Ameren Combined 10-Q for period ended 9-30-2006

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

FORM 10-Q

(X)  Quarterly report pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
for the Quarterly Period Ended September 30, 2006
OR
(   )  Transition report pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
for the transition period from ____ to____.
 
 
Commission
File Number
Exact name of registrant as specified in its charter;
State of Incorporation;
Address and Telephone Number
 
IRS Employer
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) 677-5271
 
     
1-2732
Central Illinois Light Company
37-0211050
 
(Illinois Corporation)
 
 
300 Liberty Street
 
 
Peoria, Illinois 61602
 
 
(309) 677-5271
 
     
1-3004
Illinois Power Company
37-0344645
 
(Illinois Corporation)
 
 
370 South Main Street
 
 
Decatur, Illinois 62523
 
 
(217) 424-6600
 
 
 
 

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 require-ments for the past 90 days. Yes (X)  No ( )

Indicate by check mark whether each registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definitions of accelerated filer and large accelerated filer in Rule 12b-2 of the Securities Exchange Act of 1934.  

 
Large Accelerated Filer
Accelerated Filer
Non-Accelerated Filer
Ameren Corporation
(X)
(   )
(   )
Union Electric Company
(   )
(   )
(X)
Central Illinois Public Service Company
(   )
(   )
(X)
Ameren Energy Generating Company
(   )
(   )
(X)
CILCORP Inc.
(   )
(   )
(X)
Central Illinois Light Company
(   )
(   )
(X)
Illinois Power Company
(   )
(   )
(X)

Indicate by check mark whether each registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).  

Ameren Corporation
Yes
(   )
No
(X)
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)
Illinois Power Company
Yes
(   )
No
(X)

The number of shares outstanding of each registrant’s classes of common stock as of November 1, 2006, was as follows:

Ameren Corporation
Common stock, $.01 par value per share - 206,262,150
   
Union Electric Company
Common stock, $5 par value per share, 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
   
Illinois Power Company
Common stock, no par value, held by Ameren
Corporation (parent company of the registrant) - 23,000,000


 

 
OMISSION OF CERTAIN INFORMATION

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

This combined Form 10-Q is separately filed by Ameren Corporation, Union Electric Company, Central Illinois Public Service Company, Ameren Energy Generating Company, CILCORP Inc., Central Illinois Light Company, and Illinois Power Company. Each registrant hereto is filing on its own behalf all of the information contained in this quarterly 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.
 
 

 

TABLE OF CONTENTS
 
Page
Glossary of Terms and Abbreviations
5
   
Forward-looking Statements
6
   
PART I  Financial Information
 
   
Item 1.    Financial Statements (Unaudited)
 
Ameren Corporation
 
Consolidated Statement of Income
8
Consolidated Balance Sheet
9
Consolidated Statement of Cash Flows
10
Union Electric Company 
 
Consolidated Statement of Income
11
Consolidated Balance Sheet
12
Consolidated Statement of Cash Flows
13
Central Illinois Public Service Company
 
Statement of Income
14
Balance Sheet
15
Statement of Cash Flows
16
Ameren Energy Generating Company
 
Consolidated Statement of Income
17
Consolidated Balance Sheet
18
Consolidated Statement of Cash Flows
19
CILCORP Inc.
 
Consolidated Statement of Income
20
Consolidated Balance Sheet
21
Consolidated Statement of Cash Flows
22
Central Illinois Light Company
 
Consolidated Statement of Income
23
Consolidated Balance Sheet
24
Consolidated Statement of Cash Flows
25
Illinois Power Company
 
Consolidated Statement of Income
26
Consolidated Balance Sheet
27
Consolidated Statement of Cash Flows
28
   
Combined Notes to Financial Statements
29
   
Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations
57
Item 3.    Quantitative and Qualitative Disclosures About Market Risk
82
Item 4.    Controls and Procedures
85
   
PART II Other Information
 
   
Item 1.     Legal Proceedings
85
Item 1A. Risk Factors
86
Item 2.     Unregistered Sales of Equity Securities and Use of Proceeds
90
Item 6.     Exhibits
90
   
Signatures 
92

This Form 10-Q contains “forward-looking” statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. 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. Forward-looking statements should be read with the cautionary statements and important factors included on page 6 of this Form 10-Q under the heading “Forward-looking Statements.”
 
