% - 80% 63% 59%
Debt securities............................. 18 - 55 31 37
Real estate................................. 0 - 6 4 3
Other....................................... 0 - 4 2 1
-------------------------------------------------------------------------------------------------------------------
Total ...................................... 100% 100%
===================================================================================================================


146



The following table presents the projected benefit obligation, the
accumulated benefit obligation and the fair value of plan assets for plans that
have a projected benefit obligation and an accumulated benefit obligation in
excess of plan assets at December 31, 2003 and 2002:




===================================================================================================================
2003 2002
-------------------------------------------------------------------------------------------------------------------

Projected benefit obligation................ $ 2,089 $ 1,587
Accumulated benefit obligation.............. 1,919 1,436
Fair value of plan assets................... 1,443 1,059
===================================================================================================================


The following table presents the components of the net periodic pension
benefit cost during 2003, 2002 and 2001:




===================================================================================================================
2003: Ameren(a)
-------------------------------------------------------------------------------------------------------------------

Service cost....................................................... $ 37
Interest cost...................................................... 128
Expected return on plan assets..................................... (124)
Amortization of:
Transition asset............................................... (1)
Prior service cost............................................. 9
Actuarial loss................................................. 7
-------------------------------------------------------------------------------------------------------------------
Net periodic benefit cost.......................................... 56
-------------------------------------------------------------------------------------------------------------------
Net periodic benefit cost, including special termination benefits.. $ 58
===================================================================================================================




===================================================================================================================
2002: Ameren(a) CILCORP(b) CILCO
-------------------------------------------------------------------------------------------------------------------

Service cost....................................................... $ 33 $ 4 $ 4
Interest cost...................................................... 103 22 22
Expected return on plan assets..................................... (114) (25) (25)
Amortization of:
Transition asset............................................... (1) - (1)
Prior service cost............................................. 9 - 1
Actuarial (gain) loss.......................................... (12) 1 -
-------------------------------------------------------------------------------------------------------------------
Net periodic benefit cost.......................................... 18 2 1
-------------------------------------------------------------------------------------------------------------------
Net periodic benefit cost, including special termination benefits.. $ 83 $ 2 $ 1
===================================================================================================================
===================================================================================================================
2001: Ameren(a) CILCORP(b) CILCO
-------------------------------------------------------------------------------------------------------------------
Service cost....................................................... $ 32 $ 3 $ 3
Interest cost...................................................... 100 22 22
Expected return on plan assets..................................... (115) (27) (27)
Amortization of:
Transition asset............................................... (1) - (1)
Prior service cost............................................. 9 - 1
Actuarial gain................................................. (21) - (2)
-------------------------------------------------------------------------------------------------------------------
Net periodic benefit cost.......................................... 4 (2) (4)
-------------------------------------------------------------------------------------------------------------------
Net periodic benefit cost, including special termination benefits.. $ 4 $ (2) $ (4)
===================================================================================================================

(a) Excludes amounts for CILCORP and CILCO prior to the acquisition date
of January 31, 2003.
(b) Represents predecessor information.

Prior service cost is amortized on a straight-line basis over the average
future service of active plan participants benefiting under the plan. The net
actuarial (gain) loss subject to amortization is amortized on a straight-line
basis over ten years.


147



UE, CIPS, Genco, CILCORP and CILCO are participants in Ameren's plans and
are responsible for their proportional share of the costs. The following table
presents the pension costs incurred for the years ended December 31, 2003, 2002,
and 2001:




===================================================================================================================
2003 2002 2001
-------------------------------------------------------------------------------------------------------------------

Ameren(a)............................................................. $ 56 $ 18 $ 4
UE.................................................................... 35 12 3
CIPS.................................................................. 7 3 1
Genco................................................................. 5 2 -
CILCORP(b)............................................................ 7 2 (2)
CILCO................................................................. 17 1 (4)
===================================================================================================================

(a) Excludes amounts for CILCORP and CILCO prior to the acquisition date
of January 31, 2003; includes amounts for non-registrant Ameren
subsidiaries.
(b) Includes predecessor information for periods prior to the acquisition
date of January 31, 2003. CILCORP consolidates CILCO and therefore
includes CILCO amounts in its balances.

The expected pension benefit payments from qualified trust and company
funds, which reflect expected future service, are as follows:




===================================================================================================================
Pension from Qualified Trust Pension from Company Funds
-------------------------------------------------------------------------------------------------------------------

2004.............................. $ 125 $ 2
2005.............................. 122 2
2006.............................. 127 2
2007.............................. 130 2
2008.............................. 134 2
2009 - 2013....................... 745 8
===================================================================================================================


The following table presents the assumptions used to determine net periodic
benefit cost for the years ended December 31, 2003, 2002, and 2001:




===================================================================================================================
2003 2002 2001
-------------------------------------------------------------------------------------------------------------------

Ameren, UE, CIPS and Genco:
Discount rate at measurement date.................................... 6.75% 7.25% 7.50%
Expected return on plan assets....................................... 8.50 8.50 8.50
Increase in future compensation...................................... 3.75 4.25 4.50
===================================================================================================================
CILCORP(a) and CILCO:
Discount rate at measurement date.................................... - 7.00% 7.75%
Expected return on plan assets....................................... - 9.00 9.00
Increase in future compensation...................................... - 3.50 3.50
===================================================================================================================

(a) Represents predecessor information for 2002 and 2001.

Postretirement

Our funding policy for postretirement benefits is primarily to fund the
Voluntary Employee Beneficiary Association trusts (VEBA) to match the annual
postretirement expense.

The following table presents the cash contributions made to our
postretirement plan during 2003. We made cash contributions of $74 million in
2002. We expect to make contributions of approximately $80 million during 2004.



===================================================================================================================
2003
-------------------------------------------------------------------------------------------------------------------

Ameren(a)........................................................................... $ 70
UE.................................................................................. 42
CIPS................................................................................ 6
Genco............................................................................... 2
CILCORP(b).......................................................................... 6
CILCO............................................................................... 6
===================================================================================================================

(a) Excludes amounts for CILCORP and CILCO prior to the acquisition date
of January 31, 2003; includes amounts for non-registrant Ameren
subsidiaries.
(b) CILCORP consolidates CILCO and therefore includes CILCO amounts in its
balances.

148



The following tables present the funded status of Ameren's postretirement
benefit plans at December 31, 2003 and 2002:




==================================================================================================================
2003: Ameren(a)
------------------------------------------------------------------------------------------------------------------

Change in benefit obligation:
Net benefit obligation at beginning of year................ $ 771
Service cost............................................... 13
Interest cost.............................................. 62
Employee contributions..................................... 3
Actuarial loss............................................. 62
Addition from CILCO........................................ 156
Benefits paid.............................................. (54)
-------------------------------------------------------------------------------------------------------------------
Net benefit obligation at end of year 1,013
-------------------------------------------------------------------------------------------------------------------
Change in plan assets :
Fair value of plan assets at beginning of year............. 309
Actual return on plan assets............................... 62
Addition from CILCO........................................ 33
Employer contributions..................................... 70
Employee contributions..................................... 3
Benefits paid(b)........................................... (54)
-------------------------------------------------------------------------------------------------------------------
Fair value of plan assets at end of year $ 423
-------------------------------------------------------------------------------------------------------------------
Funded status - deficiency.................................... $ 590
Unrecognized net actuarial loss............................... (392)
Unrecognized prior service cost............................... 43
Unrecognized net transition obligation(c)..................... (19)
-------------------------------------------------------------------------------------------------------------------
Postretirement benefit liability at December 31, 2003......... $ 222
===================================================================================================================



===================================================================================================================
2002: Ameren(a) CILCORP(d) CILCO
-------------------------------------------------------------------------------------------------------------------

Change in benefit obligation:
Net benefit obligation at beginning of year................ $ 701 $ 117 $ 117
Service cost............................................... 26 2 2
Interest cost.............................................. 51 10 10
Employee contributions..................................... 2 - -
Plan amendments(e)......................................... (186) - -
Actuarial loss............................................. 211 36 36
Special termination benefits(f)............................ 8 - -
Benefits paid.............................................. (42) (9) (9)
-------------------------------------------------------------------------------------------------------------------
Net benefit obligation at end of year......................... 771 156 156
-------------------------------------------------------------------------------------------------------------------
Change in plan assets:
Fair value of plan assets at beginning of year............. 300 41 41
Actual return on plan assets............................... (26) (3) (3)
Employer contributions..................................... 74 5 5
Employee contributions..................................... 2 - -
Benefits paid(b)........................................... (41) (9) (9)
-------------------------------------------------------------------------------------------------------------------
Fair value of plan assets at end of year...................... 309 34 34
-------------------------------------------------------------------------------------------------------------------
Funded status - deficiency.................................... 462 122 122
Unrecognized net actuarial loss............................... (389) (61) (62)
Unrecognized prior service cost............................... 47 - -
Unrecognized net transition obligation(c)..................... (21) - (19)
-------------------------------------------------------------------------------------------------------------------
Postretirement benefit liability at December 31, 2002......... $ 99 $ 61 $ 41
===================================================================================================================

(a) Excludes amounts for CILCORP and CILCO prior to the acquisition date
of January 31, 2003.
(b) Excludes amounts paid from company funds.
(c) Ameren's transition obligation at December 31, 2003, is being
amortized over the next 11 years.
(d) Represents predecessor information.
(e) Plan amendments represent a favorable change to our net benefit
obligation and relate to increasing retiree premiums and placing
limits on healthcare benefits.
(f) Special termination benefits for 2002 represent the enhanced
improvement in benefits provided to the approximate 550 employees who
voluntarily retired in 2002. See also Note 7 - Restructuring Charges
and Other Special Items for further information.

149



The following table presents the assumptions used to determine the
benefit obligations at December 31, 2003 and 2002:




===================================================================================================================
2003 2002
-------------------------------------------------------------------------------------------------------------------

Ameren, UE, CIPS and Genco:
Discount rate at measurement date.............................................. 6.25% 6.75%
Medical cost trend rate (initial).............................................. 9.00 10.00
Medical cost trend rate (ultimate)............................................. 5.00 5.00
===================================================================================================================
CILCORP(a) and CILCO:
Discount rate at measurement date.............................................. - 7.00%
Medical cost trend rate (initial).............................................. - 11.50
Medical cost trend rate (ultimate)............................................. - 5.00
===================================================================================================================

(a) 2002 amounts represent predecessor information.

The following table presents the accumulated postretirement benefit
obligation and the fair value of plan assets which have an accumulated
postretirement benefit obligation in excess of plan assets at December 31, 2003
and 2002:




===================================================================================================================
2003 2002
-------------------------------------------------------------------------------------------------------------------

Accumulated postretirement benefit obligation......... $ 1,013 $ 771
Fair value of plan assets............................. 423 309
===================================================================================================================


The following tables present the components of Ameren's net periodic
postretirement benefit cost as of December 31, 2003, 2002, and 2001:



===================================================================================================================
2003: Ameren(a)
-------------------------------------------------------------------------------------------------------------------

Service cost........................................................ $ 13
Interest cost....................................................... 62
Expected return on plan assets...................................... (33)
Amortization of:
Transition obligation........................................... 2
Prior service cost.............................................. (3)
Actuarial loss.................................................. 34
-------------------------------------------------------------------------------------------------------------------
Net periodic benefit cost........................................... $ 75
===================================================================================================================




===================================================================================================================
2002: Ameren(a) CILCORP(b) CILCO
-------------------------------------------------------------------------------------------------------------------

Service cost........................................................ $ 26 $ 2 $ 2
Interest cost....................................................... 51 9 9
Expected return on plan assets...................................... (27) (3) (3)
Amortization of:
Transition obligation........................................... 16 - 3
Actuarial loss................................................. 8 2 2
-------------------------------------------------------------------------------------------------------------------
Net periodic benefit cost........................................... 74 10 13
-------------------------------------------------------------------------------------------------------------------
Net periodic benefit cost, including special termination benefits... $ 82 $ 10 $ 13
===================================================================================================================
===================================================================================================================
2001: Ameren(a) CILCORP(b) CILCO
-------------------------------------------------------------------------------------------------------------------
Service cost........................................................ $ 23 $ 2 $ 2
Interest cost....................................................... 47 8 8
Expected return on plan assets...................................... (25) (4) (4)
Amortization of:
Transition obligation........................................... 16 - -
Actuarial loss.................................................. 2 - 3
-------------------------------------------------------------------------------------------------------------------
Net periodic benefit cost........................................... $ 63 $ 6 $ 9
===================================================================================================================

(a) Excludes amounts for CILCORP and CILCO prior to the acquisition date
of January 31, 2003.
(b) Represents predecessor information.

150



Prior service cost is amortized on a straight-line basis over the average
future service of active plan participants benefiting under the postretirement
plans. The net actuarial loss subject to amortization is amortized on a
straight-line basis over ten years.

UE, CIPS, Genco, CILCORP and CILCO are responsible for their proportional
share of the postretirement benefit costs. The following table presents the
postretirement benefit costs for the years ended December 31, 2003, 2002, and
2001:



===================================================================================================================
2003 2002 2001
-------------------------------------------------------------------------------------------------------------------

Ameren(a)............................................................. $ 75 $ 74 $ 63
UE.................................................................... 52 57 51
CIPS.................................................................. 9 12 3
Genco................................................................. 2 4 3
CILCORP(b)............................................................ 10 10 6
CILCO................................................................. 18 13 9
===================================================================================================================

(a) Excludes amounts for CILCORP and CILCO prior to the acquisition date
of January 31, 2003; includes amounts for non-registrant Ameren
subsidiaries.
(b) Includes predecessor information for periods prior to the acquisition
date of January 31, 2003. CILCORP consolidates CILCO and therefore
includes CILCO amounts in its balances.

The following expected postretirement benefit payments, which reflect
expected future service, are as follows:



===================================================================================================================
Benefits from Qualified Trust Benefits from Company Funds
-------------------------------------------------------------------------------------------------------------------

2004.................................... $ 63 $ 1
2005.................................... 67 1
2006.................................... 69 1
2007.................................... 72 1
2008.................................... 73 1
2009 - 2013............................. 399 6
===================================================================================================================


The following table presents our postretirement plan asset categories as of
December 31, 2003 and 2002 and our target allocations for 2004:



===================================================================================================================
Percentage of Plan Assets at
Target December 31,
Asset Allocation ------------------------------------
Category 2004 2003 2002
-------------------------------------------------------------------------------------------------------------------

Equity securities........................... 40 - 80% 57% 49%
Debt securities............................. 20 - 60 32 38
Other....................................... 0 - 15 11 13
-------------------------------------------------------------------------------------------------------------------
Total ...................................... 100% 100%
===================================================================================================================


The following table presents the assumptions used to determine net periodic
benefit cost for the years ended December 31, 2003, 2002, and 2001:



===================================================================================================================
2003 2002 2001
-------------------------------------------------------------------------------------------------------------------

Ameren, UE, CIPS and Genco:
Discount rate at measurement date..................................... 6.75% 7.25% 7.50%
Expected return on plan assets........................................ 8.50 8.50 8.50
Medical cost trend rate (initial)..................................... 10.00 5.25 5.00
Medical cost trend rate (ultimate).................................... 5.00 5.25 5.00
===================================================================================================================
CILCORP(a) and CILCO:
Discount rate at measurement date..................................... - 7.00% 7.75%
Expected return on plan assets........................................ - 9.00 9.00
Medical cost trend rate (initial)..................................... - 11.50 12.40
Medical cost trend rate (ultimate).................................... - 5.00 5.00
===================================================================================================================

(a) 2002 and 2001 amounts represent predecessor information.

151



Assumed healthcare cost trend rates have a significant effect on the
amounts reported for healthcare plans. In addition, we have plan limits on the
amount Ameren will contribute to future postretirement benefits. The following
table presents the effects of a one percent change in assumed healthcare cost
trend rates:




===================================================================================================================
1% Increase 1% Decrease
-------------------------------------------------------------------------------------------------------------------

Ameren:
Effect on net periodic cost..................................... $ 3 $ (3)
Effect on accumulated postretirement benefit obligation......... 37 (36)
===================================================================================================================


Other

Ameren, CIPS and CILCO sponsor 401(k) plans for eligible employees. The
plans allow employees to contribute a portion of their base pay in accordance
with specific guidelines. Ameren, CIPS and CILCO match a percentage of the
employee contributions up to certain limits. Ameren's and CILCO's matching
contributions to the 401(k) plans totaled $14 million and $1 million,
respectively, in 2003, and $14 million and $1 million, respectively, in 2002,
and $13 million and $1 million, respectively, in 2001. CIPS' matching
contributions to the 401(k) plan were less than $1 million in 2003, 2002 and
2001.


NOTE 12 - Stock-based Compensation

Ameren has a long-term incentive plan for eligible employees called the
Long-term Incentive Plan of 1998, which provides for the grant of options,
performance awards, restricted stock, dividend equivalents and stock
appreciation rights. Restricted stock awards were granted in 2003, 2002 and 2001
as a component of our compensation programs. We applied APB Opinion No. 25 in
accounting for our stock-based compensation for years prior to 2003. There have
not been any stock options granted since December 31, 2000. Effective January 1,
2003, we adopted SFAS No. 123. See Note 1 - Summary of Significant Accounting
Policies for further information.

Restricted Stock

Restricted stock awards may be granted under our long-term incentive plan.
Upon the achievement of certain performance levels, the restricted stock award
vests over a period of seven years, beginning at the date of grant, and includes
provisions requiring certain stock ownership levels based on position and
salary. An accelerated vesting provision is also included in this plan which
reduces the vesting period from seven years to three years. During 2003, 2002
and 2001, respectively, 152,956, 154,678 and 141,788 restricted stock awards
were granted. The weighted-average fair value for restricted stock awards
granted in 2003, 2002 and 2001 was $39.74, $42.50 and $39.60 per share,
respectively. We record unearned compensation (as a component of stockholders'
equity) equal to the market value of the restricted stock on the date of grant
and charge the unearned compensation to expense over the vesting period. In
accordance with SFAS No. 123, we recorded compensation expense relating to
restricted stock awards of approximately $5 million in 2003 (which included
accelerated expense of approximately $1 million related to employee
retirements), $2 million in 2002 (which included accelerated expense of
approximately $1 million related to our voluntary retirement program offered in
2002) and approximately $1 million in 2001.

Stock Options

Ameren

Options may be granted under our long-term incentive plan at a price not
less than the fair market value of the common shares at the date of grant.
Granted options vest over a period of five years, beginning at the date of
grant, and provide for accelerated exercising upon the occurrence of certain
events, including retirement. Outstanding options expire on various dates
through 2010. Subject to adjustment, four million shares have been authorized to
be issued or delivered under our long-term incentive plan. In accordance with
APB Opinion No. 25, no compensation expense was recognized related to our stock
options for 2002 and 2001. The pre-tax cost of weighted-average grant-date fair
value of options granted would have been approximately $2 million in each of the
years ended 2002 and 2001 had the fair value method under SFAS No. 123 been used
for options. The fair value method was used prospectively beginning January 1,
2003. See Note 1 - Summary of Significant Accounting Policies for further
information.

