1. Ameren NYSE: AEE Presented by: Ed Kennedy Brandon Honey March 12, 2009

2. Overview Company Introduction Operations/Regulations Comps and DCF Analysis Final Outlook IntroductionOperationsComps/DCFOutlook

3. Company Overview Public utility holding company formed as a result of Union Electric and CIPSCO, Inc. in 1997 Provides natural gas and electricity service to consumers in MO and IL Headquartered in St. Louis, MO IntroductionOperationsComps/DCFOutlook

4. Business Segments Missouri regulated  Missouri Public Service Commission (MoPSC)  Federal Energy Regulatory Commission Illinois regulated  Illinois Commerce Commission (ICC)  Federal Energy Regulatory Commission Non-rate regulated IntroductionOperationsComps/DCFOutlook

5. Subsidiaries Missouri regulated services  Union Electric (AmerenUE) Illinois regulated services  Central Illinois Light Company (AmerenCILCO)  Central Illinois Public Service Company (AmerenCIPS)  Illinois Power Company (AmerenIP) Non-rate regulated services  Genco, AERG, EEI Ameren-owned electricity generating subsidiaries  Ameren Energy Marketing Company IntroductionOperationsComps/DCFOutlook

6. Regulation Rates are the most influential factor for performance and liquidity  Allowed zero profit on the cost of power Sell it what AEE bought it for  Make profit on delivery of power Regulated rates  Rates are set by state and federal regulation entities Increases occur upon Ameren’s request and regulator’s approval FERC approval needed prior to issuing debt, issuing equity, merging, or acquiring utility companies Environmental regulation IntroductionOperationsComps/DCFOutlook

7. Electricity Ameren Generates Electricity Ameren Energy Marketing Company Municipalities, commercial, industrial, other utilities, etc. Consumer Demand Ameren subsidiaries Open Market competitors *AEE subsidiaries either generate or buy their electricity. They can buy it from the open market or AEMC if it’s cheaper than generating it, there is excess demand, there are plant outages, or there are extreme weather conditions. The marketing company has agreed to purchase all Genco, AERG, EEI generation. If it needs more, it buys more from the market. All Genco, AERG, EEI generation Other AEE subsidiary generation Excess demand only regulated non-regulated 76% of sales 24% of sales

8. Natural Gas 100% of natural gas revenues regulated in 2008 Any gas price fluctuations are reflected in customers’ bills Ameren files requests for rate changes and the MoPSC and ICC either grant or deny the request No MO volume-based rate increases until March 15, 2010 IntroductionOperationsComps/DCFOutlook

9. 2008 Earnings Natural Gas Revenues  14% regulated by MoPSC  86% regulated by ICC Electric Revenues  35% regulated by MoPSC  41% regulated by ICC  24% based on market Inputs for electricity generation:  Coal (85%), nuclear (12%), hydroelectric (2%), natural gas (1%), oil (< 1%) IntroductionOperationsComps/DCFOutlook

10. 2008 Earnings Revenues: $7.8 B  YOY Growth: 3.66% Operating Expenses: $6.5B  YOY Growth: 4.40% Net Income: $605 M  YOY Change: -1.945% IntroductionOperationsComps/DCFOutlook

11. 2008 Margins Operating Margin:17.375%  2007: 17.958% Net Profit Margin: 7.718%  2007: 8.159% Margins have gradually decreased since 2001  OPM: From 25% in 2001  NPM: From 12% in 2001 IntroductionOperationsComps/DCFOutlook

12. SWOT IntroductionOperationsComps/DCFOutlook StrengthsWeaknesses Revenue Dependability Regulated Monopoly Outdated Infrastructure Dependency on Regulators OpportunitiesThreats Renovations could lead to greater efficiencies Acquisitions upon recovery Regulatory Lag Environmental Regulation Commodity Price Increases

13. Industry Issues Political and Regulatory resistance to higher rates Obama looking to cap and tax carbon emissions by auction Uncertainty in credit and capital markets Environmental awareness  Cap Ex, Taxes, Litigation costs IntroductionOperationsComps/DCFOutlook