4

 
GLOSSARY OF TERMS AND ABBREVIATIONS

We use the words “our,” “we” or “us” with respect to certain information that relates to all Ameren Companies, as defined below. When appropriate, subsidiaries of Ameren are named specifically as we discuss their various business activities.
AERG - AmerenEnergy Resources Generating Company, a CILCO subsidiary that operates a non-rate-regulated electric generation business in Illinois.
AFS - Ameren Energy Fuels and Services Company, a Development Company subsidiary that procures fuel and natural gas and manages the related risks for the Ameren Companies.
Ameren - Ameren Corporation and its subsidiaries on a consolidated basis. In references to financing activities, acquisition activities, or liquidity arrangements, Ameren is defined as Ameren Corporation, the parent.
Ameren Companies - The individual registrants within the Ameren consolidated group.
Ameren Energy - Ameren Energy, Inc., an Ameren Corporation subsidiary that is a power marketing and risk management agent for affiliated companies. Beginning in 2007, Ameren Energy will only serve UE.
Ameren Illinois utilities - CIPS, CILCO and IP.
Ameren Services - Ameren Services Company, an Ameren Corporation subsidiary that provides support services to Ameren and its subsidiaries.
APB - Accounting Principles Board.
ARO - Asset retirement obligations.
Baseload - The minimum amount of electric power delivered or required over a given period of time at a steady rate.
Capacity factor - A percentage measure that indicates how much of an electric power generating unit’s capacity was used during a specific period.
CILCO - Central Illinois Light Company, a CILCORP subsidiary that operates a rate-regulated electric transmission and distribution business, a primarily non-rate-regulated electric generation business through AERG, and a rate-regulated natural gas transmission and distribution business, all in Illinois, as AmerenCILCO. CILCO owns all of the common stock of AERG.
CILCORP - CILCORP Inc., an Ameren Corporation subsidiary that operates as a holding company for CILCO and various non-rate-regulated subsidiaries.
CIPS - Central Illinois Public Service Company, an Ameren Corporation subsidiary that operates a rate-regulated electric and natural gas transmission and distribution business in Illinois as AmerenCIPS.
Cooling degree-days - The summation of positive differences between the mean daily temperature and a 65-degree Fahrenheit base. The statistic is useful as an indicator of demand for electricity for summer space cooling for residential and commercial customers.
CT - Combustion turbine electric generation equipment used primarily for peaking capacity.
CUB - Citizens Utility Board.
Development Company - Ameren Energy Development Company, a Resources Company subsidiary, and Genco and Marketing Company parent.
DOE - Department of Energy, a U.S. government agency.
DRPlus - Ameren Corporation’s dividend reinvestment and direct stock purchase plan.
Dynegy - Dynegy Inc.
DYPM - Dynegy Power Marketing, Inc., a Dynegy subsidiary.
EEI - Electric Energy, Inc., an 80%-owned Ameren Corporation subsidiary (40% owned by UE and 40% owned by Development Company) that operates non-rate-regulated electric generation and electric transmission facilities in Illinois. The remaining 20% is owned by Kentucky Utilities Company.
ELPC - Environmental Law and Policy Center.
EPA - Environmental Protection Agency, a U.S. government agency.
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.
FERC - The Federal Energy Regulatory Commission, a U.S. government agency.
FIN - FASB Interpretation. A FIN statement is an explanation intended to clarify accounting pronouncements previously issued by the FASB.
Fitch - Fitch Ratings, a credit rating agency.
GAAP - Generally accepted accounting principles in the United States.
Genco - Ameren Energy Generating Company, a Development Company subsidiary that operates a non-rate-regulated electric generation business in Illinois and Missouri.
Gigawatthour - One thousand megawatthours.
Heating degree-days - The summation of negative differences between the mean daily temperature and a 65- degree 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.
ICC - Illinois Commerce Commission, a state agency that regulates the Illinois utility businesses and operations of CIPS, CILCO, and IP.
Illinois Customer Choice Law - Illinois Electric Service Customer Choice and Rate Relief Law of 1997, which provided for electric utility restructuring and introduced competition into the retail supply of electric energy in Illinois.
Illinois EPA - Illinois Environmental Protection Agency, a state government agency.
Illinois Regulated - A financial reporting segment consisting of the regulated electric and gas transmission and distribution businesses of CIPS, CILCO and IP.
 
 
5

IP - Illinois Power Company, an Ameren Corporation subsidiary that was acquired from Dynegy on September 30, 2004. IP operates a rate-regulated electric and natural gas transmission and distribution business in Illinois as AmerenIP.
IP SPT - Illinois Power Special Purpose Trust, which was created as a subsidiary of Illinois Power Securitization Limited Liability Company to issue Transitional Funding Trust Notes as allowed under the Illinois Customer Choice Law. Pursuant to FIN 46R, IP SPT is a variable-interest entity, as the equity investment is not sufficient to permit IP SPT to finance its activities without additional subordinated debt.
JDA - The joint dispatch agreement among UE, CIPS, and Genco under which UE and Genco jointly dispatch electric generation. This agreement will terminate on December 31, 2006.
Kilowatthour - A measure of electricity consumption equivalent to the use of 1,000 watts of power over a period of one hour.
Marketing Company - Ameren Energy Marketing Company, a Development Company subsidiary that markets power for Genco, AERG and EEI primarily for periods over one year.
Medina Valley - AmerenEnergy Medina Valley Cogen (No. 4) LLC and its subsidiaries, which are all Development Company subsidiaries and indirectly own a 40-megawatt gas-fired electric generation plant.
Megawatthour - One thousand kilowatthours.
MGP - Manufactured gas plant.
MISO - Midwest Independent Transmission System Operator, Inc.
Missouri Regulated - A financial reporting segment consisting of all the operations of UE’s business except for UE’s 40% interest in EEI and other non-rate-regulated activities.
MISO Day Two Energy Market - A market that began operating on April 1, 2005. It uses market-based pricing, incorporating transmission congestion and line losses, to compensate market participants for power. The previous system required generators to make advance reservations for transmission service.
Money pool - Borrowing agreements among Ameren and its 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. These are referred to as the utility money pool and the non-state-regulated subsidiary money pool, respectively.
Moody’s - Moody’s Investors Service Inc., a credit rating agency.
MoPSC - Missouri Public Service Commission, a state agency that regulates the Missouri utility business and operations of UE.
Non-rate-regulated Generation - A financial reporting segment consisting of the operations or activities of Genco, CILCORP holding company, AERG, EEI and Marketing Company.
NOx - Nitrogen oxide.
Noranda - Noranda Aluminum, Inc.
NYMEX - New York Mercantile Exchange.
OCI - Other comprehensive income (loss) as defined by GAAP.
PUHCA 1935 - The Public Utility Holding Company Act of 1935, which was repealed, effective February 8, 2006, by the Energy Policy Act of 2005 that was enacted on August 8, 2005.
PUHCA 2005 - The Public Utility Holding Company Act of 2005, that was enacted as part of the Energy Policy Act of 2005, effective February 8, 2006.
Resources Company - Ameren Energy Resources Company, an Ameren Corporation subsidiary that consists of non-rate-regulated operations, including Development Company, Genco, Marketing Company, AFS, and Medina Valley.
S&P - Standard & Poor’s Ratings Services, a credit rating agency that is a division of The McGraw Hill Companies, Inc.
SEC - Securities and Exchange Commission, a U.S. government agency.
SFAS - Statement of Financial Accounting Standards, the accounting and financial reporting rules issued by the FASB.
SO2 - Sulfur dioxide.
UE - Union Electric Company, an Ameren Corporation subsidiary that operates a rate-regulated electric generation, transmission and distribution business, and a rate-regulated natural gas transmission and distribution business in Missouri, as AmerenUE.

