Ameren (AEE) 8-K Results of Operations and Financial Condition

Exhibit 99.1

 One Ameren Plaza

 1901 Chouteau

 Avenue

 St. Louis, MO 63103

[Missing Graphic Reference]

                                                                                                                                                       0;                                                                     

AMEREN NEWS RELEASE

Contacts:

Media	Analysts	Investors
Tim Fox	Bruce Steinke	Investor Services
(314) 554-3120	(314) 554-2574	(800) 255-2237
tfox2@ameren.com	bsteinke@ameren.com	invest@ameren.com

FOR IMMEDIATE RELEASE

AMEREN ANNOUNCES SECOND QUARTER 2006 EARNINGS

Lowers 2006 Earnings Guidance Range

ST. LOUIS, MO., Aug. 3, 2006—Ameren Corporation (NYSE: AEE) today announced second quarter 2006 net income of $123 million, or 60 cents per basic and diluted share, compared to net income of $185 million, or 93 cents per basic and diluted share, in the second quarter of 2005. Net income for the first six months of 2006 was $193 million, or 94 cents per share, compared to $306 million, or $1.55 per share, in the first half of 2005.

“Several factors contributed to Ameren’s decreased earnings in the second quarter as compared to last year,” said Gary L. Rainwater, chairman, chief executive officer and president of Ameren Corporation. “These included higher fuel and related transportation costs, decreased power plant availability, including an unplanned outage at our Callaway nuclear plant, costs associated with the Taum Sauk incident and milder weather.”

Revenues in the second quarter of 2006 of $1.6 billion were comparable to the prior-year period. Cooling degree days in the second quarter of 2006 were 20 percent above normal, but approximately 8 percent below the second quarter of 2005, according to the National Weather Service. As a result, weather-sensitive residential electric sales in the second quarter of 2006 fell almost 4 percent, and commercial electric sales decreased 1 percent below the prior-year period. The effect of weather is estimated to have reduced second quarter 2006 earnings by 4 cents per share versus the same period in 2005. 

Industrial electric sales in the second quarter of 2006 increased 9 percent as a result of sales to Noranda Aluminum, Inc, which became a customer on June 1, 2005. Interchange power sales decreased 7 percent in the second quarter of 2006 versus the same period a year ago, due primarily to decreased power plant availability and higher industrial electric sales.

Fuel and purchased power costs increased $39 million in the second quarter of 2006 over the same period in 2005, primarily because of significantly higher coal and related transportation costs,

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as well as higher purchased power costs as a result of plant outages and the expiration of a cost-based affiliate power supply contract at the end of 2005. In addition, other operations and maintenance expenses increased $19 million in the second quarter of 2006 as compared to the second quarter of 2005. Other operations and maintenance expenses increased principally because of $10 million of incremental costs associated with the December 2005 breach of the upper reservoir at AmerenUE’s Taum Sauk pumped-storage hydroelectric facility and higher legal fees.

“On July 19, and again on July 21, our service territory was hit by severe storms, which included several tornados,” added Rainwater. “These storms were the most damaging in the company’s history and resulted in the loss of power to approximately 700,000 of our customers. Through the dedication of a force of 5,200, including our employees, contractors and utility workers from 13 states, we restored service to all of our customers within nine days. While the full financial impact of these storms has not yet been determined, we have incurred unanticipated costs and the loss of electric margins as a result of these devastating storms.”

“The first half of 2006 was indeed challenging as several unexpected events transpired that negatively impacted earnings, including continuing costs from the Taum Sauk incident, milder winter weather, severe spring storms, unscheduled plant outages and weaker-than-expected power prices,” added Rainwater. “As we look ahead to the second half of 2006, we expect, among other things, to realize the benefits from the lack of a Callaway refueling outage, fewer outages and the lack of coal conservation measures at our coal-fueled power plants, and lower Midwest Independent Transmission System Operator, Inc. charges as compared to the second half of 2005. Looking forward to 2007, we are hopeful many of the events that negatively impacted earnings in 2006 will be behind us. We will also be working hard to get appropriate recovery of our higher operating costs and infrastructure investments in our pending rate cases in Missouri and Illinois. And finally, we will remain focused on optimizing the value of our low-cost unregulated generation in Illinois as below-market power supply agreements will expire at the end of 2006.”