152



The following table presents Ameren stock option activity during 2003, 2002
and 2001:


===================================================================================================================
2003 2002 2001
-------------------------------------------------------------------------------
Weighted- Weighted- Weighted-
average average average
Exercise Exercise Exercise
Shares Price Shares Price Shares Price
-------------------------------------------------------------------------------------------------------------------

Outstanding at beginning of year. 1,977,453 $ 35.10 2,241,107 $ 35.23 2,430,532 $ 35.38
Granted.......................... - - - - - -
Exercised........................ 477,777 35.78 260,324 36.11 106,416 38.31
Cancelled or expired............. - - 3,330 43.00 83,009 35.77
-------------------------------------------------------------------------------------------------------------------
Outstanding at end of year....... 1,499,676 34.88 1,977,453 35.10 2,241,107 35.23
------------------------------------------------------------------------------------------------------------------
Exercisable at end of year....... 1,032,001 $ 36.00 901,187 $ 36.97 572,092 $ 38.74
===================================================================================================================

The following table presents additional information about stock options
outstanding at December 31, 2003:


==================================================================================================================
Exercise Outstanding Weighted-average Life Exercisable
Price Shares (Years) Shares
------------------------------------------------------------------------------------------------------------------

$ 31.00 676,650 5.1 326,700
35.50 800 1.6 800
35.875 25,030 1.3 25,030
36.625 407,000 4.4 289,275
38.50 59,042 3.0 59,042
39.25 265,464 3.7 265,464
39.8125 5,300 4.5 5,300
43.00 60,390 2.0 60,390
==================================================================================================================

The fair values of stock options were estimated using a binomial
option-pricing model with the following assumptions:


==================================================================================================================
Grant Risk-free Option Expected Expected
Date Interest Rate Term Volatility Dividend Yield
------------------------------------------------------------------------------------------------------------------

2/11/00 6.81% 10 years 17.39% 6.61%
2/12/99 5.44 10 years 18.80 6.51
6/16/98 5.63 10 years 17.68 6.55
4/28/98 6.01 10 years 17.63 6.55
2/10/97 5.70 10 years 13.17 6.53
2/7/96 5.87 10 years 13.67 6.32
==================================================================================================================


CILCORP

Prior to Ameren's acquisition of CILCORP, employees of CILCORP and CILCO
participated in the AES Stock Option Plan that provided for grants of stock
options to eligible participants. Under the terms of the plan, options were
issued to purchase shares of AES common stock at a price equal to 100% of the
market price at the date the option was granted. The options became eligible for
exercise under various schedules. The following table presents CILCORP stock
option activity during 2002 and 2001:


==================================================================================================================
Predecessor
--------------------------------------------------------------------
2002 2001
--------------------------------------------------------------------
Weighted- Weighted-
average average
Exercise Exercise
Shares Price Shares Price
--------------------------------------------------------------------

Outstanding at beginning of year............. 566,445 $ 18.28 43,404 $ 33.61
Granted...................................... - - 523,041 17.01
Exercised.................................... - - - -
Cancelled or expired......................... 18,003 28.61 - -
------------------------------------------------------------------------------------------------------------------
Outstanding at end of year................... 548,442 $ 17.94 566,445 $ 18.28
------------------------------------------------------------------------------------------------------------------
Exercisable at end of year................... 528,062 9,190
==================================================================================================================


153




Provisions of CILCORP bonus programs allowed for the cash-out of certain
AES stock options in the event of an acquisition of CILCORP. CILCO paid $3
million during 2003 for the cash-out of the entire 73,502 shares which were
eligible under these provisions. All other outstanding options under the AES
Stock Option Plan remain the sole obligation of AES.

No compensation expense was recognized in connection with the issuance of
options as all options have an exercise price equal to the market price of AES
common stock on the date of grant. The following table presents the assumptions
that were used in the Black-Scholes valuation method for shares granted:



==================================================================================================================
Year of Grant Risk-free Interest Rate Option Term Expected Volatility Expected Dividend Yield
------------------------------------------------------------------------------------------------------------------

2001 4.8% 8.2 years 86% 0%
===================================================================================================================


Had compensation expense been recognized using the fair value based method
under SFAS No. 123, pre-tax cost would have decreased by $3 million and $1
million in 2002 and 2001, respectively.


NOTE 13 - Income Taxes

The following table presents the effective tax rates on income before
income taxes as a result of total income tax expense for each of the companies
for 2003, 2002 and 2001:



==================================================================================================================
2003 2002 2001
-------------------------------------------------------------------------------------------------------------------

Ameren(a)............................................... 37% 38% 39%
UE...................................................... 36 36 38
CIPS.................................................... 18 39 38
Genco................................................... 40 39 38
CILCORP(b).............................................. 31 22 48
CILCO................................................... 38 36 38
==================================================================================================================

(a) Excludes amounts for CILCORP and CILCO prior to the acquisition date
of January 31, 2003.
(b) Represents predecessor information for 2002 and 2001.

The following table presents the principal reasons why the effective income
tax rate differed from the statutory federal income tax rate for the years ended
December 31, 2003, 2002, and 2001:




==================================================================================================================
Ameren(a) UE CIPS Genco CILCORP(b) CILCO
------------------------------------------------------------------------------------------------------------------

2003:
Statutory federal income tax rate: 35% 35% 35% 35% 35% 35%
Increases (decreases) from:
Depreciation differences ............... 1 1 1 - (1) (1)
Amortization of investment tax credit .. - - (4) (1) (4) (2)
State tax............................... 3 3 7 5 6 3
Resolution of state income tax matters.. (1) - (21) - - -
Other................................... (1) (3) - 1 (5) 3
------------------------------------------------------------------------------------------------------------------
Effective income tax rate.................. 37% 36% 18% 40% 31% 38%
==================================================================================================================
2002:
Statutory federal income tax rate: 35% 35% 35% 35% 35% 35%
Increases (decreases) from:
Depreciation differences ............... 2 2 1 (1) (4) (2)
Amortization of investment tax credit .. - - (3) (3) (5) (2)
State tax............................... 3 3 6 5 5 5
Other(c)................................ (2) (4) - 3 (9) -
------------------------------------------------------------------------------------------------------------------
Effective income tax rate.................. 38% 36% 39% 39% 22% 36%
------------------------------------------------------------------------------------------------------------------


154




------------------------------------------------------------------------------------------------------------------
Ameren(a) UE CIPS Genco CILCORP(b) CILCO
------------------------------------------------------------------------------------------------------------------

2001:
Statutory federal income tax rate: 35% 35% 35% 35% 35% 35%
Increases (decreases) from:
Depreciation differences ............... 2 2 - 1 4 8
Amortization of investment tax credit .. - - (1) (1) (4) (9)
State tax............................... 3 3 5 3 5 2
Goodwill amortization................... - - - - 13 -
Other................................... (1) (2) (1) - (5) 2
------------------------------------------------------------------------------------------------------------------
Effective income tax rate.................. 39% 38% 38% 38% 48% 38%
==================================================================================================================

(a) Excludes amounts for CILCORP and CILCO prior to the acquisition date
of January 31, 2003.
(b) Represents predecessor information for 2002 and 2001.
(c) CILCORP Other primarily includes affordable housing tax credits and
company-owned life insurance.

The following table presents the components of income tax expense for the
years ended December 31, 2003, 2002, and 2001:




==================================================================================================================
Ameren(a) UE CIPS Genco CILCORP(b) CILCO
------------------------------------------------------------------------------------------------------------------

2003:
Taxes currently payable
(principally federal)............ $ 313 $ 254 $ 25 $ 22 $ 19 $ 53
Deferred taxes (principally
federal)......................... 11 3 (18) 30 (6) (23)
Deferred investment tax credits,
amortization..................... (11) (6) (1) (2) (2) (2)
------------------------------------------------------------------------------------------------------------------
Total income tax expense........... $ 313 $ 251 $ 6 $ 50 $ 11 $ 28
------------------------------------------------------------------------------------------------------------------
Included in cumulative effect of
chaange in accounting principle.. (12) - - (12) (2) (16)
------------------------------------------------------------------------------------------------------------------
Included in Income Taxes on
Statement of Income.............. $ 301 $ 251 $ 6 $ 38 $ 9 $ 12
==================================================================================================================
2002:
Taxes currently payable
(principally federal)............ $ 172 $ 171 $ 33 $ (41) $ 14 $ 31
Deferred taxes
(principally federal):........... 74 28 (15) 63 (5) (3)
Deferred investment tax credits,
amortization..................... (9) (6) (1) (2) (2) (2)
------------------------------------------------------------------------------------------------------------------
Total income tax expense........... $ 237 $ 193 $ 17 $ 20 $ 7 $ 26
==================================================================================================================
2001:
Taxes currently payable
(principally federal)............ $ 281 $ 218 $ 45 $ 18 $ 8 $ 26
Deferred taxes (principally
federal)......................... 28 15 (17) 29 16 (16)
------------------------------------------------------------------------------------------------------------------
Deferred investment tax credits,
amortization..................... (8) (6) (1) (1) (2) (2)
------------------------------------------------------------------------------------------------------------------
Total income tax expense........... $ 301 $ 227 $ 27 $ 46 $ 22 $ 8
------------------------------------------------------------------------------------------------------------------
Included in cumulative effect of
change in accounting principle... 4 3 - 1 - -
------------------------------------------------------------------------------------------------------------------
Included in Income Taxes on
Statement of Income.............. $ 305 $ 230 $ 27 $ 47 $ 22 $ 8
==================================================================================================================

(a) Excludes amounts for CILCORP and CILCO prior to the acquisition date
of January 31, 2003.
(b) Represents predecessor information for 2002 and 2001.

With respect to UE, CIPS and CILCO, in accordance with SFAS No. 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


155



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.

We adjust our 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.

The following table presents the deferred tax assets and deferred tax
liabilities recorded as a result of temporary differences at December 31, 2003
and 2002:





====================================================================================================================
Ameren(a) UE CIPS Genco CILCORP(b) CILCO
--------------------------------------------------------------------------------------------------------------------

2003:
Accumulated deferred income taxes, net:
Depreciation............................. $ 1,437 $ 903 $ 86 $ 215 $ 238 $ 172
Tax basis step-up........................ - - - (162) - -
Regulatory assets (liabilities), net..... 393 412 (7) - (12) (12)
Capitalized taxes and expenses........... 388 135 59 54 93 (7)
Investment tax credits................... (80) (66) (7) (5) (2) (2)
Deferred benefit costs................... (223) (82) (4) (5) (122) (59)
Deferred intercompany tax gain........... - - 162 - - -
Other.................................... (60) (12) (20) 1 (12) 11
--------------------------------------------------------------------------------------------------------------------
Total net accumulated deferred income tax
liabilities.............................. $ 1,855 $ 1,290 $ 269 $ 98 $ 183 $ 103
====================================================================================================================
2002:
Accumulated deferred income taxes, net:
Depreciation............................. $ 1,168 $ 887 $ 83 $ 200 $ 164 $ 164
Tax basis step-up........................ - - - (175) - -
Regulatory assets (liabilities), net..... 485 492 (7) - (9) (9)
Capitalized taxes and expenses........... 282 135 52 49 109 3
Investment tax credits................... (85) (71) (8) (6) (7) (7)
Deferred benefit costs................... (79) (74) (1) (4) (75) (55)
Deferred intercompany tax gain........... - - 175 - - -
Other.................................... (59) (23) (12) 2 8 (1)
--------------------------------------------------------------------------------------------------------------------
Total net accumulated deferred income
tax liabilities.......................... $ 1,712 $ 1,346 $ 282 $ 66 $ 190 $ 95
====================================================================================================================

(a) Excludes amounts for CILCORP and CILCO prior to the acquisition date
of January 31, 2003; includes amounts for non-registrant Ameren
subsidiaries as well as intercompany eliminations.
(b) 2002 amounts represent predecessor information. CILCORP consolidates
CILCO and therefore includes CILCO in its balances.

NOTE 14 - Related Party Transactions

The Ameren Companies have engaged in, and may in the future engage in,
affiliate transactions in the normal course of business. These transactions
primarily consist of gas and power purchases and sales, services received or
rendered, borrowings and lendings. Transactions between affiliates are reported
as intercompany transactions on their financial statements, but are eliminated
in consolidation for Ameren's financial statements. Below are the material
related party agreements.

Electric Power Supply Agreements

Under two electric power supply agreements, Genco is obligated to supply to
Marketing Company, and Marketing Company, in turn, is obligated to supply to
CIPS, all of the energy and capacity needed by CIPS to offer service for resale
to its native load customers at rates specified by the ICC and to fulfill CIPS'
other obligations under all applicable federal and state tariffs or contracts.
Any power not used by CIPS is sold by Marketing Company under various long-

156





term wholesale and retail contracts. For native load, CIPS pays an annual
capacity charge per megawatt (the greater of its forecasted peak demand or
actual demand), plus an energy charge per megawatthour to Marketing Company. For
fixed-price retail customers outside of the tariff, CIPS pays Marketing Company
the price it receives under these contracts. The fees paid by CIPS to Marketing
Company for native load and fixed-price retail customers and any other sales by
Marketing Company under various long-term wholesale and retail contracts are
passed through to Genco. In addition, under the power supply agreement between
Genco and Marketing Company, Genco bears all generation-related operating risks,
including plant performance, operations, maintenance, efficiency, employee
retention and other matters. There are no guarantees, bargain purchase options
or other terms that may convey to CIPS the right to use the property and plant
of Genco. The agreement between CIPS and Marketing Company expires on December
31, 2004. The agreement between Genco and Marketing Company can be terminated by
either party upon at least one year's notice, but may not be terminated prior to
December 31, 2004. CIPS and Marketing Company plan to pursue a renewal or
extension of their agreement through December 31, 2006. A renewal or extension
of this agreement will depend on compliance with regulatory requirements in
effect at the time. This extension was required by the ICC in its order
approving Ameren's acquisition of CILCORP and CILCO.

In October 2003, in conjunction with CILCO's transfer to AERG of
substantially all of its generating assets, AERG entered into an electric power
supply agreement with CILCO to supply CILCO with sufficient power to meet its
native load requirements. CILCO pays a monthly capacity charge per megawatt
based on CILCO's system capacity requirements, plus an energy charge per
megawatthour. This agreement expires on December 31, 2004. AERG and CILCO plan
to pursue an extension of the power supply agreement through December 31, 2006.
A renewal or extension of this agreement will depend on compliance with
regulatory requirements in effect at the time. The ICC required this extension
in its order approving Ameren's acquisition of CILCORP and CILCO. Also in
conjunction with CILCO's generating asset transfer, a bilateral power supply
agreement was entered into between AERG and Marketing Company. This agreement
provides for AERG to sell excess power to Marketing Company for sales outside
the CILCO control area, and also allows Marketing Company to sell power to AERG
to fulfill CILCO's native load requirements.

CILCO had a power purchase agreement with CIPS for the purchase of 100
megawatts of capacity and firm energy for the months of January and June through
September under a contract which commenced in January 2000 and expired in
September 2003. This power was supplied by Genco through the Marketing Company,
CIPS and Genco electric power supply agreements discussed above.

UE and CIPS are parties to a power supply agreement with EEI to purchase
and sell capacity and energy. This agreement expires on December 31, 2005. Under
a separate agreement which expires on December 31, 2005, CIPS resold its
entitlements under the power supply agreement with EEI to Marketing Company.

UE has a 150 megawatt power supply agreement with Marketing Company which
expires December 31, 2005. UE also had a one year 450 megawatt power supply
agreement with Marketing Company which expired in May 2002 and another one year
200 megawatt power supply agreement with Marketing Company which expired in May
2003. Power supplied by Marketing Company to UE through these agreements is
being obtained from Genco.

Joint Dispatch Agreement

UE and Genco jointly dispatch electric generation under an amended joint
dispatch agreement. Under the agreement, each affiliate is required to serve
their load requirements from their own generation first, and then allow access
to any available generation to their affiliate. The joint dispatch agreement can
be terminated by either party by giving one year's notice on or after January 1,
2004. UE is currently in discussions with the MoPSC regarding possible
amendments to the joint dispatch agreement. Modifications to this agreement
could have a material adverse effect on UE or Genco.

Agency Agreements

Agency Agreements Any excess generation not used by UE or Genco through the
joint dispatch agreement is sold to third parties through Ameren Energy, serving
as each affiliate's agent. Ameren Energy also acts as agent on behalf of UE and
Genco to purchase power when they require it.

157



In December 2003, the SEC approved an agency agreement between AERG and
Marketing Company that authorizes Marketing Company, on behalf of AERG, to sell
AERG's excess generation, or purchase power when needed to supply AERG
customers.

Executory Tolling, Gas Sales and Transportation Agreements

Under an executory tolling agreement, CILCO purchases steam, chilled water
and electricity from Medina Valley. In connection with this agreement, Medina
Valley purchases gas to fuel its generating facility from AFS under a fuel
supply and services agreement. Prior to September 2003, Medina Valley purchased
gas from CILCORP Energy Services, Inc., a subsidiary of CILCORP which operates
gas management services that include commodity procurement and re-delivery to
retail customers, and gas transportation from CILCO.

Under a gas transportation agreement, Genco acquires gas transportation
service from UE for its Columbia, Missouri CTs. This agreement expires in
February 2016.

Support Services Agreements

Costs of support services provided by Ameren Services, Ameren Energy and
AFS to their affiliates, including wages, employee benefits, professional
services and other expenses are based on, or are an allocation of, actual costs
incurred.

Money Pools

Utility

UE, CIPS and CILCO have the ability to borrow from Ameren and each other
through a utility money pool agreement. In September 2003, CILCO received the
final required regulatory approval necessary for its participation in the
utility money pool. In October 2003, AERG also received the required regulatory
approval necessary to participate in the utility money pool. Ameren Services
administers the utility money pool and tracks internal and external funds
separately. Ameren Services also participates in the utility money pool. Ameren
and AERG may only participate in the utility money pool as lenders. Internal
funds are surplus funds contributed to the utility money pool from participants.
The primary source of external funds for the utility money pool is the UE
commercial paper program. Through the utility money pool, the pool participants
can access committed credit facilities at Ameren which totaled $600 million at
December 31, 2003. These facilities are in addition to UE's $154 million, CIPS'
$15 million and CILCO's $60 million in committed credit facilities which are
also available to the utility money pool participants. The total amount
available to the pool participants from the utility money pool at any given time
is reduced by the amount of borrowings by their affiliates, but increased to the
extent the pool participants have surplus funds or other external sources are
used to increase the available amounts. The availability of funds is also
determined by funding requirement limits established by the SEC under the PUHCA.
UE, CIPS, CILCO and Ameren Services rely on the utility money pool to coordinate
and provide for certain short-term cash and working capital requirements.
Borrowers receiving a loan under the utility money pool agreement must repay the
principal amount of such loan, together with accrued interest. The rate of
interest depends on the composition of internal and external funds in the
utility money pool. The average interest rate for borrowing under the utility
money pool for the year ended December 31, 2003 was 1.14% (2002 - 1.68%).

Non state-regulated

Genco and other non state-regulated Ameren subsidiaries have the ability to
borrow up to $600 million in total from Ameren through a non state-regulated
subsidiary money pool agreement. However, the total amount available to the pool
participants at any time is reduced by the amount of borrowings from Ameren by
its subsidiaries and is increased to the extent other pool participants advance
surplus funds to the non state-regulated subsidiary money pool, or external
sources are used to increase the available amounts. At December 31, 2003, $600
million was available through the non state-regulated subsidiary money pool,
excluding additional funds available through excess cash balances. The non
state-regulated subsidiary money pool was established to coordinate and provide
for short-term cash and working capital requirements of Ameren's non
state-regulated activities and is administered by Ameren Services. Borrowers
receiving a loan under the non state-regulated subsidiary money pool agreement
must repay the principal amount of such loan, together with accrued interest.
The rate of interest depends on the composition of internal and external funds
in the non

158



state-regulated subsidiary money pool. These rates are based on the cost of
funds used to fund money pool advances. Ameren and CILCORP are authorized to act
only as lenders to the non state-regulated subsidiary money pool. In October
2003, AERG received the required regulatory approval necessary to participate in
the non state-regulated subsidiary money pool. The average interest rate for
borrowing under the non state-regulated subsidiary money pool for year ended
December 31, 2003 was 8.84% (2002 - 7.60%).

CILCORP has been granted authority by the SEC under the PUHCA to borrow up
to $250 million directly from Ameren in a separate arrangement unrelated to the
money pools.

Intercompany Promissory Notes

Genco has subordinated intercompany promissory notes payable to CIPS and
Ameren that were issued in connection with the transfer of CIPS' generating
plants to Genco as part of deregulation in Illinois. The two subordinated
intercompany notes each have a term of five years, bear interest at 7% based on
a 10-year amortization schedule and are due May 1, 2005. Partial principal
payments are payable annually and interest expense is payable quarterly. The
maturities associated with the subordinated intercompany notes payable are $53
million for 2004 and $358 million for 2005.

Operating Lease

Under an operating lease agreement, Genco is leasing certain CTs at a
Joppa, Illinois site to its parent, Development Company. Under an electric power
supply agreement with Marketing Company, Development Company supplies the
capacity and energy from these leased units to Marketing Company, which in turn
supplies the energy to Genco.

