UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549


                                    FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

    For Quarterly Period Ended March 31,June 30, 2000

[ ] 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 1-2967.

                             UNION ELECTRIC COMPANY
             (Exact name of registrant as specified in its charter)

           Missouri                                              43-0559760
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                               Identification No.)


                 1901 Chouteau Avenue, St. Louis, Missouri 63103
              (Address of principal executive offices and Zip Code)


                         Registrant's telephone number,
                       including area code: (314) 621-3222


    Indicate  by check  mark  whether the  registrant  (1) has 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) has been subject to such
filing requirements for the past 90 days.


                           Yes   X .       No    .
                               -------------            -----------------          ----




Shares  outstanding of each of  registrant's  classes of common stock as of April
  30,July
  31, 2000:  Common  Stock,  $5 par value,  held by Ameren  Corporation  (parent
  company of Registrant) - 102,123,834






                             Union Electric Company

                                      Index

                                                                       Page No.

Part I               Financial Information (Unaudited)

                     Management's Discussion and Analysis                  2

                     Quantitative and Qualitative Disclosures
                     About Market Risk                                     5

                     Balance Sheet
                     - March 31,June 30, 2000 and December 31, 1999                 8

                     Statement of Income
                     - Three months, six months and 12 months ended
                        March 31,June 30, 2000 and 1999                             9

                     Statement of Cash Flows
                     - ThreeSix months ended March 31,June 30, 2000 and 1999            10

                     Notes to Financial Statements                        11


Part II              Other Information                                    1314




                    PART I. FINANCIAL INFORMATION (UNAUDITED)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

OVERVIEW

Union Electric  Company  (AmerenUE or the  Registrant) is a subsidiary of Ameren
Corporation  (Ameren),  a holding  company  registered  under the Public Utility
Holding  Company Act of 1935  (PUHCA).  In December  1997,  AmerenUE  and CIPSCO
Incorporated  (CIPSCO)  combined to form  Ameren,  with  AmerenUE  and  CIPSCO's
subsidiaries,  Central  Illinois Public Service Company  (AmerenCIPS) and CIPSCO
Investment Company (CIC), becoming subsidiaries of Ameren (the Merger).

The following  discussion and analysis  should be read in  conjunction  with the
Notes to the  Financial  Statements  beginning on page 11, and the  Management's
Discussion and Analysis of Financial Condition and Results of Operations (MD&A),
the Audited  Financial  Statements,  and the Notes to the  Financial  Statements
appearing in the Registrant's 1999 Form 10-K.


RESULTS OF OPERATIONS

Earnings
FirstSecond  quarter 2000 earnings of $37$85 million  decreased $5increased $17 million  compared to
1999 firstsecond quarter  earnings.  Earnings for the six months ended June 30, 2000,
increased $12 million from the year ago period to $122 million. Earnings for the
12 months ended March 31,June 30, 2000 were $336$352 million, a $11$23 million increase from the
preceding  12-month  period.   Earnings   fluctuated  due  to  many  conditions,
primarily:  weather  variations,  credits to electric  customers,  electric rate
reductions,  gas  rate  increases,  competitive  market  forces,  sales  growth,
fluctuating   operating  costs  (including   Callaway  Nuclear  Plant  refueling
outages), changes in interest expense, changes in income and property taxes, and
a nonrecurring charge for a targeted employee separation plan.

The  significant  items  affecting  revenues,  costs  and  earnings  during  the
three-month,  six-month  and 12-month  periods  ended March 31,June 30, 2000 and 1999 are
detailed on the following pages.

Electric Operations
Electric Operating Revenues        Variations for periods ended March 31,June  30, 2000
                                       from comparable prior-year periods
- --------------------------------------------------------------------------------
(Millions of Dollars)           Three Months      Six Months      Twelve Months
                                ------------      ----------      -------------
- --------------------------------------------------------------------------------
Rate variations                   $   -             $   (4)-            $   2
Credit to customers                  10                      27(5)                5              (11)
Effect of abnormal weather           (10)                    (51)(6)              (16)             (33)
Growth and other                     3                      3539                42               91
Interchange sales                    55                     17128                83              151
- --------------------------------------------------------------------------------
                                  $  5856             $ 178114            $ 200
- --------------------------------------------------------------------------------

The $58$56 million  increase in the firstsecond quarter  electric  revenues  compared to the
year-ago  quarter was primarily  driven by a 10030 percent  increase in  the interchange
sales due to strong marketing  effortsefforts.  In addition,  revenues increased due to
increased residential,  commercial and greater  interchange
opportunities.  Also, contributing toindustrial sales, by 2 percent, 8 percent
and 2  percent,  respectively,  offset in part by lower  wholesale  sales and an
increase in the  revenue increase was a decrease in theestimated  credit to Missouri  electric  customers  (see Note 5
under Notes to Financial Statements for further information).

Electric  revenues  for the first  six  months of 2000  increased  $114  million
compared to the same 1999 period.  The decreaseincrease in native salesrevenues was primarily due to
decreased wholesalea 60 percent increase in interchange sales partially offset bydue to strong marketing efforts and a
decrease in the  estimated  credit to Missouri  electric  customers  (see Note 5
under Notes to  Financial  Statements  for further  information).  In  addition,
revenues  increased  due to increased  residential,  commercial  and  commercial sales.industrial
sales, by 2 percent, 6 percent and 1 percent, respectively.

                                      -2-


Electric  revenues for the 12 months ended March 31,June 30, 2000 and 1999 increased $178$200
million  compared to the prior  12-month  period.  The  increase in revenues was
primarily driven bydue to a strong regional economy and increased35 percent  increase in interchange  sales,  due to  increased  interchange  opportunities.  Interchange  sales  increased 54
percent,   partially  offset  bycoupled with a 3
percent declineincrease in weather-sensitive
residentialcommercial sales.  Also contributing to the revenue increase was a decrease in
the  credit  to  Missouri  electric  customers  (see  Note 5 under  the Notes to
Financial Statements for further information).

