-----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, Thqc36LGR0/QaAUpPa9YpXhz1eloQjCZ31eN3NJZPEfSOWiFD2MyOnMr3aQJn7VK JYV/mbuzgEdKn+0SKO3Jsg== 0000049816-99-000021.txt : 19990630 0000049816-99-000021.hdr.sgml : 19990630 ACCESSION NUMBER: 0000049816-99-000021 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990629 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: 11-K SEC ACT: SEC FILE NUMBER: 001-03004 FILM NUMBER: 99655211 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 11-K 1 11-K FOR THE YEAR ENDED 12/31/98 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 11-K ANNUAL REPORT PURSUANT TO SECTION 15(dd) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1998 Commission file number 1-3004 Illinois Power Company Incentive Savings Plan for Employees Covered Under a Collective Bargaining Agreement (Full title of the plan) Illinova Corporation 500 South 27th Street Decatur, Illinois 62525 (Name of issuer of the securities held pursuant to the plan and the address of its principal executive office.) ILLINOIS POWER COMPANY INCENTIVE SAVINGS PLAN FOR EMPLOYEES COVERED UNDER A COLLECTIVE BARGAINING AGREEMENT FINANCIAL STATEMENTS AND ADDITIONAL INFORMATION DECEMBER 31, 1998 ILLINOIS POWER COMPANY INCENTIVE SAVINGS PLAN FOR EMPLOYEES COVERED UNDER A COLLECTIVE BARGAINING AGREEMENT Index to Financial Statements and Additional Information Financial Statements: Page Report of Independent Accountants 1 Statements of Net Assets Available for Benefits with Fund Information as of December 31, 1998 and 1997 2-7 Statements of Changes in Net Assets Available for Benefits with Fund Information for the years ended December 31, 1997 and 1996 8-23 Notes to Financial Statements 34-42 Additional Information: Schedule I - Schedule of Assets Held for Investment Purposes Schedule II - Schedule of Reportable Transactions Note:Other schedules required by section 2520.103-10 of the Department of Labor Rules and Regulations for Reporting and Disclosure under ERISA have been omitted because they are not applicable. ILLINOIS POWER COMPANY INCENTIVE SAVINGS PLAN FOR EMPLOYEES COVERED UNDER A COLLECTIVE BARGAINING AGREEMENT Statement of Net Assets Available for Benefits with Fund Information as of December 31, 1998 Fidelity Illinova Equity Stock Income Fund Fund ASSETS: Cash and Temporary Cash Investments $ 318,089 $ 0 Investments at Fair Value 23,325,275 24,282,284 ----------- ----------- Total Investments 23,643,364 24,282,284 Dividends and Interest Receivable 1,155 0 Employee Contributions Receivable 137,940 35,887 Employer Contributions Receivable 200,413 0 Loan Repayments Receivable 812 8,114 Loans Outstanding 0 0 ----------- ----------- Other Assets 340,320 44,001 ----------- ----------- Total Assets 23,983,684 24,326,285 ----------- ----------- LIABILITIES: Accrued Expenses 59,712 0 ----------- ----------- Total Liabilities 59,712 0 ----------- ----------- NET ASSETS AVAILABLE FOR BENEFITS $23,923,972 $24,326,285 =========== =========== See Accompanying Notes to Financial Statements 2 ILLINOIS POWER COMPANY INCENTIVE SAVINGS PLAN FOR EMPLOYEES COVERED UNDER A COLLECTIVE BARGAINING AGREEMENT Statement of Net Assets Available for Benefits with Fund Information as of December 31, 1998 Fidelity Retirement Growth Loan Fund Fund ASSETS: Cash and Temporary Cash Investments $ 0 $ 0 Investments at Fair Value 29,002,482 0 ----------- ---------- Total Investments 29,002,482 0 Dividends and Interest Receivable 0 0 Employee Contributions Receivable 40,674 0 Employer Contributions Receivable 0 0 Loan Repayments Receivable 39,492 (62,283) Loans Outstanding 0 3,447,568 ----------- ---------- Other Assets 80,166 3,385,285 ----------- ---------- Total Assets 29,082,648 3,385,285 ----------- ---------- LIABILITIES: Accrued Expenses 0 0 ----------- ---------- Total Liabilities 0 0 ----------- ---------- NET ASSETS AVAILABLE FOR BENEFITS $29,082,648 $3,385,285 =========== ========== See Accompanying Notes to Financial Statements 3 ILLINOIS POWER COMPANY INCENTIVE SAVINGS PLAN FOR EMPLOYEES COVERED UNDER A COLLECTIVE BARGAINING AGREEMENT Statement of Net Assets Available for Benefits with Fund Information as of December 31, 1998 Fidelity Fidelity Asset Asset Manager Manager Income Growth Fund Fund ASSETS: Cash and Temporary Cash Investments $ 0 $ 0 Investments at Fair Value 519,921 4,135,718 ---------- ---------- Total Investments 519,921 4,135,718 Dividends and Interest Receivable 0 0 Employee Contributions Receivable 1,218 7,507 Employer Contributions Receivable 0 0 Loan Repayments Receivable 204 1,915 Loans Outstanding 0 0 ---------- ---------- Other Assets 1,422 9,422 ---------- ---------- Total Assets 521,343 4,145,140 ---------- ---------- LIABILITIES: Accrued Expenses 0 0 ---------- ---------- Total Liabilities 0 0 ---------- ---------- NET ASSETS AVAILABLE FOR BENEFITS $521,343 $4,145,140 ========== ========== See Accompanying Notes to Financial Statements 4 ILLINOIS POWER COMPANY INCENTIVE SAVINGS PLAN FOR EMPLOYEES COVERED UNDER A COLLECTIVE BARGAINING AGREEMENT Statement of Net Assets Available for Benefits with Fund Information as of December 31, 1998 Fidelity Fidelity Asset International Manager Growth and Fund Income Fund ASSETS: Cash and Temporary Cash Investments $ 0 $ 0 Investments at Fair Value 4,746,452 1,515,820 ---------- ---------- Total Investments 4,746,452 1,515,820 Dividends and Interest Receivable 0 0 Employee Contributions Receivable 8,379 3,441 Employer Contributions Receivable 0 0 Loan Repayments Receivable 1,864 916 Loans Outstanding 0 0 ---------- ---------- Other Assets 10,243 4,357 ---------- ---------- Total Assets 4,756,695 1,520,177 ---------- ---------- LIABILITIES: Accrued Expenses 0 0 ---------- ---------- Total Liabilities 0 0 ---------- ---------- NET ASSETS AVAILABLE FOR BENEFITS $4,756,695 $1,520,177 ========== ========== See Accompanying Notes to Financial Statements 5 ILLINOIS POWER COMPANY INCENTIVE SAVINGS PLAN FOR EMPLOYEES COVERED UNDER A COLLECTIVE BARGAINING AGREEMENT Statement of Net Assets Available for Benefits with Fund Information as of December 31, 1998 Fidelity Fidelity Managed US Equity Income Index Portfolio Commingled Fund Pool ASSETS: Cash and Temporary Cash Investments $ 0 $ 0 Investments at Fair Value 11,877,172 3,190,596 ----------- ---------- Total Investments 11,877,172 3,190,596 Dividends and Interest Receivable 0 0 Employee Contributions Receivable 17,261 9,286 Employer Contributions Receivable 0 0 Loan Repayments Receivable 5,570 1,758 Loans Outstanding 0 0 ----------- ---------- Other Assets 22,831 11,044 ----------- ---------- Total Assets 11,900,003 3,201,640 ----------- ---------- LIABILITIES: Accrued Expenses 0 0 ----------- ---------- Total Liabilities 0 0 ----------- ---------- NET ASSETS AVAILABLE FOR BENEFITS $11,900,003 $3,201,640 =========== ========== See Accompanying Notes to Financial Statements 6 ILLINOIS POWER COMPANY INCENTIVE SAVINGS PLAN FOR EMPLOYEES COVERED UNDER A COLLECTIVE BARGAINING AGREEMENT Statement of Net Assets Available for Benefits with Fund Information as of December 31, 1998 Founders USAA Growth International Fund Fund ASSETS: Cash and Temporary Cash Investments $ 0 $ 0 Investments at Fair Value 1,255,200 268,976 ---------- -------- Total Investments 1,255,200 268,976 Dividends and Interest Receivable 0 0 Employee Contributions Receivable 4,698 779 Employer Contributions Receivable 0 0 Loan Repayments Receivable 709 73 Loans Outstanding 0 0 ---------- -------- Other Assets 5,407 852 ---------- -------- Total Assets 1,260,607 269,828 ---------- -------- LIABILITIES: Accrued Expenses 0 0 ---------- -------- Total Liabilities 0 0 ---------- -------- NET ASSETS AVAILABLE FOR BENEFITS $1,260,607 $269,828 ========== ========= See Accompanying Notes to Financial Statements 7 ILLINOIS POWER COMPANY INCENTIVE SAVINGS PLAN FOR EMPLOYEES COVERED UNDER A COLLECTIVE BARGAINING AGREEMENT Statement of Net Assets Available for Benefits with Fund Information as of December 31, 1998 Warburg Pincus Fidelity Emerging Brokerage Growth Link ASSETS: Cash and Temporary Cash Investments $ 0 $ 0 Investments at Fair Value 558,770 866,805 -------- ---------- Total Investments 558,770 866,805 Dividends and Interest Receivable 0 0 Employee Contributions Receivable 1,704 872 Employer Contributions Receivable 0 0 Loan Repayments Receivable 243 613 Loans Outstanding 0 0 -------- ---------- Other Assets 1,947 1,485 -------- ---------- Total Assets 560,717 868,290 -------- ---------- LIABILITIES: Accrued Expenses 0 0 -------- ---------- Total Liabilities 0 0 -------- ---------- NET ASSETS AVAILABLE FOR BENEFITS $560,717 $868,290 ========== ========== See Accompanying Notes to Financial Statements 8 ILLINOIS POWER COMPANY INCENTIVE SAVINGS PLAN FOR EMPLOYEES COVERED UNDER A COLLECTIVE BARGAINING AGREEMENT Statement of Net Assets Available for Benefits with Fund Information as of December 31, 1998 Total All Funds ASSETS: Cash and Temporary Cash Investments $ 318,089 Investments at Fair Value 105,545,471 ------------ Total Investments 105,863,558 Dividends and Interest Receivable 1,155 Employee Contributions Receivable 269,646 Employer Contributions Receivable 200,413 Loan Repayments Receivable 0 Loans Outstanding 3,447,568 ------------ Other Assets 3,918,782 ------------ Total Assets 109,782,342 ------------ LIABILITIES: Accrued Expenses 59,712 ------------ Total Liabilities 59,712 ------------ NET ASSETS AVAILABLE FOR BENEFITS $109,722,630 ============ See Accompanying Notes to Financial Statements 9 ILLINOIS POWER COMPANY INCENTIVE SAVINGS PLAN FOR EMPLOYEES COVERED UNDER A COLLECTIVE BARGAINING AGREEMENT Statement of Net Assets Available for Benefits with Fund Information as of December 31, 1997 Fidelity Illinova Equity Stock Income Fund Fund ASSETS: Cash and Temporary Cash Investments $ 225,140 $ 0 Investments at Fair Value 23,978,597 22,793,804 ----------- ----------- Total Investments 24,203,737 22,793,804 Dividends and Interest Receivable 1,009 0 Employee Contributions Receivable 22,489 88,452 Employer Contributions Receivable 623,739 0 Loan Repayments Receivable 1,116 16,526 Loans Outstanding 0 0 ----------- ----------- Other Assets 648,353 104,978 ----------- ----------- Total Assets 24,852,090 22,898,782 ----------- ----------- LIABILITIES: Accrued Expenses 2,469 0 ----------- ----------- Total Liabilities 2,469 0 ----------- ----------- NET ASSETS AVAILABLE FOR BENEFITS $24,849,621 $22,898,782 =========== =========== See Accompanying Notes to Financial Statements 10 ILLINOIS POWER COMPANY INCENTIVE SAVINGS PLAN FOR EMPLOYEES COVERED UNDER A COLLECTIVE BARGAINING AGREEMENT Statement of Net Assets Available for Benefits with Fund Information as of December 31, 1997 Fidelity Retirement Growth Loan Fund Fund ASSETS: Cash and Temporary Cash Investments $ 0 $ 0 Investments at Fair Value 20,643,042 0 ----------- ---------- Total Investments 20,643,042 0 Dividends and Interest Receivable 0 0 Employee Contributions Receivable 84,167 0 Employer Contributions Receivable 0 0 Loan Repayments Receivable 18,408 (60,929) Loans Outstanding 0 3,178,759 ----------- ---------- Other Assets 102,575 3,117,830 ----------- ---------- Total Assets 20,745,617 3,117,830 ----------- ---------- LIABILITIES: Accrued Expenses 0 0 ----------- ---------- Total Liabilities 0 0 ----------- ---------- NET ASSETS AVAILABLE FOR BENEFITS $20,745,617 $3,117,830 =========== ========== See Accompanying Notes to Financial Statements 11 ILLINOIS POWER COMPANY INCENTIVE SAVINGS PLAN FOR EMPLOYEES COVERED UNDER A COLLECTIVE BARGAINING AGREEMENT Statement of Net Assets Available for Benefits with Fund Information as of December 31, 1997 Fidelity Fidelity Asset Asset Manager Manager Income Growth Fund Fund ASSETS: Cash and Temporary Cash Investments $ 0 $ 0 Investments at Fair Value 453,190 3,392,633 -------- ---------- Total Investments 453,190 3,392,633 Dividends and Interest Receivable 0 0 Employee Contributions Receivable 2,500 17,470 Employer Contributions Receivable 0 0 Loan Repayments Receivable 357 3,142 Loans Outstanding 0 0 -------- ---------- Other Assets 2,857 20,612 -------- ---------- Total Assets 456,047 3,413,245 -------- ---------- LIABILITIES: Accrued Expenses 0 0 -------- ---------- Total Liabilities 0 0 -------- ---------- NET ASSETS AVAILABLE FOR BENEFITS $456,047 $3,413,245 ======== ========== See Accompanying Notes to Financial Statements 12 ILLINOIS POWER COMPANY INCENTIVE SAVINGS PLAN FOR EMPLOYEES COVERED UNDER A COLLECTIVE BARGAINING AGREEMENT Statement of Net Assets Available for Benefits with Fund Information as of December 31, 1997 Fidelity Fidelity Asset International Manager Growth and Fund Income Fund ASSETS: Cash and Temporary Cash Investments $ 0 $ 0 Investments at Fair Value 3,930,020 1,467,400 ---------- ---------- Total Investments 3,930,020 1,467,400 Dividends and Interest Receivable 0 0 Employee Contributions Receivable 18,312 9,490 Employer Contributions Receivable 0 0 Loan Repayments Receivable 5,375 2,046 Loans Outstanding 0 0 ---------- ---------- Other Assets 23,687 11,536 ---------- ---------- Total Assets 3,953,707 1,478,936 ---------- ---------- LIABILITIES: Accrued Expenses 0 0 ---------- ---------- Total Liabilities 0 0 ---------- ---------- NET ASSETS AVAILABLE FOR BENEFITS $3,953,707 $1,478,936 ========== ========== See Accompanying Notes to Financial Statements 13 ILLINOIS POWER COMPANY INCENTIVE SAVINGS PLAN FOR EMPLOYEES COVERED UNDER A COLLECTIVE BARGAINING AGREEMENT Statement of Net Assets Available for Benefits with Fund Information as of December 31, 1997 Fidelity Fidelity Managed US Equity Income Index Portfolio Commingled