-----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, P+KQfbBO96PUDMytlwdNknwdFb9rbztHDtgOLK++JNMMVDA5gIy6aV2N7PzD+xwr laOLJLLK61wDv+Sb38WUnQ== 0000049816-00-000015.txt : 20000229 0000049816-00-000015.hdr.sgml : 20000229 ACCESSION NUMBER: 0000049816-00-000015 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990618 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000228 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/A SEC ACT: SEC FILE NUMBER: 001-03004 FILM NUMBER: 555943 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/A 1 AMENDED 8-K FILING TO SEC ON 06/18/99 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 8-K/A CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) June 18, 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 10. Item 5. Other Events Merger Agreement On June 14, 1999, Illinova Corporation, an Illinois corporation ("Illinova"),parent of Illinois Power, and Dynegy Inc., a Delaware corporation ("Dynegy"), agreed to combine in a transaction in which each of Illinova and Dynegy will become wholly owned subsidiaries of Energy Convergence Holding Company, a newly formed Illinois corporation ("Newco"). Energy Convergence Acquisition Corporation, an Illinois corporation and a wholly owned subsidiary of Newco, will be merged with and into Illinova, and Dynegy Acquisition Corporation, a Delaware corporation and a wholly owned subsidiary of Newco, will be merged with and into Dynegy. The terms of the Merger are set forth in an Agreement and Plan of Merger (the "Merger Agreement") dated as of June 14, 1999, among Newco, Illinova, Energy Convergence Acquisition Corporation, Dynegy and Dynegy Acquisition Corporation. Consummation of the combination is subject to various conditions, including: (i) receipt of necessary approvals by the stockholders of each of Illinova and Dynegy; (ii) the expiration or termination of applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended; (iii) the exemption of the acquisition by one of Dynegy's major shareholders of Newco's Class B Common Stock under the Public Utility Holding Company Act and the receipt of necessary Federal Energy Regulatory Commission and Illinois Commerce Commission approvals; (iv) the consummation by Illinois Power of its previously announced sale of its Clinton nuclear facility; (v) registration of the shares of Newco Common Stock to be issued in the merger under the Securities Act of 1933, as amended; and (vi) satisfaction of certain other conditions. For more information, please see the Illinova 8K filed on June 14, 1999. Illinova Power Marketing, Inc. Illinois Power and Illinova are proceeding with plans to transfer Illinois Power's fossil generating assets and liabilities to a newly created Illinova subsidiary, Illinova Power Marketing, Inc. ("IPMI"). The proposed transfer is subject to a number of conditions, including receipt of approvals from the Illinois Commerce Commission ("ICC") and the Federal Energy Regulatory Commission ("FERC"). In April 1999, Illinois Power filed with the ICC a Notice with respect to the proposed transfer as required by Section 16-111(g) of the Public Utilities Act (the "Act"). The Act permits transfers of utility assets upon proper demonstration that the utility will satisfy certain financial and reliability criteria. The ICC is required to render its decision by July 14, 1999. The FERC's approval is necessary for the transfer of assets to IPMI as well as IPMI's sale of electric energy at wholesale under a proposed Power Purchase Agreement between IPMI and Illinois Power. Under the terms of the proposed Power Purchase Agreement, IPMI will be obligated to provide Illinois Power with a reliable generation supply through December 31, 2004, to grant Illinois Power the ability to reserve capacity and energy from IPMI's generating 2 units, and to require IPMI to acquire replacement power as necessary to meet its capacity obligations to Illinois Power. The proposed Power Purchase Agreement is further expected to provide that Illinois Power generally will pay market-based prices for capacity and energy, and that Illinois Power may reduce required capacity and energy on an annual basis. The parties filed the proposed Power Purchase Agreement with FERC on June 11, 1999. Under the transaction as currently contemplated by the parties, Illinois Power will sell its fossil generating assets and liabilities to Illinova in exchange for a promissory note in an amount equal to the net book value of the assets and liabilities as of the date of the transaction. At March 31, 1999, the net book value of Illinois Power's fossil generating assets and liabilities was approximately $2.7 billion. The promissory note is expected to be an interest-bearing unsecured note and to mature in approximately 10 years, subject to earlier prepayment. Illinova will then contribute the fossil generating assets and liabilities to IPMI. The terms of the sale remain subject to change. Securitization In December 1998, Illinois Power caused the issuance of $864 million of Transitional Funding Trust Notes (the "Notes") through Illinois Power Securitization Limited Liability Company, a special purpose Delaware limited liability company (the "Grantee") and Illinois Power Special