Ameren also announced today that it is reducing its 2006 non-GAAP earnings guidance. The company now expects non-GAAP 2006 earnings to range between $2.75 and $3.00 per share, which excludes any impact of the July 2006 storms. Earnings per share guidance was reduced primarily because of reduced power plant availability in the second quarter of 2006, the incremental costs of the Taum Sauk incident, warmer-than-normal winter weather and lower-than-expected power prices for interchange sales. Ameren’s guidance assumes normal weather for the

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rest of 2006, excludes any impact of the July 2006 storms, and is subject to, among other things, plant operations, energy market and economic conditions, unusual or otherwise unexpected gains or losses and other risks and uncertainties outlined in Ameren’s Forward-looking Statements.

Ameren will conduct a conference call for financial analysts at 9:00 a.m. (Central Time) on Thursday, Aug. 3, to discuss second quarter 2006 earnings and other matters related to the company. Investors, the news media and the public may listen to a live Internet broadcast of the call at www.ameren.com by clicking on "Q2 2006 Ameren Corporation Earnings Conference Call," then the appropriate audio link. A slide presentation will also be available on Ameren’s Web site that reconciles second quarter and first half 2006 earnings per share to second quarter and first half 2005 earnings per share and the 2006 earnings per share guidance to 2005 earnings per share on a comparable share basis. This presentation will be posted in the “Investors” section of the Web site under “Presentations.” The analyst call will also be available for replay on the Internet for one year. Telephone playback of the conference call will also be available beginning at 11:00 a.m. (Central Time), from Aug. 3 through Aug. 10, by dialing, U.S. (800) 405-2236; international (303) 590-3000 and entering the number: 11065832#.

With assets of more than $18 billion, Ameren serves approximately 2.4 million electric customers and almost one million natural gas customers in a 64,000 square mile area of Missouri and Illinois. Ameren owns a diverse mix of electric generating plants strategically located in its Midwest market with a generating capacity of more than 16,200 megawatts.

Regulation G Statement

Ameren has presented certain information in this presentation on a diluted cents per share basis. These diluted per share amounts reflect certain factors that directly impact Ameren’s total earnings per share. Ameren believes this information is useful because it enables readers to better understand the impact of these factors on Ameren’s earnings per share. 2006 non-GAAP earnings per share guidance excludes any impact of the July 2006 storms, which has not yet been determined

Forward-looking Statements

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

·   regulatory actions, including changes in regulatory policies and ratemaking determinations;

·   changes in laws and other governmental actions, including monetary and fiscal policies;

·   the effects of increased competition in the future due to, among other things, deregulation of certain aspects of our business at both the state and federal levels, and the implementation of deregulation, such as when the current electric rate freeze and current power supply contracts expire in Illinois at the end of 2006;

·   the effects of participation in the Midwest Independent Transmission System;

·   the availability of fuel such as coal, natural gas and enriched uranium used to produce electricity; the availability of purchased power and natural gas for distribution; and the level and volatility of future market prices for such commodities, including the ability to recover the costs for such commodities;

·   the effectiveness of our risk management strategies and the use of financial and derivative instruments;

·   prices for power in the Midwest;

·   business and economic conditions, including their impact on interest rates;

·   disruptions of the capital markets or other events that make access to necessary capital more difficult or costly;

·   the impact of the adoption of new accounting standards and the application of appropriate technical accounting rules and guidance;

·   actions of credit rating agencies and the effects of such actions;

·   weather conditions and other natural phenomena;

·   the impact of system outages caused by severe weather conditions or other events;

·   generation plant construction, installation and performance, including costs associated with the Taum Sauk pumped-storage hydroelectric plant incident and its future operation;

·   operation of the Callaway nuclear power facility, including planned and unplanned outages, and decommissioning costs;