                                      -2-



Fuel and Purchased Power          Variations for periods ended March 31,June  30, 2000
                                       from comparable prior-year periods
- --------------------------------------------------------------------------------
(Millions of Dollars)           Three Months      Six Months      Twelve Months
                                ------------      ----------      -------------
- --------------------------------------------------------------------------------
Fuel:
 Generation                       $   52             $  (2)7              $ (7)
 Price                               (3)                  -(5)              (8)                1
 Generation efficiencies and other   (3)                 (7)(2)              (5)               (8)
Purchased power variation            53                 17815               68               160
- --------------------------------------------------------------------------------
                                  $  5210             $ 16962              $146
- --------------------------------------------------------------------------------


The increase in fuel and  purchased  power costs for the three monthsmonth,  six month
and 12 month  periods ended March 31,June 30, 2000,  compared to the year ago  comparable
periods,  was primarily due to increased  generation and  purchased  power resulting from higher
sales volumes.

Gas Operations
Gas revenues for the quarter ended March 31,June 30, 2000  decreased $3increased $5 million  compared
to the  prior-year  period  primarily  due to a 1437 percent  declineincrease in retail sales resulting from mild weather.

Gas  revenues  for the 12 months  ended  March 31,  2000  decreased  $5  million
compared to
the year-ago  period  primarily due to a decline in retail sales due
to milder weather,  partially offset by an Illinois gas rate increase  effective
February 1999.ultimate consumers.

Gas costs for the 12 months ended March 31,June 30, 2000 increased $4$5 million compared to
the year-ago period, primarily due to higher gas prices.

Other Operating Expenses
Other operating expense variations  reflected  recurring factors such as growth,
inflation, labor and benefit increases.

Other  operations  expenses  for the three and six months  ended  March 31,June 30,  2000
increased  $7$5  million  and $12  million,  respectively,  compared  to the  same
year-ago periodperiods  primarily due to increased costs associated with the automated
meter reading roll-out.roll-out and  professional  services.  Other  operations  expenses
decreased $19$8 million for the 12 months ended March 31,June 30, 2000, compared to the same
year-ago period  primarily due to the 1998 one-time pretax charge of $18 million
for a targeted separation plan.

Maintenance  expenses  for the  three,  six and 12 months  ended  March 31,June 30,  2000
increased $2$13 million,  $14 million and $24$36 million,  respectively,  compared to
the year-ago periods primarily due to increased power plant maintenance and tree
trimming activity.

Taxes
Income taxes decreased $3increased $11 million,  $9 million and $11 million,  for the three,
months ended March 31, 2000 due
to lower  pretax  income.  Income  taxes  increased $4 million for thesix and 12 months  ended  March 31,June 30,  2000,  respectively,  due to  higher  pretax
income.

Other tax expense decreased $12$8 million for the 12 months ended March 31,June 30, 2000 due
primarily  to a decrease in gross  receipts  taxes  related to the  Registrant's
Illinois  jurisdiction.  This decrease is the result of the restructuring of the
Illinois  public utility tax whereby gross receipts taxes are no longer recorded
as electric revenues and gross receipts tax expense.

Balance Sheet

The $47$58 million  decreaseincrease in trade accounts  receivable and unbilled  revenue at
March 31,June 30, 2000, compared to the year-end, was due primarily to lowerhigher revenues in
FebruaryMay and MarchJune 2000 compared to November and December 1999.  In addition,
four of the Registrant's  wholesale  customers were transferred to AmerenCIPS in
first quarter 2000. The $20 million  decrease in intercompany  notes  receivable
reflects  changes in funds invested in a regulated  money pool (see Note 6 under
Notes to Financial Statements for further information).

Changes in accounts and wages payable and other taxes accrued  resulted from the
timing of various payments to taxing authorities and suppliers.

                                      -3-



The $12 million  increase in other current  liabilities was primarily due to the
$10 million  estimated  credit to Missouri  electric  customers  recorded in the
first quarter of 2000 under the three-year  experimental  alternative regulation
plan. See Note 5 under Notes to Financial Statements for further information.

The $17 million increase in other deferred credits and liabilities was primarily
due to increased accrued pension liabilities.


LIQUIDITY AND CAPITAL RESOURCES

Cash  provided by operating  activities  totaled $144$161 million for the threesix months
ended March 31,June 30, 2000, compared to $110$266 million during the same 1999 period.

Cash flows used in  investing  activities  totaled $84$171 million and $47$277 million
for the threesix months  ended  March 31,June 30,  2000 and 1999,  respectively.  Construction
expenditures  for the threesix months ended March 31,June 30, 2000,  for  constructing  new or
improving  existing  facilities were $100$166 million.  In addition,  the Registrant
expended $6$8 million for the acquisition of nuclear fuel. The Registrant received
Board of  Directors  approval  on April  25,  2000 to spend  approximately  $160
million  on  capital  expenditures  relating  to the  replacement  of four steam
generators  at its  Callaway  Nuclear  Plant.  Installation  is  scheduled to be
completed in 2005. The impact on anticipated 2000 capital  expenditures  will be
insignificant.

Cash flows used in financing  activities totaled $171$106 million for the threesix months
ended March 31,June 30, 2000,  compared to $64$23 million  during the same 1999 period.  The
Registrant's principal financing activities for the period included the issuance
and redemption of long-term debt and the payment of dividends.  Proceeds from the
issuance of certain long-term debt have been set aside in an environmental  bond
redemption  fund to be used to retire  existing  long-term  indebtedness  in the
second quarter.