UE

The following tables present the impact of related party transactions on
UE's Consolidated Statement of Income for the years ended December 31, 2003,
2002, and 2001, and on the Consolidated Balance Sheet as of December 31, 2003
and 2002, based primarily on the agreements discussed above:




===================================================================================================================
Statement of Income 2003 2002 2001
-------------------------------------------------------------------------------------------------------------------

Operating revenues from affiliates:
Power supply agreement with EEI.................... $ 6 $ 9 $ 1
Joint dispatch agreement with Genco................ 112 75 81
Agency agreement with Ameren Energy................ 202 165 278
Gas transportation agreement with Genco............ 1 1 -
-------------------------------------------------------------------------------------------------------------------
Total operating revenues........................... $ 321 $ 250 $ 360
-------------------------------------------------------------------------------------------------------------------
Fuel and purchased power expenses from affiliates:
Power supply agreements:
EEI.............................................. $ 58 $ 51 $ 41
Marketing Company................................ 9 17 60
Joint dispatch agreement with Genco................ 40 40 33
Agency agreement with Ameren Energy................ 51 104 247
-------------------------------------------------------------------------------------------------------------------
Total fuel and purchased power expenses............ $ 158 $ 212 $ 381
-------------------------------------------------------------------------------------------------------------------
Other operating expenses:
Support service agreements:
Ameren Services.................................. $ 165 $ 163 $ 127
Ameren Energy.................................... 22 33 43
AFS.............................................. 6 5 2
-------------------------------------------------------------------------------------------------------------------
Total other operating expenses..................... $ 193 $ 201 $ 172
-------------------------------------------------------------------------------------------------------------------
Interest expense:
Borrowings (advances) related to money pool........ $ 2 $ 1 $ (7)
===================================================================================================================


159





===================================================================================================================
Balance Sheet 2003 2002
-------------------------------------------------------------------------------------------------------------------

Assets:
Miscellaneous accounts and notes receivable........ $ 16 $ 25
Advances to money pool............................. 12 -
Liabilities:
Accounts payable and wages payable................. $ 46 $ 103
Borrowings from money pool......................... - 15
===================================================================================================================


CIPS

The following tables present the impact of related party transactions on
CIPS' Statement of Income for the years ended December 31, 2003, 2002, and 2001,
and on the Balance Sheet as of December 31, 2003 and 2002, based primarily on
the agreements discussed above:





===================================================================================================================
Statement of Income 2003 2002 2001
-------------------------------------------------------------------------------------------------------------------

Operating revenues from affiliates:
Power supply agreements:
Marketing Company................................. $ 29 $ 25 $ 20
CILCO............................................. 8 8 8
-------------------------------------------------------------------------------------------------------------------
Total operating revenues............................ $ 37 $ 33 $ 28
-------------------------------------------------------------------------------------------------------------------
Fuel and purchased power expenses from affiliates:
Power supply agreements:
Marketing Company................................. $ 312 $ 393 $ 413
EEI............................................... 29 25 20
-------------------------------------------------------------------------------------------------------------------
Total fuel and purchased power expenses............. $ 341 $ 418 $ 433
-------------------------------------------------------------------------------------------------------------------
Other operating expenses:
Support service agreements:
Ameren Services................................... $ 54 $ 61 $ 54
AFS............................................... 1 1 -
-------------------------------------------------------------------------------------------------------------------
Total other operating expenses..................... $ 55 $ 62 $ 54
-------------------------------------------------------------------------------------------------------------------
Interest (expense) income:
Note receivable from Genco.......................... $ 27 $ 31 $ 37
Borrowings (advances) related to money pool......... - (1) 4
===================================================================================================================




===================================================================================================================
Balance Sheet 2003 2002
-------------------------------------------------------------------------------------------------------------------

Assets:
Miscellaneous accounts and notes receivable.......... $ 10 $ 12
Advances to money pool................................ - 16
Promissory note receivable from Genco(a).............. 373 419
Tax receivable from Genco............................. 162 175
Liabilities:
Accounts payable and wages payable.................... $ 43 $ 63
Borrowings from money pool............................ 121 -
===================================================================================================================

(a) Amount includes current portion of $49 million as of December 31, 2003
(December 31, 2002 - $46 million).

160



Genco

The following tables present the impact of related party transactions on
Genco's Statement of Income for the years ended December 31, 2003, 2002, and
2001, and on the Balance Sheet as of December 31, 2003 and 2002, based primarily
on the agreements discussed above.




===================================================================================================================
Statement of Income 2003 2002 2001
-------------------------------------------------------------------------------------------------------------------

Operating revenues from affiliates:
Power supply agreements:
Marketing Company..................................... $ 632 $ 626 $ 623
EEI................................................... 4 4 1
Joint dispatch agreement with UE........................ 40 40 33
Agency agreement with Ameren Energy..................... 96 56 55
Operating lease with Development Company................ 10 10 10
-------------------------------------------------------------------------------------------------------------------
Total operating revenues ............................... $ 782 $ 736 $ 722
-------------------------------------------------------------------------------------------------------------------
Fuel and purchased power expenses from affiliates:
Joint dispatch agreement with UE........................ $ 112 $ 75 $ 81
Agency agreement with Ameren Energy..................... 28 30 41
Power purchase agreement with Marketing Company......... 2 2 3
Gas transportation agreement with UE.................... 1 1 -
-------------------------------------------------------------------------------------------------------------------
Total fuel and purchased power expenses................. $ 143 $ 108 $ 125
-------------------------------------------------------------------------------------------------------------------
Other operating expenses:
Support service agreements:
Ameren Services....................................... $ 18 $ 19 $ 9
Ameren Energy......................................... 11 16 19
AFS................................................... 2 2 1
-------------------------------------------------------------------------------------------------------------------
Total other operating expenses.......................... $ 31 $ 37 $ 29
-------------------------------------------------------------------------------------------------------------------
Interest expense:
Borrowings (advances) related to money pool............. $ 15 $ 6 $ (2)
Note payable to CIPS.................................... 27 31 37
Note payable to Ameren.................................. 3 3 3
===================================================================================================================




===================================================================================================================
Balance Sheet 2003 2002
-------------------------------------------------------------------------------------------------------------------

Assets:
Miscellaneous accounts and notes receivable.............. $ 78 $ 68
Liabilities:
Accounts payable and wages payable........................ $ 22 32
Interest payable.......................................... 7 7
Promissory note payable to CIPS(a)........................ 373 420
Promissory note payable to Ameren(b)...................... 38 42
Tax payable to CIPS....................................... 162 175
Borrowings from money pool................................ 124 191
===================================================================================================================

(a) Amount includes current portion of $49 million as of December 31, 2003
(December 31, 2002 - $46 million).
(b) Amount includes current portion of $4 million as of December 31, 2003
(December 31, 2002 - $4 million).

161


CILCORP

The following tables present the impact of related party transactions on
CILCORP's Consolidated Statement of Income for the years ended December 31,
2003, 2002, and 2001, and on the Consolidated Balance Sheet as of December 31,
2003 and 2002, based primarily on the agreements discussed above.


===================================================================================================================
Statement of Income(a)(b) 2003 2002 2001
-------------------------------------------------------------------------------------------------------------------

Operating revenues from affiliates:
Gas supply and services agreement with Medina Valley.... $ 12 $ 14 $ 8
-------------------------------------------------------------------------------------------------------------------
Total operating revenues................................ $ 12 $ 14 $ 8
-------------------------------------------------------------------------------------------------------------------
Fuel and purchased power expenses from affiliates:
Executory tolling agreement with Medina Valley.......... $ 26 $ 25 $ 17
Power purchase agreement with CIPS...................... 8 8 8
Bilateral supply agreement with Marketing Company....... 1 - -
-------------------------------------------------------------------------------------------------------------------
Total fuel and purchased power expenses................. $ 35 $ 33 $ 25
-------------------------------------------------------------------------------------------------------------------
Other operating expenses:
Support services agreements:
Ameren Services....................................... $ 15 $ - $ -
AFS................................................... 2 - -
-------------------------------------------------------------------------------------------------------------------
Total other operating expenses.......................... $ 17 $ - $ -
-------------------------------------------------------------------------------------------------------------------
Interest expense:
Note payable to Ameren.................................. $ 1 $ - $ -
Borrowings related to money pool........................ - - -
===================================================================================================================

(a) 2002 and 2001 amounts represent predecessor information. 2003 amounts
include January 2003 predecessor information which included $2 million
in operating revenues and $3 million in purchased power associated
with the executory tolling agreement with Medina Valley.
(b) CILCORP consolidates CILCO and therefore includes CILCO amounts in its
balances.


===================================================================================================================
Balance Sheet(a) 2003 2002
-------------------------------------------------------------------------------------------------------------------

Assets:
Miscellaneous accounts and notes receivable.............. $ 12 $ 2
Liabilities:
Accounts payable.......................................... $ 16 $ 3
Note payable to Ameren.................................... 46 -
Borrowings from money pool................................ 149 -
===================================================================================================================

(a) CILCORP consolidates CILCO and therefore includes CILCO amounts in its
balances.

CILCO

The following tables present the impact of related party transactions on
CILCO's Consolidated Statement of Income for the years ended December 31, 2003,
2002, and 2001, and on the Consolidated Balance Sheet as of December 31, 2003
and 2002, based primarily on the various agreements discussed above:



===================================================================================================================
Statement of Income(a) 2003 2002 2001
------------------------------------------------------------ ---------------- ------------------ ------------------

Operating revenues from affiliates:
Gas transportation agreement with Medina Valley....... $ - $ 1 $ -
-------------------------------------------------------------------------------------------------------------------
Total operating revenues.............................. $ - $ 1 $ -
-------------------------------------------------------------------------------------------------------------------
Fuel and purchased power expenses from affiliates:
Executory tolling agreement with Medina Valley........ $ 26 $ 25 $ 17
Power purchase agreement with CIPS.................... 8 8 8
Bilateral supply agreement with Marketing Company..... 1 - -
-------------------------------------------------------------------------------------------------------------------
Total fuel and purchased power expenses............... $ 35 $ 33 $ 25
-------------------------------------------------------------------------------------------------------------------
Other operating expenses:
Support services agreements:
Ameren Services..................................... $ 15 $ - $ -
AFS................................................. 2 - -
-------------------------------------------------------------------------------------------------------------------
Total other operating expenses........................ $ 17 $ - $ -
-------------------------------------------------------------------------------------------------------------------
Interest expense:
Borrowings related to money pool...................... $ - $ - $ -
===================================================================================================================

(a) 2002 and 2001 amounts represent predecessor information. 2003 amounts
include January 2003 predecessor information which included $2 million
in operating revenues and $3 million in purchased power associated
with the agreement with Medina Valley.

162





===================================================================================================================
Balance Sheet 2003 2002
-------------------------------------------------------------------------------------------------------------------

Assets:
Miscellaneous accounts and notes receivable............. $ 6 $ -
Liabilities:
Accounts payable ....................................... $ 23 $ 3
Borrowings from money pool.............................. 149 -
===================================================================================================================



NOTE 15 - Commitments and Contingencies

As a result of issues generated in the course of daily business, we are
involved in legal, tax and regulatory proceedings before various courts,
regulatory commissions and governmental agencies, some of which involve
substantial amounts of money. We believe that the final disposition of these
proceedings, except as otherwise disclosed in these notes to our financial
statements, will not have an adverse material effect on our financial position,
results of operations or liquidity.

Capital Expenditures

See Note 3 - Rate and Regulatory Matters for information regarding Ameren's
and UE's capital expenditure commitments, which were agreed upon in relation to
UE's 2002 Missouri electric rate case settlement and UE's 2003 Missouri gas rate
case settlement. Additionally, UE's future estimated capital expenditures
include the addition of new CTs with approximately 330 megawatts of capacity at
its Venice, Illinois location by the end of 2005. Total costs expected to be
incurred for these units approximate $140 million of which approximately $77
million was committed as of December 31, 2003.

Fuel Purchase Commitments

To supply a portion of the fuel requirements of our generating plants, we
have entered into various long-term commitments for the procurement of coal,
natural gas and nuclear fuel. In addition, we have entered into various
long-term commitments for the purchase of electricity. The following table
presents the total estimated fuel purchase commitments at December 31, 2003:



===============================================================================================================
Coal Gas Nuclear Electric
Capacity Total
---------------------------------------------------------------------------------------------------------------

Ameren:(a)
2004................... $ 703 $ 267 $ 38 $ 25 $ 1,033
2005................... 516 178 11 23 728
2006................... 419 93 9 23 544
2007................... 266 21 1 23 311
2008................... 273 5 10 23 311
Thereafter(b).......... 202 5 10 2 219
---------------------------------------------------------------------------------------------------------------
Total ................. $ 2,379 $ 569 $ 79 $ 119 $ 3,146
===============================================================================================================
UE:
2004................... $ 355 $ 57 $ 38 $ 22 $ 472
2005................... 251 42 11 22 326
2006................... 187 23 9 22 241
2007................... 104 4 1 22 131
2008................... 108 - 10 22 140
Thereafter(b).......... 69 - 10 - 79
---------------------------------------------------------------------------------------------------------------
Total $ 1,074 $ 126 $ 79 $ 110 $ 1,389
---------------------------------------------------------------------------------------------------------------
CIPS:
2004................... $ - $ 79 $ - $ - $ 79
2005................... - 59 - - 59
2006................... - 30 - - 30
2007................... - 5 - - 5
2008................... - 1 - - 1
Thereafter(b).......... - - - - -
---------------------------------------------------------------------------------------------------------------
Total.................. $ - $ 174 $ - $ - $ 174
---------------------------------------------------------------------------------------------------------------

163




---------------------------------------------------------------------------------------------------------------
Coal Gas Nuclear Electric
Capacity Total
---------------------------------------------------------------------------------------------------------------

Genco:
2004................... $ 176 $ 16 $ - $ - $ 192
2005................... 164 14 - - 178
2006................... 161 12 - - 173
2007................... 119 4 - - 123
2008................... 122 4 - - 126
Thereafter(b).......... 105 5 - - 110
---------------------------------------------------------------------------------------------------------------
Total.................. $ 847 $ 55 $ - $ - $ 902
===============================================================================================================
CILCORP:
2004................... $ 91 $ 115 $ - $ 1 $ 207
2005................... 48 63 - 1 112
2006................... 28 28 - 1 57
2007................... 17 8 - 1 26
2008................... 17 - - 1 18
Thereafter(b).......... 11 - - 2 13
----------------------------------------------------------------------------------------------------------------
Total ................. $ 212 $ 214 $ - $ 7 $ 433
================================================================================================================
CILCO:
2004................... $ 91 $ 115 $ - $ 1 $ 207
2005................... 48 63 - 1 112
2006................... 28 28 - 1 57
2007................... 17 8 - 1 26
2008................... 17 - - 1 18
Thereafter(b).......... 11 - - 2 13
----------------------------------------------------------------------------------------------------------------
Total.................. $ 212 $ 214 $ - $ 7 $ 433
================================================================================================================

(a) Includes amounts for non-registrant Ameren subsidiaries as well as
intercompany eliminations.
(b) Commitments for coal, natural gas, nuclear fuel and the purchase of
electricity are until 2010, 2012, 2009 and 2010, respectively.

Nuclear Plant Insurance Coverage

The following table presents insurance coverage at UE's Callaway Nuclear
Plant at December 31, 2003:




===================================================================================================================
Maximum Maximum Assessments
Type and Source of Coverage Coverages for Single Incidents
-------------------------------------------------------------------------------------------------------------------

Public liability:
American Nuclear Insurers...................... $ 300 $ -
Pool participation............................. 10,562 101(a)
-------------------------------------------------------------
$ 10,862(b) $ 101
Nuclear worker liability:
American Nuclear Insurers...................... $ 300(c) $ 4
Property damage:
Nuclear Electric Insurance Ltd................. $ 2,750(d) $ 21
Replacement power:
Nuclear Electric Insurance Ltd................. $ 490(e) $ 7
===================================================================================================================

(a) Retrospective premium under the Price-Anderson liability provisions of
the Atomic Energy Act of 1954, as amended (Price-Anderson). This is
subject to retrospective assessment with respect to loss from an
incident at any U.S. reactor, payable at $10 million per year.
Price-Anderson expired in August 2002 and the temporary extension
expired December 31, 2003. Renewal legislation is pending before
Congress. Until Price-Anderson is renewed, its provisions continue to
apply to existing nuclear plants.
(b) Limit of liability for each incident under Price-Anderson.
(c) Industry limit for potential liability from workers claiming exposure
to the hazards of nuclear radiation.
(d) Includes premature decommissioning costs.
(e) Weekly indemnity of $3.5 million for 52 weeks, which commences after
the first eight weeks of an outage, plus $2.8 million per week for 110
weeks thereafter.

Price-Anderson limits the liability for claims from an incident involving
any licensed U.S. nuclear facility. The limit is based on the number of licensed
reactors and is adjusted at least every five years based on the Consumer Price
Index. Utilities owning a nuclear reactor cover this exposure through a
combination of private insurance and mandatory participation in a financial
protection pool, as established by Price-Anderson.

164


If losses from a nuclear incident at the Callaway Nuclear Plant exceed the
limits of, or are not subject to, insurance, or if coverage is not available, we
self-insure the risk. Although we have no reason to anticipate a serious nuclear
incident, if one did occur, it could have a material, but indeterminable,
adverse effect on our financial position, results of operations or liquidity.

Leases

The following table presents our lease obligations at December 31, 2003:



===================================================================================================================
Less than 1 - 3 3 - 5 After 5
Total 1 Year Years Years Years
-------------------------------------------------------------------------------------------------------------------

Ameren:(a)
Capital leases(b)........................... $ 167 $ 70 $ 7 $ 8 $ 82
Operating leases(c)......................... 146 20 25 21 80
-------------------------------------------------------------------------------------------------------------------
Total lease obligations..................... $ 313 $ 90 $ 32 $ 29 $ 162
===================================================================================================================
UE:
Capital leases(b)........................... $ 167 $ 70 $ 7 $ 8 $ 82
Operating leases(c)......................... 112 9 17 16 70
-------------------------------------------------------------------------------------------------------------------
Total lease obligations..................... $ 279 $ 79 $ 24 $ 24 $ 152
===================================================================================================================
CIPS:
Operating leases(c)......................... $ - $ - $ - $ - $ -
===================================================================================================================
Genco:
Operating leases(c)......................... $ 11 $ 1 $ 1 $ 1 $ 8
===================================================================================================================
CILCORP:
Operating leases(c)......................... $ 9 $ 2 $ 3 $ 2 $ 2
===================================================================================================================
CILCO:
Operating leases(c)......................... $ 9 $ 2 $ 3 $ 2 $ 2
===================================================================================================================

(a) Includes amounts for non-registrant Ameren subsidiaries as well as
intercompany eliminations.
(b) See Note 6 - Long-term Debt and Equity Financings for further
discussion.
(c) Amounts related to certain real estate leases and railroad licenses
have indefinite payment periods. The amounts for these items are
included in the less than 1 year, 1-3 years and 3-5 years columns.
Amounts for after 5 years are not included in the total amount due to
the indefinite periods. The estimated obligation for after 5 years is
$2 million annually for both the real estate leases and the railroad
licenses.

We lease various facilities, office equipment, plant equipment and railcars
under operating leases. We also have a capital lease relating to UE's Peno Creek
CT facility. We had a capital lease relating to nuclear fuel for UE's Callaway
Nuclear Plant which was terminated early in February 2004. See Note 6 -
Long-term Debt and Equity Financings for further information on this nuclear
fuel lease. The following table presents total rental expense, included in Other
Operations and Maintenance expenses, as of December 31, 2003, 2002, and 2001:



===================================================================================================================
2003 2002 2001
-------------------------------------------------------------------------------------------------------------------

Ameren(a)................................................. $ 61 $ 21 $ 22
UE........................................................ 59 24 19
CIPS...................................................... 9 10 9
Genco..................................................... 2 2 4
CILCORP(b)................................................ 5 5 4
CILCO .................................................... 5 5 4
===================================================================================================================

(a) Excludes amounts for CILCORP and CILCO prior to the acquisition date
of January 31, 2003; includes amounts for non-registrant Ameren
subsidiaries as well as intercompany eliminations.
(b) 2002 and 2001 amounts represent predecessor information.


Environmental Matters

We are subject to various environmental regulations by federal, state and
local authorities. From the beginning phases of siting and development, to the
ongoing operation of existing or new electric generating, transmission and
distribution facilities, our activities involve compliance with diverse laws and
regulations that address emissions and impacts to air and water, protected and
cultural resources (such as wetlands, endangered species, and
archeological/historical resources), chemical and waste handling and noise
impacts. Our activities require complex and

165



often lengthy processes to obtain approvals, permits or licenses for new,
existing or modified facilities. Additionally, the use and handling of various
chemicals or hazardous materials (including wastes) requires preparation of
release prevention plans and emergency response procedures. As new laws or
regulations are promulgated, we assess their applicability and implement the
necessary modifications to our facilities or their operations, as required. The
more significant matters are discussed below.

Clean Air Act

Both federal and state laws require significant reductions in SO2 and NOx
emissions that result from burning fossil fuels. The Clean Air Act creates a
marketable commodity called an SO2 "allowance." Each allowance gives the owner
the right to emit one ton of SO2. All existing generating facilities have been
allocated allowances based on past production and the statutory emission
reduction goals. If additional allowances are needed for new generating
facilities, they can be purchased from facilities having excess allowances or
from SO2 allowance banks. Our generating facilities comply with the SO2
allowance caps through the purchase of allowances, the use of low sulfur fuels
or through the application of pollution control technology.