·   the effects of strategic initiatives, including acquisitions and divestitures;

·   the impact of current environmental regulations on utilities and power generating companies and the expectation that more stringent requirements will be introduced over time, which could have a negative financial effect;

·   labor disputes and future wage and employee benefits costs, including changes in returns on benefit plan assets;

·   changes in the energy markets, environmental laws or regulations, interest rates, or other factors that could adversely affect assumptions in connection with the Illinois Power Company acquisition;

·   the impact of conditions imposed by regulators in connection with their approval of Ameren’s acquisition of Illinois Power Company;

·   the inability of our counterparties to meet their obligations with respect to contracts and financial instruments;

·   the cost and availability of transmission capacity for the energy generated by Ameren generating facilities or required to satisfy energy sales;

·   legal and administrative proceedings; and

·   acts of sabotage, war, terrorism or intentionally disruptive acts.

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

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AMEREN CORPORATION (AEE)
CONSOLIDATED OPERATING STATISTICS
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2006			2005			2006			2005
Electric Sales - KWH (in millions):
Residential		5,365			5,563			11,495			11,838
Commercial		6,400			6,477			12,400			12,657
Industrial		6,174			5,648			11,907			10,477
Wholesale		1,846			2,254			3,772			4,733
Other		168			166			345			360
Native		19,953			20,108			39,919			40,065
Interchange sales		3,749			4,051			7,823			7,059
Total		23,702			24,159			47,742			47,124
Electric Revenues - (in millions):
Residential	$	423		$	437		$	793		$	811
Commercial		432			433			765			768
Industrial		266			253			480			434
Wholesale		63			80			126			166
Other		12			12			23			25
Native		1,196			1,215			2,187			2,204
Interchange sales		158			148			350			254
Other		24			31			52			58
Total		1,378			1,394			2,589			2,516
Power Supply - KWH (in millions):
UE		11,928			12,758			24,600			25,279
Genco		3,036			3,571			6,502			6,453
AERG		1,595			1,613			3,322			3,188
EEI		1,959			1,894			3,987			4,021
Other		59			69			154			162
Total Generation		18,577			19,905			38,565			39,103
Purchases		5,958			5,070			10,788			9,800
Line Losses		(833	)		(816	)		(1,611	)		(1,779	)
Total Electric Sales		23,702			24,159			47,742			47,124
Fuel Cost per KWH (cents)		1.239			1.142			1.202			1.095
Gas Sales - MMBTU (in thousands)		14,047			13,871			61,835			65,951
		June 30,			December 31,
		2006			2005
Common Stock:
Shares outstanding (in millions)		205.8			204.2
Book value per share	$	30.78		$	31.09
Capitalization Ratios:
Common equity		49.8	%		52.5	%
Preferred stock		1.5	%		1.6	%
Debt, net of cash		48.7	%		45.9	%

AMEREN CORPORATION (AEE)
CONSOLIDATED STATEMENT OF INCOME
(Unaudited, in millions, except per share amounts)
	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2006			2005			2006			2005
Operating Revenues:
Electric	$	1,378		$	1,407		$	2,589		$	2,529
Gas		172			174			761			670
Other		-			3			-			4
Total operating revenues		1,550			1,584			3,350			3,203
Operating Expenses:
Fuel and purchased power		524			485			1,049			894
Gas purchased for resale		104			106			557			460
Other operations and maintenance		394			375			742			720
Depreciation and amortization		162			157			327			314
Taxes other than income taxes		90			95			203			186
Total operating expenses		1,274			1,218			2,878			2,574
Operating Income		276			366			472			629
Other Income and Expenses:
Miscellaneous income		4			6			8			13
Miscellaneous expenses		(1	)		(6	)		(1	)		(7	)
Total other income		3			-			7			6
Interest Charges		80			77			156			151
Income Before Income Taxes, Minority Interest
and Preferred Dividends of Subsidiaries		199			289			323			484
Income Taxes		68			100			112			171
Income Before Minority Interest and Preferred
Dividends of Subsidiaries		131			189			211			313
Minority Interest and Preferred Dividends of Subsidiaries		(8	)		(4	)		(18	)		(7	)
Net Income	$	123		$	185		$	193		$	306
Earnings per Common Share - Basic and Diluted:	$	0.60		$	0.93		$	0.94		$	1.55
Average Common Shares Outstanding		205.4			199.7			205.1			197.5

