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
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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