-----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, Htm9zY3HieNgQXxkdS7s4Ku8WGc1PjktY5dAC6SHQ8pgXFSZLoFBACvS5gfgaoHC Srlwm975R4vmrqsCvb59bA== 0000049816-99-000003.txt : 19990304 0000049816-99-000003.hdr.sgml : 19990304 ACCESSION NUMBER: 0000049816-99-000003 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990303 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990303 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: 8-K SEC ACT: SEC FILE NUMBER: 001-03004 FILM NUMBER: 99556180 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 8-K 1 8-K FILING TO SEC ON 03/03/99 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) March 3, 1999 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 Total number of sequentially numbered pages is 8. Item 5. Other Events - -------------------------------------------------------------------------------- Illinova Corp. announced on February 26, 1999 a loss of $1.383 billion, or $19.30 per share (basic and diluted), for 1998. This compares to a loss of $90.4 million, or $1.22 per share, for the previous year. 1998's loss reflects the impact of a significant Clinton Power Station (Clinton) related write-off due to the company's decision to exit the nuclear power business as announced on Dec. 9, 1998. This decision requires that the company remove Clinton from its balance sheet, producing a write-down of approximately $1.33 billion. In conjunction with this write-down, the company implemented an accounting restructuring (called a "quasi-reorganization"). This restructuring allows the company to revalue its other assets to their fair market value. The Clinton write-off accounted for $1.33 billion -- $18.52 per share of the overall loss. Excluding the Clinton write-off, the loss would have been $55.9 million, or 78 cents per share. Losses for the fourth quarter were 82 cents per share, excluding the Clinton write-off, compared to a loss of 46 cents per share for the fourth quarter of 1997, excluding the extraordinary write-off. Although the impact of the accounting restructuring on 1998's earnings results was extreme, actual operating results before the restructuring were among the worst in the company's history. Expenses for ongoing efforts to prepare Clinton for a return to operation and costs associated with power purchases necessitated by the Clinton outage overwhelmed good operating performance in most of the company's business segments. 2 Earnings were reduced from normal levels by an estimated 99 cents per share due to the level of operation and maintenance expenses required to support efforts for the restart of Clinton; and $1.74 per share due to incremental costs for replacement power during Clinton's continued outage. In addition to the Clinton-related issues, other factors also impacted 1998's earnings results. The most significant earnings impact was the 15 percent residential rate reduction that became effective Aug. 1. This produced a 29 cents per share reduction in earnings compared to 1997. In addition, warmer temperatures in the summer and winter led to an 8 cents per share earnings increase due to improved electric margins offset by a 7 cents per share decrease in gas margins. Earnings in 1998 also were reduced 31 cents per share from 1997's levels due to higher non-nuclear operation and maintenance expenses related, in part, to increased maintenance for the company's distribution system, higher fossil plant expenses and increased marketing expenses. The after-tax write-off for Clinton and related costs are approximately $1.8 billion. Illinois Power also is establishing a regulatory asset of approximately $472 million, net of taxes. The difference between the write-off and the regulatory asset, approximately $1.33 billion, is recorded as a charge to 1998 earnings. As part of the accounting restructuring, Illinois Power's 1998 year-end balance sheet reflects a new valuation of about $2.9 billion for its fossil-fueled generating system, a write-up of approximately $1.33 billion, net of taxes. 3 This valuation is based on current assumptions about future energy prices, plant operations, environmental costs and electric generating capacity throughout the Midwest region. Accounting rules require that the write-down flow through the income statement, while the revaluation of other assets to their fair market value be handled through balance sheet adjustments, thus producing the extremely negative earnings result. The net effect, however, is no change in the company's equity value, no reduction in its cash flows and no negative impacts on Illinova's overall financial health. Illinova Corp., headquartered in Decatur, Ill., is an energy services company with annual revenues of $2.5 billion. Its subsidiaries include Illinois Power, an electric and natural gas utility; Illinova Generating, which invests in, develops and operates independent power projects worldwide; and Illinova Energy Partners, which markets energy and energy-related services in the United States and Canada. Please see the attached Illinova Consolidated Statements of Income. 