Fund Pool ASSETS: Cash and Temporary Cash Investments $ 0 $ 0 Investments at Fair Value 10,751,250 1,442,606 ----------- ---------- Total Investments 10,751,250 1,442,606 Dividends and Interest Receivable 0 0 Employee Contributions Receivable 37,258 13,897 Employer Contributions Receivable 0 0 Loan Repayments Receivable 9,457 2,204 Loans Outstanding 0 0 ----------- ---------- Other Assets 46,715 16,101 ----------- ---------- Total Assets 10,797,965 1,458,707 ----------- ---------- LIABILITIES: Accrued Expenses 0 0 ----------- ---------- Total Liabilities 0 0 ----------- ---------- NET ASSETS AVAILABLE FOR BENEFITS $10,797,965 $1,458,707 =========== ========== See Accompanying Notes to Financial Statements 14 ILLINOIS POWER COMPANY INCENTIVE SAVINGS PLAN FOR EMPLOYEES COVERED UNDER A COLLECTIVE BARGAINING AGREEMENT Statement of Net Assets Available for Benefits with Fund Information as of December 31, 1997 Founders USAA Growth International Fund Fund ASSETS: Cash and Temporary Cash Investments $ 0 $ 0 Investments at Fair Value 525,426 172,900 -------- -------- Total Investments 525,426 172,900 Dividends and Interest Receivable 0 0 Employee Contributions Receivable 5,662 1,624 Employer Contributions Receivable 0 0 Loan Repayments Receivable 1,017 157 Loans Outstanding 0 0 -------- -------- Other Assets 6,679 1,781 -------- -------- Total Assets 532,105 174,681 -------- -------- LIABILITIES: Accrued Expenses 0 0 -------- -------- Total Liabilities 0 0 -------- -------- NET ASSETS AVAILABLE FOR BENEFITS $532,105 $174,681 ======== ======== See Accompanying Notes to Financial Statements 15 ILLINOIS POWER COMPANY INCENTIVE SAVINGS PLAN FOR EMPLOYEES COVERED UNDER A COLLECTIVE BARGAINING AGREEMENT Statement of Net Assets Available for Benefits with Fund Information as of December 31, 1997 Warburg Pincus Fidelity Emerging Brokerage Growth Link ASSETS: Cash and Temporary Cash Investments $ 0 $ 0 Investments at Fair Value 326,002 516,147 -------- -------- Total Investments 326,002 516,147 Dividends and Interest Receivable 0 0 Employee Contributions Receivable 2,478 293 Employer Contributions Receivable 0 0 Loan Repayments Receivable 289 835 Loans Outstanding 0 0 -------- -------- Other Assets 2,767 1,128 -------- -------- Total Assets 328,769 517,275 -------- -------- LIABILITIES: Accrued Expenses 0 0 -------- -------- Total Liabilities 0 0 -------- -------- NET ASSETS AVAILABLE FOR BENEFITS $328,769 $517,275 ======== ======== See Accompanying Notes to Financial Statements 16 ILLINOIS POWER COMPANY INCENTIVE SAVINGS PLAN FOR EMPLOYEES COVERED UNDER A COLLECTIVE BARGAINING AGREEMENT Statement of Net Assets Available for Benefits with Fund Information as of December 31, 1997 Total All Funds ASSETS: Cash and Temporary Cash Investments $ 225,140 Investments at Fair Value 90,393,017 ----------- Total Investments 90,618,157 Dividends and Interest Receivable 1,009 Employee Contributions Receivable 304,092 Employer Contributions Receivable 623,739 Loan Repayments Receivable 0 Loans Outstanding 3,178,759 ----------- Other Assets 4,107,599 ----------- Total Assets 94,725,756 ----------- LIABILITIES: Accrued Expenses 2,469 ----------- Total Liabilities 2,469 ----------- NET ASSETS AVAILABLE FOR BENEFITS $94,723,287 =========== See Accompanying Notes to Financial Statements 17 ILLINOIS POWER COMPANY INCENTIVE SAVINGS PLAN FOR EMPLOYEES COVERED UNDER A COLLECTIVE BARGAINING AGREEMENT Statement of Changes in Net Assets Available for Benefits with Fund Information for the Year Ended December 31, 1998 Illinova Fidelity Stock Equity Fund Income Fund Sources of Participants' Equity: Contributions: Employee $ 87,346 $1,889,199 Employer 1,387,445 0 ----------- ----------- 1,474,791 1,889,199 ----------- ----------- Plan-to-Plan Transfers (182,169) (385,644) Investment Income: Dividend and Interest Income 1,137,015 1,491,323 Net Change in Fair Value of Investments (1,732,000) 1,262,044 ----------- ----------- (594,985) 2,753,367 ----------- ----------- Application of Participants' Equity: Distributions to Active and Terminated Participants 1,289,513 1,083,400 Administrative and Miscellaneous Expenses 24,431 9,020 ----------- ----------- 1,313,944 1,092,420 ----------- ----------- Increase (Decrease) in Net Assets Available for Benefits prior to interfund transfers (616,307) 3,164,502 Loans to Participants, net (35,148) (170,309) Fund-to-Fund Transfers (274,194) (1,566,690) Net Assets Available for Benefits, Beginning of Year 24,849,621 22,898,782 ----------- ----------- Net Assets Available for Benefits, End of Year $23,923,972 $24,326,285 =========== ============ See Accompanying Notes to Financial Statements 18 ILLINOIS POWER COMPANY INCENTIVE SAVINGS PLAN FOR EMPLOYEES COVERED UNDER A COLLECTIVE BARGAINING AGREEMENT Statement of Changes in Net Assets Available for Benefits with Fund Information for the Year Ended December 31, 1998 Fidelity Retirement Loan Growth Fund Fund Sources of Participants' Equity: Contributions: Employee $ 1,877,258 $ 0 Employer 0 0 ----------- ---------- 1,877,258 0 ----------- ---------- Plan-to-Plan Transfers (214,106) (50,743) Investment Income: Dividend and Interest Income 2,949,899 0 Net Change in Fair Value of Investments 4,577,774 0 ----------- ---------- 7,527,673 0 ----------- ---------- Application of Participants' Equity: Distributions to Active and Terminated Participants 806,565 78,337 Administrative and Miscellaneous Expenses 1,712 0 ----------- ---------- 808,277 78,337 ----------- ---------- Increase (Decrease) in Net Assets Available for Benefits prior to interfund transfers 8,382,548 (129,080) Loans to Participants, net (63,373) 396,535 Fund-to-Fund Transfers 17,856 0 Net Assets Available for Benefits, Beginning of Year 20,745,617 3,117,830 ----------- ---------- Net Assets Available for Benefits, End of Year $29,082,648 $3,385,285 =========== ========== See Accompanying Notes to Financial Statements 19 ILLINOIS POWER COMPANY INCENTIVE SAVINGS PLAN FOR EMPLOYEES COVERED UNDER A COLLECTIVE BARGAINING AGREEMENT Statement of Changes in Net Assets Available for Benefits with Fund Information for the Year Ended December 31, 1998 Fidelity Fidelity Asset Manager Asset Manager Income Fund Growth Fund Sources of Participants' Equity: Contributions: Employee $ 54,493 $ 392,909 Employer 0 0 ---------- ---------- 54,493 392,909 ---------- ---------- Plan-to-Plan Transfers (4,413) 13,367 Investment Income: Dividend and Interest Income 43,633 587,331 Net Change in Fair Value of Investments 5,024 70,438 ---------- ---------- 48,657 657,769 ---------- ---------- Application of Participants' Equity: Distributions to Active and Terminated Participants 28,204 172,481 Administrative and Miscellaneous Expenses 123 61 ---------- ---------- 28,327 172,542 ---------- ---------- Increase (Decrease) in