The Registrant  plans to continue  utilizing  short-term  debt to support normal
operations and other temporary requirements. The Registrant is authorized by the
Securities  and  Exchange  Commission  under  PUHCA to have up to $1  billion of
short-term  unsecured debt instruments  outstanding at any one time.  Short-term
borrowings  consist of bank loans  (maturities  generally on an overnight basis)
and commercial  paper  (maturities  generally  within 1 to 45 days). At March 31,June 30,
2000, the Registrant had committed bank lines of credit aggregating $150 million
(all of which was  unused and  available  at such  date)  which  make  available
interim  financing  at  various  rates  of  interest  based on  LIBOR,  the bank
certificate of deposit rate or other options.  The lines of credit are renewable
annually at various dates  throughout the year. At March 31,June 30, 2000, the Registrant
had no outstanding short-term borrowings.

The  Registrant  also has a bank  credit  agreement  due 2002 which  permits the
borrowing of up to $300 million on a long-term  basis,  all of which was unused,
and $247$113 was available at March 31,June 30, 2000.  In addition,  the  Registrant  has the
ability to borrow up to  approximately  $530$525 million  from Ameren or  AmerenCIPS
through  a  regulated  money  pool  agreement.  The  regulated  money  pool  was
established  to coordinate and provide for certain  short-term  cash and working
capital  requirements  and is administered by Ameren Services  Company,  another
subsidiary  of Ameren.  Interest  is  calculated  at varying  rates of  interest
depending on the  composition  of internal and external  funds in the  regulated
money  pool.  As of March 31,June 30,  2000,  $333$196  million  was  available  through  the
regulated money pool.

Additionally,  the  Registrant  has a  lease  agreement  that  provides  for the
financing of nuclear  fuel. At March 31,June 30, 2000,  the maximum  amount that could be
financed under the agreement was $120 million. Cash used in financing activities
for the threesix months ended March 31,June 30, 2000, included redemptions under the lease for
nuclear fuel of $2$4 million, offset by $1$6 million of issuances. At March 31,June 30, 2000,
$116$119 million was financed under the lease.

The Registrant,  in the ordinary course of business,  explores  opportunities to
reduce its costcosts in order to remain competitive in the marketplace.  Areas where
the Registrant  focuses its review include,  but are not limited to, labor costs
and fuel supply costs. In the labor area, the Registrant has reached  agreements
with some of the Registrant's  collective  bargaining units which will permit it
to  manage  its  labor  costs  and  practices  effectively  in the  future.  The
Registrant  also explores  alternatives  to  effectively  manage the size of its
workforce. These alternatives include utilizing hiring freezes,  outsourcing and
offering employee separation  packages.  In the fuel supply area, the Registrant
explores  alternatives  to  effectively  manage its overall  fuel  costs.  These
alternatives  include  diversifying

                                      -4-

  fuel  sources  for use at the  Registrant's
fossil plants, as well as restructuring or terminating  existing  contracts with
suppliers.

Certain  of  these  cost  reduction  alternatives  could  result  in  additional
investments  being  made at the  Registrant's  power  plants in order to utilize
different  types of coal,  or could  require  nonrecurring  payments of employee
separation  benefits or  nonrecurring  payments to  restructure  or terminate an
existing fuel  contract  with a supplier.  Management is unable to predict which
(if any),  and to what  extent,  these  alternatives  to reduce its overall cost
structure  will be executed.  Management  is unable to  determine  the impact of
these  actions  on  the  Registrant's  future  financial  position,  results  of
operations or liquidity.

                                      -4-



RATE MATTERS

In February  2000,  the  Registrant  filed a request  with the  Missouri  Public
Service Commission (MoPSC) to increase rates  approximately $12 million annually
for  natural  gas  service  in the  Missouri  jurisdiction.  The MoPSC has until
January 2001 to render a decision.

See Note 5 under Notes to Financial  Statements  for further  discussion of Rate
Matters.


ELECTRIC INDUSTRY RESTRUCTURING

Certain states are considering  proposals or have adopted  legislation that will
promote  competition  at the retail  level.  In December  1997,  the Governor of
Illinois signed the Electric Service Customer Choice and Rate Relief Law of 1997
(the Illinois Law)  providing for electric  utility  restructuring  in Illinois.
This  legislation  introduces  competition into the supply of electric energy in
Illinois.

The Illinois Law, among other things,  requires the  phasing-in  through 2002 of
retail direct access, which allows customers to choose their electric generation
supplier.  The phase-in of retail direct  access began on October 1, 1999,  with
large  commercial and industrial  customers  principally  comprising the initial
group.  The  customers in this group  represent  approximately  6 percent of the
Registrant's  total  sales.  As of March 31,June 30,  2000,  the impact of retail  direct
access  on the  Registrant's  financial  condition,  results  of  operations  or
liquidity was immaterial.  Retail direct access will be offered to the remaining
commercial  and  industrial  customers on December  31, 2000 and to  residential
customers on May 1, 2002.


QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk  represents the risk of changes in value of a financial  instrument,
derivative  or  non-derivative,  caused by  fluctuations  in interest  rates and
equity prices.  The following  discussion of the  Registrant's  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.  The  Registrant  handles  market  risks  in
accordance with  established  policies,  which may include entering into various
derivative  transactions.  In the normal course of business, the Registrant also
faces  risks  that are  either  non-financial  or  non-quantifiable.  Such risks
principally  include  business,  legal,  operational and credit risk and are not
represented in the following analysis.

Interest Rate Risk
The  Registrant  is exposed to market risk  through  changes in  interest  rates
through its issuance of both  long-term and  short-term  variable-rate  debt fixed-rate debt and
commercial  paper.  The  Registrant   manages  its  interest  rate  exposure  by
controlling  the  amount  of  these   instruments  it  holds  within  its  total
capitalization  portfolio  and by  monitoring  the effects of market  changes in
interest rates.