AMEREN CORPORATION (AEE)
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited, in millions)
	Six Months Ended
	June 30,
	2006			2005
Cash Flows From Operating Activities:
Net income	$	193		$	306
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization		311			272
Amortization of nuclear fuel		16			17
Amortization of debt issuance costs and premium/discounts		7			7
Deferred income taxes and investment tax credits, net		(19	)		66
Loss on sale of leveraged leases		4			-
Minority interest		12			1
Other		5			4
Changes in assets and liabilities:
Receivables, net		168			(8	)
Materials and supplies		25			46
Accounts and wages payable		(258	)		(163	)
Taxes accrued		(33	)		112
Assets, other		49			(54	)
Liabilities, other		10			1
Pension and other postretirement benefit obligations, net		46			54
Net cash provided by operating activities		536			661
Cash Flows From Investing Activities:
Capital expenditures		(406	)		(442	)
Acquisitions of combustion turbines		(292	)		-
Nuclear fuel expenditures		(25	)		(13	)
Proceeds from sale of leveraged leases		11			-
Other		-			12
Net cash used in investing activities		(712	)		(443	)
Cash Flows From Financing Activities:
Dividends on common stock		(260	)		(253	)
Capital issuance costs		(2	)		(1	)
Short-term debt, net		204			(256	)
Dividends paid to minority interest		(14	)		-
Redemptions, Repurchases and Maturities:
Long-term debt		(86	)		(237	)
Issuances:
Common stock		57			402
Long-term debt		232			85
Net cash provided by (used in) financing activities		131			(260	)
Net Change In Cash and Cash Equivalents		(45	)		(42	)
Cash and Cash Equivalents at Beginning of Year		96			69
Cash and Cash Equivalents at End of Period	$	51		$	27

AMEREN CORPORATION (AEE)
CONSOLIDATED BALANCE SHEET
(Unaudited, in millions)
	June 30,			December 31,
	2006			2005
ASSETS
Current Assets:
Cash and cash equivalents	$	51		$	96
Accounts receivable - trade		409			552
Unbilled revenue		355			382
Miscellaneous accounts and notes receivable		71			31
Materials and supplies, at average cost		549			572
Other current assets		110			185
Total current assets		1,545			1,818
Property and Plant, Net		13,920			13,572
Investments and Other Assets:
Investments in leveraged leases		32			50
Nuclear decommissioning trust fund		257			250
Goodwill		976			976
Intangible assets		250			246
Other assets		643			419
Regulatory assets		827			831
Total investments and other assets		2,985			2,772
TOTAL ASSETS	$	18,450		$	18,162
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current maturities of long-term debt	$	124		$	96
Short-term debt		397			193
Accounts and wages payable		404			706
Taxes accrued		97			131
Other current liabilities		386			361
Total current liabilities		1,408			1,487
Long-term Debt, Net		5,705			5,354
Preferred Stock of Subsidiary Subject to Mandatory Redemption		19			19
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes, net		1,958			1,969
Accumulated deferred investment tax credits		123			129
Regulatory liabilities		1,173			1,132
Asset retirement obligations		531			518
Accrued pension and other postretirement benefits		800			760
Other deferred credits and liabilities		174			218
Total deferred credits and other liabilities		4,759			4,726
Preferred Stock of Subsidiaries Not Subject to Mandatory Redemption		195			195
Minority Interest in Consolidated Subsidiaries		15			17
Stockholders' Equity:
Common stock		2			2
Other paid-in capital, principally premium on common stock		4,457			4,399
Retained earnings		1,932			1,999
Accumulated other comprehensive loss		(36	)		(24	)
Other		(6	)		(12	)
Total stockholders' equity		6,349			6,364
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	18,450		$	18,162