_________________________________________________


FORWARD-LOOKING STATEMENTS

Statements in this report not based on historical facts are considered “forward-looking” and, accordingly, involve risks and uncertainties that could cause actual results to differ materially from those discussed. Although such forward-looking statements have been made in good faith and are based on reasonable assumptions, there is no assurance that the expected results will be achieved. These statements include (without limitation) statements as to future expectations, beliefs, plans, strategies, objectives, events, conditions, and financial performance. In connection with the “safe harbor” 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 our other filings with the SEC, could cause actual results to differ materially from management expectations suggested in such forward-looking statements:
 

·  
regulatory or legislative actions, including changes in regulatory policies and ratemaking determinations, such
 
 
6

as the outcome of UE, CIPS, CILCO and IP rate proceedings or the enactment of an extension of an electric rate freeze or similar action that impairs the full and timely recovery
of costs in Illinois;
·  
the impact of the termination of the JDA;
·  
changes in laws and other governmental actions, including monetary and fiscal policies;
·  
the effects of increased competition in the future due to, among other things, deregulation of certain aspects of our business at both the state and federal levels, and the implementation of deregulation, such as when the current electric rate freeze and current power supply contracts expire in Illinois at the end of 2006;
·  
the effects of participation in the MISO;
·  
the availability of fuel such as coal, natural gas and enriched uranium used to produce electricity; the availability of purchased power and natural gas for distribution; and the level and volatility of future market prices for such commodities, including the ability to recover the costs for such commodities;
·  
the effectiveness of our risk management strategies and the use of financial and derivative instruments;
·  
prices for power in the Midwest;
·  
business and economic conditions, including their impact on interest rates;
·  
disruptions of the capital markets or other events that make the Ameren Companies’ access to necessary capital more difficult or costly;
·  
the impact of the adoption of new accounting standards and the application of appropriate technical accounting rules and guidance;
·  
actions of credit rating agencies and the effects of such actions;
·  
weather conditions and other natural phenomena;
·  
the impact of system outages caused by severe weather conditions or other events;
·  
generation plant construction, installation and performance, including costs associated with UE’s Taum Sauk pumped-storage hydroelectric plant incident and its future operation;
·  
operation of UE’s nuclear power facility, including planned and unplanned outages, and decommissioning costs;
·  
the effects of strategic initiatives, including acquisitions and divestitures;
·  
the impact of current environmental regulations on utilities and power generating companies and the expectation that more stringent requirements will be introduced over time, which could have a negative financial effect;
·  
labor disputes and future wage and employee benefits costs, including changes in returns on benefit plan assets;
·  
changes in the energy markets, environmental laws or regulations, interest rates, or other factors that could adversely affect assumptions in connection with the IP acquisition;
·  
the impact of conditions imposed by regulators in connection with their approval of Ameren’s acquisition of IP;
·  
the inability of our counterparties and affiliates to meet their obligations with respect to contracts and financial instruments;
·  
the cost and availability of transmission capacity for the energy generated by the Ameren Companies’ facilities or required to satisfy energy sales made by the Ameren Companies;
·  
legal and administrative proceedings; and
·  
acts of sabotage, war, terrorism or intentionally disruptive acts.
 
Given these uncertainties, undue reliance should not be placed on these forward-looking statements. Except to the extent required by the federal securities laws, we undertake no obligation to publicly update or revise any forward-looking statements to reflect new information or future events.
 
