-----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, USVphyUvR7xmSkJKmO4q1EQfNHBL4rD9q3EtOArKXPFa23tGam89GBkmozbmU2Nu sNV/LFH+CYJCW9ZMpjK4tA== 0000049816-99-000002.txt : 19990215 0000049816-99-000002.hdr.sgml : 19990215 ACCESSION NUMBER: 0000049816-99-000002 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19990211 ITEM INFORMATION: FILED AS OF DATE: 19990212 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: 99533445 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 02/11/99 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) February 12, 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. 1 Item 7. Exhibits - -------------------------------------------------------------------------------- (c) Exhibits (99.1) Letter to the Financial Community, dated February 11, 1999 (99.2) Press Release, dated February 11, 1999 2 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: February 12, 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: February 12, 1999 3 Exhibit Index The following Exhibits are hereby filed as part of this Current Report on Form 8-K: Exhibit Number Description 99.1 Letter to the Financial Community, dated February 11, 1999 99.2 Press Release, dated February 11, 1999 4 EX-99 2 EX-99.1 LETTER TO FINANCIAL COMMUNITY, 2/11/99 Larry F. Altenbaumer Chief Financial Officer, Treasurer and Controller Illinova Corporation 500 South 27th Street P.O. Box 511 Decatur, IL 62525-1805 Tel 217 424-6678 Fax 217 362-7417 February 11, 1999 Members of the Financial Community: Illinova/Illinois Power Company (Company) Board of Directors met yesterday. Among the issues discussed was the strategy for exiting the nuclear business. The Board was advised that progress in restoring Clinton Power Station (Clinton) to service early in the second quarter was proceeding according to plan and that serious expressions of interest in the purchase of Clinton had been received. Consequently, management recommended and the Board approved proposals to continue the restart and sales efforts. Concurrently, the company is proceeding with all necessary actions to permit a timely shutdown of the plant if the restart and/or sales efforts should be unsuccessful. The company has also made excellent progress in resolving the key accounting issues surrounding the implementation of the quasi financial reorganization. The company recently completed its fossil valuation study. As a result of this study, Illinois Power will increase its fossil system valuation to about $2.9 billion as of December 31, 1998, a $1.35 billion net of tax increase. While the quasi-reorganization accounting entries have not been finalized, the company is confident that the amounts presented below will be very close to the final amounts. In view of this progress, I felt it was important to provide this update pending the release of 1998 results at the end of the month. The write-off for Clinton-related costs will be approximately $1.8 billion, net of tax, and a regulatory asset of approximately $450 million, net of tax, will be established. The net difference between these amounts, approximately $1.35 billion, will be charged to 1998 earnings. For balance sheet purposes, the company expects this net difference to be fully offset by the write-up of the fossil generating system assets, thereby avoiding any reduction in total common equity as a result of the quasi-reorganization. The quasi-reorganization accounting entries addressed above reflect the company's decision to book the most conservative outcome currently foreseen. If the actual exit option produces a smaller write-off for Clinton-related expenses, the adjustment will be reflected as a balance sheet item only - the income statement will not be affected. The final quasi-reorganization accounting entries will be reported when the company releases 1998 earnings after the market closes on Friday, February 26, 1999. A conference call will be conducted the following Monday morning, March, 1, 1999, to discuss and answer any questions regarding the 1998 results, including the quasi-reorganization accounting issues. We will advise you during the last week of February of the specific time and other particulars regarding this call. I hope you will be able to join us in the call. 5 In the interim please contact Bob Schultz (217-424-8780), Eric Weekes (217-362-7635), Cindy Steward (217-362-7633), Greg Gudeman (217-424-8715) or me if you have any questions regarding this letter. Sincerely, [OBJECT OMITTED] Larry F. Altenbaumer 6 EX-99 3 EX-99.2 PRESS RELEASE DATED 2/11/99 For Release: Feb. 11, 1999 UTILITY PURSUES RESTART, SALE OF CLINTON POWER STATION DECATUR, Ill. -- Illinois Power today affirmed that it is continuing its work toward restarting the Clinton Power Station while it pursues negotiations with potential buyers. Concurrently, the utility is continuing to develop contingency plans for permanently closing the 950-megawatt nuclear generating facility. "Our primary focus is to restart and sell the plant," said Illinova and Illinois Power Chairman Charles E. Bayless. "We will resolve the Clinton issues and clear the way to aggressively pursue other forward-looking business strategies." Efforts to sell Clinton are based on expectations that it will be in operation by late spring. Several parties have already expressed interest in the plant and discussions are ongoing. Illinois Power soon will send letters to additional prospective buyers requesting expressions of interest in buying Clinton. If satisfactory offers are not received in a timely manner, Illinois Power will be prepared to proceed with closing and decommissioning the facility. Illinova Corp. announced in December that it would exit its nuclear business, most likely by selling or closing Clinton, its only nuclear-powered generating station. In conjunction with the decision to dispose of its nuclear assets, the board also moved in December 1998 to effect a quasi-reorganization, an accounting restructuring whereby a company 7 ILLINOVA Feb. 11, 1999 Page 2 restates all its assets and liabilities to their current market value. Illinois Power's 1998 year-end balance sheet will reflect a new valuation of about $2.9 billion for its fossil-fueled generating system, a write-up of approximately $1.35 billion, net of taxes. This valuation is based on current assumptions about future energy prices, plant operations, environmental costs, and electric generating capacity throughout the Midwest region. The two additional significant elements of the quasi-reorganization will be finalized before Illinova releases 1998 earnings. The company believes the after-tax write-off for Clinton and related costs will be approximately $1.8 billion. Illinois Power will also establish a regulatory asset of approximately $450 million, net of taxes. The difference between the write-off and the regulatory asset, approximately $1.35 billion, will be recorded as a charge to 1998 earnings. The company expects that, when complete, the quasi-reorganization will result in no reduction in its total common equity. 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. 8 -----END PRIVACY-ENHANCED MESSAGE-----