Ameren Corporation (AEE) November 15, 2007 Tom Grove Jason Mueller Marissa Muge Tian

Outline Company Background and Structure Operations and Regulation Comps and DCF Analysis Recent Announcements Outlook and Recommendation

Portfolio Position Purchased 400 shares on April 27, 2006, at $50.03 per share, total $20,012 Current price is $52.35, which equates to a total value of $20, % of total portfolio Total Appreciation: $928.04, or 4.64%

Company Background Public utility holding company  Headquartered in St. Louis, MO  $19 billion in assets and $6.8 billion in sales Largest utility in Missouri, second largest in Illinois  2.4 million electric customers  1 million natural gas customers  64,000 square mile territory Created in 1997 with the merger of Union Electric Company and CIPSCO Incorporated, the parent of the Central Illinois Public Service Company In 2003, acquired the parent of Central Illinois Light Company and in 2004 with the acquired Illinois Power Company

Business Segments Missouri regulated:  Union Electric (UE) Illinois regulated:  Central Illinois Public Service Company (CIPS)  Central Illinois Light Company (CILCO)  Illinois Power Company (IP) Non-rate-regulated generation:  American Generating Energy Company (Genco)  CILCO (AERG)

Ameren Corp. Coverage Areas

2006 Net Income by Operating Company (in millions $)

Outline Company Background and Structure Operations and Regulation Comps and DCF Analysis Recent Announcements Outlook and Recommendation

The Business of Public Utilities Generation  Power plants Transmission  Transformers take voltage from low to high Distribution  Lower voltage and distribute to end consumer

How it works… Reverse auction  Generation for power goes out for bids  Sellers compete in pricing war for the power from generating companies Power ‘dumped’ into a grid or ‘pulled out’

Rates and Regulation High regulation of public utilities Single most important factor influencing Ameren’s profitability Kilowatt per hour ZERO margin on sale of electricity  Delivery of power

The Rate Freeze on Electricity Electric rates—Missouri  AmerenUE, the Missouri Pubic Service Commission  Electric rate frozen before July 1, 2006  In May 2007, the commission granted a 2.1% overall electric rate increase of about $42 million effective June 4, AmerenUE had not had an increase in electric retail rates since 1987 Electric rates—Illinois  AmerenIP, AmerenCIPS, and AmerenCILCO, the Illinois Commerce Commission (ICC)  Electric rates were frozen through Jan. 1, 2007  In November 2006, the ICC granted $97 million increased rates effective Jan. 2,  Monthly increases as high as 40-55% in some areas of Illinois. (Total electric customers)

Rates and Regulation Nature Gas rates—Missouri  In March 2007, the Missouri Public Service Commission approved AmerenUE an increase of $6 million in natural gas delivery rates. Nature Gas rates—Illinois  AmerenCILCO, AmerenCIPS received ICC approval for natural gas delivery rate increases in fourth quarter In May 2005, the ICC awardedAmerenIP increases in annual natural gas delivery rates of $11 million.  On November 2, 2007, Ameren Illinois utilities requested the ICC to approve a $247 million annual rate increase. Electricity rates for typical customers would go up as 8.7% and gas as 11.6% starting next fall if the request is approved, adding up to $11 or more to an average monthly bill depending on location and service.

Bring on the Relief… State of Illinois announces $1 billion in relief funding  $488 million to Ameren customers, of which Ameren will pay $150 million High Bill Relief Fund, Special Hardships Fund, etc. Customer Elect Plan

Outline Company Background and Structure Operations and Regulation Comps and DCF Analysis Recent Announcements Outlook and Recommendation

Comparable Companies Exelon Corporation electric generating, wholesale energy marketing and retail sales Great Plains Energy Inc. retail electricity supply services offering retail choice, and holds investments in housing limited partnerships Integrys Energy Group, Inc. electric and natural gas wholesale and retail Nicor Inc. natural gas distributing and transporting, energy-related products and services

Comparable Companies TickerStateSales($M)Assets($M)Employees Ameren Corp AEEIllinois 6,88019,5788,988 Exelon Corporation EXCIllinois 15,65544,31917,200 Great Plains Energy Inc. GXPMissouri 2,6754,3352,470 Integrys Energy Group, Inc. TEGIllinois 6,8906,8613,326 Nicor Inc. GASIllinois 2,9604,0903,900

Comparable Companies

DCF Assumptions Increasing Revenues – With the rate freeze over, Ameren is going to be moving toward market rates over the next several years. This will result in an increase in revenues over the next few years. Large Capital Expenditures – Ameren has taken a leadership to reduce emissions for coal-fired plants. Also, the Clean Air Interstate and Clean Air Mercury Rules are requiring further reductions in SO2 and NOx emissions, as well as mercury emissions. Challenges arise from extracting trace quantities of mercury from millions tons of coal burned annually with no proven technology to do so.

Assumptions (cont.) Increased Operating Expenses – We are assuming Ameren will face increasing costs for Fuel and Purchased Power and Gas Purchased For Resale. Both of these costs appear on Ameren’s income statement and we believe they will increase in the future as fossil fuels and natural gas become more and more scarce.

DCF Results DCF Value per share: $50.52 Weighted Average Cost of Capital Weight Debt 32.72% Weight Equity 67.28% Cost Debt 6.62% Cost Equity 7.85% β (from Value Line) 0.8 R f 3.25% R m 9.00% Mkt. risk premium 5.75% Tax rate 32.72% WACC 6.74% Sustainable growth rate 2.50%

How Ameren Fits… Consistent Price: Since the IP acquisition in 2004 the stock has consistently been in the range of $48-$56. Consistent Payout: 9 decades of uninterrupted cash dividend payments to stockholders. Since 1998, Ameren has paid out $.635 per share every quarter.

Outline Company Background and Structure Operations and Regulation Comps and DCF Analysis Recent Announcements Outlook and Recommendation

Announcements Ameren sees Q3 profit fall 17% Friday November 9, 1:20 pm ET Ameren Corp. said Friday that its third-quarter net income fell nearly 17 percent on higher fuel and other costs. The company reported that its third- quarter net income was $244 million, down 16.7 percent from $293 million in last year's quarter. Illinois rate relief settlement (AEE to contribute $150M) Changes in IL electric rate structures Rising Operating Costs

Announcements Ameren Corporation Reaffirms FY 2007 EPS Outlook ST. LOUIS, Nov. 5 /PRNewswire-FirstCall/ Ameren Corporation announced that for fiscal 2007, it has reaffirmed its earnings guidance. The Company expects GAAP earnings to range between $2.80-$3.05 per share and non-GAAP 2007 earnings to range between $3.15- $3.40 per share.

Outline Company Background and Structure Operations and Regulation Comps and DCF Analysis Recent Announcements Outlook and Recommendation

Future Financial Outlook Significant revenue increases in ’07 & ’08  Gradual return to market pricing Heavy capital expenditures  Regulation compliance upgrades Continued strength in dividend payout Limited stock price fluctuation  Comparisons to a corporate bond

Recommendation HOLD 400 shares of Ameren Corp. (AEE) at the market price $  Low price volatility  Lucrative, consistent dividend yield Future Considerations:  Legislative risk  Capital expenditures  Revenue recovery following rate freeze

Sources 2006 Ameren Corp. Annual Report & 10-K 3Q2007 Ameren Corp. 10-Q Filing 2Q2007 Ameren Corp. 10-Q Filing 1Q2007 Ameren Corp. 10-Q Filing 2005 Ameren Corp. Annual Report