If interest rates increase one percentage point in 2001 as compared to 2000, the
Registrant's interest expense would increase by approximately $6$7 million and net
income  would  decrease  by  approximately  $4  million.  This  amount  has been
determined using the assumptions that the Registrant's outstanding variable rate
debt as of March 31,June 30, 2000, continued to be outstanding  throughout 2001, and that
the average interest rates for these instruments  increased one percentage point
over 2000.  The model does not  consider  the  effects of the  reduced  level of
overall economic activity that would exist in such an environment.  In the event
of a significant change in interest rates,  management

                                      -5-

 would likely take actions
to further  mitigate  its  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  the  Registrant's
financial structure.

Commodity Price Risk
The  Registrant  is exposed to changes in market prices for natural gas and fuel
and  electricity.   With  regard  to  its  natural  gas  utility  business,  the
Registrant's  exposure to changing  market prices is in large part  mitigated by
the fact that Registrant has Purchased Gas Adjustment  Clauses (PGA) in place in
both its Missouri and Illinois  jurisdictions.  The PGA allows the Registrant to
pass on to its customers its prudently incurred costs of natural gas.

                                      -5-



Since  the  Registrant  does not  have a  provision  similar  to the PGA for its
electric operations, the Registrant has entered into several long-term contracts
with various  suppliers to purchase coal and nuclear fuel to manage its exposure
to fuel prices. With regard to the Registrant's exposure to commodity price risk
for  purchased  power and excess  electricity  sales,  Ameren has  established a
subsidiary,  AmerenEnergy,  Inc.,  (AmerenEnergy)  whose primary  responsibility
includes  managing  market risks  associated with the changing market prices for
electricity purchased and sold on behalf of the Registrant.

AmerenEnergy  utilizes  several  techniques  to  mitigate  its  market  risk for
electricity,  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  AmerenEnergy is
allowed to utilize (which include  forward  contracts,  futures  contracts,  and
option  contracts)  are  dictated by a risk  management  policy,  which has been
reviewed with the Auditing Committee of Ameren's Board of Directors.  Compliance
with the risk  management  policy  is the  responsibility  of a risk  management
steering  committee,  consisting  of Ameren  officers  and an  independent  risk
management officer at AmerenEnergy.

As of March 31,June 30, 2000, the fair value of derivative financial  instruments exposed
to commodity price risk was immaterial.

Equity Price Risk

The  Registrant  maintains  trust funds,  as required by the Nuclear  Regulatory
Commission  and  Missouri  and Illinois  state laws,  to fund  certain  costs of
nuclear  decommissioning.  As of  March  31,June  30,  2000,  these  funds  were  invested
primarily in domestic equity securities,  fixed-rate,  fixed-income  securities,
and cash  and  cash  equivalents.  By  maintaining  a  portfolio  that  includes
long-term equity investments,  the Registrant is seeking to maximize the returns
to be  utilized  to fund  nuclear  decommissioning  costs.  However,  the equity
securities  included  in  the  Registrant's   portfolio  are  exposed  to  price
fluctuations in equity markets, and the fixed-rate,  fixed-income securities are
exposed to changes in interest  rates.  The  Registrant  actively  monitors  its
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 its  trusts  to  various  investment
options. The Registrant's  exposure to equity price market risk is in large part
mitigated due to the fact that the  Registrant  is currently  allowed to recover
its decommissioning costs in its rates.


ACCOUNTING MATTERS

In June 1998, the Financial  Accounting  Standards Board (FASB) issued Statement
of  Financial  Accounting  Standards  (SFAS)  133,  "Accounting  for  Derivative
Instruments  and  Hedging  Activities."  SFAS  133  establishes  accounting  and
reporting  standards for derivative  instruments,  including certain  derivative
instruments embedded in other contracts, and for hedging activities and requires
recognition  of all  derivatives  as either assets or liabilities on the balance
sheet  measured  at fair  value.  In June 1999,  the FASB  issued  SFAS No. 137,
"Accounting for Derivative  Instruments and Hedging Activities - Deferral of the
Effective  Date of FASB  Statement No. 133," which delayed the effective date of
SFAS 133 to all fiscal  quarters of all fiscal years,  beginning  after June 15,
2000.  In June 2000,  the FASB  issued  SFAS No.  138,  "Accounting  for Certain
Derivative  Instruments  and Certain  Hedging  Activities  -an amendment of FASB
Statement No. 133," which amended certain accounting and reporting  standards of
SFAS 133. Management believes that adoption of SFAS 133 will not have a material
impact on the  Registrant's  financial  position or results of  operations  upon
adoption  based on the  derivative  instruments  that  existed at June 30, 2000.
However, changing market conditions, and the volume of future transactions which
fall within the scope of SFAS 133, as amended,  and the interpretations from the
FASB's  Derivative   Implementation  Group  could  change  management's  current
assessment.  As a result, SFAS 133, as amended, could increase the volatility of
the  Registrant's  future  earnings  and could be material  to the  Registrant's
financial position and results of operations upon adoption.

SAFE HARBOR STATEMENT

Statements made in this Form 10-Q 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

                                      -6-



to  future  expectations,   beliefs,  plans,  strategies,   objectives,  events,
conditions,  financial  performance  and the Year 2000 Issue. In connection with
the "Safe Harbor" provisions of the Private Securities  Litigation Reform Act of
1995,  the  Registrant  is  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 the Annual  Report on Form 10-K for the fiscal
year ended December 31, 1999, and in subsequent securities filings,  could cause
results to differ  materially from management  expectations as suggested by such
"forward-looking" statements: the effects of regulatory actions; changes in laws
and  other  governmental  actions;  the  impact  on the  Registrant  of  current
regulations  related to the phasing-in of the  opportunity for some customers to
choose  alternative  energy  suppliers  in  Illinois;  the effects of  increased
competition  in the future due to, among other -6-

things,  deregulation  of certain
aspects  of the  Registrant's  business  at both the State and  Federal  levels;
future market prices for fuel and purchased power, electricity, and natural gas,
including the use of financial instruments; average rates for electricity in the
Midwest;  business and economic conditions;  interest rates; weather conditions;
fuel  prices  and  availability;  generation  plant  performance;  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;  monetary  and  fiscal
policies; future wages and employee benefits costs; and legal and administrative
proceedings.

