-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GDaR8vgamhL8+BF0GBWIfA1F9HOSnzRQjXgepUZ23Nks6cnebJS+h2N0mH8Ocm/C xpfWWMNFkjFLv2U+FK+ImA== 0000049816-97-000018.txt : 19970520 0000049816-97-000018.hdr.sgml : 19970520 ACCESSION NUMBER: 0000049816-97-000018 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970514 SROS: CSE SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ILLINOIS POWER CO CENTRAL INDEX KEY: 0000049816 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 370344645 STATE OF INCORPORATION: IL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-03004 FILM NUMBER: 97605869 BUSINESS ADDRESS: STREET 1: 500 S 27TH ST STREET 2: C/O HARRIS TRUST & SAVINGS BANK CITY: DECATUR STATE: IL ZIP: 62525-1805 BUSINESS PHONE: 2174246600 FORMER COMPANY: FORMER CONFORMED NAME: ILLINOIS IOWA POWER CO DATE OF NAME CHANGE: 19660822 10-Q 1 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 MARCH 31, 1997 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________to __________ Commission Registrants; State of Incorporation; IRS Employer File Number Address; and Telephone Number Identification No. 1-11327 Illinova Corporation 37-1319890 (an Illinois Corporation) 500 S. 27th Street Decatur, IL 62525 (217) 424-6600 1-3004 Illinois Power Company 37-0344645 (an Illinois Corporation) 500 S. 27th Street Decatur, IL 62525 (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 report), and (2) have been subject to such filing requirements for the past 90 days. Illinova Yes X No Corporation ---- --- Illinois Power Yes X No Company ---- ---- Indicate the number of shares outstanding of each of the issuers' classes of common stock, as of the latest practicable date: Illinova Corporation Common stock, no par value, 75,681,937 shares outstanding at March 31, 1997 Illinois Power Company Common stock, no par value, 72,031,846 shares outstanding held by Illinova Corporation at March 31, 1997 ILLINOVA CORPORATION ILLINOIS POWER COMPANY This combined Form 10-Q is separately filed by Illinova Corporation and Illinois Power Company. Information contained herein relating to Illinois Power Company is filed by Illinova Corporation and separately by Illinois Power Company on its own behalf. Illinois Power Company makes no representation as to information relating to Illinova Corporation or its subsidiaries, except as it may relate to Illinois Power Company. FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 1997 INDEX PAGE NO. Part I. FINANCIAL INFORMATION Item 1. Financial Statements Illinova Corporation Consolidated Balance Sheets 3 - 4 Consolidated Statements of Income 5 Consolidated Statements of Cash Flows 6 Illinois Power Company Consolidated Balance Sheets 7 - 8 Consolidated Statements of Income 9 Consolidated Statements of Cash Flows 10 Notes to Consolidated Financial Statements of Illinova Corporation and Illinois Power Company 11 - 12 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations for Illinova Corporation and Illinois Power Company 13 - 18 Part II. OTHER INFORMATION Item 1: Legal Proceedings 19 Item 6: Exhibits and Reports on Form 8-K 19 Signatures 20 - 21 Exhibit Index 22 PART I. FINANCIAL INFORMATION ILLINOVA CORPORATION CONSOLIDATED BALANCE SHEETS (See accompanying Notes to Consolidated Financial Statements) MARCH 31, DECEMBER 31, 1997 1996 ASSETS (Unaudited) (Millions of Dollars) Utility Plant, at original cost Electric (includes construction work in progress of $183.4 million and $212.5 million, respectively) $ 6,368.4 $ 6,335.4 Gas (includes construction work in progress of $14.4 million and $21.2 million, respectively) 649.0 646.1 ---------- -------- 7,017.4 6,981.5 Less-Accumulated depreciation 2,456.1 2,419.7 ---------- -------- 4,561.3 4,561.8 Nuclear fuel in process 19.6 5.3 Nuclear fuel under capital lease 97.1 96.4 ---------- --------- Total utility plant 4,678.0 4,663.5 ---------- --------- Investments and Other Assets 153.7 146.2 ---------- --------- Current Assets Cash and cash equivalents 31.3 24.6 Accounts receivable (less allowance for doubtful accounts of $3.0 million) Service 158.8 138.8 Other 76.3 62.0 Accrued unbilled revenue 86.0 106.0 Materials and supplies, at average cost 107.9 113.2 Prepayments and other 29.0 24.1 ---------- --------- Total current assets 489.3 468.7 ---------- --------- Deferred Charges Deferred Clinton costs 103.0 103.9 Recoverable income taxes 111.0 101.3 Other 229.4 229.2 ---------- --------- Total deferred charges 443.4 434.4 ---------- --------- $5,764.4 $ 5,712.8 ========== ==========
ILLINOVA CORPORATION CONSOLIDATED BALANCE SHEETS (See accompanying Notes to Consolidated Financial Statements) MARCH 31, DECEMBER 31, 1997 1996 CAPITAL AND LIABILITIES (Unaudited) (Millions of Dollars) Capitalization Common stock - No par value, 200,000,000 shares authorized; 75,681,937 shares outstanding, stated at $ 1,425.7 $1,425.7 Less - Deferred compensation - ESOP 13.4 14.3 Retained earnings 253.5 233.0 Less - Capital stock expense 8.2 8.2 Preferred stock of subsidiary 96.2 96.2 Mandatorily redeemable preferred stock of subsidiary 197.0 197.0 Long-term debt 100.0 -- Long-term debt of subsidiary 1,638.7 1,636.4 ---------- --------- Total capitalization 3,689.5 3,565.8 ---------- --------- Current Liabilities Accounts payable 170.5 166.7 Notes payable 250.8 387.0 Long-term debt and lease obligations of subsidiary maturing within one year 46.5 47.7 Other 156.9 146.6 ---------- --------- Total current liabilities 624.7 748.0 ---------- --------- Deferred Credits Accumulated deferred income taxes 1,073.8 1,034.9 Accumulated deferred investment tax credits 213.8 215.5 Other 162.6 148.6 ---------- --------- Total deferred credits 1,450.2 1,399.0 ---------- ---------- $ 5,764.4 $ 5,712.8 ========== ==========
ILLINOVA CORPORATION CONSOLIDATED STATEMENTS OF INCOME (See accompanying Notes to Consolidated Financial Statements) THREE MONTHS ENDED MARCH 31, 1997 1996 (Unaudited) (Millions except per share) Operating Revenues: Electric $ 282.2 $ 278.7 Electric interchange 26.6 31.9 Gas 164.0 136.1 Diversified enterprises 97.4 5.1 ---------- ---------- Total 570.2 451.8 ---------- ---------- Operating Expenses: Fuel for electric plants 45.3 66.6 Power purchased 35.8 9.8 Gas purchased for resale 99.7 73.0 Diversified enterprises 102.6 5.4 Other operating expenses 59.4 65.7 Maintenance 19.7 20.5 Depreciation & amortization 49.0 48.1 General taxes 38.7 37.8 ---------- ---------- Total 450.2 326.9 ---------- ---------- Operating Income 120.0 124.9 ---------- ---------- Other Income and Deductions, (2.9) (14.9) Net ---------- ---------- Income Before Interest Charges and Income Taxes 117.1 110.0 ---------- ---------- Interest Charges Interest expense 36.4 33.8 Allowance for borrowed funds during construction (1.4) (1.7) Preferred dividend requirements 5.5 5.6 of subsidiary ---------- ---------- Total 40.5 37.7 ---------- ---------- Income Before Income Taxes 76.6 72.3 ---------- ---------- Income Taxes 32.6 29.0 ---------- ---------- Net Income Applicable to Common Stock $ 44.0 $ 43.3 ========== ========== Earnings per common share $0.58 $0.57 Cash dividends declared per common share $0.31 $0.28 Cash dividends paid per common $0.31 $0.28 share Weighted average number of common 75,681,937 75,674,514 shares outstanding during period
ILLINOVA CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (See accompanying Notes to Consolidated Financial Statements) THREE MONTHS ENDED MARCH 31, 1997 1996 (Unaudited) (Millions of Dollars) CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $ 44.0 $ 43.3 Items not requiring cash, net 69.6 45.0 Changes in assets and liabilities 1.2 56.0 -------- -------- Net cash provided by operating activities 114.8 144.3 -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Construction expenditures (33.9) (47.9) Other investing activities (15.2) (3.0) -------- -------- Net cash used in investing activities (49.1) (50.9) -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Dividends on common stock (23.5) (21.2) Exercise of stock options -- 1.1 Redemptions - Short-term debt (136.2) (209.9) Long-term debt of subsidiary -- (10.0) Preferred stock of subsidiary -- (0.3) Issuances - Short-term debt -- 55.0 Long-term debt 100.0 -- Preferred stock of subsidiary -- 100.0 Other financing activities 0.7 (2.9) --------- --------- Net cash used in financing activities (59.0) (88.2) --------- --------- NET CHANGE IN CASH AND CASH EQUIVALENTS 6.7 5.2 CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 24.6 11.3 --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 31.3 $ 16.5 ========= =========
ILLINOIS POWER COMPANY CONSOLIDATED BALANCE SHEETS (See accompanying Notes to Consolidated Financial Statements) MARCH 31, DECEMBER 31, 1997 1996 ASSETS (Unaudited) (Millions of Dollars) Utility Plant, at original cost Electric (includes construction work in progress of $183.4 million and $212.5 million, respectively) $ 6,368.4 $ 6,335.4 Gas (includes construction work in progress of $14.4 million and $21.2 million, respectively) 649.0 646.1 ------------ ---------- 7,017.4 6,981.5 Less-Accumulated depreciation 2,456.1 2,419.7 ------------ ---------- 4,561.3 4,561.8 Nuclear fuel in process 19.6 5.3 Nuclear fuel under capital lease 97.1 96.4 ------------ ------------ Total utility plant 4,678.0 4,663.5 ------------ ----------- Investments and Other Assets 6.4 14.5 ------------ ----------- Current Assets Cash and cash equivalents 15.9 12.5 Accounts receivable (less allowance for doubtful accounts of $3.0 million) Service 158.8 138.8 Other 18.9 51.1 Accrued unbilled revenue 86.0 106.0 Materials and supplies, at average cost 107.2 112.2 Prepayments and other 27.8 23.7 ------------ ----------- Total current assets 414.6 444.3 ------------ ----------- Deferred Charges Deferred Clinton costs 103.0 103.9 Recoverable income taxes 111.0 101.3 Other 239.1 241.0 ------------ ----------- Total deferred charges 453.1 446.2 ------------ ----------- $ 5,552.1 $ 5,568.5 ============ ============