Net Assets Available for Benefits prior to interfund transfers 70,410 891,503 Loans to Participants, net (1,420) (10,081) Fund-to-Fund Transfers (3,694) (149,527) Net Assets Available for Benefits, Beginning of Year 456,047 3,413,245 ---------- ---------- Net Assets Available for Benefits, End of Year $521,343 $4,145,140 ========== ========== See Accompanying Notes to Financial Statements 20 ILLINOIS POWER COMPANY INCENTIVE SAVINGS PLAN FOR EMPLOYEES COVERED UNDER A COLLECTIVE BARGAINING AGREEMENT Statement of Changes in Net Assets Available for Benefits with Fund Information for the Year Ended December 31, 1998 Fidelity Fidelity Asset International Manager Fund Growth and IncomeFund Sources of Participants' Equity: Contributions: Employee $ 399,130 $ 185,717 Employer 0 0 ---------- ---------- 399,130 185,717 ---------- ---------- Plan-to-Plan Transfers 7,016 2,962 Investment Income: Dividend and Interest Income 870,651 62,474 Net Change in Fair Value of Investments (202,415) 90,499 ---------- ---------- 668,236 152,973 ---------- ---------- Application of Participants' Equity: Distributions to Active and Terminated Participants 191,372 25,237 Administrative and Miscellaneous Expenses 91 114 ---------- ---------- 191,463 25,351 ---------- ---------- Increase (Decrease) in Net Assets Available for Benefits prior to interfund transfers 882,919 316,301 Loans to Participants, net (29,182) (1,664) Fund-to-Fund Transfers (50,749) (273,396) Net Assets Available for Benefits, Beginning of Year 3,953,707 1,478,936 ---------- ---------- Net Assets Available for Benefits, End of Year $4,756,695 $1,520,177 ========== ========== See Accompanying Notes to Financial Statements 21 ILLINOIS POWER COMPANY INCENTIVE SAVINGS PLAN FOR EMPLOYEES COVERED UNDER A COLLECTIVE BARGAINING AGREEMENT Statement of Changes in Net Assets Available for Benefits with Fund Information for the Year Ended December 31, 1998 Fidelity Fidelity US Managed Income Equity Index Portfolio Fund Commingled Pool Sources of Participants' Equity: Contributions: Employee $ 815,446 $ 424,590 Employer 0 0 ----------- ---------- 815,446 424,590 ----------- ---------- Plan-to-Plan Transfers (51,032) (142,182) Investment Income: Dividend and Interest Income 679,055 15,701 Net Change in Fair Value of Investments 0 608,595 ----------- ---------- 679,055 624,296 ----------- ---------- Application of Participants' Equity: Distributions to Active and Terminated Participants 830,212 57,007 Administrative and Miscellaneous Expenses 9,524 0 ----------- ---------- 839,736 57,007 ----------- ---------- Increase (Decrease) in Net Assets Available for Benefits prior to interfund transfers 603,733 849,697 Loans to Participants, net (108,139) (2,490) Fund-to-Fund Transfers 606,444 895,726 Net Assets Available for Benefits, Beginning of Year 10,797,965 1,458,707 ----------- ---------- Net Assets Available for Benefits, End of Year $11,900,003 $3,201,640 =========== ========== See Accompanying Notes to Financial Statements 22 ILLINOIS POWER COMPANY INCENTIVE SAVINGS PLAN FOR EMPLOYEES COVERED UNDER A COLLECTIVE BARGAINING AGREEMENT Statement of Changes in Net Assets Available for Benefits with Fund Information for the Year Ended December 31, 1998 Founders USAA Growth International Fund Fund Sources of Participants' Equity: Contributions: Employee $ 193,880 $ 48,832 Employer 0 0 ---------- -------- 193,880 48,832 ---------- -------- Plan-to-Plan Transfers (3,600) 1,617 Investment Income: Dividend and Interest Income 70,177 10,844 Net Change in Fair Value of Investments 140,280 (11,741) ---------- --------- 210,457 (897) ---------- --------- Application of Participants' Equity: Distributions to Active and Terminated Participants 6,352 0 Administrative and Miscellaneous Expenses 0 0 ---------- -------- 6,352 0 ---------- -------- Increase (Decrease) in Net Assets Available for Benefits prior to interfund transfers 394,385 49,552 Loans to Participants, net 12,626 2,587 Fund-to-Fund Transfers 321,491 43,008 Net Assets Available for Benefits, Beginning of Year 532,105 174,681 ---------- -------- Net Assets Available for Benefits, End of Year $1,260,607 $269,828 ========== ======== See Accompanying Notes to Financial Statements 23 ILLINOIS POWER COMPANY INCENTIVE SAVINGS PLAN FOR EMPLOYEES COVERED UNDER A COLLECTIVE BARGAINING AGREEMENT Statement of Changes in Net Assets Available for Benefits with Fund Information for the Year Ended December 31, 1998 Warburg Pincus Fidelity Emerging Brokerage Growth Link Sources of Participants' Equity: Contributions: Employee $ 81,262 $ 12,130 Employer 0 0 -------- ---------- 81,262 12,130 -------- ---------- Plan-to-Plan Transfers (7,416) (58,387) Investment Income: Dividend and Interest Income 1,842 120,932 Net Change in Fair Value of Investments 28,888 0 -------- ---------- 30,730 120,932 -------- ---------- Application of Participants' Equity: Distributions to Active and Terminated Participants 5,032 0 Administrative and Miscellaneous Expenses 0 35,087 -------- ---------- 5,032 35,087 -------- ---------- Increase (Decrease) in Net Assets Available for Benefits prior to interfund transfers 99,544 39,588 Loans to Participants, net 1,563 8,495 Fund-to-Fund Transfers 130,841 302,932 Net Assets Available for Benefits, Beginning of Year 328,769 517,275 -------- ---------- Net Assets Available for Benefits, End of Year $560,717 $868,290 ======== ========== See Accompanying Notes to Financial Statements 24 ILLINOIS POWER COMPANY INCENTIVE SAVINGS PLAN FOR EMPLOYEES COVERED UNDER A COLLECTIVE BARGAINING AGREEMENT Statement of Changes in Net Assets Available for Benefits with Fund Information for the Year Ended December 31, 1998 Total All Funds Sources of Participants' Equity: Contributions: Employee $ 6,462,192 Employer 1,387,445 ------------ 7,849,637 ------------ Plan-to-Plan Transfers (1,074,730) Investment Income: Dividend and Interest Income 8,040,877 Net Change in Fair Value of Investments 4,837,386 ------------ 12,878,263 ------------ Application of Participants' Equity: Distributions to Active and Terminated Participants 4,573,712 Administrative and Miscellaneous Expenses 80,163 ------------ 4,653,875 ------------ Increase (Decrease) in Net Assets Available for Benefits prior to interfund transfers 14,999,295 Loans to Participants, net 0 Fund-to-Fund Transfers 48 Net Assets Available for Benefits, Beginning of Year 94,723,287 ------------ Net Assets Available for Benefits, End of Year $109,722,630 ============ See Accompanying Notes to Financial Statements 25 ILLINOIS POWER COMPANY INCENTIVE SAVINGS PLAN FOR EMPLOYEES COVERED UNDER A COLLECTIVE BARGAINING AGREEMENT Statement of Changes in Net Assets Available for Benefits with Fund Information for the Year Ended December 31, 1997 Illinova Fidelity Stock Equity Fund Income Fund Sources