 
7

PART I.   FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS
 
AMEREN CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(Unaudited) (In millions, except per share amounts)
                 
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
 
2006
 
2005
 
2006
 
2005
 
Operating Revenues:
                       
Electric
$
1,767
 
$
1,732
 
$
4,356
 
$
4,257
 
Gas
 
143
   
149
   
904
   
819
 
Other
 
-
   
-
   
-
   
3
 
Total operating revenues
 
1,910
   
1,881
   
5,260
   
5,079
 
                         
Operating Expenses:
                       
Fuel and purchased power
 
623
   
634
   
1,672
   
1,524
 
Gas purchased for resale
 
84
   
90
   
641
   
550
 
Other operations and maintenance
 
395
   
392
   
1,137
   
1,112
 
Depreciation and amortization
 
162
   
158
   
489
   
472
 
Taxes other than income taxes
 
99
   
98
   
302
   
284
 
Total operating expenses
 
1,363
   
1,372
   
4,241
   
3,942
 
                         
Operating Income
 
547
   
509
   
1,019
   
1,137
 
                         
Other Income and Expenses:
                       
Miscellaneous income
 
5
   
6
   
13
   
19
 
Miscellaneous expense
 
(3
)
 
(1
)
 
(4
)
 
(7
)
Total other income
 
2
   
5
   
9
   
12
 
                         
Interest Charges
 
82
   
70
   
238
   
221
 
                         
Income Before Income Taxes, Minority Interest
                       
and Preferred Dividends of Subsidiaries
 
467
   
444
   
790
   
928
 
                         
Income Taxes
 
161
   
159
   
273
   
330
 
                         
Income Before Minority Interest and Preferred
                       
Dividends of Subsidiaries
 
306
   
285
   
517
   
598
 
                         
Minority Interest and Preferred Dividends
                       
of Subsidiaries
 
(13
)
 
(5
)
 
(31
)
 
(12
)
                         
Net Income
$
293
 
$
280
 
$
486
 
$
586
 
                         
Earnings per Common Share – Basic and Diluted
$
1.42
 
$
1.37
 
$
2.37
 
$
2.94
 
                         
Dividends per Common Share
$
0.635
 
$
0.635
 
$
1.905
 
$
1.905
 
Average Common Shares Outstanding
 
205.9
   
203.8
   
205.4
   
199.6
 
                         
 
The accompanying notes are an integral part of these consolidated financial statements.
 
8



AMEREN CORPORATION
CONSOLIDATED BALANCE SHEET
(Unaudited) (In millions, except per share amounts)
         
 
September 30,
 
December 31,
 
 
2006
 
2005
 
ASSETS
           
Current Assets:
           
Cash and cash equivalents
$
34
 
$
96
 
Accounts receivable – trade (less allowance for doubtful
           
accounts of $13 and $22, respectively)
 
463
   
552
 
Unbilled revenue
 
267
   
382
 
Miscellaneous accounts and notes receivable
 
116
   
31
 
Materials and supplies
 
710
   
572
 
Other current assets
 
147
   
185
 
Total current assets
 
1,737
   
1,818
 
Property and Plant, Net
 
14,028
   
13,572
 
Investments and Other Assets:
           
Investments in leveraged leases
 
31
   
50
 
Nuclear decommissioning trust fund
 
271
   
250
 
Goodwill
 
976
   
976
 
Intangible assets
 
228
   
246
 
Other assets
 
753
   
419
 
Regulatory assets
 
806
   
831
 
Total investments and other assets
 
3,065
   
2,772
 
TOTAL ASSETS
$
18,830
 
$
18,162
 
             
LIABILITIES AND STOCKHOLDERS' EQUITY
           
Current Liabilities:
           
Current maturities of long-term debt
$
465
 
$
96
 
Short-term debt
 
311
   
193
 
Accounts and wages payable
 
382
   
706
 
Taxes accrued
 
249
   
131
 
Other current liabilities
 
433
   
361
 
Total current liabilities
 
1,840
   
1,487
 
Long-term Debt, Net
 
5,349
   
5,354
 
Preferred Stock of Subsidiary Subject to Mandatory Redemption
 
18
   
19
 
Deferred Credits and Other Liabilities:
           
Accumulated deferred income taxes, net
 
2,013
   
1,969
 
Accumulated deferred investment tax credits
 
121
   
129
 
Regulatory liabilities
 
1,205
   
1,132
 
Asset retirement obligations
 
538
   
518
 
Accrued pension and other postretirement benefits
 
840
   
760
 
Other deferred credits and liabilities
 
144
   
218
 
Total deferred credits and other liabilities
 
4,861
   
4,726
 
Preferred Stock of Subsidiaries Not Subject to Mandatory Redemption
 
195
   
195
 
Minority Interest in Consolidated Subsidiaries
 
19
   
17
 
Commitments and Contingencies (Notes 2, 8 and 9)
           
Stockholders' Equity:
           
Common stock, $.01 par value, 400.0 shares authorized,
           
206.2 and 204.7 shares outstanding, respectively
 
2
   
2
 
Other paid-in capital, principally premium on common stock
 
4,478
   
4,399
 
Retained earnings
 
2,094
   
1,999
 
Accumulated other comprehensive loss
 
(23
)
 
(24
)
Other
 
(3
)
 
(12
)
Total stockholders’ equity
 
6,548
   
6,364
 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
18,830
 
$
18,162
 
             
 
The accompanying notes are an integral part of these consolidated financial statements.
9

 
AMEREN CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited) (In millions)
         