The EPA issued a rule in October 1998 requiring 22 eastern states and the
District of Columbia to reduce emissions of NOx in order to reduce ozone in the
eastern United States. Among other things, the EPA's rule establishes an ozone
season, which runs from May through September, and a NOx emission budget for
each state, including Illinois. The EPA rule requires states to implement
controls sufficient to meet their NOx budget by May 31, 2004. In February 2002,
the EPA proposed similar rules for Missouri. These rules are expected to be
issued as final rules in the spring of 2004. The compliance date for the
Missouri rules is expected to be May 1, 2007.

As a result of these requirements, we have installed a variety of NOx
control technologies on our power plant boilers over the past several years. The
following table presents our future estimated capital expenditures to comply
with the final NOx regulations in Missouri and Illinois between 2004 and 2008:




===================================================================================================================

Ameren......................................................................... $210 million to $250 million
UE............................................................................. $160 million to $180 million
CIPS........................................................................... -
Genco.......................................................................... $ 50 million to $ 70 million
CILCORP........................................................................ -
CILCO.......................................................................... -
===================================================================================================================


These estimates include the assumption that the regulations will require
the installation of selective catalytic reduction technology on some of our
units, as well as additional controls.

In 2004, we are seeking regulatory approval to transfer at net book value
approximately 550 megawatts (approximately $250 million) of generating capacity
from Genco to UE, to satisfy the requirements of UE's 2002 Missouri electric
rate case settlement and to meet future UE generating capacity needs. See Note 3
- - Rate and Regulatory Matters to our financial statements for further
information.

On December 31, 2002, the EPA published in the Federal Register revisions
to the NSR programs under the Clean Air Act, governing pollution control
requirements for new fossil-fueled generating plants and major modifications to
existing plants. On October 27, 2003, the EPA published a set of associated
rules governing the routine maintenance, repair and replacement of equipment at
power plants. Various northeastern states, the state of Illinois and others,
have filed a petition with the United States District Court for the District of
Columbia challenging the legality of the revisions to these NSR programs. Other
states, various industries and environmental groups have filed to intervene in
this challenge. At this time, we are unable to predict the impact if this
challenge is successful on our future financial position, results of operations
or liquidity.

In mid-December 2003, the EPA issued proposed regulations with respect to
SO2 and NOx emissions (the "Interstate Air Quality Rule") and mercury emissions
from coal-fired power plants. These new rules, if adopted, will require
significant additional reductions in these emissions from our power plants in
phases, beginning in 2010. The rules are currently under a public review and
comment period and may change before being issued as final late in 2004 or early

166




2005. The following table presents preliminary estimated capital costs based on
current technology on the Ameren systems to comply with the SO2 and NOx rules,
as proposed:




===================================================================================================================
2010 2015
-------------------------------------------------------------------------------------------------------------------

Ameren...................................... $400 million to $600 million $500 million to $800 million
UE.......................................... $250 million to $350 million $300 million to $500 million
CIPS........................................ - -
Genco....................................... $140 million to $220 million $150 million to $200 million
CILCORP(a).................................. $ 10 million to $30 million $ 50 million to $100 million
CILCO....................................... $ 10 million to $30 million $ 50 million to $100 million
===================================================================================================================

(a) CILCORP consolidates CILCO and therefore includes CILCO amounts in its
balances.

The proposed mercury regulations contain a number of options and the final
control requirements are highly uncertain. Ameren anticipates additional capital
costs to comply with the mercury rules could be up to $100 million by 2010, with
UE incurring approximately two-thirds of the costs and Genco incurring most of
the remaining costs. Depending upon the final mercury rules, similar additional
costs would be incurred between 2010 and 2018.

Multi-Pollutant Legislation

The United States Congress has been working on legislation to consolidate
the numerous air pollution regulations facing the utility industry. Continued
deliberation on this "multi-pollutant" legislation is expected in 2004. The cost
to comply with such legislation, if enacted, is expected to be covered by the
modifications to our facilities required by combined Mercury and Interstate Air
Quality Rules described above.

Global Climate

Future initiatives regarding greenhouse gas emissions and global warming
continue to be the subject of much debate. The related Kyoto Protocol was signed
by the United States but has since been rejected by the President, who instead
has asked for an 18% decrease in carbon intensity on a voluntary basis. Future
initiatives on this issue and the ultimate effects of the Kyoto Protocol and the
President's initiatives on us are unknown. As a result of our diverse fuel
portfolio, our contribution to greenhouse gases varies. Coal-fired power plants,
however, are significant sources of carbon dioxide emissions, a principal
greenhouse gas. Therefore, our compliance costs with any mandated federal
greenhouse gas reductions in the future could have a material impact on our
future financial position, results of operations or liquidity.

Clean Water Act

In April 2002, the EPA proposed rules under the Clean Water Act that
require that cooling water intake structures reflect the best technology
available for minimizing adverse environmental impacts. These rules pertain to
existing generating facilities that currently employ a cooling water intake
structure whose flow exceeds 50 million gallons per day. The proposed rule may
require us to install additional intake screens or other protective measures, as
well as extensive site specific study and monitoring requirements. There is also
the possibility that the proposed rules may lead to the installation of cooling
towers on some of our facilities. Final rules are expected by March 2004. Our
compliance costs associated with the final rules are unknown, but are not
expected to be material.

Remediation

We are involved in a number of remediation actions to clean up hazardous
waste sites as required by federal and state law. Such statutes require that
responsible parties fund remediation actions regardless of fault, legality of
original disposal, or ownership of a disposal site. UE and CIPS have been
identified by the federal or state governments as a potentially responsible
party at several contaminated sites. Several of these sites involve facilities
which were transferred by CIPS to Genco in May 2000 and were transferred by
CILCO to AERG in October 2003. As part of each transfer, the transferor (CIPS or
CILCO) has contractually agreed to indemnify the transferee (Genco or AERG) for
remediation costs associated with pre-existing environmental contamination at
the transferred sites.

167



CIPS, CILCO and UE own or are otherwise responsible for 13, four and one
former MGP sites in Illinois, respectively. All of these sites are in various
stages of investigation, evaluation and remediation. Under its current schedule,
Ameren anticipates that remediation at these sites should be completed by 2010.
The ICC permits each company to recover remediation and litigation costs
associated with their former MGP sites located in Illinois from their Illinois
electric and natural gas utility customers through environmental riders. To be
recoverable, such costs must be prudently and properly incurred and are subject
to annual reconciliation review by the ICC. The total costs deferred, net of
recoveries from insurers and through environmental adjustment rate riders, at
December 31, 2003, were $26 million, $4 million and $1 million for CIPS, CILCO
and UE, respectively.

In addition, UE owns or is otherwise responsible for 10 MGP sites in
Missouri and one in Iowa. Unlike in Illinois, UE does not have in effect in
Missouri a rate rider mechanism which permits remediation costs associated with
MGP sites to be recovered from utility customers, and UE does not have any
retail utility operations in Iowa. Because of the unknown and unique
characteristics of each site (such as amount and type of residues present,
physical characteristics of the site and the environmental risk), and uncertain
regulatory requirements, we are not able to determine the maximum liability for
the remediation of these sites. UE has recorded a $12 million liability as of
December 31, 2003, representing its estimated minimum obligation. At this time,
we are unable to determine what portion of these costs, if any, will be eligible
for recovery from insurance carriers.

In June 2000, the EPA notified UE and numerous other companies that former
landfills and lagoons in Sauget, Illinois, may contain soil and groundwater
contamination. These sites are known as Sauget Area 1 and Sauget Area 2. From
approximately 1926 until 1976, UE operated a power generating facility adjacent
to Sauget Area 2 and currently owns and operates electric transmission and
distribution facilities in or near Sauget Areas 1 and 2.

In September 2000, the DOJ was granted leave by the United States District
Court - Southern District of Illinois to add numerous additional parties,
including UE, to a pre-existing lawsuit between the government and others. The
government seeks recovery of response costs under CERCLA (Superfund), incurred
in connection with the remediation of Sauget Area 1. In October 2003, the
government dismissed UE as a party to the lawsuit and UE considers the Sauget
Area 1 litigation closed.

In September 2001, the EPA proposed in the Federal Register that Sauget
Area 1 and Sauget Area 2 be listed on the National Priorities List. The
inclusion of a site on this list allows the EPA to access Superfund trust monies
to fund site remediations. With respect to Sauget Area 2, UE has joined with
other potentially responsible parties to evaluate the extent of potential
contamination. We are unable to predict the ultimate impact of the Sauget Area 2
site on our financial position, results of operations or liquidity.

In October 2002, UE was included in a Unilateral Administrative Order list
of potentially liable parties for groundwater contamination for a portion of the
Sauget Area 2 site. The Unilateral Administrative Order encompasses the
groundwater contamination releasing to the Mississippi River adjacent to
Monsanto Chemical Company's (now known as Solutia's) former chemical waste
landfill and the resulting impact area in the Mississippi River. UE is being
asked to participate in response activities that involve the installation of a
barrier wall around a chemical waste site with three recovery wells to divert
groundwater flow. The projected cost for this remedy method is approximately $26
million. In November 2002, UE sent a letter to the EPA asserting its defenses to
the Unilateral Administrative Order and requested its removal from the list of
potentially responsible parties under the Unilateral Administrative Order.
Solutia agreed to comply with the Unilateral Administrative Order. However, in
December 2003, Solutia filed for bankruptcy protection and is seeking to
discharge its environmental liabilities. As the status of future remediation at
Sauget Area 2 or compliance with the Unilateral Administrative Order is
uncertain, we are unable to predict the ultimate impact of the Sauget Area 2
site on our financial position, results of operations or liquidity.

In October 2002, CILCO submitted a corrective action plan to the Illinois
Environmental Protection Agency (Illinois EPA) in accordance with permit
conditions to address ground water issues associated with the recycle pond and
ash ponds at the Duck Creek power plant facility. In January 2003, the Illinois
EPA accepted portions of the plan but rejected other portions. Additional
discussions with the Illinois EPA will be necessary to develop an acceptable
plan. CILCORP and CILCO both have a liability of $8 million at December 31,
2003, included on their Consolidated Balance Sheets for the estimated cost of
the remediation effort to treat and discharge the recycle system water in order
to address these ground water issues. Future CILCO capital expenditures at Duck
Creek will entail installation of a bypass water

168



line and construction of a landfill and a new pond. CILCO estimates future
capital expenditures for the indicated activities could range from $19 million
to $30 million by 2008.

In addition, our operations, or that of our predecessor companies, involve
the use, disposal and, in appropriate circumstances, the cleanup of substances
regulated under environmental protection laws. We are unable to determine the
impact these actions may have on our financial position, results of operations
or liquidity.

Waste Disposal

On July 30, 2002, the Illinois Attorney General's Office advised us that it
would be commencing an enforcement action concerning an inactive waste disposal
site near Coffeen, Illinois, which is the location of a disposal facility
permitted by the Illinois EPA to receive fly ash from Genco's Coffeen power
plant. The Illinois Attorney General also notified the disposal facility's
current and former owners as to the proposed enforcement action. The Attorney
General advised that it may initiate an action under CERCLA (Superfund) to
recover past costs incurred at the site (approximately $0.3 million) and to
obtain a declaratory judgment as to liability for future costs. Neither Genco,
the current owner of the Coffeen power plant, nor CIPS, the prior owner of the
Coffeen power plant, owned or operated the disposal facility. We believe that
this matter will not have a material adverse effect on Ameren's, CIPS or Genco's
financial position, results of operations or liquidity.

Noise-related Matters

On July 8, 2003, Genco and its parent company, Development Company, as well
as U.S. Can Company, filed a complaint in the Circuit Court of Cook County,
Illinois, Chancery Division, against the Village of Bartlett, Illinois, the
Village Trustees, and Realen Homes, L.P., a Pennsylvania limited partnership,
seeking a declaratory judgment and/or writ of certiorari to invalidate decisions
by the Village of Bartlett on June 3, 2003, to annex and rezone properties for a
proposed project to be developed by Realen Homes. The project would consist of
approximately 210 single family and 119 townhouse units on land located across
from Genco's CTs, U.S. Can Company's plant and other industrial facilities in
Elgin, Illinois. The proposed residential project could impact, among other
things, Genco's ability to meet certain state and local noise standards. On
March 3, 2004, Genco, Development Company, the Village of Bartlett and Realen
Homes, L.P., agreed to a settlement of the lawsuit by the terms of which the
parties, among other things, agreed to a dismissal of the complaint, as then
amended, and entered into an easement and restrictive covenant agreement
pertaining to the transmissioin of noise and light from the property where
Genco's CTs are located. In a related matter, on October 28, 2003, Genco filed a
rulemaking proceeding before the Illinois Pollution Control Board seeking site
specific noise limitations for its CTs in Elgin, Illinois. The new limitations,
if adopted by the Illinois Pollution Control Board, would allow Genco to meet
Illinois noise requirements in a newly proposed residential area. The Illinois
Pollution Control Board held a hearing on this rulemaking proceeding on January
22, 2004. A ruling is anticipated in May 2004.

Asbestos-Related Litigation

Ameren, UE, CIPS, Genco and CILCO have been named, along with numerous
other parties, in a number of lawsuits which have been filed by certain
plaintiffs claiming varying degrees of injury from asbestos exposure. Most have
been filed in the Circuit Court of Madison County, Illinois. The number of total
defendants named in each case is significant with as many as 110 parties named
in a case to as few as six. However, the average number of parties is 60 in the
cases that were pending as of December 31, 2003.

The claims filed against Ameren, UE, CIPS, Genco and CILCO allege injury
from asbestos exposure during the plaintiffs' activities at our electric
generating plants. In the case of CIPS, its former plants are now owned by
Genco, and in the case of CILCO, most of its former plants are now owned by
AERG. As a part of the transfer of ownership of the generating plants, the
transferor (CIPS or CILCO) has contractually agreed to indemnify the transferee
(Genco or AERG) for liabilities associated with asbestos-related claims arising
from activities prior to the transfer. Each lawsuit seeks unspecified damages in
excess of $50,000, which, if proved, typically would be shared among the named
defendants.

169



The following table presents the status of the asbestos-related lawsuits
that have been filed against the Ameren Companies as of December 31, 2003:




===================================================================================================================
Specifically Named as Defendant
-----------------------------------------------------------------------
Total(a) Ameren UE CIPS Genco CILCO
-------------------------------------------------------------------------------------------------------------------

Filed.......................... 178 15 121 68 2 13
Settled........................ 31 - 22 11 - 1
Dismissed...................... 67 2 50 21 - 1
Pending........................ 80 13 49 36 2 11
===================================================================================================================

(a) Addition of the numbers in the individual columns does not equal the
total column because some of the lawsuits name multiple Ameren
entities as defendants.

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

Other Matters

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

On December 10, 2002, EPMI filed a complaint against AES, Constellation New
Energy, Inc., formerly known as AES New Energy Inc., and CILCO in the U.S.
Bankruptcy Court for the Southern District of New York. With respect to CILCO,
EPMI alleges that it is owed $31.2 million under the Master Agreement. CILCO
disputes that any amount is owed EPMI based on the clear language of the Master
Agreement, Section 553 of the Bankruptcy Code and EPMI's misconduct prior to
entering into the Master Agreement and continuing through the date of its
bankruptcy filing. EPMI's complaint against CILCO and others is part of a large
class of claims that have been stayed pending mandatory court ordered mediation.
Mediation sessions are ongoing and the parties are continuing to discuss
potential settlement. AES has agreed to undertake CILCO's defense in this
proceeding and intends to vigorously contest these claims. Due to CILCO's
contractual and other defenses to EPMI's claims, as well as certain provisions
related to the sale of CILCO to Ameren, we do not believe the results of this
litigation will have a material adverse effect on CILCO's financial position,
results of operations or liquidity.

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

170



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

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

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

Regulation

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, we are
unable to predict the impact of these changes on our future financial position,
results of operations or liquidity. See Note 3 - Rate and Regulatory Matters for
further information.


NOTE 16 - Callaway Nuclear Plant

Under the Nuclear Waste Policy Act of 1982, the DOE is responsible for the
permanent storage and disposal of spent nuclear fuel. The DOE currently charges
one mill, or 1/10 of one cent, per nuclear-generated kilowatthour sold for
future disposal of spent fuel. Pursuant to this Act, UE collects one mill from
its electric customers for each kilowatthour of electricity that it generates
from its Callaway Nuclear Plant. Electric utility rates charged to customers
provide for recovery of such costs. The DOE is not expected to have its
permanent storage facility for spent fuel available until at least 2015. UE has
sufficient storage capacity at its Callaway Nuclear Plant until 2019 and has the
capability for additional storage capacity through the licensed life of the
plant. The delayed availability of the DOE's disposal facility is not expected
to adversely affect the continued operation of the Callaway Nuclear Plant
through its currently licensed life.

Electric utility rates charged to customers provide for the recovery of the
Callaway Nuclear Plant's decommissioning costs over the life of the plant, based
on an assumed 40-year life, ending with expiration of the plant's operating
license in 2024. The Callaway Nuclear Plant site is assumed to be decommissioned
based on immediate dismantlement method and removal from service.
Decommissioning costs, including decontamination, dismantling and site
restoration, are estimated to be $536 million in current year dollars and are
expected to escalate approximately 3.5% per year through the end of
decommissioning activity in 2033. Decommissioning costs are charged to cost of
services used to establish electric rates for UE's customers and amounted to
approximately $7 million in each of the years 2003, 2002 and 2001. Every three
years, the MoPSC and ICC require UE to file updated cost studies for
decommissioning its

171



Callaway Nuclear Plant, and electric rates may be adjusted at such times to
reflect changed estimates. The latest studies were filed in 2002. Costs
collected from customers are deposited in an external trust fund to provide for
the Callaway Nuclear Plant's decommissioning. Fund earnings are expected to
average approximately 8.6% annually through the date of decommissioning. If the
assumed return on trust assets is not earned, we believe it is probable that any
such earnings deficiency will be recovered in rates. The fair value of the
nuclear decommissioning trust fund for UE's Callaway Nuclear Plant is reported
in Nuclear Decommissioning Trust Fund in Ameren's and UE's Consolidated Balance
Sheets. This amount is legally restricted to fund the costs of nuclear
decommissioning. Changes in the fair value of the trust fund are recorded as an
increase or decrease to the nuclear decommissioning trust fund and to the
regulatory asset recorded in connection with the adoption of SFAS No. 143. Upon
the completion of UE's transfer of its Illinois electric and gas utility
businesses to CIPS, which is subject to the receipt of regulatory approvals, the
assets and liabilities related to the Illinois portion of the decommissioning
trust fund will be transferred to Missouri. See Note 3 - Rate and Regulatory
Matters for further information.


NOTE 17 - 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, Temporary Investments and Short-term Borrowings

The carrying amounts approximate fair value because of the short-term
maturity of these instruments.

Marketable Securities

The fair value is based on quoted market prices obtained from dealers or
investment managers.

Nuclear Decommissioning Trust Fund

The fair value is estimated based on quoted market prices for securities.

Preferred Stock of UE, CIPS and CILCO

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 Ameren and its subsidiaries
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. All
derivative financial instruments are carried at fair value.

The following table presents the carrying amounts and estimated fair values
of our financial instruments at December 31, 2003 and 2002:



===================================================================================================================
2003 2002
--------------------------------------------------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
-------------------------------------------------------------------------------------------------------------------

Ameren:(a)
Long-term debt and capital lease obligations
(including current portion).................... $ 4,568 $ 4,903 $ 3,772 $ 4,014
Preferred stock.................................... 203 186 193 170
===================================================================================================================
UE:
Long-term debt and capital lease obligations
(including current portion).................... $ 2,102 $ 2,117 $ 1,817 $ 1,878
Preferred stock.................................... 113 110 113 98
-------------------------------------------------------------------------------------------------------------------


172





-------------------------------------------------------------------------------------------------------------------
2003 2002
--------------------------------------------------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
-------------------------------------------------------------------------------------------------------------------

CIPS:
Long-term debt..................................... $ 485 $ 539 $ 579 $ 625
Preferred stock.................................... 50 39 80 72
===================================================================================================================
Genco:
Long-term debt..................................... $ 698 $ 832 $ 698 $ 783
===================================================================================================================
CILCORP:(b)
Long-term debt (including current portion)......... $ 769 $ 827 $ 818 $ 917
Preferred stock.................................... 40 37 41 41
===================================================================================================================
CILCO:
Long-term debt (including current portion)......... $ 238 $ 256 $ 343 $ 365
Preferred stock.................................... 40 37 41 41
===================================================================================================================

(a) Excludes amounts for CILCORP and CILCO prior to the acquisition date
of January 31, 2003 and includes amounts for non-registrant Ameren
subsidiaries.
(b) Includes predecessor information for periods prior to January 31,
2003. CILCORP consolidates CILCO and therefore includes CILCO amounts
in its balances.