                                      -7-



UNION ELECTRIC COMPANY BALANCE SHEET UNAUDITED --------- (Thousands of Dollars, Except Shares) March 31,June 30, December 31, ASSETS 2000 1999 - ------ ---------- ---------------------- Property and plant, at original cost: Electric $9,271,152$9,331,165 $9,210,122 Gas 227,832230,897 223,789 Other 37,156 37,156 ---------- ---------- 9,536,1409,599,218 9,471,067 Less accumulated depreciation and amortization 4,380,5884,445,047 4,320,910 ---------- ---------- 5,155,5525,154,171 5,150,157 Construction work in progress: Nuclear fuel in process 95,29497,635 88,830 Other 114,257108,360 92,833 ---------- ---------- Total property and plant, net 5,365,1035,360,166 5,331,820 ---------- ---------- Investments and other assets: Nuclear decommissioning trust fund 193,438191,687 186,760 Other 61,26461,396 59,748 ---------- ---------- Total investments and other assets 254,702253,083 246,508 ---------- ---------- Current assets: Cash and cash equivalents 6,4151,602 117,308 Environmental bond redemption fund 186,500 -- Accounts receivable - trade (less allowance for doubtful accounts of $5,598$7,872 and $5,308, respectively) 135,220176,017 151,399 Unbilled revenue 47,853111,788 78,213 Other accounts and notes receivable 21,64551,545 19,803 Intercompany notes receivable 142,460169,120 165,700 Materials and supplies, at average cost - Fossil fuel 57,87261,154 65,292 Other 79,57279,597 90,921 Other 17,63819,639 19,205 ---------- ---------- Total current assets 695,175670,462 707,841 ---------- ---------- Regulatory assets: Deferred income taxes 600,604600,343 600,604 Other 155,350153,105 156,789 ---------- ---------- Total regulatory assets 755,954753,448 757,393 ---------- ---------- Total Assets $7,070,934$7,037,159 $7,043,562 ========== ========== CAPITAL AND LIABILITIES Capitalization: Common stock, $5 par value, 150,000,000 shares authorized - 102,123,834 shares outstanding $ 510,619 $ 510,619 Other paid-in capital, principally premium on common stock 701,896 701,896 Retained earnings 1,189,1231,204,696 1,221,167 ---------- ---------- Total common stockholder's equity 2,401,6382,417,211 2,433,682 Preferred stock not subject to mandatory redemption 155,197 155,197 Long-term debt 1,782,5131,919,662 1,882,601 ---------- ---------- Total capitalization 4,339,3484,492,070 4,471,480 ---------- ---------- Current liabilities: Current maturity of long-term debt 199,29112,782 11,423 Accounts and wages payable 130,416188,721 234,845 Accumulated deferred income taxes 48,13945,607 48,139 Taxes accrued 171,731179,355 119,699 Other 220,130165,217 208,373 ---------- ---------- Total current liabilities 769,707591,682 622,479 ---------- ---------- Accumulated deferred income taxes 1,246,7411,260,723 1,248,721 Accumulated deferred investment tax credits 137,145135,740 138,665 Regulatory liability 153,246151,578 154,399 Other deferred credits and liabilities 424,747405,366 407,818 ---------- ---------- Total Capital and Liabilities $7,070,934$7,037,159 $7,043,562 ========== ==========
See Notes to Financial Statements. -8-
UNION ELECTRIC COMPANY STATEMENT OF INCOME UNAUDITED --------- (Thousands of Dollars) Three Months Ended TwelveSix Months Ended March 31, March 31, ------------------ --------------------Twelve MonthsEnded June 30, June 30, June 30, --------------------- --------------------- ---------------------- 2000 1999 2000 1999 2000 1999 ---- ---- ---- ---- OPERATING REVENUES:---- ---- OPERATING REVENUES: Electric $ 519,113664,197 $ 461,134608,429 $ 2,492,9961,183,310 $ 2,315,3431,069,563 $ 2,548,764 $ 2,348,810 Gas 42,077 44,917 89,138 93,99818,095 12,787 60,172 57,704 94,446 93,164 Other -- 20 151 216-- 171 -- 274 ----------- ----------- ----------- ----------- ----------- ------------ Total operating revenues 561,190 506,071 2,582,285 2,409,557682,292 621,367 1,243,482 1,127,438 2,643,210 2,442,248 OPERATING EXPENSES: Operations Fuel and purchased power 172,438 120,575 708,397 539,247179,176 168,842 351,614 289,417 718,731 572,242 Gas 22,599 21,800 55,268 51,3179,849 8,557 32,448 30,357 56,560 51,418 Other 104,725 97,924 441,257 459,802120,668 115,228 225,393 213,152 446,697 454,842 ----------- ----------- ----------- ----------- 299,762 240,299 1,204,922 1,050,366----------- ------------ 309,693 292,627 609,455 532,926 1,221,988 1,078,502 Maintenance 52,260 50,623 248,772 224,57380,400 67,617 132,660 118,240 261,555 225,360 Depreciation and amortization 67,066 65,405 257,733 260,67167,118 64,918 134,184 130,323 259,933 261,335 Income taxes 28,612 31,255 228,048 224,20860,872 49,647 89,484 80,902 239,273 228,024 Other taxes 47,715 49,602 202,654 214,78950,196 50,266 97,911 99,868 202,584 210,612 ----------- ----------- ----------- ----------- ----------- ------------ Total operating expenses 495,415 437,184 2,142,129 1,974,607568,279 525,075 1,063,694 962,259 2,185,333 2,003,833 OPERATING INCOME 65,775 68,887 440,156 434,950114,013 96,292 179,788 165,179 457,877 438,415 OTHER INCOME AND (DEDUCTIONS): Allowance for equity funds used during construction 1,229 2,669 5,730 6,6371,600 2,219 2,829 4,888 5,111 7,655 Miscellaneous, net 2,879 1,328 13,199 12,7512,662 1,387 5,541 2,715 14,474 12,729 ----------- ----------- ----------- ----------- ----------- ------------ Total other income and (deductions) 4,108 3,997 18,929 19,3884,262 3,606 8,370 7,603 19,585 20,384 INCOME BEFORE INTEREST CHARGES 69,883 72,884 459,085 454,338118,275 99,898 188,158 172,782 477,462 458,799 INTEREST CHARGES :CHARGES: Interest 32,466 30,923 121,521 126,71033,548 31,055 66,014 61,978 124,014 127,105 Allowance for borrowed funds used during construction (1,819) (1,782) (7,181) (5,883)(2,125) (1,826) (3,944) (3,608) (7,480) (6,235) ----------- ----------- ----------- ----------- ----------- ------------ Net interest charges 30,647 29,141 114,340 120,827 ----------- ----------- ----------- -----------31,423 29,229 62,070 58,370 116,534 120,870 NET INCOME 39,236 43,743 344,745 333,51186,852 70,669 126,088 114,412 360,928 337,929 PREFERRED STOCK DIVIDENDS 2,204 2,2042,205 2,205 4,409 4,409 8,817 8,817 ----------- ----------- ----------- ----------- ----------- ------------ NET INCOME AFTER PREFERRED STOCK DIVIDENDS $ 37,03284,647 $ 41,53968,464 $ 335,928121,679 $ 324,694110,003 $ 352,111 $ 329,112 =========== =========== =========== =========== =========== ===========