Purpose Trust, a special purpose Delaware business trust (the "Note Issuer"). As required by generally accepted accounting principles, the accounts of the Grantee and the Note Issuer are included in the consolidated financial statements of Illinois Power and Illinova, and the Notes are reflected as long-term debt on their consolidated balance sheets. However, the Grantee and the Note Issuer are special purpose entities that are legally separate from Illinois Power and Illinova. Accordingly, the holders of the Notes do not have recourse to any assets or revenues of Illinois Power or Illinova, and the creditors of Illinois Power or Illinova do not have recourse to any assets or revenues of the Grantee or the Note Issuer, including without limitation, the Intangible Transition Property. Intangible Transition Property, in the amount of $1.634 billion, was created by a transitional funding order of the ICC on September 10, 1998. Intangible Transition Property includes the right to impose and receive certain nonbypassable, usage-based, per kilowatt hour instrument funding charges ("IFCs") on designated consumers of electricity in Illinois Power's service territory, regardless of their electric supplier. The Grantee initially owned and then assigned all of its right, title and interest in the Intangible Transition Property to the Note Issuer, in exchange for the net proceeds of the Notes. For the three months ended March 31, 1999, approximately $43 million of electric operating revenues included in the consolidated statements of income of Illinois Power and Illinova consisted of IFCs. The Notes are primarily secured by, and payable from, the Intangible Transition Property. Illinois Power received the net proceeds from the sale of the Notes in consideration of the creation of the Intangible Transition Property. For accounting purposes, Illinois Power accounts for the net proceeds of the Notes as an intercompany payable owing to the Grantee, but it has no payment obligation in respect of such payable except to remit IFC collections as required by the Servicing Agreement between Illinois Power and the Grantee. For additional information 3 about the Notes, the Intangible Transition Property and the IFC collections, please refer to Illinova's and Illinois Power's Annual Report on Form 10-K/A for the fiscal year ended December 31, 1998, and the Grantee's Annual Report on Form 10-K/A for the fiscal year ended December 31, 1998. Clinton Power Station Illinois Power's Clinton Power Station returned to service on May 27, 1999, and is currently operating at full capacity. Illinois Power and AmerGen Energy Company are continuing to negotiate the terms of a definitive agreement for the sale of Clinton to AmerGen. AmerGen's exclusive right to negotiate with Illinois Power for the sale of Clinton has been extended from June 15, 1999, to July 2, 1999, and discussions continue between the two companies. RESTATEMENT OF THE COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES FOR THE TWELVE MONTHS ENDED MARCH 31, 1999 In February 2000, Illinova and Illinois Power Company restated its statements of income for the twelve months ended December 31, 1998, which is reflected in the Statement of Computation of Ratio of Earnings to Fixed Charges for the twelve months ended March 31, 1999. The restatement reflects a revision to the initial estimate of the "Transition period cost recovery" regulatory asset established in December 1998 coincident with the impairment of the Clinton Power Station. The effect of this revision was to decrease the amount of the regulatory asset at December 31, 1998, and correspondingly increase the related impairment charge by $325.7 million ($196.5 million net of tax). The net effect of this revision was to increase the previously reported net loss for the twelve months ended March 31, 1999 by $196.5 million. * * * * * This report contains statements that may be deemed to be forward-looking information such as the possible consummation of the merger and other transactions contemplated by Illinova and Dynegy; the terms of Illinois Power's proposed transfer of fossil generating assets to IPMI; the proposed terms and expected prepayment of the Power Purchase Agreement between Illinois Power and IPMI; the proposed terms of the Illinova promissory note to Illinois Power and certain matters relating to the proposed Clinton sale. Although Illinova and Illinois Power believe that this forward-looking information is accurate, its businesses are dependent on various regulatory issues, general economic conditions and future trends, and these factors can cause actual results to differ materially from the forward-looking information that has been provided. The reader is cautioned not to put undue reliance on this forward-looking information, which is not a guarantee of future performance and is subject to a number of uncertainties and other factors, many of which are outside the control of Illinova and Illinois Power. 