UE has investments in debt and equity securities that are held in trust
funds for the purpose of funding the nuclear decommissioning of its Callaway
Nuclear Plant. See Note 16 - Callaway Nuclear Plant for further information. We
have classified these investments in debt and equity securities as available for
sale and have recorded all such investments at their fair market value at
December 31, 2003 and 2002. Investments by the nuclear decommissioning trust
funds are allocated 60% to 70% to equity securities with the balance invested in
fixed income securities. Fixed income investments are limited to U.S. government
or agency securities, municipal bonds or investment-grade corporate securities.
The proceeds from the sale of investments were $123 million in 2003 (2002 - $141
million; 2001 - $230 million). Using the specific identification method to
determine cost, the gross realized gains on those sales were approximately $1
million for 2003 (2002 - less than $1 million; 2001 - $4 million). Net realized
and unrealized gains and losses are reflected in regulatory assets on Ameren's
and UE's Consolidated Balance Sheets, which is consistent with the method we use
to account for the decommissioning costs recovered in rates. Gains or losses on
assets in the trusts could result in lower or higher funding requirements for
decommissioning costs, which we believe would be reflected in electric rates
paid by UE's customers.

The following table presents the costs and fair values of investments in
debt and equity securities in the nuclear decommissioning trust fund at December
31, 2003 and 2002:



===================================================================================================================
Security Cost Gross Unrealized Gross Unrealized Fair
Type Gain (Loss) Value
-------------------------------------------------------------------------------------------------------------------

2003:
Debt securities.............. $ 62 $ 2 $ - $ 64
Equity securities............ 96 47 - 143
Cash equivalents............. 5 - - 5
-------------------------------------------------------------------------------------------------------------------
Total........................ $ 163 $ 49 $ - $ 212
--------------------------------------------------------------------------------------------------------------------
2002:
Debt securities.............. $ 57 $ 4 $ - $ 61
Equity securities............ 89 17 - 106
Cash equivalents............. 5 - - 5
-------------------------------------------------------------------------------------------------------------------
Total........................ $ 151 $ 21 $ - $ 172
===================================================================================================================


173




The following table presents the costs and fair values of investments in
debt securities according to their contractual maturities at December 31, 2003:



===================================================================================================================
Cost Fair Value
-------------------------------------------------------------------------------------------------------------------

Less than 5 years............................................................... $ 24 $ 24
5 years to 10 years............................................................. 22 23
Due after 10 years.............................................................. 16 17
-------------------------------------------------------------------------------------------------------------------
Total........................................................................... $ 62 $ 64
===================================================================================================================


NOTE 18 - Segment Information

Ameren

Ameren's reportable segment, Utility Operations, is comprised of its
electric generation and electric and gas transmission and distribution
operations. Ameren's reportable segment, Other, is comprised of the parent
holding company, Ameren Corporation. As a result of the CILCORP acquisition, we
modified our segment presentation in 2003 and have made reclassifications to
prior periods to conform to current period presentation.

The accounting policies for segment data are the same as those described in
Note 1 - Summary of Significant Accounting Policies. Segment data includes
intersegment revenues, as well as a charge for allocating costs of
administrative support services to each of the operating companies, which, in
each case, is eliminated upon consolidation. Ameren Services allocates
administrative support services based on various factors, such as headcount,
number of customers and total assets.

The table below presents information about the reported revenues, net
income and total assets of Ameren for the years ended December 31, 2003, 2002,
and 2001:



===================================================================================================================
Utility Other Reconciling Items
Operations Total
-------------------------------------------------------------------------------------------------------------------

2003:(a)
Operating revenues....... $ 5,692 $ - $ (1,099)(b) $ 4,593
Net income............... 546 (22) - 524
Total assets............. 13,472 761 - 14,233
===================================================================================================================
2002:
Operating revenues....... $ 4,912 $ - $ (1,071)(b) $ 3,841
Net income............... 384 (2) - 382
Total assets............. 11,037 1,114 - 12,151
===================================================================================================================
2001:
Operating revenues....... $ 4,965 $ - $ (1,107)(b) 3,858
Net income............... 472 (3) - 469
Total assets............. 9,939 462 - 10,401
===================================================================================================================

(a) Excludes amounts for CILCORP and CILCO prior to the acquisition date
of January 31, 2003; includes amounts for non-registrant Ameren
subsidiaries as well as intercompany eliminations.
(b) Elimination of intercompany revenues.

174



The following table presents specified items included in Ameren's segment
profit (loss) for the years ended December 31, 2003, 2002, and 2001:




===================================================================================================================
Utility Other Reconciling
Operations Items Total
-------------------------------------------------------------------------------------------------------------------

2003:(a)
-------------------------------------------------------------------------------------------------------------------
Interest expense.............................. $ 344 $ 29 $ (96)(b) $ 277
Depreciation and amortization................. 519 - - 519
Income tax.................................... 305 (4) - 301(c)
===================================================================================================================
2002:
-------------------------------------------------------------------------------------------------------------------
Interest expense.............................. $ 279 $ 28 $ (93)(b) $ 214
Depreciation and amortization................. 431 - - 431
Income tax.................................... 244 (7) - 237
===================================================================================================================
2001:
-------------------------------------------------------------------------------------------------------------------
Interest expense.............................. $ 259 $ 13 $ (81)(b) $ 191
Depreciation and amortization................. 406 - - 406
Income tax.................................... 306 (1) - 305(d)
===================================================================================================================

(a) Excludes amounts for CILCORP and CILCO prior to the acquisition date
of January 31, 2003; includes amounts for non-registrant Ameren
subsidiaries as well as intercompany eliminations.
(b) Elimination of intercompany interest charges.
(c) Does not include income tax expense related to the cumulative effect
gain recognized upon adoption of SFAS No. 143.
(d) Does not include tax benefit related to the cumulative effect loss
recognized upon adoption of SFAS No. 133.

All construction expenditures for the years ended December 31, 2003, 2002,
and 2001, were in the Utility Operations segment.




SELECTED QUARTERLY INFORMATION (Unaudited)(In millions, except per share amounts)

======================================================================================================================
Income (Loss)
Before
Income (Loss) Cumulative
Before Effect of
Cumulative Change in Earnings
Effect of Accounting per
Change in Net Principle per Common
Ameren (a) Operating Operating Accounting Income Common Share -
Quarter Ended Revenues(b) Income Principle (Loss) Share Basic
-------------------------------------------------------------------------------------------------------------------

March 31, 2003........ $ 1,108 $ 201 $ 83 $ 101 $ 0.52 $ 0.63
March 31, 2002........ 874 149 59 59 0.42 0.42
-------------------------------------------------------------------------------------------------------------------
June 30, 2003......... 1,088 250 110 110 0.68 0.68
June 30, 2002......... 978 277 115 115 0.80 0.80
-------------------------------------------------------------------------------------------------------------------
September 30, 2003.... 1,350 500 275 275 1.70 1.70
September 30, 2002.... 1,166 441 240 240 1.64 1.64
-------------------------------------------------------------------------------------------------------------------
December 31, 2003..... 1,047 139 38 38 0.24 0.24
December 31, 2002..... 823 6 (32) (32) (0.20) (0.20)
===================================================================================================================

(a) Includes amounts for CILCORP since the acquisition date of January 31,
2003.
(b) For 2002, revenues were netted with costs upon adoption of EITF No.
02-3 and the rescission of EITF No. 98-10. See Note 1 - Summary of
Significant Accounting Policies to our financial statements for
further information. The amount netted for each quarter is as follows:
2002 - $241 million in first quarter, $133 million in second quarter,
$189 million in third quarter and $175 million in fourth quarter.

175





===================================================================================================================
Net Income
Operating Net (Loss) Available
UE Operating Income Income to Common
Quarter Ended Revenues(a) (Loss) (Loss) Stockholder
-------------------------------------------------------------------------------------------------------------------

March 31, 2003.................................... $ 620 $ 131 $ 68 $ 67
March 31, 2002.................................... 584 100 51 49
-------------------------------------------------------------------------------------------------------------------
June 30, 2003..................................... 636 188 107 105
June 30, 2002..................................... 672 199 107 105
-------------------------------------------------------------------------------------------------------------------
September 30, 2003................................ 816 380 225 224
September 30, 2002................................ 853 351 206 204
-------------------------------------------------------------------------------------------------------------------
December 31, 2003................................. 565 88 47 45
December 31, 2002................................. 541 (6) (20) (22)
===================================================================================================================


(a) For 2002, revenues were netted with costs upon adoption of EITF No.
02-3 and the rescission of EITF No. 98-10. See Note 1 - Summary of
Significant Accounting Policies to our financial statements for
further information. The amount netted for each quarter is as follows:
2002 - $150 million in first quarter, $78 million in second quarter,
$117 million in third quarter and $113 million in fourth quarter.



===================================================================================================================
Net Income
Operating Net (Loss) Available
CIPS Operating Income Income to Common
Quarter Ended Revenues(a) (Loss) (Loss) Stockholder
-------------------------------------------------------------------------------------------------------------------

March 31, 2003.................................... $ 209 $ 6 $ 2 $ 1
March 31, 2002.................................... 215 4 2 1
-------------------------------------------------------------------------------------------------------------------
June 30, 2003..................................... 167 9 3 3
June 30, 2002..................................... 187 15 8 7
-------------------------------------------------------------------------------------------------------------------
September 30, 2003................................ 196 31 26 25
September 30, 2002................................ 224 43 24 23
-------------------------------------------------------------------------------------------------------------------
December 31, 2003................................. 170 (1) (2) (3)
December 31, 2002................................. 198 (10) (8) (8)
===================================================================================================================





===================================================================================================================
Income Before
Genco Operating Operating Effect of Change in Net
Quarter Ended Revenues(a) Income Accounting Principle Income
------------------------------ -------------------- --------------- --------------------------------- -------------

March 31, 2003............... $ 206 $ 58 $ 21 $ 39
March 31, 2002............... 176 38 13 13
-------------------------------------------------------------------------------------------------------------------
June 30, 2003................ 173 41 10 10
June 30, 2002................ 175 26 2 2
-------------------------------------------------------------------------------------------------------------------
September 30, 2003........... 217 53 17 17
September 30, 2002........... 207 49 15 15
-------------------------------------------------------------------------------------------------------------------
December 31, 2003............ 192 42 9 9
December 31, 2002............ 185 26 2 2
===================================================================================================================


(a) For 2002, revenues were netted with costs upon adoption of EITF No.
02-3 and the rescission of EITF No. 98-10. See Note 1 - Summary of
Significant Accounting Policies to our financial statements for
further information. The amount netted for each quarter is as follows:
2002 - $87 million in first quarter, $44 million in second quarter,
$60 million in third quarter and $62 million in fourth quarter.




===================================================================================================================
Income (Loss) Before Net
CILCORP (a) Operating Operating Cumulative Effect of Change Income
Quarter Ended Revenues Income in Accounting Principle (Loss)
-------------------------------------------------------------------------------------------------------------------

March 31, 2003............... $ 289 $ 25 $ 6 $ 10
March 31, 2002............... 203 21 4 4
-------------------------------------------------------------------------------------------------------------------
June 30, 2003................ 192 13 2 2
June 30, 2002................ 173 19 2 2
-------------------------------------------------------------------------------------------------------------------
September 30, 2003........... 215 33 11 11
September 30, 2002........... 202 53 23 23
-------------------------------------------------------------------------------------------------------------------
December 31, 2003............ 213 14 - -
December 31, 2002............ 200 5 (4) (4)
===================================================================================================================

(a) Includes predecessor information for periods prior to January 31,
2003.

176





===================================================================================================================
Income (Loss) Net Income
Before Cumulative (Loss)
Effect of Change Net Available to
CILCO Operating Operating in Accounting Income Common
Quarter Ended Revenues Income Principle (Loss) Stockholder
-------------------------------------------------------------------------------------------------------------------

March 31, 2003........ $ 246 $ 24 $ 11 $ 35 $ 35
March 31, 2002........ 186 21 10 10 9
-------------------------------------------------------------------------------------------------------------------
June 30, 2003......... 172 12 5 5 4
June 30, 2002......... 161 18 8 8 8
-------------------------------------------------------------------------------------------------------------------
September 30, 2003.... 203 29 15 15 15
September 30, 2002.... 192 52 29 29 28
-------------------------------------------------------------------------------------------------------------------
December 31, 2003..... 201 (12) (10) (10) (11)
December 31, 2002..... 180 6 3 3 3
===================================================================================================================



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

PricewaterhouseCoopers LLP served as independent accountants for Ameren,
UE, CIPS and Genco for the two fiscal years ended December 31, 2003 and 2002 and
the subsequent interim period through the date of this report and for CILCORP
and CILCO for the fiscal year ended December 31, 2003, and the subsequent
interim period through the date of this report. During these periods,
PricewaterhouseCoopers LLP did not resign, decline to stand for re-election or
was dismissed.

During the fiscal year ended December 31, 2002, and the subsequent interim
period through March 14, 2003, Deloitte & Touche LLP served as independent
public accountants for CILCORP and CILCO. The following text was filed by
CILCORP and CILCO by Form 8-K on March 20, 2003, regarding a change in their
certifying accountant:

On March 14, 2003, the Auditing Committees of CILCORP Inc. and Central
Illinois Light Company (the "Registrants") dismissed Deloitte & Touche LLP
("Deloitte & Touche") as the Registrants' independent public accountants
subject to completion of its services related to the audits of the fiscal
year 2002 and engaged PricewaterhouseCoopers LLP ("PricewaterhouseCoopers")
to serve as the Registrants' independent auditors for the fiscal year 2003.
The Registrants' Auditing Committees made this replacement because
PricewaterhouseCoopers is serving as the independent auditors for the
Registrants' parent company, Ameren Corporation, for the fiscal year 2003.

Deloitte & Touche's reports on the Registrants' consolidated financial
statements for the fiscal years ended December 31, 2001 and 2000 did not
contain an adverse opinion or a disclaimer of opinion, nor were they
qualified or modified as to uncertainty, audit scope or accounting
principles.

During the Registrants' two fiscal years ended December 31, 2001 and 2000
and the subsequent interim period through March 14, 2003, there were no
disagreements with Deloitte & Touche on any matter of accounting principles
or practices, financial statement disclosure or auditing scope or procedure
which, if not resolved to Deloitte & Touche's satisfaction, would have
caused it to make reference to the subject matter in connection with its
reports on the Registrants' consolidated financial statements for such
years, and there were no reportable events, as listed in Item 304(a)(1)(v)
of Regulation S-K.

177



The Registrants have provided Deloitte & Touche with a copy of the
foregoing disclosures. Attached as Exhibit 16.1 is a copy of Deloitte &
Touche's letter, dated March 20, 2003, stating its agreement with such
statements.

During the Registrants' two fiscal years ended December 31, 2002 and 2001
and the subsequent interim period through March 14, 2003, the Registrants
did not consult PricewaterhouseCoopers regarding the application of
accounting principles to a specified transaction, either contemplated or
proposed, or the type of audit opinion that might be rendered on the
Registrants' consolidated financial statements, or any other matter or
reportable event that would be required to be reported in this Current
Report on Form 8-K.


ITEM 9A. CONTROLS AND PROCEDURES.

(a) Evaluation of Disclosure Controls and Procedures

As of December 31, 2003, the principal executive officer and principal
financial officer of each Registrant have evaluated the effectiveness of the
design and operation of such Registrant's disclosure controls and procedures (as
defined in Rules 13a - 15(e) and 15d - 15(e) of the Exchange Act). Based upon
that evaluation, the principal executive officer and principal financial officer
of each such Registrant have concluded that such disclosure controls and
procedures are effective in timely alerting them to any material information
relating to such Registrant, which is required to be included in such
Registrant's reports filed or submitted with the SEC under the Exchange Act.

(b) Change in Internal Controls

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


PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANTS.

Information required by Item 401and 405 of SEC Regulation S-K for Ameren,
UE, CIPS and CILCO will be included in each company's definitive proxy statement
for their 2004 annual meetings of shareholders filed pursuant to SEC Regulation
14A and is incorporated herein by reference. With respect to Genco and CILCORP,
this information is omitted in reliance on General Instruction I(2) of Form
10-K.

Information concerning executive officers required by this item is reported
under a separate caption in Part I of this report.

The Boards of Directors of the Ameren Companies have determined that they
have one Audit Committee financial expert serving on each of their Audit
Committees. His name is Douglas R. Oberhelman and he has been determined by the
Ameren Companies' Boards of Directors to be "independent" as that term is used
in SEC Regulation 14A.

To provide for ethical conduct in its financial management and reporting,
Ameren has adopted a Code of Ethics that applies to the principal executive
officer, the principal financial officer, the principal accounting officer or
controller, and the treasurer of the Ameren Companies. Ameren has also adopted a
Code of Business Conduct that applies to the directors, officers and employees
of the Ameren Companies, referred to as the Corporate Compliance Policy. The
Ameren Companies make available free of charge through Ameren's Internet website
(http://www.ameren.com) the Code of Ethics and Corporate Compliance Policy.
These documents are also available without charge in print upon written request
to Ameren Corporation, Attention: Secretary, P.O. Box 66149, St. Louis, Missouri
63166-6149. Any amendment to, or waiver of, the Code of Ethics and Corporate
Compliance Policy will be posted on Ameren's Internet website within five
business dates following the date of the amendment or waiver.

178



ITEM 11. EXECUTIVE COMPENSATION.

Information required by Item 402 of SEC Regulation S-K for Ameren, UE, CIPS
and CILCO will be included in each company's definitive proxy statement for
their 2004 annual meetings of shareholders filed pursuant to SEC Regulation 14A
and is incorporated herein by reference. With respect to Genco and CILCORP, this
information is omitted in reliance on General Instruction I(2) of Form 10-K.


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS.

Equity Compensation Plan Information

The following table presents information as of December 31, 2003, with
respect to the shares of Ameren's common stock that may be issued under its
existing equity compensation plan.




===================================================================================================================
Number of Securities
Remaining Available for
Number of Securities to Weighted-Average Exercise Future Issuance Under Equity
be Issued Upon Exercise Price of Outstanding Compensation Plans (excluding
of Outstanding Options, Options, Warrants and securities reflected in
Plan Warrants and Rights Rights column (a) )
Category (a) (b) (c)
-------------------------------------------------------------------------------------------------------------------

Equity compensation plans
approved by
securityholders(a).... 1,499,676 $ 34.88 1,772,632(b)
-------------------------------------------------------------------------------------------------------------------
Equity compensation plans
not approved by
securityholders....... - - -
-------------------------------------------------------------------------------------------------------------------
Total..................... 1,499,676 $ 34.88 1,772,632
===================================================================================================================

(a) Consists of the Ameren Corporation Long-term Incentive Plan of 1998
which was approved by stockholders in April 1998 and expires on April
1, 2008.
(b) Excludes an aggregate of 584,762 restricted shares of Ameren common
stock issued under the Ameren Corporation Long-term Incentive Plan of
1998 in 2001, 2002, 2003 and 2004.

UE, CIPS, Genco, CILCORP and CILCO do not have separate equity compensation
plans.

The information required by Item 403 of SEC Regulation S-K for Ameren, UE,
CIPS and CILCO will be included in each company's definitive proxy statement for
their 2004 annual meetings of shareholders filed pursuant to SEC Regulation 14A
and is incorporated herein by reference. With respect to Genco and CILCORP, this
information is omitted in reliance on General Instruction I(2) of Form 10-K.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

Information required by Item 404 of SEC Regulation S-K for Ameren, UE, CIPS
and CILCO will be included in each company's definitive proxy statement for
their 2004 annual meetings of shareholders filed pursuant to SEC Regulation 14A
and is incorporated herein by reference. With respect to Genco and CILCORP, this
information is omitted in reliance on General Instruction I(2) of Form 10-K.


ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Information required by Item 9(e) of SEC Schedule 14A for the Ameren
Companies will be included in the definitive proxy statements of Ameren, UE,
CIPS and CILCO for their 2004 annual meetings of shareholders filed pursuant to
SEC Regulation 14A and is incorporated herein by reference.

179



PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.