 
Nine Months Ended
 
September 30,
 
 
2006
 
2005
 
Cash Flows From Operating Activities:
           
Net income
$
486
 
$
586
 
Adjustments to reconcile net income to net cash
           
provided by operating activities:
           
Depreciation and amortization
 
507
   
499
 
Amortization of nuclear fuel
 
26
   
25
 
Amortization of debt issuance costs and premium/discounts
 
12
   
11
 
Deferred income taxes and investment tax credits, net
 
7
   
83
 
Loss on sale of leveraged leases
 
4
   
-
 
Gain on sales of emission allowances
 
(25
)
 
(4
)
Minority interest
 
23
   
1
 
Other
 
17
   
3
 
Changes in assets and liabilities, excluding the effects of acquisitions:
           
Receivables, net
 
157
   
(1
)
Materials and supplies
 
(136
)
 
(94
)
Accounts and wages payable
 
(289
)
 
(72
)
Taxes accrued
 
148
   
172
 
Assets, other
 
(97
)
 
(28
)
Liabilities, other
 
101
   
(11
)
Pension and other postretirement benefit obligations, net
 
89
   
7
 
Net cash provided by operating activities
 
1,030
   
1,177
 
             
Cash Flows From Investing Activities:
           
Capital expenditures
 
(666
)
 
(660
)
Acquisitions, net of cash acquired
 
-
   
12
 
CT acquisitions
 
(292
)
 
-
 
Nuclear fuel expenditures
 
(37
)
 
(16
)
Proceeds from sale of leveraged leases
 
11
   
-
 
Purchases of emission allowances
 
(38
)
 
(92
)
Sales of emission allowances
 
12
   
4
 
Other
 
5
   
16
 
Net cash used in investing activities
 
(1,005
)
 
(736
)
             
Cash Flows From Financing Activities:
           
Dividends on common stock
 
(391
)
 
(383
)
Capital issuance costs
 
(4
)
 
(4
)
Short-term debt, net
 
118
   
(394
)
Borrowings from credit facility
 
40
   
-
 
Dividends paid to minority interest
 
(21
)
 
-
 
Redemptions, repurchases, and maturities:
           
Long-term debt
 
(138
)
 
(262
)
Preferred stock
 
(1
)
 
(1
)
Issuances:
           
Common stock
 
78
   
430
 
Long-term debt
 
232
   
382
 
Net cash used in financing activities
 
(87
)
 
(232
)
             
Net change in cash and cash equivalents
 
(62
)
 
209
 
Cash and cash equivalents at beginning of year
 
96
   
69
 
Cash and cash equivalents at end of period
$
34
 
$
278
 
             
 
The accompanying notes are an integral part of these consolidated financial statements.
 
10

 

UNION ELECTRIC COMPANY
CONSOLIDATED STATEMENT OF INCOME
(Unaudited) (In millions)
                 
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
 
2006
 
2005
 
2006
 
2005
 
Operating Revenues:
                       
Electric
$
836
 
$
876
 
$
2,090
 
$
2,134
 
Gas
 
20
   
19
   
111
   
120
 
Other
 
1
   
-
   
2
   
-
 
Total operating revenues
 
857
   
895
   
2,203
   
2,254
 
                         
Operating Expenses:
                       
Fuel and purchased power
 
214
   
261
   
598
   
586
 
Gas purchased for resale
 
10
   
8
   
66
   
66
 
Other operations and maintenance
 
214
   
199
   
581
   
573
 
Depreciation and amortization
 
82
   
79
   
243
   
231
 
Taxes other than income taxes
 
66
   
66
   
184
   
180
 
Total operating expenses
 
586
   
613
   
1,672
   
1,636
 
                         
Operating Income
 
271
   
282
   
531
   
618
 
                         
Other Income and Expenses:
                       
Miscellaneous income
 
2
   
3
   
6
   
12
 
Miscellaneous expense
 
(3
)
 
(2
)
 
(7
)
 
(6
)
Total other income (expense)
 
(1
)
 
1
   
(1
)
 
6
 
                         
Interest Charges
 
35
   
29
   
107
   
81
 
                         
Income Before Income Taxes and Equity
                       
in Income of Unconsolidated Investment
 
235
   
254
   
423
   
543
 
                         
Income Taxes
 
92
   
91
   
161
   
193
 
                         
Income Before Equity in Income
                       
of Unconsolidated Investment
 
143
   
163
   
262
   
350
 
                         
Equity in Income of Unconsolidated Investment
 
23
   
1
   
47
   
3
 
                         
Net Income
 
166
   
164
   
309
   
353
 
                         
Preferred Stock Dividends
 
1
   
1
   
4
   
4
 
                         
Net Income Available to Common Stockholder
$
165
 
$
163
 
$
305
 
$
349
 
                         
 
The accompanying notes as they relate to UE are an integral part of these consolidated financial statements.
 