14. Recent Rate Changes Missouri regulated  Increase of $162 million annually Based on allowed 10.76% ROE Illinois regulated  Increase of $161 million annually Based on allowed 10.7% ROE Management expects an ROE of 6% for both Illinois and Missouri regulated in 2009 IntroductionOperationsComps/DCFOutlook

15. Industry Trends Returns expected are below the ROE’s allowed  Rates depend on historical costs and costs are expected to increase Significant costs to update infrastructure to comply with environmental regulations  50% is expected to be recoverable in MO market Environmental Cost Recovery Mechanisms  Decreased plant availability during renovation  Higher operating costs IntroductionOperationsComps/DCFOutlook

16. Macroeconomic Factors Higher income taxes for the wealthy  Lower P/E ratios in the market, lesser discretionary income Increased borrowing by US government provides competition for funds, possibly resulting in lower overall share prices in the market Flight to safety continues to hurt share prices Deteriorating International Market discourages foreign investors IntroductionOperationsComps/DCFOutlook

17. Short Term Credit Facilities Total = $2.029B from 18 banks Revolving credit facilities up to:  $1B expire January 2010  $1.029B expire July 2010 IntroductionOperationsComps/DCFOutlook

18. Short Term Credit Facilities Total = $2.029B from 18 banks End of 2008, $1.291B drawn from the banks  $584M/1.029B drawn from July 2010 expiration  $707M/1B drawn from Jan 2010 expiration Currently limited in commercial paper market because of downgrades on ST debt IntroductionOperationsComps/DCFOutlook

19. Long-Term Debt Maturities IntroductionOperationsComps/DCFOutlook Year of MaturationAmount (in millions) 2009380 2010204 2011154 2012179 2013355 Thereafter5624

20. Credit Ratings Issuer/Corporate Credit Rating  Moody’s - Baa3 Senior Unsecured Debt  Moody’s - Baa3 Downgraded August 2008, affirmed afterward, stable  Liquidity concerns, costs rising faster than revenues, cap ex, labor costs, lack of environmental cost recovery  Affirmed only because reduced dividend will free up cash flows Still likely to have interest rates reasonably higher due to market uncertainty IntroductionOperationsComps/DCFOutlook

21. Equity Repurchase/Issuance Management issues shares through 401k plans Have not repurchased any common stock IntroductionOperationsComps/DCFOutlook Year of IssueNumber of SharesPrice of Shares 20084 million$38.50 20071.7 million$53.53 20061.9 million$50.53

22. Capital Expenditures Plans $1.685B expenditure in 2009 Provided an estimated range of $6.6-8.7B total expenditures 2010-2013 Expenditures will be funded by debt and equity  Targeted range 50-55% equity Expenditures will be towards infrastructure improvements and environmental regulation compliance  $4.5-5.5B towards environmental regulation until 2018  May be recoverable by 2.5% annual rate increases IntroductionOperationsComps/DCFOutlook

23. Commodity Risk UE is exposed to 5% of electricity price fluctuations Genco, AERG, EEI are exposed to 100% of electricity price fluctuations IP, CIP, CILCO also have certain cost recovery abilities in electricity Natural Gas costs are passed directly to the consumer Uses hedging strategies to mitigate risks IntroductionOperationsComps/DCFOutlook

24. Shareholder Makeup UE is exposed to 5% of electricity price fluctuations Genco, AERG, EEI are exposed to 100% of electricity price fluctuations IP, CIP, CILCO also have certain cost recovery abilities in electricity Natural Gas costs are passed directly to the consumer Uses hedging strategies to mitigate risks IntroductionOperationsComps/DCFOutlook

25. Correlation IntroductionOperationsComps/DCFOutlook Monthly Ameren Correlation (past 10 yrs) CompanyTickerCorrelation American EagleAEO-0.0638 CopartCPRT0.0762 Diamond OffshoreDO0.2685 First IndustrialFR0.5116 Jack Henry & AssociatesJKHY0.1139 Kimberly-ClarkKMB0.3298 McDonaldsMCD0.3202 StericycleSRCL-0.0140 WalgreensWAG0.1551 MEMC ElectronicsWFR0.0759 Average Correlation =.1898