See Notes to Financial Statements. -9-
UNION ELECTRIC COMPANY STATEMENT OF CASH FLOWS UNAUDITED --------- (Thousands of Dollars) ThreeSix Months Ended March 31, ------------------June 30, 2000 1999 ---- ---- Cash Flows From Operating: Net income $ 39,236126,088 $ 43,743114,412 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 64,077 63,071128,210 125,655 Amortization of nuclear fuel 9,075 10,41618,342 21,025 Allowance for funds used during construction (3,048) (4,451)(6,773) (8,496) Deferred income taxes, net (3,284) (4,507)6,725 (2,153) Deferred investment tax credits, net (1,520) (1,386)(2,925) (2,772) Changes in assets and liabilities: Receivables, net 44,697 (4,381)(89,935) (39,729) Materials and supplies 18,769 (3,584)15,462 (18,532) Accounts and wages payable (104,429) (103,745)(46,124) (59,123) Taxes accrued 52,032 60,50259,656 71,859 Other, net 25,030 54,108(47,367) 63,718 --------- --------- Net cash provided by operating activities 140,635 109,786161,359 265,864 Cash Flows From Investing: Construction expenditures (100,124) (49,473)(166,283) (120,658) Allowance for funds used during construction 3,048 4,4516,773 8,496 Nuclear fuel expenditures (6,228) (2,381)(8,449) (19,313) Intercompany notes receivable 23,240 --(3,420) (145,500) --------- --------- Net cash used in investing activities (80,064) (47,403)(171,379) (276,975) Cash Flows From Financing: Dividends on common stock (69,076) (61,581)(138,150) (123,161) Dividends on preferred stock (2,204) (2,204) Environmental bond redemption fund (186,500) --(4,409) (4,409) Redemptions - Nuclear fuel lease (1,818) (3,635)(3,933) (7,427) Long-term debt (99,722) --(186,500) - Issuances - Nuclear fuel lease 1,356 3,6175,656 38,430 Long-term debt 186,500 --221,650 73,900 --------- --------- Net cash used in financing activities (171,464) (63,803)(105,686) (22,667) Net change in cash and cash equivalents (110,893) (1,420)(115,706) (33,778) Cash and cash equivalents at beginning of year 117,308 47,337 --------- --------- Cash and cash equivalents at end of period $ 6,4151,602 $ 45,91713,559 ========= ========= Cash paid during the periods: Interest (net of amount capitalized) $ 22,89058,958 $ 20,21758,025 Income taxes, net $ (179)69,868 $ (2,633)58,426
See Notes to Financial Statements. -10- UNION ELECTRIC COMPANY NOTES TO FINANCIAL STATEMENTS (UNAUDITED) March 31,June 30, 2000 Note 1 - Union Electric Company (AmerenUE or the Registrant) is a subsidiary of Ameren Corporation (Ameren), which is the parent company of two utilitythe following operating companies,companies: the Registrant, and Central Illinois Public Service Company (AmerenCIPS). and AmerenEnergy Generating Company, a wholly owned subsidiary of AmerenEnergy Resources Company. Ameren is a registered holding company under the Public Utility Holding Company Act of 1935 (PUHCA) formed in December 1997 upon the merger of AmerenUE and CIPSCO Incorporated (the Merger). Both Ameren and its subsidiaries are subject to the regulatory provisions of the PUHCA. The operating companies are engaged principally in the generation, transmission, distribution and sale of electric energy and the purchase, distribution, transportation and sale of natural gas in the states of Missouri and Illinois. Contracts among the companies--dealing with jointly-owned generating facilities, interconnecting transmission lines, and the exchange of electric power--are regulated by the Federal Energy Regulatory Commission (FERC) or the Securities and Exchange Commission (SEC). Administrative support services are provided to the Registrant by a separate Ameren subsidiary, Ameren Services Company. The Registrant serves 1.1 million electric and 124,000 gas customers in a 24,500 square-mile area of Missouri and Illinois, including Metropolitan St. Louis. The Registrant also has a 40 percent interest in Electric Energy, Inc. (EEI), which is accounted for under the equity method of accounting. EEI owns and operates an electric generating and transmission facility in Illinois that supplies electric power primarily to a uranium enrichment plant located in Paducah, Kentucky. Note 2 - Financial statement note disclosures, normally included in financial statements prepared in conformity with generally accepted accounting principles, have been omitted in this Form 10-Q pursuant to the Rules and Regulations of the SEC. However, in the opinion of the Registrant, the disclosures contained in this Form 10-Q are adequate to make the information presented not misleading. See Notes to Financial Statements included in the 1999 Form 10-K for information relevant to the financial statements contained in this Form 10-Q, including information as to the significant accounting policies of the Registrant. Note 3 - In the opinion of the Registrant the interim financial statements filed as part of this Form 10-Q reflect all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the periods presented. Registrant's financial statements were prepared to permit the information required in the Financial Data Schedule (FDS), Exhibit 27, to be directly extracted from the filed statements. The FDS amounts correspond to or are calculable from the amounts reported in the financial statements or notes thereto. Note 4 - Due to the effect of weather on sales and other factors which are characteristic of public utility operations, financial results for the periods ended March 31,June 30, 2000 and 1999, are not necessarily indicative of trends for any three-month, six-month or 12-month period. Note 5 - - In July 1995, the Missouri Public Service Commission (MoPSC) approved an agreement establishing contractual obligations involving the Registrant's Missouri retail electric rates. Included was a three-year experimental alternative regulation plan (the Original