(a)(1) Financial Statements Page No.
Herein
--------
Ameren
Report of Independent Auditors................................................................ 77
Consolidated Statement of Income - Years Ended December 31, 2003, 2002, and 2001.............. 86
Consolidated Balance Sheet - December 31, 2003 and 2002....................................... 87
Consolidated Statement of Cash Flows - Years Ended December 31, 2003, 2002, and 2001.......... 88
Consolidated Statement of Common Stockholders' Equity......................................... 89

UE
Report of Independent Auditors................................................................ 79
Consolidated Statement of Income - Years Ended December 31, 2003, 2002, and 2001.............. 90
Consolidated Balance Sheet - December 31, 2003 and 2002....................................... 91
Consolidated Statement of Cash Flows - Years Ended December 31, 2003, 2002, and 2001.......... 92
Consolidated Statement of Common Stockholder's Equity......................................... 93

CIPS
Report of Independent Auditors................................................................ 80
Statement of Income - Years Ended December 31, 2003, 2002, and 2001........................... 94
Balance Sheet - December 31, 2003 and 2002.................................................... 95
Statement of Cash Flows - Years Ended December 31, 2003, 2002, and 2001....................... 96
Statement of Common Stockholder's Equity...................................................... 97

Genco
Report of Independent Auditors................................................................ 81
Statement of Income - Years Ended December 31, 2003, 2002, and 2001........................... 98
Balance Sheet - December 31, 2003 and 2002.................................................... 99
Statement of Cash Flows - Years Ended December 31, 2003, 2002, and 2001....................... 100
Statement of Common Stockholder's Equity...................................................... 101

CILCORP
Report of Independent Auditors (regarding 2003)............................................... 82
Report of Independent Auditors (regarding 2002).............................................. 84
Consolidated Statement of Income - Years Ended December 31, 2003, 2002, and 2001.............. 102
Consolidated Balance Sheet - December 31, 2003 and 2002....................................... 103
Consolidated Statement of Cash Flows - Years Ended December 31, 2003, 2002, and 2001.......... 104
Consolidated Statement of Common Stockholder's Equity......................................... 105

CILCO
Report of Independent Auditors (regarding 2003)............................................... 83
Report of Independent Auditors (regarding 2002)............................................... 85
Consolidated Statement of Income - Years Ended December 31, 2003, 2002, and 2001.............. 106
Consolidated Balance Sheet - December 31, 2003 and 2002....................................... 107
Consolidated Statement of Cash Flows - Years Ended December 31, 2003, 2002, and 2001.......... 108
Consolidated Statement of Common Stockholder's Equity......................................... 109


180





(a)(2) Financial Statement Schedule

Report of Independent Auditors on Financial Statement Schedule................................ 78

Schedule II - Valuation and Qualifying Accounts
for the years ended December 31, 2003, 2002, and 2001....................................... 182



The above schedule should be read in conjunction with the aforementioned
financial statements. Schedules not included have been omitted because they are
not applicable or the required data is shown in the aforementioned financial
statements.

(a)(3) Exhibits.

Reference is made to the Exhibit Index commencing on page 189.


(b) Reports on Form 8-K. The Ameren Companies filed the following
reports on Form 8-K during the quarterly period ended December 31,
2003:



Date of Report Items Reported Financial Statements Filed
-------------- -------------- --------------------------

Ameren
October 3, 2003 5 None
October 10, 2003 5 None
December 5, 2003 5, 7 None
December 10, 2003 5, 7 None
UE
October 7, 2003 5, 7 None
October 10, 2003 5 None
December 5, 2003 5, 7 None
December 10, 2003 5, 7 None
CIPS
October 10, 2003 5 None
December 5, 2003 5, 7 None
Genco
October 10, 2003 5 None
December 5, 2003 5, 7 None
CILCORP
October 3, 2003 5 None
October 10, 2003 5 None
December 5, 2003 5, 7 None
CILCO
October 3, 2003 5 None
October 10, 2003 5 None
December 5, 2003 5, 7 None


(c) Exhibits are listed in the Exhibit Index commencing on page 189.



181





====================================================================================================================================
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 2003, 2002, AND 2001
(In millions) Col. A Col. B Col. C Col. D Col. E
(1) (2)
Balance at Charged to Charged to Balance at
Beginning of Costs and Other End of
Description Period Expenses Accounts Deductions(b) Period
- ------------------------------------------------------------------------------------------------------------------------------------

Ameren:
Deducted from assets - allowance for doubtful accounts:
2003.............................................. $ 7 $ 30(a) $ 24 $ 13
2002.............................................. 9 20 22 7
2001.............................................. 8 24 23 9
====================================================================================================================================
====================================================================================================================================
UE:
Deducted from assets - allowance for doubtful accounts:
2003.............................................. $ 6 $ 16 $ 16 $ 6
2002.............................................. 7 15 16 6
2001.............................................. 6 17 16 7
====================================================================================================================================
====================================================================================================================================
CIPS:
Deducted from assets - allowance for doubtful accounts:
2003.............................................. $ 1 $ 5 $ 5 $ 1
2002.............................................. 1 5 5 1
2001.............................................. 2 6 7 1
====================================================================================================================================
====================================================================================================================================
CILCORP:
Deducted from assets - allowance for doubtful accounts:
2003.............................................. $ 2 $ 7 $ 3 $ 6
2002.............................................. 2 2 2 2
2001.............................................. 1 6 5 2
====================================================================================================================================
====================================================================================================================================
CILCO:
Deducted from assets - allowance for doubtful accounts:
2003.............................................. $ 2 $ 7 $ 3 $ 6
2002.............................................. 2 2 2 2
2001.............................................. 1 6 5 2
====================================================================================================================================


(a) Amount includes $2 million related to CILCO balance at the date of
acquisition on January 31, 2003.
(b) Uncollectible accounts charged off, less recoveries.

182




SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, each Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized. The signatures for
each undersigned company shall be deemed to relate only to matters having
reference to such company or its subsidiaries.





AMEREN CORPORATION (Registrant)
Date: March 9, 2004 By /s/ Gary L. Rainwater
-----------------------------
Gary L. Rainwater
Chairman, Chief Executive Officer and President


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.


/s/ Gary L. Rainwater Chairman, Chief Executive March 9, 2004
- --------------------------------- Officer, President and Director
Gary L. Rainwater (Principal Executive Officer)


/s/ Warner L. Baxter Executive Vice President and March 9, 2004
- --------------------------------- Chief Financial Officer
Warner L. Baxter (Principal Financial Officer)


/s/ Martin J. Lyons Vice President and Controller March 9, 2004
- --------------------------------- (Principal Accounting Officer
Martin J. Lyons

* Director March 9, 2004
- ---------------------------------
William E. Cornelius

* Director March 9, 2004
- ---------------------------------
Susan S. Elliott

* Director March 9, 2004
- ---------------------------------
Clifford L. Greenwalt

* Director March 9, 2004
- ---------------------------------
Thomas A. Hays

* Director March 9, 2004
- ---------------------------------
Richard A. Liddy

* Director March 9, 2004
- ---------------------------------
Gordon R. Lohman

* Director March 9, 2004
- ---------------------------------
Richard A. Lumpkin

* Director March 9, 2004
- ---------------------------------
John Peters MacCarthy

* Director March 9, 2004
- ---------------------------------
Paul L. Miller, Jr.

* Director March 9, 2004
- ---------------------------------
Charles W. Mueller

* Director March 9, 2004
- ---------------------------------
Douglas R. Oberhelman

* Director March 9, 2004
- ---------------------------------
Harvey Saligman

*By /s/ Steven R. Sullivan March 9, 2004
------------------------------
Steven R. Sullivan
Attorney-in-Fact



183




UNION ELECTRIC COMPANY (Registrant)

Date: March 9, 2004 By /s/ Gary L. Rainwater
-----------------------------
Gary L. Rainwater
Chairman, Chief Executive Officer and President


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.


/s/ Gary L. Rainwater Chairman, Chief Executive March 9, 2004
- --------------------------------- Officer, President and Director
Gary L. Rainwater (Principal Executive Officer)


/s/ Warner L. Baxter Executive Vice President, Chief March 9, 2004
- --------------------------------- Financial Officer and Director
Warner L. Baxter (Principal Financial Officer)


/s/ Martin J. Lyons Vice President and Controller March 9, 2004
- --------------------------------- (Principal Accounting Officer
Martin J. Lyons

* Director March 9, 2004
- ---------------------------------
Richard A. Liddy

* Director March 9, 2004
- ---------------------------------
Richard A. Lumpkin

* Director March 9, 2004
- ---------------------------------
Paul L. Miller, Jr.

* Director March 9, 2004
- ---------------------------------
Douglas R. Oberhelman

* Director March 9, 2004
- ---------------------------------
Garry L. Randolph

* Director March 9, 2004
- ---------------------------------
Harvey Saligman

/s/ Steven R. Sullivan Director March 9, 2004
- ---------------------------------
Steven R. Sullivan

* Director March 9, 2004
- ---------------------------------
Thomas R. Voss

* Director March 9, 2004
- ---------------------------------
David A. Whiteley

*By /s/ Steven R. Sullivan March 9, 2004
- ---------------------------------
Steven R. Sullivan
Attorney-in-Fact





184









CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
(Registrant)

Date: March 9, 2004 By /s/ Gary L. Rainwater
-----------------------------
Gary L. Rainwater
Chief Executive Officer and President


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.


/s/ Gary L. Rainwater Chief Executive Officer, March 9, 2004
- --------------------------------- President and Director
Gary L. Rainwater (Principal Executive Officer)


/s/ Warner L. Baxter Executive Vice President, Chief March 9, 2004
- --------------------------------- Financial Officer and Director
Warner L. Baxter (Principal Financial Officer)


/s/ Martin J. Lyons Vice President and Controller March 9, 2004
- --------------------------------- (Principal Accounting Officer
Martin J. Lyons

* Director March 9, 2004
- ---------------------------------
Daniel F. Cole

* Director March 9, 2004
- ---------------------------------
Richard A. Liddy

* Director March 9, 2004
- ---------------------------------
Richard A. Lumpkin

* Director March 9, 2004
- ---------------------------------
Paul L. Miller, Jr.

* Director March 9, 2004
- ---------------------------------
Douglas R. Oberhelman

* Director March 9, 2004
- ---------------------------------
Harvey Saligman

/s/ Steven R. Sullivan Director March 9, 2004
- ---------------------------------
Steven R. Sullivan

* Director March 9, 2004
- ---------------------------------
Thomas R. Voss

* Director March 9, 2004
- ---------------------------------
David A. Whiteley

*By /s/ Steven R. Sullivan March 9, 2004
- ---------------------------------
Steven R. Sullivan
Attorney-in-Fact




185





AMEREN ENERGY GENERATING COMPANY
(Registrant)

Date: March 9, 2004 By /s/ Thomas R. Voss
-----------------------------
Thomas R. Voss
President


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.


/s/ Thomas R. Voss President March 9, 2004
- --------------------------------- (Principal Executive Officer)
Thomas R. Voss


/s/ Warner L. Baxter Executive Vice President, Chief March 9, 2004
- --------------------------------- Financial Officer and Director
Warner L. Baxter (Principal Financial Officer)


/s/ Martin J. Lyons Vice President and Controller March 9, 2004
- --------------------------------- (Principal Accounting Officer
Martin J. Lyons

* Director March 9, 2004
- ---------------------------------
Daniel F. Cole

* Director March 9, 2004
- ---------------------------------
Richard A. Liddy

* Director March 9, 2004
- ---------------------------------
Richard A. Lumpkin

* Director March 9, 2004
- ---------------------------------
Paul L. Miller, Jr.

* Director March 9, 2004
- ---------------------------------
Douglas R. Oberhelman

* Director March 9, 2004
- ---------------------------------
Gary L. Rainwater

* Director March 9, 2004
- ---------------------------------
Harvey Saligman

/s/ Steven R. Sullivan Director March 9, 2004
- ---------------------------------
Steven R. Sullivan

* Director March 9, 2004
- ---------------------------------
David A. Whiteley

*By /s/ Steven R. Sullivan March 9, 2004
- ---------------------------------
Steven R. Sullivan
Attorney-in-Fact




186





CILCORP INC. (Registrant)

Date: March 9, 2004 By /s/ Gary L. Rainwater
-----------------------------
Gary L. Rainwater
Chairman, Chief Executive Officer and President


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.


/s/ Gary L. Rainwater Chairman, Chief Executive Officer, March 9, 2004
- --------------------------------- President and Director
Gary L. Rainwater (Principal Executive Officer)


/s/ Warner L. Baxter Executive Vice President, Chief March 9, 2004
- --------------------------------- Financial Officer and Director
Warner L. Baxter (Principal Financial Officer)


/s/ Martin J. Lyons Vice President and Controller March 9, 2004
- --------------------------------- (Principal Accounting Officer
Martin J. Lyons

* Director March 9, 2004
- ---------------------------------
Daniel F. Cole

* Director March 9, 2004
- ---------------------------------
Richard A. Liddy

* Director March 9, 2004
- ---------------------------------
Richard A. Lumpkin

* Director March 9, 2004
- ---------------------------------
Paul L. Miller, Jr.

* Director March 9, 2004
- ---------------------------------
Douglas R. Oberhelman

* Director March 9, 2004
- ---------------------------------
Harvey Saligman

/s/ Steven R. Sullivan Director March 9, 2004
- ---------------------------------
Steven R. Sullivan

* Director March 9, 2004
- ---------------------------------
Thomas R. Voss

* Director March 9, 2004
- ---------------------------------
David A. Whiteley

*By /s/ Steven R. Sullivan March 9, 2004
- ---------------------------------
Steven R. Sullivan
Attorney-in-Fact




187





CENTRAL ILLINOIS LIGHT COMPANY (Registrant)

Date: March 9, 2004 By /s/ Gary L. Rainwater
-----------------------------
Gary L. Rainwater
Chairman, Chief Executive Officer and President


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.


/s/ Gary L. Rainwater Chairman, Chief Executive Officer, March 9, 2004
- --------------------------------- President and Director
Gary L. Rainwater (Principal Executive Officer)


/s/ Warner L. Baxter Executive Vice President, Chief March 9, 2004
- --------------------------------- Financial Officer and Director
Warner L. Baxter (Principal Financial Officer)


/s/ Martin J. Lyons Vice President and Controller March 9, 2004
- --------------------------------- (Principal Accounting Officer
Martin J. Lyons

* Director March 9, 2004
- ---------------------------------
Scott A. Cisel

* Director March 9, 2004
- ---------------------------------
Daniel F. Cole

* Director March 9, 2004
- ---------------------------------
Richard A. Liddy

* Director March 9, 2004
- ---------------------------------
Richard A. Lumpkin

* Director March 9, 2004
- ---------------------------------
Paul L. Miller, Jr.

* Director March 9, 2004
- ---------------------------------
Douglas R. Oberhelman

* Director March 9, 2004
- ---------------------------------
Harvey Saligman

/s/ Steven R. Sullivan Director March 9, 2004
- ---------------------------------
Steven R. Sullivan

* Director March 9, 2004
- ---------------------------------
Thomas R. Voss

*By /s/ Steven R. Sullivan March 9, 2004
- ---------------------------------
Steven R. Sullivan
Attorney-in-Fact




188






EXHIBIT INDEX


The documents listed below are being filed or have previously been filed on behalf of Ameren, UE, CIPS,
Genco, CILCORP and CILCO (collectively the "Ameren Companies") and are incorporated herein by reference from the
documents indicated and made a part hereof. Exhibits not identified as previously filed are filed herewith.

-----------------------------------------------------------------------------------------------------------------------
Exhibit Nature Previously Filed
Designation Registrant(s) of Exhibit as Exhibit to:
-----------------------------------------------------------------------------------------------------------------------

2.1 Ameren Stock Purchase Agreement, dated as March 31, 2002, Form 10-Q,
of April 28, 2002, by and between Exhibit 2.1, File No. 1-14756
AES and Ameren
-----------------------------------------------------------------------------------------------------------------------
2.2 Ameren Membership Interest Purchase March 31, 2002, Form 10-Q,
Agreement, dated as of April 28, Exhibit 2.2, File No. 1-14756
2002, by and between AES and Ameren
-----------------------------------------------------------------------------------------------------------------------
2.3 Ameren Companies Stock Purchase Agreement, dated as February 3, 2004, Combined
of February 2, 2004, by and Ameren Companies Form 8-K,
between Dynegy and certain of its Exhibit 2.1*
subsidiaries and Ameren
-----------------------------------------------------------------------------------------------------------------------
Articles of
Incorporation /
By Laws
-----------------------------------------------------------------------------------------------------------------------
3.1(i) Ameren Restated Articles of Incorporation File No. 33-64165, Annex F
of Ameren
-----------------------------------------------------------------------------------------------------------------------
3.2(i) Ameren Certificate of Amendment to 1998 Form 10-K, Exhibit 3(i),
Ameren's Restated Articles of File No. 1-14756
Incorporation filed December 14,
1998
-----------------------------------------------------------------------------------------------------------------------
3.3(i) UE Restated Articles of Incorporation UE 1993 Form 10-K, Exhibit
of UE 3(i), File No. 1-2967
-----------------------------------------------------------------------------------------------------------------------
3.4(i) CIPS Restated Articles of Incorporation March 31, 1994 CIPS Form 10-Q,
of CIPS Exhibit 3(b), File No. 1-3672
-----------------------------------------------------------------------------------------------------------------------
3.5(i) Genco Articles of Incorporation of Genco Exhibit 3.1 to Genco's
Registration Statement on Form
S-4 File No. 333-56594
-----------------------------------------------------------------------------------------------------------------------
3.6(i) Genco Amendment to Articles of Exhibit 3.2 to Genco's
Incorporation of Genco filed April Registration Statement Form
19, 2000 S-4 File No. 333-56594
-----------------------------------------------------------------------------------------------------------------------
3.7(i) CILCORP Articles of Incorporation of CILCORP 1999 Form 10-K, Exhibit
CILCORP as amended November 15, 3, File No. 1-18946
1999
-----------------------------------------------------------------------------------------------------------------------
3.8(i) CILCO Articles of Incorporation of CILCO CILCO 1998 Form 10-K, Exhibit
as amended April 28, 1998 3, File No. 1-8946
-----------------------------------------------------------------------------------------------------------------------
3.9(ii) Ameren By-Laws of Ameren as amended Exhibit 4.3, File No. 333-112823
February 13, 2004
-----------------------------------------------------------------------------------------------------------------------
3.10(ii) UE By-Laws of UE as amended August September 30, 2001, UE Form
23, 2001 10-Q, Exhibit 3(ii), File No.
1-2967
-----------------------------------------------------------------------------------------------------------------------
3.11(ii) CIPS By-Laws of CIPS as amended January CIPS 2002 Form 10-K, Exhibit
21, 2003 3.2(ii), File No. 1-3672
-----------------------------------------------------------------------------------------------------------------------
3.12(ii) Genco By-Laws of Genco as amended Genco 2002 Form 10-K, Exhibit
January 21, 2003 3.3, File No. 333-56594
-----------------------------------------------------------------------------------------------------------------------




189








-----------------------------------------------------------------------------------------------------------------------
3.13(ii) CILCORP By-Laws of CILCORP as amended May June 30, 2003 CILCORP Form
20, 2003 10-Q, Exhibit 3.1, File No.
2-95569
-----------------------------------------------------------------------------------------------------------------------
3.14(ii) CILCO By-Laws of CILCO as amended May June 30, 2003 CILCORP Form
20, 2003 10-Q, Exhibit 3.2, File No.
1-2732
-----------------------------------------------------------------------------------------------------------------------
Instruments Defining
Rights of Security
Holders
-----------------------------------------------------------------------------------------------------------------------
4.1 UE Order of the SEC dated October 16, Exhibit 3-E, File No. 2-27474
1945, in File No. 70-1154
permitting the issue of UE
Preferred Stock, $3.70 Series
-----------------------------------------------------------------------------------------------------------------------
4.2 UE Order of the SEC dated April 30, Exhibit 3-F, File No. 2-27474
1946, in File No. 70-1259
permitting the issue of UE
Preferred Stock, $3.50 Series
-----------------------------------------------------------------------------------------------------------------------
4.3 UE Order of the SEC dated October 20, Exhibit 3-G, File No. 2-27474
1949, in File No. 70-2227
permitting the issue of UE
Preferred Stock, $4.00 Series
-----------------------------------------------------------------------------------------------------------------------
4.4 Ameren Indenture of Mortgage and Deed of Exhibit B-1, File No. 2-4940
UE Trust dated June 15, 1937 (UE
Mortgage), as amended May 1, 1941,
and Second Supplemental Indenture
dated May 1, 1941
-----------------------------------------------------------------------------------------------------------------------
4.5 Ameren Supplemental Indenture to the UE April 1971, UE Form 8-K, Exhibit
UE Mortgage dated as of April 1, 1971 No. 6, File No. 1-2967
-----------------------------------------------------------------------------------------------------------------------
4.6 Ameren Supplemental Indenture to the UE February 1974, UE Form 8-K,
UE Mortgage dated as of February 1, Exhibit No. 3, File No. 1-2967
1974
-----------------------------------------------------------------------------------------------------------------------
4.7 Ameren Supplemental Indenture to the UE Exhibit No. 4.6, File No.
UE Mortgage dated as of July 7, 1980 2-69821
-----------------------------------------------------------------------------------------------------------------------
4.8 Ameren Supplemental Indenture to the UE Exhibit No. 4.4, File No.
UE Mortgage dated as of December 1, 33-45008
1991
-----------------------------------------------------------------------------------------------------------------------
4.9 Ameren Supplemental Indenture to the UE Exhibit No. 4.5, File No.
UE Mortgage dated as of December 4, 33-45008
1991
-----------------------------------------------------------------------------------------------------------------------
4.10 Ameren Supplemental Indenture to the UE UE 1991 Form 10-K, Exhibit 4.6,
UE Mortgage dated as of January 1, File No. 1-2967
1992
-----------------------------------------------------------------------------------------------------------------------
4.11 Ameren Supplemental Indenture to the UE UE 1992 Form 10-K, Exhibit 4.6,
UE Mortgage dated as of October 1, File No. 1-2967
1992
-----------------------------------------------------------------------------------------------------------------------
4.12 Ameren Supplemental Indenture to the UE UE 1992 Form 10-K, Exhibit 4.7,
UE Mortgage dated as of December 1, File No. 1-2967
1992
-----------------------------------------------------------------------------------------------------------------------
4.13 Ameren Supplemental Indenture to the UE UE 1992 Form 10-K, Exhibit 4.8,
UE Mortgage dated as of February 1, File No. 1-2967
1993
-----------------------------------------------------------------------------------------------------------------------
4.14 Ameren Supplemental Indenture to the UE UE 1993 Form 10-K, Exhibit 4.6,
UE Mortgage dated as of May 1, 1993 File No. 1-2967
-----------------------------------------------------------------------------------------------------------------------



