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.


                                      113



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