ILLINOIS POWER COMPANY CONSOLIDATED BALANCE SHEETS (See accompanying Notes to Consolidated Financial Statements) MARCH 31, DECEMBER 31, 1997 1996 CAPITAL AND LIABILITIES (Unaudited) (Millions of Dollars) Capitalization Common stock - No par value, 100,000,000 shares authorized; 75,643,937 shares issued, stated at $ 1,424.6 $ 1,424.6 Retained earnings 271.9 245.9 Less - Capital stock expense 8.2 8.2 Less - 3,612,091 and 3,410,897 shares of common stock in treasury, respectively, at cost 90.5 86.2 Preferred stock 96.2 96.2 Mandatorily redeemable preferred stock 197.0 197.0 Long-term debt 1,638.7 1,636.4 ------------ ----------- Total capitalization 3,529.7 3,505.7 ------------ ----------- Current Liabilities Accounts payable 118.0 149.7 Notes payable 250.8 310.0 Long-term debt and lease obligations maturing within one year 46.5 47.7 Other 154.6 148.1 ------------ ----------- Total current liabilities 569.9 655.5 ------------ ----------- Deferred Credits Accumulated deferred income taxes 1,082.4 1,048.0 Accumulated deferred investment tax credits 213.8 215.5 Other 156.3 143.8 ------------ ----------- Total deferred credits 1,452.5 1,407.3 ------------ ----------- $ 5,552.1 $ 5,568.5 ============ ============
ILLINOIS POWER COMPANY CONSOLIDATED STATEMENTS OF INCOME (See accompanying Notes to Consolidated Financial Statements) THREE MONTHS ENDED MARCH 31, 1997 1996 (Unaudited) (Millions of Dollars) Operating Revenues: Electric $ 282.2 $ 278.7 Electric interchange 26.6 31.9 Gas 164.0 136.1 ---------- ----------- Total 472.8 446.7 ----------- ----------- Operating Expenses and Taxes: Fuel for electric plants 45.3 66.6 Power purchased 35.8 9.8 Gas purchased for resale 99.7 73.0 Other operating expenses 59.4 65.7 Maintenance 19.7 20.5 Depreciation & amortization 49.0 48.1 General taxes 38.7 37.8 Income taxes 36.3 37.1 ----------- ---------- Total 383.9 358.6 ----------- ---------- Operating Income 88.9 88.1 ---------- ----------- Other Income and Deductions, Net (1.2) (6.9) ---------- ----------- Income Before Interest Charges 87.7 81.2 ----------- ---------- Interest Charges and Other: Interest Expense 34.1 33.8 Allowance for borrowed funds used during construction (1.7) (1.4) ----------- ---------- Total 32.7 32.1 ----------- ---------- Net Income 55.0 49.1 Preferred dividend requirements 5.5 5.6 ---------- ---------- Net Income applicable to common stock $ 49.5 $ 43.5 ========== ===========
ILLINOIS POWER COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS (See accompanying Notes to Consolidated Financial Statements) THREE MONTHS ENDED MARCH 31, 1997 1996 (Unaudited) (Millions of Dollars) CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $ 55.0 49.1 Items not requiring cash, net 65.3 45.9 Changes in assets and 8.5 51.7 liabilities ------------ ------------ Net cash provided by operating 128.8 146.7 activities ------------- ------------ CASH FLOWS FROM INVESTING ACTIVITIES: Construction expenditures (33.9) (47.9) Other investing activities 0.4 3.1 ------------- ------------- Net cash used in investing (33.5) (44.8) activities ------------- ------------ CASH FLOWS FROM FINANCING ACTIVITIES: Dividends on preferred and common stock (29.0) (24.5) Repurchase of common stock (4.3) (7.7) Redemptions - Short-term debt (59.2) (209.9) Long-term debt -- (10.0) Preferred stock -- (0.3) Common stock -- -- Issuances Short-term debt -- 55.0 Preferred Stock -- 100.0 Other financing activities 0.6 (2.9) ------------- ------------- Net cash used in financing (91.9) (100.3) activities ------------- ------------- NET CHANGE IN CASH AND CASH EQUIVALENTS 3.4 1.6 CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 12.5 4.3 ------------- ------------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 15.9 $ 5.9 ============ =============
ILLINOVA CORPORATION AND ILLINOIS POWER COMPANY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS GENERAL Financial Statement note disclosures, normally included in financial statements prepared in conformity with generally accepted accounting principles, have been omitted from this Form 10-Q pursuant to the Rules and Regulations of the Securities and Exchange Commission (SEC). However, in the opinion of Illinova Corporation (Illinova) and Illinois Power Company (IP), the disclosures and information contained in this Form 10-Q are adequate and not misleading. See the consolidated financial statements and the accompanying notes in Illinova's 1996 Annual Report to Shareholders (included in the Proxy Statement), the consolidated financial statements and the accompanying notes in IP's 1996 Annual Report to Shareholders (included in the Information Statement), Illinova's and IP's 1996 Form 10-K filings to the SEC for information relevant to the consolidated financial statements contained herein, including information as to certain regulatory and environmental matters and as to the significant accounting policies followed. In the opinion of Illinova, the accompanying unaudited consolidated financial statements for Illinova reflect all adjustments necessary to present fairly the Consolidated Balance Sheets as of March 31, 1997 and December 31, 1996, the Consolidated Statements of Income for the three months ended March 31, 1997 and 1996, and the Consolidated Statements of Cash Flows for the three months ended March 31, 1997 and 1996. In addition, it is Illinova's and IP's opinion that the accompanying unaudited consolidated financial statements for IP reflect all adjustments necessary to present fairly the Consolidated Balance Sheets as of March 31, 1997 and December 31, 1996, the Consolidated Statements of Income for the three months ended March 31, 1997 and 1996, and the Consolidated Statements of Cash Flows for the three months ended March 31, 1997 and 1996. Due to seasonal and other factors which are characteristic of electric and gas utility operations, interim period results are not necessarily indicative of results to be expected for the year. ACCOUNTING MATTERS CONSOLIDATION The consolidated financial statements of Illinova include the accounts of Illinova, IP, Illinova Generating Company (IGC), Illinova Insurance Company (IIC), and Illinova Energy Partners, Inc. (IEPI). All significant intercompany balances and transactions have been eliminated from the consolidated financial statements. All non-utility operating transactions are included in the sections titled "Diversified enterprises", "Interest expense" and "Income taxes" with the exception of some immaterial transactions recorded in "Other Income and Deductions, Net" in Illinova's Consolidated Statements of Income. This represents a format change to Illinova's Consolidated Statements of Income and subsequent reclassification of prior year's amounts to conform to the new presentation. The consolidated financial statements of IP include the accounts of Illinois Power Capital, L.P. and Illinois Power Financing I (IPFI). All significant intercompany balances and transactions have been eliminated from the consolidated financial statements. All non- utility operating transactions are included in the section titled "Other Income and Deductions, Net" in IP's Consolidated Statements of Income. IP's consolidated financial position and results of operations are currently the principal factors affecting Illinova's consolidated financial position and results of operations. REGULATORY AND LEGAL MATTERS OPEN ACCESS AND COMPETITION IP continues to work with other interested parties in the state to propose legislation that would allow a managed transition to direct access for all consumers. The proposed legislation, which was introduced in the Illinois House of Representatives on January 29, 1997, is designed to provide an orderly transition to direct access for all customers, and balance financial stability for current utility providers with customer choice. Other parties have introduced plans that allow for full competition by as early as 1998. On February 18, 1997, the Citizen's Utility Board (CUB) outlined its regulatory reform proposal which would require utilities to separate their generation assets, shop for the cheapest available power in the wholesale market, and sell that power to consumers, by January 1999. On March 1, 1997, a new restructuring bill was introduced in the Illinois House. This bill, supported by a broad- based alliance representing residential, commercial and industrial consumers, would allow all customers served by investor-owned utilities to have equal access to a competitive electric market by May 1, 1998. On March 7, 1997, a fourth and final bill on this issue was submitted to the Illinois House that also calls for all customers to be able to choose their electric supplier beginning May 1, 1998. Legislation for regulatory reform is currently being considered in the spring legislative session. At this time, it is impossible to predict what legislation, if any, will be enacted. Unfavorable legislation could have a material adverse impact on the financial position of Illinova, IP and their operations. IP currently prepares its financial statements in accordance with Statement of Financial Accounting Standards No. 71, "Accounting for the Effects of Certain Types of Regulation" (FAS 71). The SEC has raised the issue of continued qualification to report under FAS 71 for utilities in states that have changed their utility laws to introduce competition, even if the legislation provides for a transition to full competition and for stranded cost recovery. The Emerging Issues Task Force (EITF) of the Financial Accounting Standards Board (FASB) is scheduled to debate this and related issues at its May 22, 1997 meeting. Reporting under FAS 71 allows companies whose service obligations and prices are regulated, to maintain assets on their balance sheets representing costs they reasonably expect to recover from customers in the future, through inclusion of such costs in their rates. If IP ceased to qualify for reporting under FAS 71, it could be required to write off its regulatory assets, and this could have a material adverse impact on the financial position of Illinova, IP and