190







----------------------------------------------------------------------------------------------------------------------
4.15 Ameren Supplemental Indenture to the UE UE 1993 Form 10-K, Exhibit 4.7,
UE Mortgage dated as of August 1, 1993 File No. 1-2967
----------------------------------------------------------------------------------------------------------------------
4.16 Ameren Supplemental Indenture to the UE UE 1993 Form 10-K, Exhibit 4.8,
UE Mortgage dated as of October 1, File No. 1-2967
1993
----------------------------------------------------------------------------------------------------------------------
4.17 Ameren Supplemental Indenture to the UE UE 1993 Form 10-K, Exhibit 4.9,
UE Mortgage dated as of January 1, File No. 1-2967
1994
----------------------------------------------------------------------------------------------------------------------
4.18 Ameren Supplemental Indenture to the UE UE 2000 Form 10-K, Exhibit 4.1,
UE Mortgage dated as of February 1, File No. 1-2967
2000
----------------------------------------------------------------------------------------------------------------------
4.19 Ameren Supplemental Indenture to the UE August 22, 2002, UE Form 8-K,
UE Mortgage dated as of August 15, Exhibit 4.3, File No. 1-2967
2002
----------------------------------------------------------------------------------------------------------------------
4.20 Ameren Supplemental Indenture to the UE March 10, 2003, UE Form 8-K,
UE Mortgage dated as of March 5, 2003 Exhibit 4.4, File No. 1-2967
----------------------------------------------------------------------------------------------------------------------
4.21 Ameren Supplemental Indenture to the UE April 9, 2003, UE Form 8-K,
UE Mortgage dated as of April 1, 2003 Exhibit 4.4, File No. 1-2967
----------------------------------------------------------------------------------------------------------------------
4.22 Ameren Supplemental Indenture to the UE July 28, 2003, UE Form 8-K,
UE Mortgage dated as of July 15, 2003 Exhibit 4.4, File No. 1-2967
----------------------------------------------------------------------------------------------------------------------
4.23 Ameren Supplemental Indenture to the UE October 7, 2003, UE Form 8-K,
UE Mortgage dated as of October 1, Exhibit 4.4, File No. 1-2967
2003
----------------------------------------------------------------------------------------------------------------------
4.24 Ameren Indenture (for unsecured UE 1996 Form 10-K, Exhibit
UE subordinated debt securities) of 4.36, File No. 1-2967
UE dated as of December 1, 1996
----------------------------------------------------------------------------------------------------------------------
4.25 Ameren Loan Agreement dated as of UE 1992 Form 10-K, Exhibit
UE December 1, 1991, between The 4.37, File No. 1-2967
State Environmental Improvement and
Energy Resources Authority and UE,
together with Indenture of Trust
dated as of December 1, 1991,
between The State Environmental
Improvement and Energy Resources
Authority and UMB Bank, N.A. as
successor trustee to Mercantile
Bank of St. Louis, N. A.
----------------------------------------------------------------------------------------------------------------------
4.26 Ameren Loan Agreement dated as of UE 1992 Form 10-K, Exhibit
UE December 1, 1992, between The 4.38, File No. 1-2967
State Environmental Improvement
and Energy Resources Authority and
UE, together with Indenture of
Trust dated as of December 1, 1992,
between The State Environmental
Improvement and Energy Resources
Authority and UMB Bank, N.A. as
successor trustee to Mercantile
Bank of St. Louis, N. A.
----------------------------------------------------------------------------------------------------------------------




191






----------------------------------------------------------------------------------------------------------------------
4.27 Ameren Series 1998A Loan Agreement dated September 30, 1998, UE Form
UE as of September 1, 1998, between 10-Q, Exhibit 4.28, File No.
The State Environmental 1-2967
Improvement and Energy Resources
Authority of the State of Missouri
and UE
----------------------------------------------------------------------------------------------------------------------
4.28 Ameren Series 1998B Loan Agreement dated September 30, 1998, UE Form
UE as of September 1, 1998, between 10-Q, Exhibit 4.29, File No.
The State Environmental 1-2967
Improvement and Energy Resources
Authority of the State of Missouri
and UE
----------------------------------------------------------------------------------------------------------------------
4.29 Ameren Series 1998C Loan Agreement dated September 30, 1998, UE Form
UE as of September 1, 1998, between 10-Q, Exhibit 4.30, File No.
The State Environmental 1-2967
Improvement and Energy Resources
Authority of the State of Missouri
and UE
----------------------------------------------------------------------------------------------------------------------
4.30 Ameren Indenture dated as of August 15, August 22, 2002, UE Form 8-K,
UE 2002, from UE to The Bank of New Exhibit 4.1, File No. 1-2967
York, as Trustee, relating to
senior secured debt securities
(including the forms of senior
secured debt securities as
exhibits)
----------------------------------------------------------------------------------------------------------------------
4.31 Ameren UE Company Order dated August 22, August 22, 2002, UE Form 8-K,
UE 2002, establishing the 5.25% Exhibit 4.2, File No. 1-2967
senior secured notes due 2012
----------------------------------------------------------------------------------------------------------------------
4.32 Ameren UE Company Order dated March 10, March 10, 2003, UE Form 8-K,
UE 2003, establishing the 5.50% Exhibit 4.2, File No. 1-2967
senior secured notes due 2034
----------------------------------------------------------------------------------------------------------------------
4.33 Ameren UE Company Order dated April 9, April 9, 2003, UE Form 8-K,
UE 2003, establishing the 4.75% Exhibit 4.2, File No. 1-2967
senior secured notes due 2015
----------------------------------------------------------------------------------------------------------------------
4.34 Ameren UE Company Order dated July 28, July 28, 2003, UE Form 8-K,
UE 2003, establishing the 5.10% Exhibit 4.2, File No. 1-2967
senior secured notes due 2018
----------------------------------------------------------------------------------------------------------------------
4.35 Ameren UE Company Order dated October 7, October 7, 2003, UE Form 8-K,
UE 2003, establishing the 4.65% Exhibit 4.2, File No. 1-2967
senior secured notes due 2013
----------------------------------------------------------------------------------------------------------------------
4.36 Ameren Indenture of Mortgage or Deed of Exhibit 2.01, File No. 2-60232
CIPS Trust dated October 1, 1941, from
CIPS to Continental Illinois
National Bank and Trust Company of
Chicago and Edmond B. Stofft, as
Trustees (U.S. Bank Trust National
Association and Patrick J. Crowley
are successor Trustees) (CIPS
Mortgage)
----------------------------------------------------------------------------------------------------------------------
4.37 Ameren Supplemental Indenture to the CIPS Amended Exhibit 7(b), File No.
CIPS Mortgage, dated September 1, 1947 2-7341
----------------------------------------------------------------------------------------------------------------------
4.38 Ameren Supplemental Indenture to the CIPS Second Amended Exhibit 7.03,
CIPS Mortgage, dated January 1, 1949 File No. 2-7795
----------------------------------------------------------------------------------------------------------------------



192






----------------------------------------------------------------------------------------------------------------------
4.39 Ameren Supplemental Indenture to the CIPS Second Amended Exhibit 4.07,
CIPS Mortgage, dated February 1, 1952 File No. 2-9353
----------------------------------------------------------------------------------------------------------------------
4.40 Ameren Supplemental Indenture to the CIPS Amended Exhibit 4.05, File No.
CIPS Mortgage, dated September 1, 1952 2-9802
----------------------------------------------------------------------------------------------------------------------
4.41 Ameren Supplemental Indenture to the CIPS Amended Exhibit 4.02, File No.
CIPS Mortgage, dated June 1, 1954 2-10944
----------------------------------------------------------------------------------------------------------------------
4.42 Ameren Supplemental Indenture to the CIPS Amended Exhibit 2.02, File No.
CIPS Mortgage, dated February 1, 1958 2-13866
----------------------------------------------------------------------------------------------------------------------
4.43 Ameren Supplemental Indenture to the CIPS Amended Exhibit 2.02, File No.
CIPS Mortgage, dated January 1, 1959 2-14656
----------------------------------------------------------------------------------------------------------------------
4.44 Ameren Supplemental Indenture to the CIPS Amended Exhibit 2.02, File No.
CIPS Mortgage, dated May 1, 1963 2-21345
----------------------------------------------------------------------------------------------------------------------
4.45 Ameren Supplemental Indenture to the CIPS Amended Exhibit 2.02, File No.
CIPS Mortgage, dated May 1, 1964 2-22326
----------------------------------------------------------------------------------------------------------------------
4.46 Ameren Supplemental Indenture to the CIPS Amended Exhibit 2.02, File No.
CIPS Mortgage, dated June 1, 1965 2-23569
----------------------------------------------------------------------------------------------------------------------
4.47 Ameren Supplemental Indenture to the CIPS Amended Exhibit 2.02, File No.
CIPS Mortgage, dated May 1, 1967 2-26284
----------------------------------------------------------------------------------------------------------------------
4.48 Ameren Supplemental Indenture to the CIPS Amended Exhibit 2.02, File No.
CIPS Mortgage, dated April 1, 1970 2-36388
----------------------------------------------------------------------------------------------------------------------
4.49 Ameren Supplemental Indenture to the CIPS Amended Exhibit 2.02, File No.
CIPS Mortgage, dated April 1, 1971 2-39587
----------------------------------------------------------------------------------------------------------------------
4.50 Ameren Supplemental Indenture to the CIPS Amended Exhibit 2.02, File No.
CIPS Mortgage, dated September 1, 1971 2-41468
----------------------------------------------------------------------------------------------------------------------
4.51 Ameren Supplemental Indenture to the CIPS Amended Exhibit 2.02, File No.
CIPS Mortgage, dated May 1, 1972 2-43912
----------------------------------------------------------------------------------------------------------------------
4.52 Ameren Supplemental Indenture to the CIPS Exhibit 2.03, File No. 2-60232
CIPS Mortgage, dated December 1, 1973
----------------------------------------------------------------------------------------------------------------------
4.53 Ameren Supplemental Indenture to the CIPS Amended Exhibit 2.02, File No.
CIPS Mortgage, dated March 1, 1974 2-50146
----------------------------------------------------------------------------------------------------------------------
4.54 Ameren Supplemental Indenture to the CIPS Amended Exhibit 2.02, File No.
CIPS Mortgage, dated April 1, 1975 2-52886
----------------------------------------------------------------------------------------------------------------------
4.55 Ameren Supplemental Indenture to the CIPS Second Amended Exhibit 2.04,
CIPS Mortgage, dated October 1, 1976 File No. 2-57141
----------------------------------------------------------------------------------------------------------------------
4.56 Ameren Supplemental Indenture to the CIPS Amended Exhibit 2.04, File No.
CIPS Mortgage, dated November 1, 1976 2-57557
----------------------------------------------------------------------------------------------------------------------



193





------------------------------------------------------------------------------------------------------------------------
4.57 Ameren Supplemental Indenture to the CIPS Amended Exhibit 2.06, File No.
CIPS Mortgage, dated October 1, 1978 2-62564
------------------------------------------------------------------------------------------------------------------------
4.58 Ameren Supplemental Indenture to the CIPS Exhibit 2.02(a), File No.
CIPS Mortgage, dated August 1, 1979 2-65914
------------------------------------------------------------------------------------------------------------------------
4.59 Ameren Supplemental Indenture to the CIPS Exhibit 2.02(a), File No.
CIPS Mortgage, dated February 1, 1980 2-66380
------------------------------------------------------------------------------------------------------------------------
4.60 Ameren Supplemental Indenture to the CIPS Amended Exhibit 4.02, File No.
CIPS Mortgage, dated February 1, 1986 33-3188
------------------------------------------------------------------------------------------------------------------------
4.61 Ameren Supplemental Indenture to the CIPS May 15, 1992, CIPS Form 8-K,
CIPS Mortgage, dated May 15, 1992 Exhibit 4.02, File No. 1-3672
------------------------------------------------------------------------------------------------------------------------
4.62 Ameren Supplemental Indenture to the CIPS July 1, 1992, CIPS Form 8-K,
CIPS Mortgage, dated July 1, 1992 Exhibit 4.02, File No. 1-3672
------------------------------------------------------------------------------------------------------------------------
4.63 Ameren Supplemental Indenture to the CIPS September 15, 1992, CIPS
CIPS Mortgage, dated September 15, 1992 Form 8-K, Exhibit 4.02, File
No. 1-3672
------------------------------------------------------------------------------------------------------------------------
4.64 Ameren Supplemental Indenture to the CIPS March 30, 1993, CIPS Form 8-K,
CIPS Mortgage, dated April 1, 1993 Exhibit 4.02, File No. 1-3672
------------------------------------------------------------------------------------------------------------------------
4.65 Ameren Supplemental Indenture to the CIPS June 5, 1995, CIPS Form 8-K,
CIPS Mortgage, dated June 1, 1995 Exhibit 4.03, File No. 1-3672
------------------------------------------------------------------------------------------------------------------------
4.66 Ameren Supplemental Indenture to the CIPS March 15, 1997, CIPS Form 8-K,
CIPS Mortgage, dated March 15, 1997 Exhibit 4.03, File No. 1-3672
------------------------------------------------------------------------------------------------------------------------
4.67 Ameren Supplemental Indenture to the CIPS June 1, 1997, CIPS Form 8-K,
CIPS Mortgage, dated June 1, 1997 Exhibit 4.03, File No. 1-3672
------------------------------------------------------------------------------------------------------------------------
4.68 Ameren Supplemental Indenture to the CIPS Exhibit 4.2, File No. 333-59438
CIPS Mortgage, dated December 1, 1998
------------------------------------------------------------------------------------------------------------------------
4.69 Ameren Supplemental Indenture to the CIPS June 30, 2001, CIPS Form 10-Q,
CIPS Mortgage, dated June 1, 2001 Exhibit 4.1, File No. 1-3672
------------------------------------------------------------------------------------------------------------------------
4.70 Ameren Agreement, dated as of October 9, October 14, 1998, Form 8-K,
1998, between Ameren and EquiServe Exhibit 4, File No. 1-3672
Trust Company, N.A. (as successor
to First Chicago Trust Company of
New York), as Rights Agent, which
includes the form of Certificate
of Designation of the Preferred
Shares as Exhibit A, the form of
Rights Certificate as Exhibit B
and the Summary of Rights as
Exhibit C
------------------------------------------------------------------------------------------------------------------------
4.71 Ameren Indenture dated as of December 1, Exhibit 4.4, File No. 333-59438
CIPS 1998, from CIPS to The Bank of New
York, as Trustee, relating to
CIPS' senior notes, 5.375% due
2008 and 6.125% due 2028
------------------------------------------------------------------------------------------------------------------------



194





------------------------------------------------------------------------------------------------------------------------
4.72 Ameren Indenture dated as of November 1, Exhibit 4.1, File No. 333-56594
Genco 2000, from Genco to The Bank of New
York, as Trustee, relating to the
issuance of senior notes
------------------------------------------------------------------------------------------------------------------------
4.73 Ameren First Supplemental Indenture dated Exhibit 4.2, File No. 333-56594
Genco as of November 1, 2000, to
Indenture dated as of November 1,
2000, from Genco to The Bank of
New York, as Trustee, relating to
Genco's 7.75% senior notes, Series
A due 2005 and 8.35% senior notes,
Series B due 2010
------------------------------------------------------------------------------------------------------------------------
4.74 Ameren Form of Second Supplemental Exhibit 4.3, File No. 333-56594
Genco Indenture dated as of June 12,
2001, to Indenture dated as of
November 1, 2000, from Genco to The
Bank of New York, as Trustee,
relating to Genco's 7.75% senior
notes, Series C due 2005 and 8.35%
senior note, Series D due 2010
(including as exhibit the form of
Exchange Note)
------------------------------------------------------------------------------------------------------------------------
4.75 Ameren Third Supplemental Indenture dated June 30, 2002, Genco, Form 10-Q,
Genco as of June 1, 2002, to Indenture Exhibit 4.1, File No. 333-56594
dated as of November 1, 2000, from
Genco to The Bank of New York, as
Trustee, relating to Genco's 7.95%
senior notes, Series E due 2032
(including as exhibit the form of
note)
------------------------------------------------------------------------------------------------------------------------
4.76 Ameren Fourth Supplemental Indenture Genco 2002, Form 10-K, Exhibit
Genco dated as of January 15, 2003, to 4.5, File No. 333-56594
Indenture dated as of November 1,
2000, from Genco to The Bank of New
York, as Trustee, relating to
Genco 7.95% senior notes, Series F
due 2032 (including as exhibit the
form of Exchange Note)
------------------------------------------------------------------------------------------------------------------------
4.77 Ameren Indenture of Ameren with The Bank Exhibit 4.5, File No. 333-81774
of New York, as Trustee, relating
to senior debt securities dated as
of December 1, 2001 (Ameren's
Senior Indenture)
------------------------------------------------------------------------------------------------------------------------
4.78 Ameren Ameren Company Order relating to Exhibit 4.7, File No. 333-81774
$100 million 5.70% notes due
February 1, 2007, issued under
Ameren's Senior Indenture
------------------------------------------------------------------------------------------------------------------------
4.79 Ameren Ameren Company Order relating to Exhibit 4.8, File No. 333-81774
$345 million Notes due May 15,
2007, issued under Ameren's Senior
Indenture
------------------------------------------------------------------------------------------------------------------------



195





------------------------------------------------------------------------------------------------------------------------
4.80 Ameren Purchase Contract Agreement dated Exhibit 4.15, File No. 333-81774
as of March 1, 2002, between Ameren
and The Bank of New York, as
purchase contract agent, relating
to the 13,800,000 9.75% Adjustable
Conversion-Rate Equity Security
Units (Equity Security Units)
------------------------------------------------------------------------------------------------------------------------
4.81 Ameren Pledge Agreement dated as of March Exhibit No. 4.16, File No.
1, 2002, among Ameren, The Bank of 333-81774
New York, as purchase contract
agent and BNY Trust Company of
Missouri, as collateral agent,
custodial agent and securities
intermediary, relating to the
Equity Security Units
------------------------------------------------------------------------------------------------------------------------
4.82 Ameren Indenture, dated as of October 18, Exhibits 4.1 and 4.2, File No.
CILCORP 1999, between Midwest Energy, Inc. 333-90373
and The Bank of New York, as
Trustee, and First Supplemental
Indenture, dated as of October 18,
1999, between CILCORP and the Bank
of New York
------------------------------------------------------------------------------------------------------------------------
4.83 Ameren Indenture of Mortgage and Deed of Designated in Registration No.
CILCO Trust between Illinois Power and 2-1937 as Exhibit B-1, in
Bankers Trust Company, as Trustee, Registration No. 2-2093 as
dated as of April 1, 1933 (CILCO Exhibit B-1(a), in Form 8-K for
Mortgage), Supplemental Indenture April 1940.
between the same parties dated as
of June 30, 1933, Supplemental
Indenture between CILCO and
Bankers Trust Company, as Trustee,
dated as of July 1, 1933, and
Supplemental Indenture between the
same parties dated as of January
1, 1935, securing first mortgage
bonds.
------------------------------------------------------------------------------------------------------------------------
4.84 Ameren Supplemental Indenture to the December 1949, CILCO 8-K,
CILCO CILCO Mortgage, dated December 1, Exhibit A, File No. 1-2732
1949
------------------------------------------------------------------------------------------------------------------------
4.85 Ameren Supplemental Indenture to the December 1951, CILCO 8-K,
CILCO CILCO Mortgage, dated December 1, Exhibit A, File No. 1-2732
1951
------------------------------------------------------------------------------------------------------------------------
4.86 Ameren Supplemental Indenture to the July 1957, CILCO 8-K, Exhibit A,
CILCO CILCO Mortgage, dated July 1, 1957 File No. 1-2732
------------------------------------------------------------------------------------------------------------------------
4.87 Ameren Supplemental Indenture to the July 1958, CILCO 8-K, Exhibit A,
CILCO CILCO Mortgage, dated July 1, 1958 File No. 1-2732
------------------------------------------------------------------------------------------------------------------------
4.88 Ameren Supplemental Indenture to the March 1960, CILCO 8-K, Exhibit A,
CILCO CILCO Mortgage, dated March 1, 1960 File No. 1-2732
------------------------------------------------------------------------------------------------------------------------