11

 

UNION ELECTRIC COMPANY
CONSOLIDATED BALANCE SHEET
(Unaudited) (In millions, except per share amounts)
         
 
September 30,
 
December 31,
 
 
2006
 
2005
 
ASSETS
           
Current Assets:
           
Cash and cash equivalents
$
2
 
$
20
 
Accounts receivable – trade (less allowance for doubtful
           
accounts of $5 and $6, respectively)
 
196
   
190
 
Unbilled revenue
 
105
   
133
 
Miscellaneous accounts and notes receivable
 
84
   
7
 
Accounts receivable – affiliates
 
35
   
53
 
Current portion of intercompany note receivable – CIPS
 
-
   
6
 
Materials and supplies
 
236
   
199
 
Other current assets
 
59
   
57
 
Total current assets
 
717
   
665
 
Property and Plant, Net
 
7,756
   
7,379
 
Investments and Other Assets:
           
Nuclear decommissioning trust fund
 
271
   
250
 
Intercompany note receivable – CIPS
 
-
   
61
 
Intangible assets
 
63
   
63
 
Other assets
 
565
   
269
 
Regulatory assets
 
562
   
590
 
Total investments and other assets
 
1,461
   
1,233
 
TOTAL ASSETS
$
9,934
 
$
9,277
 
             
LIABILITIES AND STOCKHOLDERS' EQUITY
           
Current Liabilities:
           
Current maturities of long-term debt
$
10
 
$
4
 
Short-term debt
 
208
   
80
 
Accounts and wages payable
 
119
   
274
 
Accounts payable – affiliates
 
141
   
134
 
Taxes accrued
 
214
   
59
 
Other current liabilities
 
176
   
96
 
Total current liabilities
 
868
   
647
 
Long-term Debt, Net
 
2,932
   
2,698
 
Deferred Credits and Other Liabilities:
           
Accumulated deferred income taxes, net
 
1,286
   
1,277
 
Accumulated deferred investment tax credits
 
91
   
96
 
Regulatory liabilities
 
815
   
802
 
Asset retirement obligations
 
484
   
466
 
Accrued pension and other postretirement benefits
 
238
   
203
 
Other deferred credits and liabilities
 
51
   
72
 
Total deferred credits and other liabilities
 
2,965
   
2,916
 
Commitments and Contingencies (Notes 2, 8 and 9)
           
Stockholders' Equity:
           
Common stock, $5 par value, 150.0 shares authorized – 102.1 shares outstanding
 
511
   
511
 
Preferred stock not subject to mandatory redemption
 
113
   
113
 
Other paid-in capital, principally premium on common stock
 
736
   
733
 
Retained earnings
 
1,839
   
1,689
 
Accumulated other comprehensive loss
 
(30
)
 
(30
)
Total stockholders' equity
 
3,169
   
3,016
 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
9,934
 
$
9,277
 
             
 
The accompanying notes as they relate to UE are an integral part of these consolidated financial statements.
 
12

 

UNION ELECTRIC COMPANY
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited) (In millions)
         
 
Nine Months Ended
September 30,
 
 
2006
 
2005
 
Cash Flows From Operating Activities:
           
Net income
$
309
 
$
353
 
Adjustments to reconcile net income to net cash
           
provided by operating activities:
           
Depreciation and amortization
 
243
   
231
 
Amortization of nuclear fuel
 
26
   
25
 
Amortization of debt issuance costs and premium/discounts
 
4
   
3
 
Deferred income taxes and investment tax credits, net
 
(10
)
 
27
 
Gain on sales of emission allowances
 
(2
)
 
(2
)
Other
 
-
   
12
 
Changes in assets and liabilities:
           
Receivables, net
 
(34
)  
(96
)
Materials and supplies
 
(35
)
 
2
 
Accounts and wages payable
 
(127
)
 
44
 
Taxes accrued
 
174
   
130
 
Assets, other
 
(52
)   
(14
)
Liabilities, other
 
62
   
(2
)
Pension and other postretirement benefit obligations, net
 
35
   
(1
)
Net cash provided by operating activities
 
593
   
712
 
             
Cash Flows From Investing Activities:
           
Capital expenditures
 
(325
)
 
(388
)
CT acquisitions from nonaffiliates
 
(292
)
 
-
 
CT acquisitions from Genco
 
-
   
(241
)
Nuclear fuel expenditures
 
(37
)
 
(16
)
Changes in money pool advances
 
-
   
-
 
Proceeds from intercompany note receivable - CIPS
 
67
   
-
 
Sales of emission allowances
 
2
   
2
 
Other
 
1
   
10
 
Net cash used in investing activities
 
(584
)
 
(633
)
             
Cash Flows From Financing Activities:
           
Dividends on common stock
 
(154
)
 
(209
)
Dividends on preferred stock
 
(4
)
 
(4
)
Capital issuance costs
 
-
   
(3
)
Changes in short-term debt, net
 
128
   
(375
)
Changes in money pool borrowings
 
-
   
79
 
Issuance of long-term debt
 
-
   
382
 
Capital contribution from parent
 
3
   
4
 
Net cash used in financing activities
 
(27
)
 
(126
)
Net change in cash and cash equivalents
 
(18
)
 
(47
)
Cash and cash equivalents at beginning of year
 
20
   
48
 
Cash and cash equivalents at end of period
$
2
 
$
1
 
             
 
The accompanying notes as they relate to UE are an integral part of these consolidated financial statements.
 