4 Item 7. Financial Statements - -------------------------------------------------------------------------------- (A) Financial Statements (99.1) Illinova Consolidated Income Statements 5 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/ Larry F. Altenbaumer --------------------------- Larry F. Altenbaumer Chief Financial Officer Treasurer and Controller on behalf of Illinova Corporation Date: March 3, 1999 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/ Larry F. Altenbaumer --------------------------- Larry F. Altenbaumer Senior Vice President and Chief Financial Officer on behalf of Illinois Power Company Date: March 3, 1999 6 Exhibit Index The following Exhibits are hereby filed as part of this Current Report on Form 8-K: Exhibit Number Description 99.1 Illinova Consolidated Income Statements 7 EX-99 2 EX-99.1 ILLINOVA CONSOLIDATED INCOME STATEMENTS ILLINOVA Condensed Consolidated Statements of Income Three Months Ended * Twelve Months Ended December 31, December 31, % Change % Change Fay/ Fay/ 1998 1997** (Unfav) 1998 1997** (Unfav) (Millions) (Millions) Operating Revenues Electric $251.1 $266.5 (6) % $1,224.2 $1,244.4 (2) % Electric interchange 63.1 34.2 85 557.2 175.6 - Gas 83.2 88.0 (5) 287.8 353.9 (19) Diversified enterprises 87.2 165.7 (47) 361.4 735.6 (51) --------- ------- -------- ------- Total 484.6 554.4 (13) 2,430.6 2,509.5 (3) --------- ------- -------- ------- Operating Expenses Fuel for electric plants 67.2 68.5 2 250.2 232.4 (8) Power purchased 91.0 62.3 (46) 735.2 217.9 - Gas purchased for resale 45.9 67.1 32 149.6 207.7 28 Diversified enterprises 96.8 179.7 46 392.0 792.3 51 Other operating and maintenance 173.2 127.7 (36) 537.9 402.2 (34) Depreciation and amortization 51.4 50.4 (2) 203.6 198.8 (2) General Taxes 22.9 28.0 18 123.2 133.8 8 Clinton plant impairment loss 2,341.2 - (100) 2,341.2 - (100) --------- ------- -------- ------- Total 2,889.6 583.7 - 4,732.9 2,185.1 (117) --------- ------- -------- ------- Operating Income (Loss) (2,405.0) (29.3) - (2,302.3) 324.4 - --------- ------- -------- ------- Other Income Miscellaneous - net 0.3 0.2 50 3.1 3.5 (11) Equity earnings in affiliates 10.8 6.4 69 22.5 17.5 29 --------- ------- -------- ------- Total 11.1 6.6 68 25.6 21.0 22 --------- ------- -------- ------- Income (Loss) Before Interest Charges and Income Taxes (2,393.9) (22.7) - (2,276.7) 345.4 - --------- ------- -------- ------- Interest Charges Interest expense 36.7 35.5 (3) 146.0 144.2 (1) Allowance for borrowed funds used during construction 0.6 (1.6) (138) (3.2) (5.0) (36) Preferred dividend requirements of subsidiary 4.9 5.1 4 19.8 21.5 8 --------- ------- -------- ------- Total 42.2 39.0 (8) 162.6 160.7 (1) --------- ------- -------- ------- Income (Loss) Before Income Taxes (2,436.1) (61.7) - (2,439.3) 184.7 - --------- ------- -------- ------- Income Taxes Income tax - impairment loss (853.6) - 100 (853.6) - 100 ITC - Clinton impairment (160.4) - 100 (160.4) - 100 Other income taxes (36.5) (27.4) 33 (42.3) 80.3 153 --------- ------- -------- ------- Total (1,050.5) (27.4) - (1,056.3) 80.3 - --------- ------- -------- ------- Net Income (Loss) Before Extraordinary Item (1,385.6) (34.3) - (1,383.0) 104.4 - Extraordinary Item Net of Income Tax Benefit of $118.0 Million - (195.0) - - (195.0) - --------- ------- -------- ------- Net Income (Loss) (1,385.6) (229.3) - (1,383.0) (90.6) - Carrying amount over (under) consideration paid for redeemed preferred stock of subsidiary - (0.9) - - 0.2 - --------- ------- -------- ------- Net Income (Loss) Applicable to Common Stock ($1,385.6) ($230.2) - ($1,383.0) ($90.4) - ========= ======= ========= ====== Weighted average common shares 71.5 71.7 71.7 74.0 Earnings (loss) per common share before extraordinary item (basic and diluted) ($19.38) ($0.49) ($19.30) $1.41 Extraordinary item per common share (basic and diluted) - ($2.72) - ($2.63) Earnings (loss) per common share (basic and diluted) ($19.38) ($3.21) ($19.30) ($1.22) Cash dividends declared per common share $0.31 $0.31 $1.24 $1.24 Cash dividends paid per common share $0.31 $0.31 $1.24 $1.24 * Unaudited ** Restated to conform to new financial format These statements are submitted as a matter of general information and are not intended to induce, or to be used in connection with, any sale or purchase of securities. These statements should be read in conjunction with Illinova's and Illinois Power Company's 1998 Quarterly Reports on Form 10-Q and Form 8-K filings to the Securities and Exchange Commission, Illinova's 1998 Annual Report to Shareholders (included in the Proxy Statement) and Illinova and Illinois Power Company's 1998 Form 10-K filings to the Securities and Exchange Commission. 8
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