of Participants' Equity: Contributions: Employee $ 87,490 $ 1,890,400 Employer 1,762,154 0 ----------- ----------- 1,849,644 1,890,400 ----------- ----------- Plan-to-Plan Transfers (362,516) (173,427) Investment Income: Dividend and Interest Income 1,097,468 1,309,266 Net Change in Fair Value of Investments (422,572) 3,817,687 ----------- ----------- 674,896 5,126,953 ----------- ----------- Application of Participants' Equity: Distributions to Active and Terminated Participants 1,077,520 756,492 Administrative and Miscellaneous Expenses 37,347 6,314 ----------- ----------- 1,114,867 762,806 ----------- ----------- Increase (Decrease) in Net Assets Available for Benefits prior to interfund transfers 1,047,157 6,081,121 Loans to Participants, net (6,724) (172,034) Fund-to-Fund Transfers (457,237) 741,903 Net Assets Available for Benefits, Beginning of Year 24,266,425 16,247,792 ----------- ----------- Net Assets Available for Benefits, End of Year $24,849,621 $22,898,782 =========== =========== See Accompanying Notes to Financial Statements 26 ILLINOIS POWER COMPANY INCENTIVE SAVINGS PLAN FOR EMPLOYEES COVERED UNDER A COLLECTIVE BARGAINING AGREEMENT Statement of Changes in Net Assets Available for Benefits with Fund Information for the Year Ended December 31, 1997 Fidelity Retirement Loan Growth Fund Fund Sources of Participants' Equity: Contributions: Employee $ 1,890,161 $ 0 Employer 0 0 ----------- ---------- 1,890,161 0 ----------- ---------- Plan-to-Plan Transfers (329,329) (51,768) Investment Income: Dividend and Interest Income 3,644,909 0 Net Change in Fair Value of Investments (295,168) 0 ----------- ---------- 3,349,741 0 ----------- ---------- Application of Participants' Equity: Distributions to Active and Terminated Participants 813,814 79,284 Administrative and Miscellaneous Expenses 1,597 0 ----------- ---------- 815,411 79,284 ----------- ---------- Increase (Decrease) in Net Assets Available for Benefits prior to interfund transfers 4,095,162 (131,052) Loans to Participants, net (155,659) 504,238 Fund-to-Fund Transfers (1,647,064) 0 Net Assets Available for Benefits, Beginning of Year 18,453,178 2,744,644 ----------- ---------- Net Assets Available for Benefits, End of Year $20,745,617 $3,117,830 =========== ========== See Accompanying Notes to Financial Statements 27 ILLINOIS POWER COMPANY INCENTIVE SAVINGS PLAN FOR EMPLOYEES COVERED UNDER A COLLECTIVE BARGAINING AGREEMENT Statement of Changes in Net Assets Available for Benefits with Fund Information for the Year Ended December 31, 1997 Fidelity Fidelity Asset Manager Asset Manager Income Fund Growth Fund Sources of Participants' Equity: Contributions: Employee $71,810 $369,988 Employer 0 0 -------- ---------- 71,810 369,988 -------- ---------- Plan-to-Plan Transfers (8,078) (73,516) Investment Income: Dividend and Interest Income 29,285 367,688 Net Change in Fair Value of Investments 14,718 318,629 -------- ---------- 44,003 686,317 -------- ---------- Application of Participants' Equity: Distributions to Active and Terminated Participants 28,056 77,393 Administrative and Miscellaneous Expenses 135 50 -------- ---------- 28,191 77,443 -------- ---------- Increase (Decrease) in Net Assets Available for Benefits prior to interfund transfers 79,544 905,346 Loans to Participants, net 235 (26,121) Fund-to-Fund Transfers 70,609 119,410 Net Assets Available for Benefits, Beginning of Year 305,659 2,414,610 -------- ---------- Net Assets Available for Benefits, End of Year $456,047 $3,413,245 ======== ========== See Accompanying Notes to Financial Statements 28 ILLINOIS POWER COMPANY INCENTIVE SAVINGS PLAN FOR EMPLOYEES COVERED UNDER A COLLECTIVE BARGAINING AGREEMENT Statement of Changes in Net Assets Available for Benefits with Fund Information for the Year Ended December 31, 1997 Fidelity Fidelity Asset Manager International Growth Fund and Income Fund Sources of Participants' Equity: Contributions: Employee $ 398,097 $ 220,362 Employer 0 0 ---------- ---------- 398,097 220,362 ---------- ---------- Plan-to-Plan Transfers (51,709) 3,351 Investment Income: Dividend and Interest Income 358,830 96,983 Net Change in Fair Value of Investments 386,629 17,608 ---------- ---------- 745,459 114,591 ---------- ---------- Application of Participants' Equity: Distributions to Active and Terminated Participants 210,913 56,396 Administrative and Miscellaneous Expenses 107 200 ---------- ---------- 211,020 56,596 ---------- ---------- Increase (Decrease) in Net Assets Available for Benefits prior to interfund transfers 880,827 281,708 Loans to Participants, net (52,655) (15,525) Fund-to-Fund Transfers (332,512) (269,119) Net Assets Available for Benefits, Beginning of Year 3,458,047 1,481,872 ---------- ---------- Net Assets Available for Benefits, End of Year $3,953,707 $1,478,936 ========== ========== See Accompanying Notes to Financial Statements 29 ILLINOIS POWER COMPANY INCENTIVE SAVINGS PLAN FOR EMPLOYEES COVERED UNDER A COLLECTIVE BARGAINING AGREEMENT Statement of Changes in Net Assets Available for Benefits with Fund Information for the Year Ended December 31, 1997 Fidelity Fidelity US Managed Income Equity Index Portfolio Fund Commingled Pool Sources of Participants' Equity: Contributions: Employee $ 826,080 $ 158,523 Employer 0 0 ----------- ---------- 826,080 158,523 ----------- ---------- Plan-to-Plan Transfers (79,845) 26,171 Investment Income: Dividend and Interest Income 678,958 4,482 Net Change in Fair Value of Investments 0 115,245 ----------- ---------- 678,958 119,727 ----------- ---------- Application of Participants' Equity: Distributions to Active and Terminated Participants 708,412 4,665 Administrative and Miscellaneous Expenses 8,606 0 ----------- ---------- 717,018 4,665 ----------- ---------- Increase (Decrease) in Net Assets Available for Benefits prior to interfund transfers 708,175 299,756 Loans to Participants, net (118,524) 28,254 Fund-to-Fund Transfers (792,296) 1,130,697 Net Assets Available for Benefits, Beginning of Year 11,000,610 0 ----------- ---------- Net Assets Available for Benefits, End of Year $10,797,965 $1,458,707 =========== ========== See Accompanying Notes to Financial Statements 30 ILLINOIS POWER COMPANY INCENTIVE SAVINGS PLAN FOR EMPLOYEES COVERED UNDER A COLLECTIVE BARGAINING AGREEMENT Statement of Changes in Net Assets Available for Benefits with Fund Information for the Year Ended December 31, 1997 Founders USAA Growth International Fund Fund Sources of Participants' Equity: Contributions: Employee $ 55,563 $ 22,288 Employer 0 0 -------- -------- 55,563 22,288 -------- -------- Plan-to-Plan Transfers (3,189) (1,035) Investment Income: Dividend and Interest Income 72,159 12,420 Net Change in Fair Value of Investments (50,169) (12,725) -------- -------- 21,990 (305) -------- -------- Application