their operations. MANUFACTURED GAS PLANT SITES IP's liability for Manufactured Gas Plant (MGP) site remediation is $70.2 million. This amount represents IP's best estimate of its remaining costs to remediate the 24 MGP sites for which it is responsible. Because of the unknown and unique characteristics of each site, IP is not able to determine its ultimate liability for remediation. IP is recovering MGP site cleanup costs from its customers through tariff riders approved by the Illinois Commerce Commission (ICC) in March 1996. In anticipation of full recovery of MGP site costs, IP has recorded a regulatory asset equivalent to its liability. IP is continuing settlement discussions with its insurance carriers regarding the recovery of estimated MGP site remediation costs. A settlement has been reached with thirteen carriers, and settlement negotiations with nine other carriers are ongoing. Litigation related to a suit filed by IP in October 1995 seeking a declaratory judgment and damages regarding insurance coverage for four MGP sites is in progress. The trial has been scheduled for January, 1998. Any insurance recoveries received will cause the regulatory asset to be reduced by the amount of the recovery. TREASURY STOCK IP repurchased 201,194 shares of its common stock from Illinova during the three months ended March 31, 1997. Through March 31, 1997, IP has purchased 3,612,091 shares of its common stock, all of which are held as treasury stock and are deducted from common equity at the cost of the shares. ILLINOVA CORPORATION AND ILLINOIS POWER COMPANY MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Reference is made to the Notes to the Consolidated Financial Statements and Management's Discussion and Analysis of Financial Condition and Results of Operations presented in Illinova's 1996 Annual Report to Shareholders (included in the Proxy Statement), the Consolidated Financial Statements and Management's Discussion and Analysis of Financial Condition and Results of Operations presented in IP's 1996 Annual Report to Shareholders (included in the Information Statement), and Illinova's and IP's Form 10-K for the year ended December 31, 1996. ILLINOVA SUBSIDIARIES IP is the primary business and subsidiary of Illinova and engages in the generation, transmission, distribution and sale of electric energy and the distribution, transportation and sale of natural gas in the State of Illinois. IGC is a wholly-owned independent power subsidiary of Illinova and invests in energy supply projects throughout the world. IGC's strategy is to invest in and develop "greenfield" power plants, acquire existing generation facilities and provide power plant operations and maintenance services. IEPI is a wholly-owned subsidiary of Illinova formed in May 1996. IEPI develops and markets energy-related services to the unregulated energy market throughout the United States and engages in the brokering and marketing of electric power and gas. IIC is a wholly-owned subsidiary of Illinova and was licensed by the State of Vermont as a captive insurance company in August 1996. The primary business of IIC is to insure certain risks of Illinova and its subsidiaries. LIQUIDITY AND CAPITAL RESOURCES CAPITAL RESOURCES AND REQUIREMENTS Cash flows from operations during the first three months of 1997 provided sufficient working capital to meet ongoing operating requirements, to service existing common and IP preferred stock dividends and debt requirements and all of IP's construction requirements. Additionally, Illinova expects 1997 cash flows will enable it to meet operating requirements and continue to service IP's existing debt, IP's preferred and Illinova's common stock dividends, IP's sinking fund requirements and IP's anticipated construction requirements. IP periodically repurchases shares of its common stock from Illinova to provide Illinova cash for operations, in accordance with authority granted by the ICC. During the first three months of 1997, IP made purchases of 201,194 shares. On April 10, 1997, IP issued $150 million of Adjustable Rate Pollution Control Revenue Refunding Bonds, due April 1, 2032. The proceeds will be used on June 2, 1997 to retire $150 million of IP's 7 5/8% pollution control first mortgage bonds due 2016. IP issued a call notice on April 28, 1997 to retire the 7 5/8% bonds at a premium of 103. IP's capital requirements for construction were approximately $34 million and $48 million during the three months ended March 31, 1997 and 1996, respectively. Illinova and IP currently have total lines of credit represented by bank commitments of $150 million and $354 million, respectively. Both Illinova and IP have adequate short- and intermediate-term bank borrowing capacity. Currently, Illinova is reviewing additional financing alternatives to provide cash for operations and has remaining shelf authority with the SEC to issue $200 million in debt securities. Presently, IP's mortgage bonds are rated Baa1 by Moody's, BBB+ by Duff & Phelps, and BBB by Standard & Poor's. IP's preferred stock is rated Baa2 by Moody's and BBB- by both Duff & Phelps and Standard & Poor's. Illinova's $100 million senior notes issued February 5, 1997 have a rating of Baa3 and BBB- from Moody's and Standard & Poor's, respectively. ACCOUNTING ISSUES IP is considering seeking regulatory approval to increase the rate at which its generation-related assets are expensed. Because this change is viewed as discretionary, and subject to regulatory approval, the rate of such increase, if any, will be based on then current conditions and financial performance. The increase in expense could begin as early as the second quarter of 1997 and could amount to at least $400 million in the aggregate through the year 2001, and potentially more thereafter, depending on changes in regulation, the marketplace and financial performance. This reduction in the net book value of IP's generating assets should help position the Company to operate competitively and profitably in the changing business environment. This acceleration of expense would have a direct impact on earnings but not on cash flow. For further information on accounting issues, see "Open Access and Competition" under "Regulatory and Legal Matters" of the "Notes to Consolidated Financial Statements" on page 12 of this report. REGULATORY MATTERS ACQUISITION OF CLINTON POWER STATION FROM SOYLAND On March 13, 1997, the Nuclear Regulatory Commission (NRC) issued an order approving transfer of the Clinton Power Station (Clinton) operating license related to Soyland Power Cooperative's (Soyland) 13.21% ownership, to IP, in connection with the transfer from Soyland to IP of all of Soyland's interest in Clinton pursuant to an agreement reached in 1996. Soyland's title to the plant and directly related assets such as nuclear fuel was transferred to IP on May 1, 1997. Soyland's nuclear decommissioning trust will also be transferred to IP, consistent with IP's assumption of all of Soyland's ownership obligations including those related to decommissioning. On February 21, 1997, IP filed with the Federal Energy Regulatory Commission (FERC) an amended Power Coordination Agreement (PCA) between Soyland and IP entered into in furtherance of the transfer. FERC approval of the amended PCA is expected by the third quarter of 1997. That Agreement obligates Soyland to purchase all of its capacity and energy needs from IP for at least ten years. OPEN ACCESS AND COMPETITION See "Open Access and Competition" under "Regulatory and Legal Matters" of the "Notes to Consolidated Financial Statements" on Page 12 of this report. ENVIRONMENTAL MATTERS GAS MANUFACTURING SITES See "Manufactured Gas Plant Sites" under "Regulatory and Legal Matters" of the Notes to Consolidated Financial Statements on page 12 of this report. NITROGEN OXIDE Regulators in the Chicago and metropolitan areas of the Northeast are continuing to examine potential approaches for compliance with current federal ozone level requirements impacted by nitrogen oxide (NOx) emissions. A regulatory initiative to examine recommendations on reducing the amount of ozone transported across the eastern United States is expected to release its findings by June 1997. Any legislative action resulting from the initiative's findings could make IP's fossil-fuel generating plants less competitive. CLINTON POWER STATION On September 6, 1996, leakage at a recirculation pump seal caused IP operations personnel to shut down Clinton. IP decided not to restart Clinton prior to the start of the scheduled refueling outage on October 13, 1996. During the current outage, Clinton has attempted to modify the first of three divisions of its electrical power system. Because of deficiencies in the implementation of the new transformer design, the decision was made to return to the old transformers until the newer design is modified and fully tested. This unanticipated delay, along with necessary NRC approval of the action, will delay start up of Clinton. It is anticipated Clinton will return to service before the summer cooling season, when demand is greatest. If Clinton does not return to service as anticipated, there could be periods when IP is unable to meet demand. The seventh refueling outage at Clinton originally scheduled for the spring of 1998 is now planned for the fall of 1998. WOOD RIVER POWER STATION On December 18, 1996, the control and computer rooms for Wood River units 4 and 5 were damaged by an in-plant fire. Current estimates are to return Unit 4 to service in June 1997, with Unit 5 returning to service in September 1997. The cost associated with restoring the units to service is not expected to have a material adverse impact on Illinova, IP and their operations. POWER SUPPLY AND RELIABIITY Electricity may be in short supply throughout Illinois and Wisconsin this summer because of an unusually high number of plant outages in this region. If the weather is abnormally hot and if IP's major generating units were to require maintenance and/or experience delay in