13

 

CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
STATEMENT OF INCOME
(Unaudited) (In millions)
                 
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
   
2006
   
2005
   
2006
   
2005
 
Operating Revenues:
                       
Electric
$
228
 
$
244
 
$
569
 
$
542
 
Gas
 
23
   
22
   
150
   
133
 
Other
 
3
   
1
   
4
   
2
 
Total operating revenues
 
254
   
267
   
723
   
677
 
                         
Operating Expenses:
                       
Purchased power
 
125
   
140
   
355
   
331
 
Gas purchased for resale
 
11
   
12
   
99
   
86
 
Other operations and maintenance
 
41
   
39
   
117
   
109
 
Depreciation and amortization
 
16
   
17
   
47
   
45
 
Taxes other than income taxes
 
9
   
9
   
30
   
24
 
Total operating expenses
 
202
   
217
   
648
   
595
 
                         
Operating Income
 
52
   
50
   
75
   
82
 
                         
Other Income and Expenses:
                       
Miscellaneous income
 
4
   
4
   
13
   
13
 
Miscellaneous expense
 
-
   
(1
)
 
(1
)
 
(5
)
Total other income
 
4
   
3
   
12
   
8
 
                         
Interest Charges
 
8
   
7
   
23
   
22
 
                         
Income Before Income Taxes
 
48
   
46
   
64
   
68
 
                         
Income Taxes
 
19
   
15
   
21
   
22
 
                         
Net Income
 
29
   
31
   
43
   
46
 
                         
Preferred Stock Dividends
 
1
   
1
   
2
   
2
 
                         
Net Income Available to Common Stockholder
$
28
 
$
30
 
$
41
 
$
44
 
                         
 
The accompanying notes as they relate to CIPS are an integral part of these financial statements.
14

 

CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
BALANCE SHEET
(Unaudited) (In millions)
 
September 30,
 
December 31,
 
 
2006
 
2005
 
ASSETS
           
Current Assets:
           
Cash and cash equivalents
$
-
 
$
-
 
Accounts receivable – trade (less allowance for doubtful
           
accounts of $2 and $4, respectively)
 
58
   
70
 
Unbilled revenue
 
44
   
71
 
Accounts receivable – affiliates
 
4
   
18
 
Current portion of intercompany note receivable – Genco
 
37
   
34
 
Current portion of intercompany tax receivable – Genco
 
10
   
10
 
Advances to money pool
 
18
   
-
 
Materials and supplies
 
82
   
75
 
Other current assets
 
22
   
28
 
Total current assets
 
275
   
306
 
Property and Plant, Net
 
1,150
   
1,130
 
Investments and Other Assets:
           
Intercompany note receivable – Genco
 
126
   
163
 
Intercompany tax receivable – Genco
 
118
   
125
 
Other assets
 
31
   
24
 
Regulatory assets
 
35
   
36
 
Total investments and other assets
 
310
   
348
 
TOTAL ASSETS
$
1,735
 
$
1,784
 
             
LIABILITIES AND STOCKHOLDERS' EQUITY
           
Current Liabilities:
           
Current maturities of long-term debt
$
-
 
$
20
 
Accounts and wages payable
 
31
   
36
 
Accounts payable – affiliates
 
65
   
65
 
Borrowings from money pool
 
-
   
2
 
Current portion of intercompany note payable – UE
 
-
   
6
 
Taxes accrued
 
28
   
26
 
Other current liabilities
 
43
   
43
 
Total current liabilities
 
167
   
198
 
Long-term Debt, Net
 
471
   
410
 
Deferred Credits and Other Liabilities:
           
Accumulated deferred income taxes and investment tax credits, net
 
289
   
302
 
Intercompany note payable – UE
 
-
   
61
 
Regulatory liabilities
 
218
   
208
 
Accrued pension and other postretirement benefits
 
13
   
7
 
Other deferred credits and liabilities
 
21
   
29
 
Total deferred credits and other liabilities
 
541
   
607
 
Commitments and Contingencies (Notes 2 and 8)
           
Stockholders' Equity:
           
Common stock, no par value, 45.0 shares authorized – 25.5 shares outstanding
 
-
   
-
 
Other paid-in capital
 
190
   
189
 
Preferred stock not subject to mandatory redemption
 
50
   
50
 
Retained earnings
 
321
   
329
 
Accumulated other comprehensive income (loss)
 
(5
)
 
1
 
Total stockholders' equity
 
556
   
569
 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
1,735
 
$
1,784
 
             
 
The accompanying notes as they relate to CIPS are an integral part of these financial statements.
 
15

 
CENTRAL ILLINOIS PUBLIC SERVICE COMPANY
STATEMENT OF CASH FLOWS
(Unaudited) (In millions)
         
 
Nine Months Ended
September 30,
 
 
2006
 
2005
 
Cash Flows From Operating Activities:
           
Net income
$
43
 
$
46
 
Adjustments to reconcile net income to net cash
           
provided by operating activities:
           
Depreciation and amortization
 
47
   
45
 
Amortization of debt issuance costs and premium/discounts
 
1
   
1
 
Deferred income taxes and investment tax credits, net
 
(27
)
 
(5
)
Other
 
1
   
1
 
Changes in assets and liabilities:
           
Receivables, net
 
60
   
21
 
Materials and supplies
 
(7
)
 
(25
)
Accounts and wages payable
 
(5
)
 