of Participants' Equity: Distributions to Active and Terminated Participants 0 0 Administrative and Miscellaneous Expenses 0 0 -------- -------- 0 0 -------- -------- Increase (Decrease) in Net Assets Available for Benefits prior to interfund transfers 74,364 20,948 Loans to Participants, net 3,770 1,305 Fund-to-Fund Transfers 453,971 152,428 Net Assets Available for Benefits, Beginning of Year 0 0 -------- -------- Net Assets Available for Benefits, End of Year $532,105 $174,681 ======== ======== See Accompanying Notes to Financial Statements 31 ILLINOIS POWER COMPANY INCENTIVE SAVINGS PLAN FOR EMPLOYEES COVERED UNDER A COLLECTIVE BARGAINING AGREEMENT Statement of Changes in Net Assets Available for Benefits with Fund Information for the Year Ended December 31, 1997 Warburg Pincus Fidelity Emerging Brokerage Growth Link Sources of Participants' Equity: Contributions: Employee $35,886 $3,821 Employer 0 0 -------- -------- 35,886 3,821 -------- -------- Plan-to-Plan Transfers (1,375) 0 Investment Income: Dividend and Interest Income 19,692 2,396 Net Change in Fair Value of Investments 4,894 0 -------- -------- 24,586 2,396 -------- -------- Application of Participants' Equity: Distributions to Active and Terminated Participants 0 0 Administrative and Miscellaneous Expenses 0 57,920 -------- -------- 0 57,920 -------- -------- Increase (Decrease) in Net Assets Available for Benefits prior to interfund transfers 59,098 (51,703) Loans to Participants, net 803 8,637 Fund-to-Fund Transfers 268,869 560,341 Net Assets Available for Benefits, Beginning of Year 0 0 -------- -------- Net Assets Available for Benefits, End of Year $328,769 $517,275 ======== ======== See Accompanying Notes to Financial Statements 32 ILLINOIS POWER COMPANY INCENTIVE SAVINGS PLAN FOR EMPLOYEES COVERED UNDER A COLLECTIVE BARGAINING AGREEMENT Statement of Changes in Net Assets Available for Benefits with Fund Information for the Year Ended December 31, 1997 Total All Funds Sources of Participants' Equity: Contributions: Employee $ 6,030,469 Employer 1,762,154 ----------- 7,792,623 ----------- Plan-to-Plan Transfers (1,106,265) Investment Income: Dividend and Interest Income 7,694,537 Net Change in Fair Value of Investments 3,894,776 ----------- 11,589,313 ----------- Application of Participants' Equity: Distributions to Active and Terminated Participants 3,812,945 Administrative and Miscellaneous Expenses 112,276 ----------- 3,925,221 ----------- Increase (Decrease) in Net Assets Available for Benefits prior to interfund transfers 14,350,451 Loans to Participants, net 0 Fund-to-Fund Transfers 0 Net Assets Available for Benefits, Beginning of Year 80,372,837 ----------- Net Assets Available for Benefits, End of Year $94,723,287 =========== See Accompanying Notes to Financial Statements 33 ILLINOIS POWER COMPANY INCENTIVE SAVINGS PLAN FOR EMPLOYEES COVERED UNDER A COLLECTIVE BARGAINING AGREEMENT NOTES TO FINANCIAL STATEMENTS NOTE 1 - DESCRIPTION OF PLAN: General: The Illinois Power Company Incentive Savings Plan for Employees Covered Under a Collective Bargaining Agreement (the Plan) is sponsored and administered by Illinois Power Company (the Company). The Plan became effective as of January 1, 1987. Assets of the Plan are held and managed by a Trustee. Effective July 1, 1995, Fidelity Management Trust Company of Boston, Massachusetts became trustee and custodian. The purpose of the Plan is to enable participants to invest a portion of their salaries in tax-deferred savings pursuant to section 401(k) of the Internal Revenue Code (IRC). The Plan is subject to and in compliance with the provisions of the Employee Retirement Income Security Act of 1974 (ERISA) as amended. Illinois Power Company is a wholly-owned subsidiary of Illinova Corporation (Illinova). Although Illinois Power Company remains the sponsor and administrator of the Plan, all shares of stock contributed to participants' accounts or held in the Stock Fund are shares of Illinova. Participation: All employees of the Company who are covered under a collective bargaining agreement are eligible to participate in the Plan. Participation is voluntary. Active participation ceases upon termination of employment with the Company. Former employees can choose to liquidate their accounts or to leave them in the Plan. Earnings will continue to accrue on undistributed accounts. All accounts, whether for active or former employees, are fully vested. Plan Changes and Amendments: Effective April 1, 1997, new contributions and balances transferred from other options could be invested in five new alternatives. The one new Fidelity fund was the Fidelity U.S. Equity Index Commingled Pool. Three mutual funds managed by other firms include the Founders Growth Fund, USAA International Fund, and the Warburg Pincus Emerging Growth Fund. In addition, participants are 34 able to buy individual stocks and make other investment choices. Additional fees apply for this service which is called Fidelity Brokerage Link. Fidelity Management Trust Company will continue to handle transactions and serve employees accounts, regardless of which funds the participant invests in. New contributions could also be made, or balances transferred to, the Stock Fund, the Fidelity Equity Income Fund, the Fidelity Retirement Growth Fund, the Fidelity Asset Manager Income Fund, the Fidelity Asset Manager Growth Fund, the Fidelity Asset Manager Fund, the Fidelity International Growth and Income Fund, or the Fidelity Managed Income Portfolio Fund, which were not affected by the changes. Effective June 1997, the Plan was amended to reflect the change to daily valuation and elections through telephonic delivery; permit participants to request a loan from amounts that have been rolled over to the Plan; clarify that if a participant's additions exceeds the limits of section 415 of the IRC, correction will first be made by distributing the participant's after-tax and 401(k) contributions; and clarify that a participant must be an active employee on the last day of the plan year to receive a Company Incentive Contribution for that plan year. Contributions: Participants may make before-tax contributions by payroll deduction up to the legal dollar limit. Participants may also make after-tax contributions in cash or by payroll deduction. Total contributions are limited to the applicable percentage limit set by law. A participant may also "roll-over" into the Plan amounts previously invested in another retirement plan. Participants have the option of investing their contributions into any or all of the investment funds in the proportions they choose. They may change their investment options or transfer amounts from fund to fund at any time. Amounts are transferred to or from the Illinois Power Company Incentive Savings Plan as