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Ameren Announces First Quarter 2006 Earnings Narrows 2006 Earnings Guidance
PDF Versions of This Release and Supporting Documents

AEE 1st Quarter 2006 Earnings Release
AEE 1st Quarter 2006 Cash Flow, Balance Sheet, Income Statement
AEE 1st Quarter 2006 Consolidated Operating Statistics

Ameren Corporation (NYSE: AEE) today announced first quarter 2006 net income of $70 million, or 34 cents per basic and diluted share, compared to net income of $121 million, or 62 cents per basic and diluted share, in the first quarter of 2005.

"Despite solid operations, our first quarter 2006 earnings fell short of the strong earnings we achieved last year," said Gary L. Rainwater, chairman, chief executive officer and president of Ameren Corporation. "Several factors negatively impacted our earnings. Temperatures in our service territory during the 2006 winter season were extremely mild resulting in lower electric and gas margins. Our electric margins were also negatively impacted by higher fuel and purchased power costs due primarily to increased coal and related transportation costs. In addition, we incurred incremental costs of operating in the Midwest Independent Transmission System Operator Inc. (MISO) Day Two Energy Market in the first quarter of 2006 because MISO Day Two operations didn't commence until the second quarter last year. These factors offset higher margins from organic growth and interchange sales compared to the first quarter of last year.

"Other operating expenses and taxes other than income taxes also rose, negatively affecting earnings for the quarter," Rainwater added. "These expenses grew primarily as a result of higher gross receipts taxes, the absence of a favorable property tax settlement such as the one realized during the first quarter of 2005 and higher bad debt expenses."

Revenues in the first quarter of 2006 increased to $1.8 billion from $1.6 billion in the prior-year period primarily because of organic growth, interchange revenue increases and higher natural gas revenues that were driven by higher natural gas prices. These higher natural gas prices also contributed to a $99 million increase in the cost of gas purchased for resale. Heating degree days in the first quarter of 2006 were approximately 11 percent below a mild 2005 first quarter and 18 percent below normal, according to the National Weather Service. As a result, weather-sensitive natural gas sales decreased 8 percent, and residential megawatthour sales decreased 2 percent in the 2006 first quarter from the mild 2005 first quarter. Weather is estimated to have reduced first quarter 2006 earnings by 4 cents per share versus 2005 and 7 cents per share versus normal weather conditions.

Commercial electric megawatthour sales were flat in the first quarter of 2006 compared to 2005 as customer growth offset the effect of extremely mild weather. Industrial electric megawatthour sales increased 15 percent as a result of sales to Noranda Aluminum, which became a customer on June 1, 2005. Interchange sales increased 35 percent in the first quarter of 2006 over the same period a year ago due to increased sales by the company's 80 percent-owned unregulated subsidiary, Electric Energy, Inc. (EEI). EEI's interchange sales rose as a result of the Dec. 31, 2005, expiration of cost-based long-term power sales contracts with its affiliates for 1,000 megawatts that are now available for sale in the interchange markets.

Fuel and purchased power costs increased $109 million in the first quarter of 2006 over the same period in 2005, due primarily to higher coal and related transportation costs and incremental costs of operating in the MISO Day Two Energy Market. Incremental MISO costs reduced first quarter 2006 earnings by approximately 6 cents per share versus the year-ago period. In addition, fuel and purchased power costs rose during the quarter due to the expiration of the cost-based EEI power contracts with its affiliates.

Other operations and maintenance expenses increased $3 million in the first quarter of 2006 as compared to the first quarter of 2005, due primarily to higher bad debt expense. In addition, taxes other than income taxes increased $22 million in the first quarter of 2006 compared to the first quarter of 2005. Taxes were higher as a result of the absence in 2006 of the benefit of an $8 million property tax settlement realized in the first quarter of 2005 and increased gross receipts taxes in 2006.

"While we are off to a challenging start in 2006, we do anticipate improvements in our operating results, especially in the second half of 2006," added Rainwater. "In the second half of the year, we expect, among other things, to realize the benefits from the lack of a Callaway refueling outage, fewer outages at our power plants, and lower MISO costs than in 2005. As a result, despite our slow start in 2006, we continue to expect to deliver solid earnings results for the year."

Ameren also announced today that it is narrowing its 2006 earnings guidance. The company now expects 2006 earnings to range between $2.95 and $3.15 per share. Earnings per share guidance was narrowed due primarily to warmer-than- normal weather in the first quarter of 2006 and power prices for interchange sales for the remainder of 2006 which are anticipated to be lower than originally expected. Ameren's guidance assumes normal weather for the rest of 2006 and is subject to, among other things, plant operations, energy market and economic conditions, unusual or otherwise unexpected gains or losses and other risks and uncertainties outlined in Ameren's Forward-looking Statements.

Ameren will conduct a conference call for financial analysts at 9:00 a.m. (Central Time) on Thursday, May 4, to discuss first quarter 2006 earnings and other matters related to the company. Investors, the news media and the public may listen to a live Internet broadcast of the call at www.ameren.com by clicking on "Q1 2006 Ameren Corporation Earnings Conference Call," then the appropriate audio link. A slide presentation will also be available on Ameren's Web site that reconciles first quarter 2006 earnings per share to first quarter 2005 earnings per share and the 2006 earnings per share guidance to 2005 earnings per share on a comparable share basis. This presentation will be posted in the "Investors" section of the Web site under "Presentations." The analyst call will also be available for replay on the Internet for one year. Telephone playback of the conference call will also be available beginning at 11:00 a.m. (Central Time), from May 4 through May 11, by dialing, U.S. (800) 405-2236; international (303) 590-3000 and entering the number: 11059080#.

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

Regulation G Statement

Ameren has presented certain information in this presentation on a diluted cents per share basis. These diluted per share amounts reflect certain factors that directly impact Ameren's total earnings per share. Ameren believes this information is useful because it enables readers to better understand the impact of these factors on Ameren's earnings per share.

Forward-looking Statements

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

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

• the impact of changes to the joint dispatch agreement;

• 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 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;

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

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

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

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

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

• changes in the energy markets, environmental laws or regulations, interest rates, or other factors that could adversely affect assumptions in connection with the 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 to meet their obligations with respect to contracts and financial instruments;

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

• legal and administrative proceedings; and

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

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

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