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)
July 16, 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
Certain information contained in this report is forward-looking
information based on current expectations and plans that involve risks and
uncertainties. Forward-looking information includes, among other things,
statements concerning estimates and projections of earnings. Although Illinova
believes 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.
The following factors, in addition to those discussed in the company's
Annual Report on Form 10-K for the year ended Dec. 31, 1998, and subsequent
securities filings, could cause results to differ materially from management
expectations as suggested by such forward-looking information: 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 impacts 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.
ILLINOVA REPORTS SECOND-QUARTER EARNINGS
On July 14, 1999, Illinova Corporation announced second-quarter 1999
earnings of $8.7 million, or 12 cents per common share (basic and diluted). This
compares to a loss of $47 million, or 66 cents per common share, for the same
period last year.
Year-to-date earnings are $26.4 million, or 38 cents per common share,
compared to a loss of $24 million, or 34 cents per common share, for the same
period in 1998.
Based on financial results for the first half of 1999, and excluding
the impacts of merger-related expenses, Illinova remains on target to meet its
earlier projection of $1.50 per share earnings for the year.
Major factors affecting the current quarter's results were the 15
percent residential electric rate reduction which began Aug. 1, 1998, and the
revised management services agreement for Clinton Power Station under which PECO
Energy assumed the plant's direct operating and capital expenses starting April
1, 1999. The rate decrease reduced revenues by $14.9 million, or 12 cents per
share, while the restructured agreement for Clinton trimmed IP's expenses by
$16.9 million, or 14 cents per share, from second quarter 1998.
Second-quarter 1999 expenses also include $7.3 million related to
Illinova's recently announced merger with Dynegy; $5 million related to
amortization of the regulatory asset created as part of the 1998
quasi-reorganization; and $6.4 million in interest due to changes in net present
value of decommissioning assets and liabilities, an expense that will be
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reversed if the sale of Clinton Power Station to AmerGen is completed by year's
end. Without these three expense items, earnings for the quarter would have been
$19.9 million, or approximately 27 cents per share.
Last year's second-quarter loss of 66 cents per share was primarily due to
$107 million in higher replacement power costs following last June's
unprecedented spike in market prices for electricity. Without the $107 million
in higher replacement power costs, second-quarter 1998 earnings would have been
24 cents per share.
Illinova Corporation [NYSE:ILN], headquartered in Decatur, Ill., is an
energy services holding company with $6.8 billion in assets and annual revenues
of $2.4 billion. Its subsidiaries include Illinois Power, an electric and
natural gas utility that serves approximately 650,000 customers over a
15,000-square-mile area of Illinois; 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.
RESTATEMENT OF THE CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE TWELVE
MONTHS ENDED JUNE 30, 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
condensed consolidated statements of income for the twelve months ended June 30,
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 June 30,
1999 by $196.5 million, or $2.78 per common share (basic and diluted).
Please see the attached Illinova Condensed Consolidated Statements of Income.
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Item 7. Financial Statements
(A) Financial Statements
(99.1) Illinova Consolidated Income Statements
4
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
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Exhibit Index
The following Exhibits are hereby filed as part of this Current Report on Form
8-K/A:
Exhibit
Number Description
99.1 Illinova Consolidated Income Statements
6