39
 
Taxes accrued
 
 8
 
 
16
 
Assets, other
 
-
   
(32
)
Liabilities, other
 
-
   
41
 
Pension and other postretirement obligations, net
 
6
   
-
 
Net cash provided by operating activities
 
127
   
148
 
             
Cash Flows From Investing Activities:
           
Capital expenditures
 
(63
)
 
(41
)
Proceeds from intercompany note receivable – Genco
 
34
   
52
 
Changes in money pool advances
 
(18
)
 
(51
)
Net cash used in investing activities
 
(47
)
 
(40
)
             
Cash Flows From Financing Activities:
           
Dividends on common stock
 
(50
)
 
(21
)
Dividends on preferred stock
 
(2
)
 
(2
)
Capital issuance costs
 
(1
)
 
-
 
Changes in money pool borrowings
 
(2
)
 
(68
)
Redemptions, repurchases, and maturities:
           
Long-term debt
 
(20
)
 
(20
)
Intercompany note payable - UE
 
(67
)
 
-
 
Issuance of long-term debt
 
61
   
-
 
Capital contribution from parent
 
1
   
1
 
Net cash used in financing activities
 
(80
)
 
(110
)
             
Net change in cash and cash equivalents
 
-
   
(2
)
Cash and cash equivalents at beginning of year
 
-
   
2
 
Cash and cash equivalents at end of period
$
-
 
$
-
 
             
 
The accompanying notes as they relate to CIPS are an integral part of these financial statements.
 
16

 
AMEREN ENERGY GENERATING COMPANY
CONSOLIDATED STATEMENT OF INCOME
(Unaudited) (In millions)
                 
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
 
2006
 
2005
 
2006
 
2005
 
Operating Revenues:
                       
Electric
$
259
 
$
287
 
$
744
 
$
777
 
Other
 
-
   
2
   
-
   
2
 
Total operating revenues
 
259
   
289
   
744
   
779
 
                         
Operating Expenses:
                       
Fuel and purchased power
 
170
   
162
   
485
   
398
 
Other operations and maintenance
 
34
   
32
   
113
   
108
 
Depreciation and amortization
 
18
   
18
   
53
   
55
 
Taxes other than income taxes
 
3
   
4
   
14
   
7
 
Total operating expenses
 
225
   
216
   
665
   
568
 
                         
Operating Income
 
34
   
73
   
79
   
211
 
                         
Other Income:
                       
Miscellaneous income
 
-
   
-
   
-
   
1
 
Total other income
 
-
   
-
   
-
   
1
 
                         
Interest Charges
 
15
   
17
   
45
   
57
 
                         
Income Before Income Taxes
 
19
   
56
   
34
   
155
 
                         
Income Taxes
 
-
   
24
   
7
   
61
 
                         
Net Income
$
19
 
$
32
 
$
27
 
$
94
 
                         
 
The accompanying notes as they relate to Genco are an integral part of these consolidated financial statements.
 
17

 
AMEREN ENERGY GENERATING COMPANY
CONSOLIDATED BALANCE SHEET
(Unaudited) (In millions, except shares)
         
 
September 30,
 
December 31,
 
 
2006
 
2005
 
ASSETS
           
Current Assets:
           
Cash and cash equivalents
$
2
 
$
-
 
Accounts receivable – affiliates
 
143
   
102
 
Accounts receivable – trade
 
18
   
29
 
Materials and supplies
 
103
   
73
 
Other current assets
 
4
   
1
 
Total current assets
 
270
   
205
 
Property and Plant, Net
 
1,512
   
1,514
 
Intangible Assets
 
81
   
79
 
Other Assets
 
27
   
13
 
TOTAL ASSETS
$
1,890
 
$
1,811
 
             
LIABILITIES AND STOCKHOLDER'S EQUITY
           
Current Liabilities:
           
Current portion of intercompany note payable – CIPS
$
37
 
$
34
 
Borrowings from money pool
 
216
   
203
 
Accounts and wages payable
 
25
   
41
 
Accounts payable – affiliates
 
84
   
60
 
Current portion of intercompany tax payable – CIPS
 
10
   
10
 
Taxes accrued
 
24
   
37
 
Other current liabilities
 
32
   
16
 
Total current liabilities
 
428
   
401
 
Long-term Debt, Net
 
474
   
474
 
Intercompany Note Payable – CIPS
 
126
   
163
 
Deferred Credits and Other Liabilities:
           
Accumulated deferred income taxes, net
 
161
   
156
 
Accumulated deferred investment tax credits
 
9
   
10
 
Intercompany tax payable – CIPS
 
118
   
125
 
Asset retirement obligations
 
30
   
29
 
Accrued pension and other postretirement benefits
 
12
   
8
 
Other deferred credits and liabilities
 
2
   
1
 
Total deferred credits and other liabilities
 
332
   
329
 
Commitments and Contingencies (Notes 2 and 8)
           
Stockholder's Equity:
           
Common stock, no par value, 10,000 shares authorized – 2,000 shares outstanding
 
-
   
-
 
Other paid-in capital
 
378
   
228
 
Retained earnings
 
154
   
220
 
Accumulated other comprehensive loss
 
(2
)
 
(4
)
Total stockholder's equity
 
530
   
444
 
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY
$
1,890
 
$
1,811
 
             
 
The accompanying notes as they relate to Genco are an integral part of these consolidated financial statements.
18