Plan) that ran from July 1, 1995 through June 30, 1998, which provided that earnings in those years in excess of a 12.61 percent12.61% regulatory return on equity (ROE) be shared equally between customers and stockholders, and earnings above a 14 percent14% ROE be credited to customers. The formula for computing the credit used twelve-month results ending June 30, rather than calendar year earnings. The MoPSC staff proposed adjustments to the Registrant's estimated customer credit for the final year of the Original Plan ended June 30, 1998, which were the subject of regulatory proceedings before the MoPSC in 1999. In December 1999, the MoPSC issued a Report and Order (Order) concerning these proposed adjustments. Based on the provisions of that Order, the Registrant revised its estimated final year credit to $31 million. Subsequently, in December 1999, the Registrant filed a request for rehearing of the Order with the MoPSC, asking that it reconsider its decision to adopt certain of the MoPSC staff's adjustments. The request was denied by the MoPSC and in February 2000, the Registrant filed a Petition -11- for Writ of Review with the Circuit Court of Cole County, Missouri, requesting that the Order be reversed. -11- The appeal is pending and the ultimate outcome can not be predicted; however, the final decision is not expected to materially impact the financial condition, results of operations or liquidity of the Registrant. A partial stay of the Order was granted by the Court pending the appeal. A new three-year experimental alternative regulation plan (the New Plan) was included in the joint agreement authorized by the MoPSC in its February 1997 order approving the Merger. Like the Original Plan, the New Plan requires that earnings over a 12.61 percent ROE up to a 14 percent ROE be shared equally between customers and stockholders. The New Plan also returns to customers 90 percent of all earnings above a 14 percent ROE up to a 16 percent ROE. Earnings above a 16 percent ROE are credited entirely to customers. The New Plan runs from July 1, 1998 through June 30, 2001. During the three months ended March 31,June 30, 2000, the Registrant recorded an estimated $10$5 million credit (4(2 cents per share) for the plan year endingended June 30, 2000 that the Registrant expects to pay its Missouri electric customers. In total, the Registrant has recorded an estimated credit of $30$35 million (15 cents per share) as of March 31,June 30, 2000 for the plan year endingended June 30, 2000, compared to an estimated $20 million credit recorded over the same period last year. These credits were reflected as a reduction in electric revenues. The final amount of the credit will depend on several factors, including the Registrant's earnings for 12 months ended June 30, 2000. As of March 31,June 30, 2000, the Registrant has also reflected an estimated $25 million credit it expects to pay its Missouri electric customers for the plan year ended June 30, 1999. The Registrant's proposed credit is still under review by the MoPSC staff and the Office of the Public Counsel. The joint agreement approved by the MoPSC in its February 1997 Order approving the Merger also provided for a Missouri electric rate decrease, retroactive to September 1, 1998, based on the weather-adjusted average annual credits to customers under the Original Plan. The rate decrease was impacted by the Order issued by the MoPSC in December 1999 relating to the estimated credit for the third year of the Original Plan and a settlement reached between the Registrant, the MoPSC staff and other parties relating to the calculation of the weather-adjusted credits. Based on those results, the Registrant estimates that its Missouri electric rate decrease will be $17 million on an annualized basis. This estimate is subject to the final outcome of the above-referenced court appeal of the Order. Note 6 - The Registrant has transactions in the normal course of business with other Ameren subsidiaries. These transactions are primarily comprised of power purchases and sales and services received or rendered. Intercompany receivables included in other accounts and notes receivable were approximately $19$46 million and $15 million, respectively, as of March 31,June 30, 2000 and December 31, 1999. Intercompany payables included in accounts and wages payable totaled approximately $21$43 million and $25 million, respectively, as of March 31,June 30, 2000 and December 31, 1999. Also, the Registrant has the ability to borrow up to approximately $530$525 million from Ameren or AmerenCIPS through a regulated money pool agreement. The regulated money pool was established to coordinate and provide for certain short-term cash and working capital requirements and is administered by Ameren Services Company. Interest is calculated at varying rates of interest depending on the composition of internal and external funds in the regulated money pool. At March 31,June 30, 2000, the Registrant had outstanding intercompany receivables of $142$169 million and $333$196 million available through the regulated money pool. Note 7- The Company's union employees are represented by the International Brotherhood of Electrical Workers and the International Union of Operating Engineers. These employees comprise approximately 65% of the Company's workforce. New contracts with collective bargaining unit representing approximately 46% of these employees was ratified in 1999 with terms expiring in 2002. New contracts with collective bargaining units representing approximately 28% of these employees were ratified in 2000 with terms expiring in 2003. On July 27, 2000, after engaging in extensive good-faith bargaining with collective bargaining units representing approximately 26% of the Registrant's union employees, the Registrant submitted a last, best and final offer to the bargaining unit representing most of these employees for a new contract with a term expiring in 2003. The bargaining unit has until August 25, 2000 to notify the Registrant on whether the offer has been ratified by