returning to service, IP may be unable to meet demand. Although IP can purchase replacement power, and has secured generation and transmission capacity in order to guard against disruptions in service, availability of power in the region may be limited, and recovery of the added expense is subject to ICC approval in the annual reconciliation of the Uniform Fuel Adjustment Clause (UFAC) cost recovery mechanism. IP will also be incurring additional expense by reactivating older power plants in cold storage and upgrading electric transmission facilities in an attempt to avoid a power supply shortage. RESULTS OF OPERATIONS THREE MONTHS ENDED MARCH 31, 1997 AND 1996 Electric Operations - Electric revenues for the first quarter of 1997 increased $3.5 million compared to the first quarter of 1996. Electric interchange sales decreased $5.3 million in the same time frame due to reduced available capacity to sell. Heating degree days decreased approximately nine percent during the first quarter of 1997 compared to the same time frame in 1996, resulting in a 1.5% decrease in kilowatt hour (kwh) sales to the temperature sensitive residential market. Revenue from the industrial and commercial markets remained relatively stable. Power purchased increased $26 million for the period due to lower equivalent availability at both the nuclear and fossil facilities. This increase in operating costs was partially offset by a decrease of $21.3 million in fuel for electric plants. The equivalent availability of Clinton was 0.0% and 99.7% for the three months ended March 31, 1997 and 1996, respectively. Clinton was unavailable in the first quarter of 1997 due to the continued outage which began September 6, 1996. The equivalent availability for IP's coal-fired plants was 70.9% and 83.2% for the three months ended March 31, 1997 and 1996, respectively. The lower equivalent availability for the fossil plants in 1997 was primarily due to the fire and subsequent shut-down of the Wood River fossil station in December, 1996. Gas Operations - Gas revenues increased $27.9 million in the first quarter of 1997. Therms transported increased 65% (35.1 million therms) resulting in an increase to revenue of $1.9 million. Gas prices charged by suppliers drastically increased during the first quarter of 1997. Nationwide, supplier prices increased 50-70% over 1996. This in turn caused the Purchased Gas Adjustment (PGA) rates to rise, which increased gas revenues by $39.9 million. This increase was offset by reduced volumes caused in part by milder weather in 1997 than in 1996. Therm sales decreased 13.5% (43.2 million therms) resulting in a total decrease in gas consumption of 2.1% (8.0 million therms). Other Income and Deductions, Net - The current quarter decrease in net deductions of $12 million is primarily a result of 1996 costs recorded to reflect the planned disposition of property, partially offset by 1997 holding company expenses and decreased interest revenues. Operation and Maintenance Expense - The current quarter decrease of $7.1 million dollars is primarily due to lower expenses associated with professional services, maintenance of dispatch equipment, employee activities and reduced pension plan contributions. The first quarter trend in lower Operation and Maintenance expenses is not expected to continue throughout 1997. Diversified enterprises revenues increased $92.3 million for the first quarter of 1997 due to increased activity at IEPI. However, diversified enterprises expenses increased $97.2 million which offsets the growth in revenues. Earnings per Common Share - The earnings per common share for Illinova during the first quarter of 1997 and 1996 resulted from the interaction of all other factors discussed herein. PART II. OTHER INFORMATION ITEM 1. Legal Proceedings See "Notes to Consolidated Financial Statements" in Part I for a discussion of certain legal proceedings related to manufactured gas plant sites. ITEM 6. Exhibits and Reports on Form 8-K (a) Exhibits The Exhibits filed with this 10-Q are listed on the Exhibit Index. (b) Reports on Form 8-K since January 1, 1997: Report filed on Form 8-K on January 29, 1997 Other Events: NRC informed IP via letter that it viewed Clinton as having a declining safety performance trend, but did not place Clinton on its semiannual "watch list". Report filed on Form 8-K on March 6, 1997 Other Events: Communication to the Financial Community regarding the status of Clinton outage. 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. ILLINOVA CORPORATION (Registrant) By /s/Leah Manning Stetzner -------------------------- Leah Manning Stetzner, General Counsel and Corporate Secretary on behalf of Illinova Corporation Date: May 14, 1997 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. ILLINOIS POWER COMPANY (Registrant) By /s/Leah Manning Stetzner -------------------------- Leah Manning Stetzner, Vice President, General Counsel, and Corporate Secretary on behalf of Illinois Power Company Date: May 14, 1997 EXHIBIT INDEX PAGE NO. WITHIN SEQUENTIAL NUMBERING EXHIBIT DESCRIPTION SYSTEM 4(a) Supplemental Indenture dated 23 April 1, 1997 to Mortgage and Deed of Trust dated November 1, 1943. 4(b) Supplemental Indenture dated 34 April 1, 1997 to General Mortgage Indenture and Deed of Trust dated as of November 1, 1992. 27 Financial Data Schedule UT (filed herewith) EX-27 2 FINANCIAL DATA SCHEDULE UT FOR 1997 1ST QTR 10-Q
UT THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE SHEET, INCOME STATEMENT AND CASH FLOW STATEMENT OF ILLINOIS POWER COMPANY AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE BALANCE SHEET, INCOME STATEMENT AND CASH FLOW STATEMENT OF ILLINOIS POWER COMPANY. 3-MOS DEC-31-1996 MAR-31-1997 PER-BOOK 4678 6 415 453 0 5552 1326 0 272 1598 197 96 1577 75 0 176 11 0 61 36 1725 5552 473 36 348 384 89 (1) 88 33 55 5 50 24 28 129 0 0
EX-4 3 ========================================================================= ILLINOIS POWER COMPANY TO HARRIS TRUST AND SAVINGS BANK, as Trustee Supplemental Indenture DATED AS OF APRIL 1, 1997 TO General Mortgage Indenture and Deed of Trust DATED AS OF NOVEMBER 1, 1992 =================================================================== SUPPLEMENTAL INDENTURE dated as of April 1, 1997 (the "Supplemental Indenture"), made by and between ILLINOIS POWER COMPANY, a corporation organized and existing under the laws of the State of Illinois (the "Company"), party of the first part, and HARRIS TRUST AND SAVINGS BANK, a corporation organized and existing under the laws of the State of Illinois (the "Trustee"), as Trustee under the General Mortgage Indenture and Deed of Trust dated as of November 1, 1992, hereinafter mentioned, party of the second part; WHEREAS, the Illinois Development Finance Authority Act (20 ILCS 3505/1 et seq.), as amended and supplemented (the "Act"), authorizes and empowers the Illinois Development Finance Authority, a political subdivision and body politic and corporate, duly organized and validly existing under and by virtue of the Constitution and laws of the State of Illinois ("IDFA") to issue bonds for the refunding of any bonds deemed necessary in connection with any purpose of IDFA; and WHEREAS, pursuant to and in accordance with the provisions of the Illinois Environmental Facilities Financing Act (20 ILCS 3515/1 et seq.), as amended and supplemented (the "Environmental Act"), IDFA has heretofore made a loan to the Company for the purpose of financing the acquisition, construction and installation of the Company's ownership interest in certain air and water pollution control, sewage and solid waste disposal facilities, including all machinery and other equipment required for said facilities, all located at the Company's Clinton Generating Station near Clinton, in DeWitt County, Illinois (the "Project"); and WHEREAS, IDFA has financed a portion of the costs of the Project as an authorized project under the Environmental Act by the issuance of three separate series of its Pollution Control Revenue Bonds (Illinois Power Company Project) Series 1986A in the aggregate principal amount of $25,000,000; Series 1986B in the aggregate principal amount of $50,000,000, and Series 1986C in the aggregate principal amount of $75,000,000 (all of which are currently outstanding) (the "Prior Bonds") and by loaning the proceeds therefrom to the Company; and WHEREAS, IDFA now intends to issue its Adjustable Rate Pollution Control Revenue Refunding Bonds in the aggregate principal amount of $150,000,000 in three separate series consisting of (i) $70,000,000 aggregate principal amount Adjustable Rate Pollution Control Revenue Refunding Bonds, 1997 Series A (Illinois Power Company Project) (the "Series A IDFA Bonds"), (ii) $45,000,000 aggregate principal amount of Adjustable Rate Pollution Control Revenue Refunding Bonds, 1997 Series B (Illinois Power Company Project) (the "Series B IDFA Bonds"), and (iii) $35,000,000 aggregate principal amount of Adjustable Rate Pollution Control Revenue Refunding Bonds, 1997 Series C (Illinois Power Company Project) (the "Series C IDFA Bonds") (the Series A IDFA Bonds, Series B IDFA Bonds and Series C IDFA Bonds shall collectively be referred to as the "Related IDFA Bonds") and to lend the proceeds of the issuance of the Related IDFA Bonds to the Company pursuant to three separate Loan Agreements each dated as of April 1, 1997 (individually as from time to time amended or modified a "Loan Agreement" and collectively the "Loan Agreements"), to assist the Company in refunding on or about June 1, 1997 the Prior Bonds; and WHEREAS, the Series A IDFA Bonds, Series B IDFA Bonds and Series C IDFA Bonds will be issued by IDFA pursuant to three separate Indentures of Trust (as from time to time amended or modified, the "IDFA Series A Indenture," the "IDFA Series B Indenture" and the "IDFA Series C Indenture," respectively), each dated as of April 1, 1997 between IDFA and Harris Trust and Savings Bank as Trustee under each such Indenture (together with any successor in such capacity the "IDFA Indenture Trustee"); WHEREAS, the Company has heretofore executed and delivered its General Mortgage Indenture and Deed of Trust dated as of November 1, 1992 as from time to time amended (the "Indenture"), to the Trustee, for the security of the Bonds of the Company issued and to be issued thereunder (the "Bonds"); and WHEREAS, pursuant to the terms and provisions of the Indenture there were created and authorized by Supplemental Indentures thereto bearing the following dates, respectively, the New Mortgage Bonds of the series issued thereunder and respectively identified opposite such dates: Date of Identification of Series Called Supplemental ------------------------ ------ Indenture ------------ February 15, 1993 8% Series due 2023 Bonds of the 2023 Series March 15, 1993 6-1/8% Series due 2000 Bonds of the 2000 Series March 15, 1993 6-3/4% Series due 2005 Bonds of the 2005 Series July 15, 1993 7-1/2% Series due 2025 Bonds of the 2025 Series August 1, 1993 6-1/2% Series due 2003 Bonds of the 2003 Series October 15, 1993 5-5/8% Series due 2000 Bonds of the Second 2000 Series November 1, 1993 Pollution Control Series M Bonds of the Pollution Control Series M November 1, 1993 Pollution Control Series N Bonds of the Pollution Control Series N November 1, 1993 Pollution Control Series O Bonds of the Pollution Control Series O