196





--------------------------------------------------------------------------------------------------------------------------
4.89 Ameren Supplemental Indenture to the September 1961, CILCO 8-K,
CILCO CILCO Mortgage, dated September Exhibit A, File No. 1-2732
20, 1961
--------------------------------------------------------------------------------------------------------------------------
4.90 Ameren Supplemental Indenture to the March 1963, CILCO 8-K, Exhibit B,
CILCO CILCO Mortgage, dated March 1, 1963 File No. 1-2732
--------------------------------------------------------------------------------------------------------------------------
4.91 Ameren Supplemental Indenture to the February 1966, CILCO 8-K,
CILCO CILCO Mortgage, dated February 1, Exhibit A, File No. 1-2732
1966
--------------------------------------------------------------------------------------------------------------------------
4.92 Ameren Supplemental Indenture to the March 1967, CILCO 8-K, Exhibit A,
CILCO CILCO Mortgage, dated March 1, 1967 File No. 1-2732
--------------------------------------------------------------------------------------------------------------------------
4.93 Ameren Supplemental Indenture to the August 1970, CILCO 8-K, Exhibit A,
CILCO CILCO Mortgage, dated August 1, File No. 1-2732
1970
--------------------------------------------------------------------------------------------------------------------------
4.94 Ameren Supplemental Indenture to the September 1971, CILCO 8-K,
CILCO CILCO Mortgage, dated September 1, Exhibit A, File No. 1-2732
1971
--------------------------------------------------------------------------------------------------------------------------
4.95 Ameren Supplemental Indenture to the September 1972, CILCO 8-K,
CILCO CILCO Mortgage, dated September Exhibit A, File No. 1-2732
20, 1972
--------------------------------------------------------------------------------------------------------------------------
4.96 Ameren Supplemental Indenture to the April 1974, CILCO 8-K, Exhibit A,
CILCO CILCO Mortgage, dated April 1, 1974 File No. 1-2732
--------------------------------------------------------------------------------------------------------------------------
4.97 Ameren Supplemental Indenture to the June 1974, CILCO 8-K, Exhibit 2(b),
CILCO CILCO Mortgage, dated June 1, 1974 File No. 1-2732
--------------------------------------------------------------------------------------------------------------------------
4.98 Ameren Supplemental Indenture to the March 1975, CILCO 8-K, Exhibit A,
CILCO CILCO Mortgage, dated March 1, 1975 File No. 1-2732
--------------------------------------------------------------------------------------------------------------------------
4.99 Ameren Supplemental Indenture to the May 1976, CILCO 8-K, Exhibit A,
CILCO CILCO Mortgage, dated May 1, 1976 File No. 1-2732
--------------------------------------------------------------------------------------------------------------------------
4.100 Ameren Supplemental Indenture to the June 30, 1978, CILCO 10-Q,
CILCO CILCO Mortgage, dated May 16, 1978 Exhibit A, File No. 1-2732
--------------------------------------------------------------------------------------------------------------------------
4.101 Ameren Supplemental Indenture to the CILCO 1982 Form 10-K, Exhibit 2,
CILCO CILCO Mortgage, dated September 1, File No. 1-2732
1982
--------------------------------------------------------------------------------------------------------------------------
4.102 Ameren Supplemental Indenture to the January 30, 1982, CILCO 8-K,
CILCO CILCO Mortgage, dated January 15, Exhibit (4)(b), File No. 1-2732
1992
--------------------------------------------------------------------------------------------------------------------------
4.103 Ameren Supplemental Indenture to the January 29, 1993, CILCO 8-K,
CILCO CILCO Mortgage, dated January 1, Exhibit (4), File No. 1-2732
1993
--------------------------------------------------------------------------------------------------------------------------
4.104 Ameren Supplemental Indenture to the December 2, 1994, CILCO 8-K,
CILCO CILCO Mortgage, dated November 1, Exhibit 4, File No. 1-2732
1994
--------------------------------------------------------------------------------------------------------------------------
Material Contracts
--------------------------------------------------------------------------------------------------------------------------
10.1 Ameren Companies **Ameren's Long-term Incentive Ameren 1998, Form 10-K, Exhibit 10.1,
Plan of 1998 File No. 1-14756
--------------------------------------------------------------------------------------------------------------------------
10.2 Ameren Companies **Ameren's Change of Control Ameren 1998, Form 10-K, Exhibit 10.2,
Severance Plan File No. 1-14756
--------------------------------------------------------------------------------------------------------------------------



197





------------------------------------------------------------------------------------------------------------------------
10.3 Ameren Companies **Ameren's Deferred Compensation Ameren 1998 Form 10-K, Exhibit
Plan for Members of the Board of 10.4, File No. 1-14756
Directors
------------------------------------------------------------------------------------------------------------------------
10.4 Ameren Companies **Ameren's Deferred Compensation Ameren 2000 Form 10-K, Exhibit
Plan for Members of the Ameren 10.1, File No. 1-14756
Leadership Team as amended and
restated effective January 1, 2001
------------------------------------------------------------------------------------------------------------------------
10.5 Ameren Companies **Ameren's Executive Incentive Ameren 2000 Form 10-K, Exhibit
Compensation Program Elective 10.2, File No. 1-14756
Deferral Provisions for Members of
the Ameren Leadership Team as
amended and restated effective
January 1, 2001
------------------------------------------------------------------------------------------------------------------------
10.6 Ameren **2003 Ameren Executive Incentive March 31, 2003, Ameren Form
UE Plan 10-Q, Exhibit 10.1, File No.
CIPS 1-14756
Genco
CILCORP
CILCO
------------------------------------------------------------------------------------------------------------------------
10.7 Ameren **2004 Ameren Executive Incentive
UE Plan
CIPS
Genco
CILCORP
CILCO
------------------------------------------------------------------------------------------------------------------------
10.8 Ameren Asset Transfer Agreement between June 30, 2000, CIPS Form 10-Q,
CIPS Genco and CIPS Exhibit 10, File No.1-3672
Genco
------------------------------------------------------------------------------------------------------------------------
10.9 Ameren Amended Electric Power Supply Exhibit 10.2, File No. 333-56594
CIPS Agreement between Genco and
Genco Marketing Company
------------------------------------------------------------------------------------------------------------------------
10.10 Ameren Second Amended Electric Power March 31, 2001, Ameren Form
CIPS Supply Agreement between Genco and 10-Q, Exhibit 10.1, File No.
Genco Marketing Company 1-14756
------------------------------------------------------------------------------------------------------------------------
10.11 Ameren Electric Power Supply Agreement Exhibit 10.3, File No. 333-56594
CIPS between Marketing Company and CIPS
Genco
------------------------------------------------------------------------------------------------------------------------
10.12 Ameren Amended Electric Power Supply March 31, 2001, Ameren Form
CIPS Agreement between Marketing 10-Q, Exhibit 10.2, File No.
Genco Company and CIPS 1-14756
------------------------------------------------------------------------------------------------------------------------
10.13 Ameren Power Sales Agreement between September 30, 2001, UE Form
UE Marketing Company and UE 10-Q, Exhibit 10.1, File No.
Genco 1-2967
------------------------------------------------------------------------------------------------------------------------
10.14 Ameren Power Sales Agreement between March 31, 2002, UE Form 10-Q,
UE Marketing Company and UE Exhibit 10.1, File No. 1-2967
Genco
------------------------------------------------------------------------------------------------------------------------
10.15 Ameren Amended Joint Dispatch Agreement Exhibit 10.4, File No. 333-56594
UE among Genco, CIPS and UE
CIPS
Genco
------------------------------------------------------------------------------------------------------------------------
10.16 Ameren Lease Agreement dated as of UE 2002 Form 10-K, Exhibit
UE December 1, 2002, between the City 10.9, File No. 1-2967
of Bowling Green, Missouri, as
Lessor and UE, as Lessee
------------------------------------------------------------------------------------------------------------------------



198






------------------------------------------------------------------------------------------------------------------------
10.17 Ameren Trust Indenture dated as of UE 2002 Form 10-K, Exhibit
UE December 1, 2002, between the City 10.10, File No. 1-2967
of Bowling Green, Missouri and
Commerce Bank, N.A. as Trustee
------------------------------------------------------------------------------------------------------------------------
10.18 Ameren Bond Purchase Agreement dated as UE 2002 Form 10-K, Exhibit
UE of December 20, 2002, between the 10.11, File No. 1-2967
City of Bowling Green, Missouri
and UE as purchaser
------------------------------------------------------------------------------------------------------------------------
10.19 Ameren Amended and Restated Appendix I Ameren 2002 Form 10-K, Exhibit
UE ITC Agreement dated February 14, 10.17, File No. 1-14756
CIPS 2003, between the Midwest ISO and
Genco GridAmerica LLC (Grid America)
------------------------------------------------------------------------------------------------------------------------
10.20 Ameren Amended and Restated Limited Ameren 2002 Form 10-K, Exhibit
UE Liability Company Agreement of 10-18, File No. 1-14756
CIPS GridAmerica dated February 14, 2003
Genco
------------------------------------------------------------------------------------------------------------------------
10.21 Ameren Amended and Restated Master Ameren 2002 Form 10-K, Exhibit
UE Agreement by and among 10.19, File No. 1-14756
CIPS GridAmerica, GridAmerica Holdings,
Genco Inc., GridAmerica Companies and
National Grid USA dated February
14, 2003
------------------------------------------------------------------------------------------------------------------------
10.22 Ameren Amended and Restated Operation Ameren 2002 Form 10-K, Exhibit
CIPS Agreement by and among UE, CIPS, 10.20, File No. 1-14756
American Transmission Systems,
Inc., Northern Indiana Public
Service Company and GridAmerica
dated February 14, 2003
------------------------------------------------------------------------------------------------------------------------
10.23 Ameren **CILCO Executive Deferral Plan as CILCORP 1999 Form 10-K, Exhibit 10
CILCORP amended effective August 15, 1999
CILCO
------------------------------------------------------------------------------------------------------------------------
10.24 Ameren **CILCO Executive Deferral Plan II CILCORP 1999 Form 10-K, Exhibit 10a
CILCORP as amended effective April 1, 1999
CILCO
------------------------------------------------------------------------------------------------------------------------
10.25 Ameren **CILCO Benefit Replacement Plan. CILCORP 1999 Form 10-K, Exhibit 10b
CILCORP As amended effective August 15,
CILCO 1999
------------------------------------------------------------------------------------------------------------------------
10.26 Ameren **Retention Agreement between CILCORP 2001 Form 10-K, Exhibit 10c
CILCORP CILCO and Scott A. Cisel dated
CILCO October 16, 2001
------------------------------------------------------------------------------------------------------------------------
10.27 Ameren **CILCO Involuntary Severance Pay CILCORP 2001 Form 10-K, Exhibit 10e
CILCORP Plan effective July 16, 2001
CILCO
------------------------------------------------------------------------------------------------------------------------
10.28 Ameren **CILCO Restructured Executive CILCORP 1999 Form 10-K, Exhibit 10e
CILCORP Deferral Plan (approved August 15,
CILCO 1999)
------------------------------------------------------------------------------------------------------------------------
10.29 Ameren Contribution Agreement between September 30, 2003, Combined
CILCORP CILCO and AERG Ameren Companies Form 10-Q,
CILCO Exhibit 10.1*
------------------------------------------------------------------------------------------------------------------------



199





------------------------------------------------------------------------------------------------------------------------
10.30 Ameren Power Supply Agreement between September 30, 2003, Combined
CILCORP AERG and CILCO Ameren Companies Form 10-Q,
CILCO Exhibit 10.2*
------------------------------------------------------------------------------------------------------------------------
10.31 Ameren Second Amended Ameren Corporation September 30, 2003, Combined
UE System Utility Money Pool Ameren Companies Form 10-Q,
CIPS Agreement Exhibit 10.3*
CILCORP
CILCO
------------------------------------------------------------------------------------------------------------------------
10.32 Ameren Ameren Corporation System Non September 30, 2003, Combined
Genco State-Regulated Subsidiary Money Ameren Companies Form 10-Q,
CILCORP Pool Agreement Exhibit 10.4*
------------------------------------------------------------------------------------------------------------------------
Statement re:
Computation of Ratios
------------------------------------------------------------------------------------------------------------------------
12.1 Ameren Ameren's Statement of Computation
of Ratio of Earnings to Fixed
Charges Requirements
------------------------------------------------------------------------------------------------------------------------
12.2 Ameren UE's Statement of Computation of
UE Ratio of Earnings to Fixed Charges
and Preferred Stock Dividend
Requirements
------------------------------------------------------------------------------------------------------------------------
12.3 Ameren CIPS' Statement of Computation of
CIPS Ratio of Earnings to Fixed Charges
and Preferred Stock Dividend
Requirements
------------------------------------------------------------------------------------------------------------------------
12.4 Ameren Genco's Statement of Computation
Genco of Ratio of Earnings to Fixed
Charges
------------------------------------------------------------------------------------------------------------------------
12.5 Ameren CILCORP's Statement of Computation
CILCORP of Ratio of Earnings to Fixed
Charges
------------------------------------------------------------------------------------------------------------------------
12.6 Ameren CILCO's Statement of Computation
CILCO of Ratio of Earnings to Fixed
Charges and Preferred Stock
Dividend Requirements
------------------------------------------------------------------------------------------------------------------------
Code of Ethics
------------------------------------------------------------------------------------------------------------------------
14.1 Ameren Companies Code of Ethics
------------------------------------------------------------------------------------------------------------------------
Subsidiaries of the
Registrant
------------------------------------------------------------------------------------------------------------------------
21.1 Ameren Companies Subsidiaries of Ameren
------------------------------------------------------------------------------------------------------------------------
Consent of Experts
and Counsel
------------------------------------------------------------------------------------------------------------------------
23.1 Ameren Consent of Independent Accountants
with respect to Ameren
------------------------------------------------------------------------------------------------------------------------
23.2 UE Consent of Independent Accountants
with respect to UE
------------------------------------------------------------------------------------------------------------------------
23.3 CIPS Consent of Independent Accountants
with respect to CIPS
------------------------------------------------------------------------------------------------------------------------



200





-------------------------------------------------------------------------------------------------------------------
Power of Attorney
-------------------------------------------------------------------------------------------------------------------
24.1 Ameren Power of Attorney with respect to
Ameren
-------------------------------------------------------------------------------------------------------------------
24.2 UE Power of Attorney with respect to
UE
-------------------------------------------------------------------------------------------------------------------
24.3 CIPS Power of Attorney with respect to
CIPS
-------------------------------------------------------------------------------------------------------------------
24.4 Genco Power of Attorney with respect to
Genco
-------------------------------------------------------------------------------------------------------------------
24.5 CILCORP Power of Attorney with respect to
CILCORP
-------------------------------------------------------------------------------------------------------------------
24.6 CILCO Power of Attorney with respect to
CILCO
-------------------------------------------------------------------------------------------------------------------
Rule 13a-14(a) /
15d-14(a)
Certifications
-------------------------------------------------------------------------------------------------------------------
31.1 Ameren Rule13a-14(a)/15d-14(a)
Certification of Principal
Executive Officer of Ameren
-------------------------------------------------------------------------------------------------------------------
31.2 Ameren Rule 13a-14(a)/15d-14(a)
Certification of Principal
Financial Officer of Ameren
-------------------------------------------------------------------------------------------------------------------
31.3 UE Rule 13a-14(a)/15d-14(a)
Certification of Principal
Executive Officer of UE
-------------------------------------------------------------------------------------------------------------------
31.4 UE Rule 13a-14(a)/15d-14(a)
Certification of Principal
Financial Officer of UE
-------------------------------------------------------------------------------------------------------------------
31.5 CIPS Rule 13a-14(a)/15d-14(a)
Certification of Principal
Executive Officer of CIPS
-------------------------------------------------------------------------------------------------------------------
31.6 CIPS Rule 13a-14(a)/15d-14(a)
Certification of Principal
Financial Officer of CIPS
-------------------------------------------------------------------------------------------------------------------
31.7 Genco Rule 13a-14(a)/15d-14(a)
Certification of Principal
Executive Officer of Genco
-------------------------------------------------------------------------------------------------------------------
31.8 Genco Rule 13a-14(a)/15d-14(a)
Certification of Principal
Financial Officer of Genco
-------------------------------------------------------------------------------------------------------------------
31.9 CILCORP Rule 13a-14(a)/15d-14(a)
Certification of Principal
Executive Officer of CILCORP
-------------------------------------------------------------------------------------------------------------------
31.10 CILCORP Rule13a-14(a)/15d-14(a)
Certification of Principal
Financial Officer of CILCORP
-------------------------------------------------------------------------------------------------------------------
31.11 CILCO Rule 13a-14(a)/15d-14(a)
Certification of Principal
Executive Officer of CILCO
-------------------------------------------------------------------------------------------------------------------
31.12 CILCO Rule 13a-14(a)/15d-14(a)
Certification of Principal
Financial Officer of CILCO
-------------------------------------------------------------------------------------------------------------------



201







-------------------------------------------------------------------------------------------------------------------
Section 1350
Certifications
-------------------------------------------------------------------------------------------------------------------
32.1 Ameren Section 1350 Certification of
Principal Executive Officer of
Ameren
-------------------------------------------------------------------------------------------------------------------
32.2 Ameren Section 1350 Certification of
Principal Financial Officer of
Ameren
-------------------------------------------------------------------------------------------------------------------
32.3 UE Section 1350 Certification of
Principal Executive Officer of UE
-------------------------------------------------------------------------------------------------------------------
32.4 UE Section 1350 Certification of
Principal Financial Officer of UE
-------------------------------------------------------------------------------------------------------------------
32.5 CIPS Section 1350 Certification of
Principal Executive Officer of CIPS
-------------------------------------------------------------------------------------------------------------------
32.6 CIPS Section1350 Certification of
Principal Financial Officer of CIPS
-------------------------------------------------------------------------------------------------------------------
32.7 Genco Section 1350 Certification of
Principal Executive Officer of
Genco
-------------------------------------------------------------------------------------------------------------------
32.8 Genco Section 1350 Certification of
Principal Financial Officer of
Genco
-------------------------------------------------------------------------------------------------------------------
32.9 CILCORP Section 1350 Certification of
Principal Executive Officer of
CILCORP
-------------------------------------------------------------------------------------------------------------------
32.10 CILCORP Section 2350 Certification of
Principal Financial Officer of
CILCORP
-------------------------------------------------------------------------------------------------------------------
32.11 CILCO Section 1350 Certification of
Principal Executive Officer of
CILCO
-------------------------------------------------------------------------------------------------------------------
32.12 CILCO Section 1350 Certification of
Principal Financial Officer of
CILCO
-------------------------------------------------------------------------------------------------------------------
Additional
Exhibits
-------------------------------------------------------------------------------------------------------------------
99.1 Ameren Stipulation and Agreement dated Exhibit 99.1, File Nos.
UE July 15, 2002, in Missouri Public 333-87506 and 333-87506-01
Service Commission Case No.
EC-2002-1 (earnings complaint case
against UE)
-------------------------------------------------------------------------------------------------------------------


*The file number references for the Combined Ameren Companies' filings with
the SEC are: Ameren, 1-14756; UE, 1-2967; CIPS, 1-3672; Genco, 333-56594;
CILCORP, 2-95569; and CILCO, 1-2732.
**Management compensatory plan or arrangement.

Each Registrant hereby undertakes to furnish to the SEC upon request a copy
of any long-term debt instrument not listed above.



202