its membership. The Registrant is unable to predict whether the offer will be ratified or what action, if any, the collective bargaining unit will take in the event -12- it is not ratified or the response of the Registrant's other union represented employees to any action by its employees. The Registrant is also unable to determine what, if any impact these labor matters could have on its future financial condition, results of operations or liquidity. Note 8- In 1998, the Registrant joined a group of companies that support the formation of the Midwest Independent System Operator (Midwest ISO). An ISO operates, but does not own, electric transmission systems and maintains system reliability and security while alleviating certain pricing issues. The FERC conditionally approved the formation of the Midwest ISO. The Registrant is evaluating certain issues which are outstanding related to the start-up of operations of the Midwest ISO, including the final determination of revenue distribution among the Midwest ISO members. Further, the Registrant is evaluating alternatives to membership in the Midwest ISO. At this time, management has not decided its course of action relative to its transmission business and accordingly is unable to determine the impact that operation of the Midwest ISO or other alternatives will have on its financial condition, results of operations or liquidity. -13- PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS ----------------- Reference is made to "Liquidity and Capital Resources" in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations and Note 122 - Commitments and ContingenciesRegulatory Matters (Illinois Electric Restructuring) in the Notes to Financial Statements inof the Registrant's Form 10-K for the year ended December 31, 1999, for information regardingrelating to a transmission system rate case filed by the United States Environmental Protection Agency's (EPA) issuanceRegistrant with the Federal Energy Regulatory Commission (FERC) in 1997August 1999. This filing was primarily designed to implement rates, terms and conditions for electric transmission service for those retail customers in Illinois who choose other suppliers as allowed under the Electric Service Customer Choice and Rate Relief Law of 1997. On May 17, 2000, the FERC issued a letter order approving a settlement of this case reached with the FERC trial staff and other interested parties. Reference is made to Item 1. Legal Proceedings in Part II of the Registrant's Form 10-Q for the quarterly period ended March 31, 2000, for information relating to the National Ambient Air Quality Standards for ozone and particulate matter. Inmatter litigation. On May 1999,22, 2000, the United States Supreme Court granted certiorari and agreed to review the United States Court of Appeals for the District of Columbia Circuit remandedCircuit's decision to remand the ambient air quality standard regulations to the EPAUnited States Environmental Protection Agency for reconsideration. In January and February 2000, the parties to the litigation filed petitions for review before the United States Supreme Court. The Supreme Court has not decided whether to accept the case for review. At this time, the Registrant is unable to predict the ultimate impact of those revised air quality standards on its future financial condition, results of operationsoperation or liquidity. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS -------------------------------------------------- At5. OTHER INFORMATION ----------------- Any stockholder proposal intended for inclusion in the proxy material for the Registrant's 2001 annual meeting of stockholders must be received by the Registrant by November 30, 2000. In addition, under the Registrant's By-Laws, stockholders who intend to submit a proposal in person at an annual meeting, or who intend to nominate a director at a meeting, must provide advance written notice along with other prescribed information. In general, such notice must be received by the Secretary of the Registrant held on April 25, 2000, the following matter was presentednot later than 60 nor earlier than 90 days prior to the first anniversary of the preceding year's annual meeting. For the Registrant's 2001 annual meeting for a vote and the results of such voting are as follows: Item (1) Electionstockholders, written notice of Directors. Non-Voted Name For Withheld Brokers ---- --- -------- --------- Paul A. Agathen............. 104,080,301 18,457 0 Warner L. Baxter............ 104,078,764 19,815 0 Donald E. Brandt............ 104,079,864 18,807 0 Charles W. Mueller.......... 104,079,807 18,864 0 Gary L. Rainwater........... 104,079,157 19,514 0any in-person stockholder proposal or director nomination must be received not later than February 24, 2001 or earlier than January 25, 2001. ITEM 6. EXHIBITEXHIBITS AND REPORTS ON FORM 8-K --------------------------------------------------------------- (a) Exhibits. Exhibit 12 - Computation of Ratio of Earnings to Fixed Charges and Preferred Stock Dividend Requirements, 12 Months Ended March 31,June 30, 2000. Exhibit 27 - Financial Data Schedule. The following instrument defining the rights of holders of certain unregistered long-term debt of AmerenUE has not been filed with the Securities and Exchange Commission but will be furnished upon request. 1. Loan Agreement dated as of March 1, 2000 between AmerenUE and the State Environmental Improvement and Energy Resources Authority of the State of Missouri (EIERA) in connection with the EIERA's $186,500,000 Environmental Improvement Revenue Refunding Bonds (AmerenUE Project) ($63,500,000 Series 2000A, $63,000,000 Series 2000B, and $60,000,000 Series 2000C) due March 1, 2035. (b) Reports on Form 8-K. None. -13--14- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. UNION ELECTRIC COMPANY (Registrant) By /S//s/ Donald E. Brandt ---------------------------------------------------- Donald E. Brandt Senior Vice President Finance and Corporate Services (Principal Financial Officer) Date: May 15,August 14, 2000 -14--15-