4 The following factors, in addition to those discussed in Illinova's and Illinois Power's Annual Report on Form 10-K/A for the year ended December 31, 1998, could cause results to differ materially from management expectations as suggested by such forward-looking information: the results of regulatory proceedings at the ICC and FERC; the negotiations between the parties with respect to the Power Purchase Agreements; the negotiations between the parties with respect to the sale of Clinton; the operating performance of Clinton; the impact of recent and future Federal and state regulatory changes; the effects of increased competition; the impact of fluctuations in commodity prices and customer demand, the impact of new environmental laws and regulations; factors affecting non-utility investments, such as the risk of doing business in foreign countries, construction and operation risks, and increases in financing costs. 5 Item 7. Financial Statements, Pro Forma Financial Information and Exhibits (c) Exhibits. Exhibit 12: Statements Re Computation of Ratios. 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 President on behalf of Illinova Corporation Date: February 28, 2000 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 President on behalf of Illinois Power Company Date: February 28, 2000 6 Exhibit Index The following Exhibits are hereby filed as part of this Current Report on Form 8-K/A: Exhibit Number Description 12 Statements re computation of ratios 7 EX-12 2 EX-12
ILLINOVA CORPORATION STATEMENT OF COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES Twelve Three Months Ended Months Ended As Restated March March (Thousands of Dollars) 1999 1999 ** 1999 -------------------------- ------------- Earnings Available for Fixed Charges: Net Income (Loss) ($1,565,825) ($1,565,825) $21,870 Add: Income Taxes: Current (2,533) (2,533) - Deferred - Net (18,393) (18,393) 14,100 Allocated income taxes (7,393) (7,393) (2,410) Investment tax credit - deferred (6,897) (6,897) (365) Income tax effect of CPS impairment (1,143,252) (1,143,252) - Interest on long-term debt 118,972 118,972 31,085 Amortization of debt expense and premium-net, and other interest charges 33,528 33,528 12,041 One-third of all rentals (Estimated to be representative of the interest component) 4,002 4,002 946 Interest on in-core fuel 3,872 3,872 966 FAS 71 Regulatory Write-Offs - - - CPS Impairment - 2,666,909 - ------------ ----------- ------------- Earnings (loss) available for fixed charges ($2,583,919) $82,990 $78,233 ============ =========== ============= Fixed charges: Interest on long-term debt $118,972 $118,972 $31,085 Amortization of debt expense and premium-net, and other interest charges 41,410 41,410 13,860 One-third of all rentals (Estimated to be representative of the interest component) 4,002 4,002 946 ------------ ----------- ------------- Total Fixed Charges $164,384 $164,384 $45,891 ============ =========== ============= Ratio of earnings to fixed charges N/A * N/A 1.70 ============ =========== ============= * Earnings are inadequate to cover fixed charges. Additional earnings (thousands) of $2,748,303 are required to attain a one-to-one ratio of Earnings to Fixed Charges. ** Supplemental ratio of earnings to fixed charges presented to exclude write-off related to Clinton Impairment. Additional earnings (thousands) of $81,394 are required to attain a one-to-one ratio of Earnings to Fixed Charges.
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ILLINOIS POWER COMPANY STATEMENT OF COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES Twelve Three Months Ended Months Ended As Restated March March (Thousands of Dollars) 1999 1999 ** 1999 -------------------------- -------------- Earnings Available for Fixed Charges: Net Income (Loss) ($1,559,941) ($1,559,941) $22,911 Add: Income Taxes: Current (2,533) (2,533) - Deferred - Net (18,393) (18,393) 14,100 Allocated income taxes (2,249) (2,249) (2,121) Investment tax credit - deferred (6,897) (6,897) (365) Income tax effect of CPS impairment (1,143,252) (1,143,252) - Interest on long-term debt 108,562 108,562 28,523 Amortization of debt expense and premium-net, and other interest charges 32,179 32,179 11,384 One-third of all rentals (Estimated to be representative of the interest component) 4,002 4,002 946 Interest on in-core fuel 3,872 3,872 966 FAS 71 Regulatory Write-Offs - - - CPS Impairment - 2,666,909 - ------------- ------------ -------------- Earnings (loss) available for fixed charges ($2,584,650) $82,259 $76,344 ============= ============ ============== Fixed charges: Interest on long-term debt $108,562 $108,562 $28,523 Amortization of debt expense and premium-net, and other interest charges 40,061 40,061 13,203 One-third of all rentals (Estimated to be representative of the interest component) 4,002 4,002 946 ------------- ------------ -------------- Total Fixed Charges $152,625 $152,625 $42,672 ============= ============ ============== Ratio of earnings to fixed charges N/A * 0.54 1.79 ============= ============ ============== * Earnings are inadequate to cover fixed charges. Additional earnings (thousands) $2,737,275 are required to attain a one-to-one ratio of Earnings to Fixed Charges. ** Supplemental ratio of earnings to fixed charges presented to exclude write-off related to Clinton Impairment. Additional earnings (thousands) of $70,366 are required to attain a one-to-one ratio of Earnings to Fixed Charges.
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