and WHEREAS, the Company desires to create three new series of Bonds to be issued under the Indenture to be known as New Mortgage Bonds, Pollution Control Series P (the "Pollution Control Series P Bonds"), New Mortgage Bonds, Pollution Control Series Q (the "Pollution Control Series Q Bonds") and New Mortgage Bonds, Pollution Control Series R (the "Pollution Control Series R Bonds") to secure its obligations under the Loan Agreements; and WHEREAS, the Company, in the exercise of the powers and authority conferred upon and reserved to it under the provisions of the Indenture, and pursuant to appropriate resolutions of the Board of Directors, has duly resolved and determined to make, execute and deliver to the Trustee a Supplemental Indenture in the form hereof for the purposes herein provided; and WHEREAS, all conditions and requirements necessary to make this Supplemental Indenture a valid, binding and legal instrument have been done, performed and fulfilled and the execution and delivery hereof have been in all respects duly authorized; NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH: THAT Illinois Power Company, in consideration of the purchase and ownership from time to time of the Bonds and the service by the Trustee, and its successors, under the Indenture and of One Dollar to it duly paid by the Trustee at or before the ensealing and delivery of these presents, the receipt whereof is hereby acknowledged, hereby covenants and agrees to and with the Trustee and its successors in the trust under the Indenture, for the benefit of those who shall hold the Bonds as follows: ARTICLE I. DESCRIPTION OF POLLUTION CONTROL SERIES P BONDS. SECTION 1. The Company hereby creates a new series of Bonds to be known as "Pollution Control Series P Bonds." The Pollution Control Series P Bonds shall be executed, authenticated and delivered in accordance with the provisions of, and shall in all respects be subject to, all of the terms, conditions and covenants of the Indenture, as supplemented and modified. The Pollution Control Series P Bonds shall be issued only to the IDFA Indenture Trustee as security for the Company's obligations under the Loan Agreement relating to the Series A IDFA Bonds. The Company shall not cause any Pollution Control Series P Bonds to be paid or deemed to be paid prior to the payment of the Series A IDFA Bonds. The Pollution Control Series P Bonds shall be dated as provided in Section 3.03 of Article Three of the Indenture. The Pollution Control Series P Bonds shall mature at the same time as the Series A IDFA Bonds, and shall not bear interest. SECTION 2. The Pollution Control Series P Bonds and the Trustee's Certificate of Authentication shall be substantially in the following forms respectively: [FORM OF FACE OF BOND) ILLINOIS POWER COMPANY (Incorporated under the laws of the State of Illinois) NEW MORTGAGE BOND, POLLUTION CONTROL SERIES P No. ________ $80,500,000 ILLINOIS POWER COMPANY, a corporation organized and existing under the laws of the State of Illinois (the "Company"), which term shall include any successor corporation as defined in the Indenture hereinafter referred to), for value received, hereby promises to pay to Harris Trust and Savings Bank, as Trustee (the "IDFA Indenture Trustee") under the Indenture of Trust relating to the Adjustable Rate Pollution Control Revenue Refunding Bonds, 1997 Series A (the "Series A IDFA Bonds"), between the Illinois Development Finance Authority ("IDFA") and the IDFA Indenture Trustee (the "IDFA Series A Indenture"), or registered assigns, the principal sum of $80,500,000 on the date that the Series A IDFA Bonds mature, in any coin or currency of the United States of America which at the time of payment is legal tender for public and private debts. This Bond shall not bear interest. The principal of this Bond is payable at the agency of the Company in the City of Chicago, Illinois. This Bond shall not be entitled to any benefit under the Indenture or any indenture supplemental thereto, or become valid or obligatory for any purpose, until the form of certificate endorsed hereon shall have been signed by or on behalf of Harris Trust and Savings Bank, the Trustee under the Indenture, or a successor trustee thereto under the Indenture (the "Trustee"). The provisions of this Bond are continued on the reverse hereof and such continued provisions shall for all purposes have the same effect as though fully set forth at this place. IN WITNESS WHEREOF, Illinois Power Company has caused this Bond to be signed (manually or by facsimile signature) in its name by an Authorized Executive Officer, as defined in the aforesaid Indenture, and its corporate seal (or a facsimile thereof) to be hereto affixed and attested (manually or by facsimile signature) by an Authorized Executive Officer, as defined in such Indenture on the date hereof. Dated __________, 1997 ILLINOIS POWER COMPANY, By ______________________________ Authorized Executive Officer ATTEST: _________________________________ Authorized Executive Officer [FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION] This is one of the Bonds of the series designated therein referred to in the within-mentioned Indenture and Supplemental Indenture dated as of April 1, 1997. HARRIS TRUST AND SAVINGS BANK, Trustee, By ______________________________ Authorized Signatory [FORM OF REVERSE OF BOND] This Bond is one of a duly authorized issue of Bonds of the Company (the "Bonds") in unlimited aggregate principal amount, of the series hereinafter specified, all issued and to be issued under and equally secured by the General Mortgage Indenture and Deed of Trust (the "Indenture"), dated as of November 1, 1992, executed by the Company to Harris Trust and Savings Bank (the "Trustee"), as Trustee, to which Indenture and all indentures supplemental thereto reference is hereby made for a description of the properties mortgaged and pledged, the nature and extent of the security, the rights of registered owners of the Bonds and of the Trustee in respect thereof, and the terms and conditions upon which the Bonds are, and are to be, secured. The Bonds may be issued in series, for various principal sums, may mature at different times, may bear interest at different rates and may otherwise vary as provided in the Indenture. This Bond is one of a series designated as the "New Mortgage Bonds, Pollution Control Series P" (the "Pollution Control Series P Bonds") of the Company, unlimited in aggregate principal amount, issued under and secured by the Indenture and described in the Supplemental Indenture dated as of April 1, 1997 (the "Supplemental Indenture of April 1, 1997"), between the Company and the Trustee, supplemental to the Indenture. This Pollution Control Series P Bond shall not bear interest. This Pollution Control Series P Bond is subject to redemption in accordance with the terms of Section 3 of Article I in the Supplemental Indenture of April 1, 1997. In case an Event of Default, as defined in the Indenture, shall occur, the principal of all Bonds at any such time outstanding under the Indenture may be declared or may become due and payable, upon the conditions and in the manner and with the effect provided in the Indenture. The Indenture provides that such declaration may be rescinded under certain circumstances. SECTION 3. The Pollution Control Series P Bonds shall be redeemed in whole whenever the Trustee receives a written notice from the trustee under the IDFA Series A Indenture stating that the principal of any bonds then outstanding under the IDFA Series A Indenture has been declared to be immediately due and payable pursuant to the provision of Section 902 thereof. Such redemption shall be on any date not more than one (1) business day after the receipt of such notice from the trustee under the IDFA Series A Indenture. Any such redemption shall be at the redemption price of 100% of the principal amount of the Bonds to be redeemed, together with accrued interest to the date selected for redemption. A demand from the trustee under the IDFA Series A Indenture shall be executed on behalf of such trustee by its President or a Vice President or a Trust Officer and shall be deemed received by the Trustee when delivered at its corporate trust office in Chicago, Illinois. The Trustee may conclusively rely as to the truth of the statements contained therein upon any such demand. Subject to the provisions of the Indenture, notice of redemption of Pollution Control Series P Bonds shall be sent by the Company by certified mail, postage prepaid, not later than the date fixed for redemption to the registered owners of such Bonds at their addresses as the same shall