26. Comparable Companies IntroductionOperationsComps/DCFOutlook Centerpoint Energy Inc.  Natural gas distribution, electric transmission and distribution, approximately 3.2 million customers Consolidated Edison Inc.  Electric, gas, and steam service provider, approximately 1.1 million customers Exelon Corp.  Generation, distribution, transmission, and sale of electricity, approximately 5.8 million customers

27. Comparable Companies IntroductionOperationsComps/DCFOutlook Northeast Utilities  Electric distribution, natural gas distribution, electric transmission, approximately 2 million customers PG&E Corp.  Electricity and natural gas distribution, approximately 9.4 million customers Public Service Enterprise Group  Transmission, distribution, and sale of electric energy and natural gas, approximately 3.8 million customers

28. Comparable Companies IntroductionOperationsComps/DCFOutlook SCANA Corp.  Generates, transports, and sells electric power, approximately 1.8 million customers Wisconsin Energy Corp.  Electricity and natural gas provider, approximately 2.1 million customers in the Wisconsin and Michigan region

29. Comparable Companies IntroductionOperationsComps/DCFOutlook

30. Comparable Companies IntroductionOperationsComps/DCFOutlook

31. DCF Assumptions Increased Corporate Taxes  With the current changes in political climate, Ameren should expect to see increases in corporate taxes over the upcoming five years Minimal Capital Expenditures  Ameren has recognized a decline in cash flows over the previous year that will likely diminish their plans for capital expenditures over the next five years. The firm continues to fund these capital expenditures through 50% equity and 50% debt, but this decrease in cash flows will make it tougher to fund these projects. WACC Calculation  Using ROE “Goal-Post” Theory, we came to a WACC calculation based on the firms return on equity and CAPM analysis IntroductionOperationsComps/DCFOutlook

32. DCF Calculation IntroductionOperationsComps/DCFOutlook Weighted-Average Cost of Capital (WACC) Weight of Debt61.20% Weight of Equity38.80% Cost of Debt7.44% Cost of Equity9.78% β (Beta) 0.92 Risk-Free Rate (R f )4.00% Market Return (R m )10.00% Market Risk Premium (RP m )6.00% Tax Rate35.00% WACC6.75% Sustainable Growth2.00% Ameren Share Price = $19.22

33. Valuations CAPM DCF Valuation: $20.33 ROE DCF Valuation: $18.17 “Goal Post” Valuation: $19.22 Comparables Valuation: Slightly Overvalued Constant Dividend Discount Model: $15.74 Constant Growth Dividend Discount Model: $19.78 Current Price: $19.78 IntroductionOperationsComps/DCFOutlook

34. Final Outlook Costs are rising faster than revenues and will continue to do so Credit will be more difficult to come by Equity investment is discouraged because of higher taxes for the rich, international economic deterioration, and flight to safety due to uncertainty Ameren will incur large capital expenditures to meet environmental regulations During renovation, plants will be unavailable IntroductionOperationsComps/DCFOutlook

35. Final Outlook (cont.) Ameren will pay higher taxes due to higher income taxes, carbon emission taxes, and elimination of tax breaks for corporations Commodity prices will increase Regulatory agencies will be more hesitant to increase rates due to economic circumstances and political views Bad debt expense will increase due to economic conditions Raising equity capital will be more difficult IntroductionOperationsComps/DCFOutlook

36. Holding Currently own 400 shares at $19.78  2.78% of the portfolio value Purchased 400 shares at $50.03 on April 27, 2006 Unrealized loss of 60.5% IntroductionOperationsComps/DCFOutlook

37. Proposal Ameren is currently overvalued and is exposed to many risks Sell 200 shares at the market price IntroductionOperationsComps/DCFOutlook