participants shift out of or into positions covered by a collective bargaining agreement. These transfers are shown in the Statement of Changes in Net Assets Available for Benefits with Fund Information as Plan-to-Plan Transfers. The Company contributes a monthly matching contribution to the Plan equal to 50% of the first $80 of the participants' monthly before-tax contributions and 25% of the balance of deferrals per month, up to 6% of the employee's base earnings for the month. All Company matching contributions are paid in units of Illinova common stock and are contained in the Stock Fund. Dividends on stock held in the Stock Fund are also invested in the Illinova Stock Fund. 35 The Company has an Incentive Compensation arrangement in which all participants employed by the Company on the last day of the Plan year are eligible to earn cash and Illinova stock if specified performance goals are met. Units awarded under the Incentive Compensation arrangement are held in the Stock Fund. Dividends earned on these units are also invested in the Stock Fund. Shares previously held in the Tax Reduction Act Stock Ownership Plan (TRASOP), which was eliminated in 1988, are also held in the Stock Fund. ESOP: In October 1990, the Board of Directors authorized amendments to the Incentive Savings Plan to provide for the implementation of an Employee Stock Ownership Plan (ESOP) arrangement. Under this arrangement, the Company, pursuant to authorization granted by the Illinois Commerce Commission (ICC), loaned $35 million to the Trustee of the ESOP in January 1991. The loan proceeds were used to purchase 2,031,445 shares of the Company's common stock on the open market. These shares are held in a suspense account under the Plans and are being distributed to the accounts of participating employees as the loan is repaid by the Trustee with funds contributed by Illinois Power, together with dividends on the shares acquired with the loan proceeds. The shares are allocated to the accounts of eligible participating employees as they are earned through the Match or Incentive Compensation features of the Plan. As of December 31, 1998, 341,852 and 340,566 shares have been allocated to bargaining unit employees for Matching Contributions and Company Incentive Contributions, respectively. Distributions: Distributions as provided for in the Plan are made to retired Plan participants or their beneficiaries. Distributions must begin by April 1st of the calendar year following the later of the calendar year in which the employee reaches age 70 1/2 or the calendar year in which the employee retires. All distributions are made in the form of cash and/or Illinova common stock. Forfeitures: Each participant is responsible for supplying the Company with a current address. If the address of the participant (or the participant's beneficiary in 36 the event of participant's death) is not known to the Company within four years (three years in the event of participant's death) of the date on which distribution may first be made, the adjusted balance in the participant's account shall be deemed a forfeiture and shall be used to reduce matching contributions and company incentive contributions. In the event that the participant or beneficiary makes a valid claim for the forfeited amount, the benefits shall be reinstated. Loans: The Plan allows participants to borrow from their before-tax and TRASOP accounts an amount not to exceed the lesser of $50,000 reduced by the excess of the highest outstanding balance of loans during the one-year period before the date the loan is made over the outstanding balance of loans on the date the loan is made or 50% of the vested account balance. Interest is charged on these loans at a rate commensurate with interest rates charged by persons in the business of lending money for similar type loans. For 1998, the interest rate ranged from 8.75% to 9.50%, however for 1997 the rate was 9.50%. All loans made will mature and be payable in full no earlier than one year and no later than five years from the date of the loan. An exception exists when the loan is used by the participant to acquire his or her principal residence. In this case, the loan will mature and be payable in full no earlier than one year and no later than ten years from the date of the loan. Loan repayments are made by payroll deductions authorized by the participant and by optional cash payments. Interest paid on the loan is credited to the participant's account. The Trustee maintains a Loan Fund to hold the balances of participants' loans. Plan Termination: It is expected that the Plan will be continued, but the right to amend, modify or terminate the Plan is reserved by the Company provided that such action does not retroactively and adversely affect the rights of any participant or beneficiary under the Plan. 37 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Basis of Accounting: The accompanying Plan financial statements are prepared on the accrual basis of accounting. Investments: The guaranteed investment fund is valued at contract value as reported to the Plan by the Trustee. Participant notes receivable included in the loan fund are valued at cost, which approximates fair value. Other investments are stated at current value based on the latest quoted market price. Income: Interest and dividend income is accrued as earned. Net appreciation (depreciation) of investments is comprised of realized and unrealized gains and losses. Realized gains or losses represent the difference between proceeds received upon sale and the average cost of the investment. Unrealized gain or loss is the difference between market value and cost of investments retained in the Plan (at financial statement date). For the purpose of allocation to participants, the Illinova common stock is valued by the Plan at market value on the date of allocation and current value is used at the time of distribution to participants resulting in a realized gain or loss as reflected in the Statement of Changes in Net Assets Available for Benefits with Fund Information. Expenses: Certain expenses Incurred in the administration of the Plan are paid by the Plan rather than the Company. The expenses paid by the Plan include ESOP record keeping fees and trustee administrative fees. All other expenses incurred in the operation of the Plan are paid by the Company. Income Taxes: The Internal Revenue Service has determined and informed the Company by a letter dated January 8, 1996, that the Plan and related trust are designed in accordance with applicable sections of the IRC. The plan has been amended since receiving the determination letter. However, the Plan Administrator and the Plan's tax counsel believe that the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRC. 38 Use of Estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Reclassifications Certain reclassifications have been made to the 1997 financial statements to conform with the 1998 presentation. 