appear, if at all, on the transfer register of the Company. Any notice which is mailed in the manner herein provided shall be conclusively presumed to have been duly given whether or not the holders receive such notice, but failure to give notice by mail, or any defect in such notice, to the holder of any such Bonds designated for redemption shall not affect the validity of the redemption of any other such Bond. ARTICLE II. DESCRIPTION OF POLLUTION CONTROL SERIES Q BONDS. All of the words of Article I of this Supplemental Indenture are by this reference incorporated in this Article II except: (a) The words "New Mortgage Bond, Pollution Control Series P" and "New Mortgage Bonds, Pollution Control Series P" are changed wherever they appear to "New Mortgage Bond, Pollution Control Series Q" and "New Mortgage Bonds, Pollution Control Series Q," respectively; (b) The words "Pollution Control Series P Bond" and "Pollution Control Series P Bonds" are changed wherever they appear to "Pollution Control Series Q Bond" and "Pollution Control Series Q Bonds," respectively; (c) The words "Article I" are changed wherever they appear to "Article II"; (d) The words "Adjustable Rate Pollution Control Revenue Refunding Bonds, 1997 Series A (Illinois Power Company Project)" are changed wherever they appear to "Adjustable Rate Pollution Control Revenue Refunding Bonds, 1997 Series B (Illinois Power Company Project)"; (e) The words "IDFA Series A Indenture" are changed wherever they appear to "IDFA Series B Indenture"; and (f) The amount of $80,500,000 is changed wherever it appears to $51,750,000. ARTICLE III. DESCRIPTION OF POLLUTION CONTROL SERIES R BONDS. All of the words of Article I of this Supplemental Indenture are by this reference incorporated in this Article III except: (a) The words "New Mortgage Bond, Pollution Control Series P" and "New Mortgage Bonds, Pollution Control Series P" are changed wherever they appear to "New Mortgage Bond, Pollution Control Series R" and "New Mortgage Bonds, Pollution Control Series R," respectively; (b) The words "Pollution Control Series P Bond" and "Pollution Control Series P Bonds" are changed wherever they appear to "Pollution Control Series R Bond" and "Pollution Control Series R Bonds," respectively; (c) The words "Article I" are changed wherever they appear to "Article III"; (d) The words "Adjustable Rate Pollution Control Revenue Refunding Bonds, 1997 Series A (Illinois Power Company Project)" are changed wherever they appear to "Adjustable Rate Pollution Control Revenue Refunding Bonds, 1997 Series C (Illinois Power Company Project)"; (e) The words "IDFA Series A Indenture" are changed wherever they appear to "IDFA Series C Indenture"; and (f) The amount of $80,500,000 is changed wherever it appears to $40,250,000. ARTICLE IV. ISSUE OF POLLUTION CONTROL SERIES P BONDS, POLLUTION CONTROL SERIES Q BONDS AND POLLUTION CONTROL SERIES R BONDS. SECTION 1. The Company hereby exercises the right to obtain the authentication of $172,500,000 principal amount of Bonds pursuant to the terms of Section 4.02 of the Indenture. Of such Bonds, $80,500,000 shall be Pollution Control Series P Bonds, $51,750,000 shall be Pollution Control Series Q Bonds and $40,250,000 shall be Pollution Control Series R Bonds. SECTION 2. Such Pollution Control Series P Bonds, Pollution Control Series Q Bonds and Pollution Control Series R Bonds may be authenticated and delivered prior to the filing for recordation of this Supplemental Indenture. ARTICLE V. THE TRUSTEE. The Trustee hereby accepts the trusts hereby declared and provided, and agrees to perform the same upon the terms and conditions in the Indenture set forth and upon the following terms and conditions: The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or the due execution hereof by the Company or for or in respect of the recitals contained herein, all of which recitals are made by the Company solely. In general, each and every term and condition contained in Article Eleven of the Indenture shall apply to this Supplemental Indenture with the same force and effect as if the same were herein set forth in full, with such omissions, variations and modifications thereof as may be appropriate to make the same conform to this Supplemental Indenture. ARTICLE VI. MISCELLANEOUS PROVISIONS. This Supplemental Indenture may be simultaneously executed in any number of counterparts, each of which when so executed shall be deemed to be an original; but such counterparts shall together constitute but one and the same instrument. IN WITNESS WHEREOF, said Illinois Power Company has caused this Supplemental Indenture to be executed on its behalf by an Authorized Executive Officer as defined in the Indenture, and its corporate seal to be hereto affixed and said seal and this Supplemental Indenture to be attested by an Authorized Executive Officer as defined in the Indenture; and said Harris Trust and Savings Bank, in evidence of its acceptance of the trust hereby created, has caused this Supplemental Indenture to be executed on its behalf by its President or one of its Vice Presidents and its corporate seal to be hereto affixed and said seal and this Supplemental Indenture to be attested by its Secretary or one of its Assistant Secretaries; all as of the first day of April, 1997. ILLINOIS POWER COMPANY By /s/ Larry F. Altenbaumer ------------------------------ Larry F. Altenbaumer Senior Vice President and Chief Financial Officer (CORPORATE SEAL) ATTEST: /s/ Leah Manning Stetzner - -------------------------------- Leah Manning Stetzner Vice President, General Counsel and Corporate Secretary HARRIS TRUST AND SAVINGS BANK, Trustee By /s/ J. Bartolini ------------------------------ J. Bartolini Vice President (CORPORATE SEAL) ATTEST: /s/ D. G. Donovan - -------------------------------- D. G. Donovan Assistant Secretary EX-4 4 ==================================================================== ILLINOIS POWER COMPANY TO HARRIS TRUST AND SAVINGS BANK, as Trustee _______________ Supplemental Indenture DATED AS OF APRIL 1, 1997 TO Mortgage and Deed of Trust DATED NOVEMBER 1, 1943 ==================================================================== SUPPLEMENTAL INDENTURE dated as of April 1, 1997 (the "Supplemental Indenture"), made by and between ILLINOIS POWER COMPANY, a corporation organized and existing under the laws of the State of Illinois (the "Company"), party of the first part, and HARRIS TRUST AND SAVINGS BANK, a corporation organized and existing under the laws of the State of Illinois (the "Trustee"), as Trustee under the Mortgage and Deed of Trust dated November 1, 1943, hereinafter mentioned, party of the second part; WHEREAS, the Company has heretofore executed and delivered its Mortgage and Deed of Trust dated November 1, 1943 ("Original Indenture"), to the Trustee, for the security of the First Mortgage Bonds of the Company issued and to be issued thereunder (the "Bonds"); and WHEREAS, pursuant to the terms and provisions of the Original Indenture there were created and authorized by Supplemental Indentures thereto bearing the following dates, respectively, the First Mortgage Bonds of the series issued thereunder and respectively identified opposite such dates: Date of Identification of Series Called Supplemental ------------------------ ------ Indenture ------------ November 1, 1943 4% Series due 1973 Bonds of the 1973 (redeemed) Series March 1, 1946 2-7/8% Series due 1976 Bonds of the 1976 (paid at maturity) Series February 1, 1948 3-1/2% Series due 1978 Bonds of the 1978 (paid at maturity) Series July 1, 1949 2-7/8% Series due 1979 Bonds of the 1979 (paid at maturity) Series April 1, 1950 2-3/4% Series due 1980 Bonds of the 1980 (paid at maturity) Series March 1, 1952 3-1/2% Series due 1982 Bonds of the 1982 (paid at maturity) Series November 1, 1953 3-1/2% Series due 1983 Bonds of the 1983 (paid at maturity) Series July 1, 1956 3-3/4% Series due 1986 Bonds of the 1986 (paid at maturity) Series May 1, 1958 4% Series due 1988 Bonds of the 1988 (redeemed) Series January 1, 1963 4-1/4% Series due 1993 Bonds of the 1993 (paid at maturity) Series October 1, 1966 5.85% Series due 1996 Bonds of the 1996 (paid at maturity) Series January 1, 1968 6-3/8% Series due 1998 Bonds of the First (redeemed) 1998 Series October 1, 1968 6-3/4% Series due October Bonds of the 1, 1998 (redeemed) Second 1998 Series October 1, 1969 8.35% Series due 1999 Bonds of the First (redeemed) 1999 Series November 1, 1970 9% Series due 2000 Bonds of the 2000 (redeemed) Series October 1, 1971 7.60% Series due 2001 Bonds of the 2001 (redeemed) Series June 1, 1973 7-5/8% Series due 2003 Bonds of the First (redeemed) 2003 Series May 1, 1974 Pollution Control Series A Bonds of the Pollution Control Series A September 1, 1974 10-1/2% Series due 2004 Bonds of the First (redeemed) 2004 Series July 1, 1976 8-3/4% Series due 2006 Bonds of the 2006 (redeemed) Series May 1, 1977 Pollution Control Series B Bonds of Pollution Control Series B November 1, 1977 8-1/4% Series due 2007 Bonds of the 2007 (redeemed) Series August 1, 1978 8-7/8% Series due 2008 Bonds of the 2008 (redeemed) Series July 1, 1979 9-7/8% Series due July 1, Bonds of the 2004 Second 2004 Series (redeemed) July 31, 1980 11-38% Series due 1987 Bonds of the 1987 (redeemed) Series August 1, 1980 12-5/8% Series due 2010 Bonds of the 2010 (redeemed) Series July 1, 1982 14-1/2% Series due 1990 Bonds of the 1990 (redeemed) Series November 1, 1982 12% Series due 2012 Bonds of the 2012 (redeemed) Series December 15, 1983 Pollution Control Series C Bonds of the (redeemed) Pollution Control Series C May 15, 1984 Pollution Control Series D Bonds of the (redeemed) Pollution Control Series D March 1, 1985 Pollution Control Series E Bonds of the (redeemed) Pollution Control Series E February 1, 1986 10-1/2% Series due 2016 Bonds of the First (redeemed) 2016 Series July 1, 1986 9-7/8% Series due 2016 Bonds of the (redeemed) Second 2016 Series September 1, 1986 9-3/8% Series due 2016 Bonds of the Third (redeemed) 2016 Series February 1, 1987 Pollution Control Series F Bonds of the Pollution Control Series F February 1, 1987 Pollution Control Series G Bonds of the Pollution Control Series G February 1, 1987 Pollution Control Series H Bonds of the Pollution Control Series H July 1, 1987 Pollution Control Series I Bonds of the Pollution Control Series I July 1, 1988 10% Series due 1998 Bonds of the Third (redeemed) 1998 Series July 1, 1991 Pollution Control Series J Bonds of the Pollution Control Series J June 1, 1992 Pollution Control Series K Bonds of the Pollution Control Series K June 1, 1992 Pollution Control Series L Bonds of the Pollution Control Series L July 1, 1992 7.95% Series due 2004 Bonds of the Third 2004 Series July 1, 1992 8-3/4% Series due 2021 Bonds of the 2021 Series September 1, 1992 6-1/2% Series due 1999 Bonds of the 1999 Series February 15, 1993 8% Series due 2023 Bonds of the 2023 Series March 15, 1993 6-1/8% Series due 2000 Bonds of the 2000 Series March 15, 1993 6-3/4% Series due 2005 Bonds of the 2005 Series July 15, 1993 7-1/2% Series due 2025 Bonds of the 2025 Series August 1, 1993 6-1/2% Series due 2003 Bonds of the Second 2003 Series October 15, 1993 5-5/8% Series due 2000 Bonds of the Second 2000 Series November 1, 1993 Pollution Control Series M Bonds of the Pollution Control Series M November 1, 1993 Pollution Control Series N Bonds of the Pollution Control Series N November 1, 1993 Pollution Control Series O Bonds of the Pollution Control Series O
and WHEREAS, the Company desires to create three new series of Bonds to be issued under the Original Indenture, to be known as Pollution Control Series P Bonds (the "Pollution Control Series P Bonds"), Pollution Control Series Q Bonds (the "Pollution Control Series Q Bonds") and Pollution Control Series R Bonds (the "Pollution Control Series R Bonds") and to issue additional Bonds under the Original Indenture; and WHEREAS, the Pollution Control Series P Bonds, Pollution Control Series Q Bonds and Pollution Control Series R Bonds are to be issued to Harris Trust and Savings Bank, as trustee (the "New Mortgage Trustee") under the Company's General Mortgage Indenture and Deed of Trust dated as of November 1, 1992 (the "New Mortgage") and are to be owned and held by the New Mortgage Trustee as "Pledged Bonds" (as defined in the New Mortgage) in accordance with the terms of the New Mortgage; and WHEREAS, the Company, in the exercise of the powers and authority conferred upon and reserved to it under the provisions of the Original Indenture, and pursuant to appropriate resolutions of the Board of Directors, has duly resolved and determined to make, execute and deliver to the Trustee a Supplemental Indenture in the form hereof for the purposes herein provided; and WHEREAS, all conditions and requirements necessary to make this Supplemental Indenture a valid, binding and legal instrument have been done, performed and fulfilled and the execution and delivery hereof have been in all respects duly authorized; NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH: THAT Illinois Power Company, in consideration of the purchase and ownership from time to time of the Bonds and the service by the Trustee, and its successors, under the Original Indenture and of One Dollar to it duly paid by the Trustee at or before the ensealing and delivery of these presents, the receipt whereof is hereby acknowledged, hereby covenants and agrees to and with the Trustee and its successors in the trust under the Original Indenture, for the benefit of the New Trustee and any successor holder of the Bonds as follows: ARTICLE I. DESCRIPTION OF POLLUTION CONTROL SERIES P BONDS. SECTION 1. The Company hereby creates a new series of Bonds to be known as "Pollution Control Series P Bonds." The Pollution Control Series P Bonds shall be executed, authenticated and delivered in accordance with the provisions of, and shall in all respects be subject to, all of the terms, conditions and covenants of the Original Indenture, as supplemented and modified. The Pollution Control Series P Bonds will be issued only to the New Mortgage Trustee as security for a series of bonds being issued under the Company's New Mortgage and an indenture supplemental to the New Mortgage dated as of April 1, 1997 ("New Mortgage Pollution Control Series P Bonds") and in the same principal amount as the New Mortgage Pollution Control Series P Bonds. Pollution Control Series P Bonds shall be dated as provided in Section 6 of Article II of the Original Indenture. All Pollution Control Series P Bonds shall mature at the same time as the New Mortgage Pollution Control Series P Bonds, and shall not bear interest. Any payment by the Company of principal of any Pollution Control Series P Bonds shall be applied by the New Mortgage Trustee to the payment of any principal in respect of the New Mortgage Pollution Control Series P Bonds due in accordance with the terms of the New Mortgage. SECTION 2. The Pollution Control Series P Bonds and the Trustee's Certificate shall be substantially in the following forms respectively: [FORM OF FACE OF BOND] ILLINOIS POWER COMPANY (Incorporated under the laws of the State of Illinois) POLLUTION CONTROL SERIES P BOND No. __________ $80,500,000 ILLINOIS POWER COMPANY, a corporation organized and existing under the laws of the State of Illinois (the "Company," which term shall include any successor corporation as defined in the Indenture hereinafter referred to), for value received, hereby promises to pay to Harris Trust and Savings Bank as trustee (the "New Mortgage Trustee") under the Company's General Mortgage Indenture and Deed of Trust dated as of November 1, 1992 (the "New Mortgage") or its respective registered assigns, the principal sum of $80,500,000 on the date that the bonds issued by the Company pursuant to Article I of the indenture supplemental to the New Mortgage dated as of April 1, 1997 ("New Mortgage Pollution Control Series P Bonds") mature, in any coin or currency of the United States of America which at the time of payment is legal tender for public and private debts. This Bond shall not bear interest. The principal of this Bond is payable at the agency of the Company in the City of Chicago, Illinois. This Bond shall not be entitled to any benefit under the Indenture or any indenture supplemental thereto, or become valid or obligatory for any purpose, until the form of certificate endorsed hereon shall have been signed by or on behalf of Harris Trust and Savings Bank, the Trustee under the Indenture, or a successor trustee thereto under the Indenture (the "Trustee"). The provisions of this Bond are continued on the reverse hereof and such continued provisions shall for all purposes have the same effect as though fully set forth at this place. IN WITNESS WHEREOF, Illinois Power Company has caused this Bond to be signed (manually or by facsimile signature) in its name by its President or a Vice President, and its corporate seal (or a facsimile thereof) to be hereto affixed and attested (manually or by facsimile signature) by its Secretary or an Assistant Secretary. Dated ______________, 1997 ILLINOIS POWER COMPANY, By ______________________________ Vice President ATTEST: ________________________________ Assistant Secretary [FORM OF TRUSTEE'S CERTIFICATE] This Bond is one of the Bonds of the series designated therein, described in the within-mentioned Indenture and Supplemental Indenture dated as of April 1, 1997. HARRIS TRUST AND SAVINGS BANK, Trustee, By ______________________________ Authorized Officer [FORM OF REVERSE OF BOND) This Bond is one of a duly authorized issue of Bonds of the Company (the "Bonds") in unlimited aggregate principal amount, of the series hereinafter specified, all issued and to be issued under and equally secured by the Mortgage and Deed of Trust (the "Indenture"), dated November 1, 1943, executed by the Company to Harris Trust and Savings Bank (the "Trustee"), as Trustee, to which Indenture and all indentures supplemental thereto, including the Supplemental Indenture dated February 15, 1993, which amended Section 1 of Article IX of the Indenture, reference is hereby made for a description of the properties mortgaged and pledged, the nature and extent of the security, the rights of the registered owners of the Bonds and of the Trustee in respect thereof, and the terms and conditions upon which the Bonds are, and are to be, secured. The Bonds may be issued in series, for various principal sums, may mature at different times, may bear interest at different rates and may otherwise vary as in the Indenture provided. This Bond is one of a series designated as the "Pollution Control Series P Bonds" (the "Pollution Control Series P Bonds") of the Company, unlimited in aggregate principal amount, issued under and secured by the Indenture and described in the supplemental indenture dated as of April 1, 1997 (the "Supplemental Indenture of April 1, 1997"), between the Company and the Trustee, supplemental to the Indenture. To the extent permitted by, and as provided in, the Indenture, modifications or alterations of the Indenture, or of any indenture supplemental thereto, and of the rights and obligations of the Company and of the holders of the Bonds and coupons may be made with the consent of the Company by an affirmative vote of the holders of not less than 66-2/3% in amount of the Bonds entitled to vote then outstanding, at a meeting of Bondholders called and held as provided in the Indenture, and by an affirmative vote of the holders of not less than 66-2/3% in amount of the Bonds of any series entitled to vote then outstanding and affected by such modification or alteration, in case one or more but less than all of the series of Bonds then outstanding under the Indenture are so affected; provided however, that no such modification or alteration shall be made which will affect the terms of payment of the principal of, or interest or premium, if any, on this Bond. This Pollution Control Series P Bond is subject to redemption in accordance