39 NOTE 3 - INVESTMENTS Plan investments are received, invested and held by the Trustee. Individual investments that represent 5% or more of the Plan's net assets available for benefits include: December 31, 1998 Investments at Fair Value as Determined by Quoted Market Price Units Value Cost Illinova Common Stock 933,011 $23,325,275 $19,405,395 Fidelity Equity Income Fund 437,125 $24,282,284 $17,266,208 Fidelity Retirement Growth Fund 1,414,065 $29,002,482 $25,539,827 Fidelity Managed Income Portfolio Fund 11,877,171 $11,877,172 $11,877,171 December 31, 1997 Investments at Fair Value as Determined by Quoted Market Price Units Value Cost Illinova Common Stock 890,194 23,978,597 18,813,033 Fidelity Equity Income Fund 434,913 $22,793,804 $16,044,188 Fidelity Retirement Growth Fund 1,225,106 $20,643,042 $21,559,849 Fidelity Managed Income Portfolio Fund 10,751,250 $10,751,250 $10,751,250 40 NOTE 4 - TRANSACTIONS WITH PARTIES-IN-INTEREST Fidelity Management Trust Company, the Trustee for the Plan, purchased shares of Illinova Common Stock at a cost of $3,525,126 in 286 transactions and sold shares, the proceeds of which totaled $3,393,270, in 264 transactions. The net gain on these sales was $650,848. The transactions are allowable party-in-interest transactions under Section 408(3) of ERISA and the regulations thereunder. The majority of the assets of the Plan are invested in Fidelity Investments mutual funds. The Plan also invests in a short-term money market fund, the Fidelity Investments Cash Portfolio. The transactions with these Fidelity funds are allowable party-in-interest transactions under Section 408(b)(8) of ERISA and the regulations thereunder. The number of purchase transactions with each fund and the dollar amount of purchases for each fund as of December 31, 1998 are listed below: Purchase Purchase Fund Transactions Amount Fidelity Equity Income Fund 223 $5,869,785 Fidelity Retirement Growth Fund 216 $7,378,990 Fidelity Asset Manager Income Fund 86 $213,132 Fidelity Asset Manager Growth Fund 148 $1,338,823 Fidelity Asset Manager Fund 158 $1,625,100 Fidelity International Growth and Income Fund 120 $324,653 Fidelity Managed Income Portfolio Fund 174 $4,914,087 Fidelity US Equity Index Commingled Pool 154 $1,904,825 Founders Growth Fund 123 $845,486 USAA International Fund 81 $212,858 Warburg Pincus Emerging Growth 104 $296,104 Fidelity Brokerage Link 58 $454,237 Cash Portfolio 146 $4,308,151 41 The number of sales transactions with each fund, the dollar amount of sales, and the gain on these sales for each fund as of December 31, 1998 are shown below: Sales Trans- Sales Fund actions Amount Gain/(Loss) Fidelity Equity Income Fund 198 $5,643,348 $995,583 Fidelity Retirement Growth Fund 188 $3,597,324 $198,313 Fidelity Asset Manager Income Fund 36 $151,426 $5,331 Fidelity Asset Manager Growth Fund 99 $666,176 $108,086 Fidelity Asset Manager Fund 126 $606,253 $79,305 Fidelity International Growth and Income Fund 86 $366,732 $36,177 Fidelity Managed Income Portfolio Fund 187 $3,788,166 $0 Fidelity US Equity Index Commingled Pool 77 $765,429 $42,481 Founders Growth Fund 52 $255,992 $7,561 USAA International Fund 26 $105,042 ($7,608) Warburg Pincus Emerging Growth 35 $92,226 ($1,449) Fidelity Brokerage Link 252 $103,579 $0 Cash Portfolio 211 $4,215,173 $0 42 NOTE 5 - SUBSEQUENT EVENT Illinova has announced an intention to merge with Dynegy. Status of the plan following the merger has not been determined. 43 Item 27a Schedule I Illinois Power Company Incentive Savings Plan for Employees Covered Under a Collective Bargaining Agreement Schedule of Assets Held for Investment Purposes December 31, 1998 Identity of Issue/ Current Description of Investment Cost Value *Illinova Common Stock $19,405,395 $23,325,275 *Fidelity Equity Income Fund $17,266,208 $24,282,284 *Fidelity Retirement Growth Fund $25,539,827 $29,002,482 *Fidelity Asset Manager Income Fund $498,402 $519,921 *Fidelity Asset Manager Growth Fund $3,682,573 $4,135,718 *Fidelity Asset Manager Fund $4,461,886 $4,746,452 *Fidelity International Growth and Income Fund $1,365,092 $1,515,820 *Fidelity Managed Income Portfolio Fund $11,877,171 $11,877,172 *Fidelity US Equity Index Commingled Pool $2,521,443 $3,190,596 *Founders Growth Fund $1,172,193 $1,255,200 *USAA International Fund $287,828 $268,976 *Warburg Pincus Emerging Growth $524,811 $558,770 *Fidelity Brokerage Link $866,805 $866,805 *Participant Loans** $3,447,568 $3,447,568 ---------- ----------- $92,917,202 $108,993,039 *A party-in-interest to the Plan **Interest rates on loans range from 7% to 11%
Item 27d Schedule II Illinois Power Company Incentive Savings Plan for Employees Covered Under a Collective Bargaining Agreement Schedule of Reportable Transactions * for the Year Ended December 31, 1998 Expense Current Identity of Incurred Value of Party Involved/ Purchase Selling Lease with Cost of Asset on Description of Asset Price Price Rental Trans Asset Trans DT Net Gain - -------------------- ---------- ---------- ------ -------- ---------- ---------- ---------- Illinova Common Stock $3,525,126 $3,393,270 N/A N/A $2,742,422 $3,393,270 $ 650,848 Fidelity Equity Income Fund $5,869,785 $5,643,349 N/A N/A $4,647,766 $5,643,349 $ 995,583 Fidelity Retirement Growth Fund $7,378,990 $3,597,324 N/A N/A $3,399,011 $3,597,324 $ 198,313 Fidelity Managed Income Portfolio Fund $4,914,087 $3,788,166 N/A N/A $3,788,166 $3,788,166 0
* Transactions or series of transactions in excess of 5% of the current value of the Plan's assets as of December 31, 1997 as defined in Section 2520.103-6 of the Department of Labor Rules and Regulations for Reporting and Disclosure under ERISA. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, Illinois Power Company has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. Illinois Power Company Incentive Savings Plan for Employees Covered Under a Collective Bargaining Agreement by: /s/Kim B. Leftwich Kim B. Leftwich Vice-President Date: June 28, 1999 EXHIBIT INDEX Exhibits Filed Herewith Exhibit No. Description - -------------------------------------------------------------------------------- 1 Consent of Independent Accountants Exhibit 1 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 33-60278) of Illinova Corporation of our report dated June 18, 1999 relating to the financial statements of Illinois Power Company Incentive Savings Plan for Employees Covered Under a Collective Bargaining Agreement for the year ended December 31, 1998, which appears in this Form 11-K. by /s/PricewaterhouseCoopers LLP St. Louis, Missouri June 28, 1999 -----END PRIVACY-ENHANCED MESSAGE-----