with the terms of Section 5 of Article I in the Supplemental Indenture of April 1, 1997. This Pollution Control Series P Bond shall not bear interest. In case an Event of Default, as defined in the Indenture, shall occur, the principal of all the Bonds at any such time outstanding under the Indenture may be declared or may become due and payable, upon the conditions and in the manner and with the effect provided in the Indenture. The Indenture provides that such declaration may in certain events be rescinded by the holders of a majority in principal amount of the Bonds outstanding. No recourse shall be had for the payment of the principal of, or premium or interest on this Bond, or for any claim based hereon or on the Indenture or any indenture supplemental thereto, against any incorporator, or against any stockholder, director or officer, as such, past, present or future, of the Company, or of any predecessor or successor corporation, either directly or through the Company or any such predecessor or successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability, whether at common law, in equity, by any constitution, statute, rule of law, or otherwise, of incorporators, stockholders, directors or officers being released by every owner hereof by the acceptance of this Bond and as part of the consideration for the issue hereof, and being likewise released by the terms of the Indenture; provided, however, that nothing herein or in the Indenture or any indenture supplemental thereto contained shall prevent the enforcement of the liability, if any, of any stockholder or subscriber to capital stock upon or in respect of shares of capital stock not fully paid up. Notwithstanding any provision in the Indenture, the Supplemental Indenture of April 1, 1997 or this Pollution Control Series P Bond to the contrary, any payment by the Company under the New Mortgage of principal of Bonds which shall have been authenticated and delivered under the New Mortgage (the "New Mortgage Pollution Control Series P Bonds") upon the basis of the issuance and delivery to the New Mortgage Trustee of the Pollution Control Series P Bonds shall, to the extent thereof, be deemed to satisfy and discharge the obligation of the Company to make a payment of principal in respect of this Pollution Control Series P Bond which is then due. This Pollution Control Series P Bond constitutes a "Pledged Bond" (as defined in the New Mortgage) and is subject to all of the rights and restrictions applicable to Pledged Bonds as set forth in the New Mortgage. Without limiting the generality of the foregoing, this Pollution Control Series P Bond shall be subject to surrender by the New Mortgage Trustee in accordance with the provisions of Section 7.03 of the New Mortgage. To the extent that any provisions in the Indenture, the Supplemental Indenture of April 1, 1997 or this Pollution Control Series P Bond are inconsistent with the provisions relating to Pledged Bonds that are set forth in the New Mortgage, the provisions of the New Mortgage shall apply. SECTION 3. Notwithstanding any provision in the Original Indenture, this Supplemental Indenture dated April 1, 1997 or the Pollution Control Series P Bonds to the contrary, any payment by the Company under the New Mortgage of principal of the New Mortgage Pollution Control Series P Bonds shall, to the extent thereof, be deemed to satisfy and discharge the obligation of the Company to make any payment of principal in respect of the Pollution Control Series P Bonds which is then due. SECTION 4. The Pollution Control Series P Bonds constitute "Pledged Bonds" (as defined in the New Mortgage) and are subject to all of the rights and restrictions applicable to Pledged Bonds as set forth in the New Mortgage. Without limiting the generality of the foregoing, the Pollution Control Series P Bonds shall be subject to surrender by the New Mortgage Trustee in accordance with the provisions of Section 7.03 of the New Mortgage. To the extent that any provisions in the Original Indenture, this Supplemental Indenture or the Pollution Control Series P Bonds are inconsistent with the provisions relating to Pledged Bonds that are set forth in the New Mortgage, the provisions of the New Mortgage shall apply. SECTION 5. The Pollution Control Series P Bonds shall be redeemed on the same terms, on the same date and in the same manner as the New Mortgage Pollution Control Series P Bonds shall be redeemed under the terms of the indenture supplemental to the New Mortgage dated as of April 1, 1997. ARTICLE II. DESCRIPTION OF POLLUTION CONTROL SERIES Q BONDS. All of the words of Article I of this Supplemental Indenture are by this reference incorporated in this Article II except: (a) The words "Pollution Control Series P Bond" and "Pollution Control Series P Bonds" are changed wherever they appear to "Pollution Control Series Q Bond" and "Pollution Control Series Q Bonds," respectively; (b) The words "New Mortgage Pollution Control Series P Bond" and "New Mortgage Pollution Control Series P Bonds" are changed wherever they appear to "New Mortgage Pollution Control Series Q Bond" and "New Mortgage Pollution Control Series Q Bonds," respectively; (c) The words "Article I" are changed wherever they appear to "Article II"; and (d) The amount of $80,500,000 is changed wherever it appears to $51,750,000. ARTICLE III. DESCRIPTION OF POLLUTION CONTROL SERIES R BONDS. All of the words of Article I of this Supplemental Indenture are by this reference incorporated in this Article III except: (a) The words "Pollution Control Series P Bond" and "Pollution Control Series P Bonds" are changed wherever they appear to "Pollution Control Series R Bond" and "Pollution Control Series R Bonds," respectively; (b) The words "New Mortgage Pollution Control Series P Bond" and "New Mortgage Pollution Control Series P Bonds" are changed wherever they appear to "New Mortgage Pollution Control Series R Bond" and "New Mortgage Pollution Control Series R Bonds," respectively; (c) The words "Article I" are changed wherever they appear to "Article III"; and (d) The amount of $80,500,000 is changed wherever it appears to $40,250,000. ARTICLE IV. ISSUE OF POLLUTION CONTROL SERIES P BONDS. POLLUTION CONTROL SERIES Q BONDS AND POLLUTION CONTROL SERIES R BONDS. SECTION 1. The Company hereby exercises the right to obtain the authen-tication of $172,500,000 principal amount of additional Bonds pursuant to the terms of Section 6 of Article III of the Original Indenture in substitution for refundable Bonds. Of such Bonds, $80,500,000 shall be Pollution Control Series P Bonds, $51,750,000 shall be Pollution Control Series Q Bonds and $40,250,000 shall be Pollution Control Series R Bonds. SECTION 2. Such Pollution Control Series P Bonds, Pollution Control Series Q Bonds and Pollution Control Series R Bonds may be authenticated and delivered prior to the filing for recordation of this Supplemental Indenture. SECTION 3. Notwithstanding any provision in the Original Indenture to the contrary, execution of the Pollution Control Series P Bonds, Pollution Control Series Q Bonds and Pollution Control Series R Bonds on behalf of the Company, and the attesting of the corporate seal of the Company affixed to the Pollution Control Series P Bonds, Pollution Control Series Q Bonds and Pollution Control Series R Bonds, by the officers of the Company authorized to do such acts by Section 12 of Article II of the Original Indenture may be validly done either by the manual or the facsimile signatures of such authorized officers of the Company. ARTICLE V. THE TRUSTEE. The Trustee hereby accepts the trusts hereby declared and provided, and agrees to perform the same upon the terms and conditions in the Original Indenture set forth and upon the following terms and conditions: The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or the due execution hereof by the Company or for or in respect of the recitals contained herein, all of which recitals are made by the Company solely. In general, each and every term and condition contained in Article XIII of the Original Indenture shall apply to this Supplemental Indenture with the same force and effect as if the same were herein set forth in full, with such omissions, variations and modifications thereof as may be appropriate to make the same conform to this Supplemental Indenture. ARTICLE VI. MISCELLANEOUS PROVISIONS. This Supplemental Indenture may be simultaneously executed in any number of counterparts, each of which when so executed shall be deemed to be an original; but such counterparts shall together constitute but one and the same instrument. IN WITNESS WHEREOF, Illinois Power Company has caused this Supplemental Indenture to be executed on its behalf by its Chairman and President, one of its Executive Vice Presidents, one of its Senior Vice Presidents or one of its Vice Presidents and its corporate seal to be hereto affixed and said seal and this Supplemental Indenture to be attested by its Secretary or one of its Assistant Secretaries; and said Harris Trust and Savings Bank, in evidence of its acceptance of the trust hereby created, has caused this Supplemental Indenture to be executed on its behalf by its President or one of its Vice Presidents and its corporate seal to be hereto affixed and said seal and this Supplemental Indenture to be attested by its Secretary or one of its Assistant Secretaries; all as of the first day of April, 1997. ILLINOIS POWER COMPANY By /s/ Larry F. Altenbaumer ------------------------------ Larry F. Altenbaumer Senior Vice President and Chief Financial Officer (CORPORATE SEAL) ATTEST: /s/ Leah Manning Stetzner - -------------------------------- Leah Manning Stetzner Vice President, General Counsel and Corporate Secretary HARRIS TRUST AND SAVINGS BANK, Trustee By /s/ J. Bartolini ------------------------------ J. Bartolini Vice President (CORPORATE SEAL) ATTEST: /s/ D. G. Donovan - -------------------------------- D. G. Donovan Assistant Secretary -----END PRIVACY-ENHANCED MESSAGE-----