SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996
Commission file number 1-3004
Illinois Power Company
Incentive Savings Plan
(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
FINANCIAL STATEMENTS
AND ADDITIONAL INFORMATION
DECEMBER 31, 1996
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
Index to Financial Statements and Additional Information
Financial Statements: Page
Report of Independent Accountants 1
Statement of Net Assets Available for Benefits
with fund information as of December 31, 1996
and 1995 2-12
Statement of Changes in Net Assets Available
for Benefits with fund information for the
years ended December 31, 1996 and 1995 13-24
Notes to Financial Statements 25-31
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
<TABLE>
Statement of Net Assets Available for Benefits
As of December 31, 1996
<C> <C> <C>
Illinova Equity
Stock Income
Fund Fund
ASSETS:
Cash and Temporary Cash Investments $239,867 $0
Investments at Fair Value 23,995,153 32,696,498
----------- -----------
Total Investments 24,235,020 32,696,498
Dividends and Interest Receivable 954 0
Employee Contributions Receivable 1,768 54,454
Employer Contributions Receivable 1,166,375 0
Loan Repayments Receivable 1,446 12,518
Loans Outstanding 0 0
----------- -----------
Other Assets 1,170,543 66,972
----------- -----------
Total Assets 25,405,563 32,763,470
----------- -----------
LIABILITIES:
Accrued Expenses 1,906 0
----------- -----------
Total Liabilities 1,906 0
----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $25,403,657 $32,763,470
=========== ===========
See Accompanying Notes to Financial Statements
</TABLE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
<TABLE>
Statement of Net Assets Available for Benefits
As of December 31, 1996
<C> <C> <C>
Retirement
Growth Loan
Fund Fund
ASSETS:
Cash and Temporary Cash Investments $0 $0
Investments at Fair Value 30,209,967 0
----------- ----------
Total Investments 30,209,967 0
Dividends and Interest Receivable 0 0
Employee Contributions Receivable 61,030 0
Employer Contributions Receivable 0 0
Loan Repayments Receivable 12,184 (41,691)
Loans Outstanding 0 3,959,549
----------- ----------
Other Assets 73,214 3,917,858
----------- ----------
Total Assets 30,283,181 3,917,858
----------- ----------
LIABILITIES:
Accrued Expenses 0 0
----------- ----------
Total Liabilities 0 0
----------- ----------
NET ASSETS AVAILABLE FOR BENEFITS $30,283,181 $3,917,858
=========== ===========
See Accompanying Notes to Financial Statements
</TABLE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
<TABLE>
Statement of Net Assets Available for Benefits
As of December 31, 1996
<C> <C> <C>
Asset Asset
Manager Manager
Income Growth
Fund Fund
ASSETS:
Cash and Temporary Cash Investments $0 $0
Investments at Fair Value 1,119,400 5,160,883
----------- ----------
Total Investments 1,119,400 5,160,883
Dividends and Interest Receivable 0 0
Employee Contributions Receivable 2,886 12,849
Employer Contributions Receivable 0 0
Loan Repayments Receivable 308 2,247
Loans Outstanding 0 0
----------- ----------
Other Assets 3,194 15,096
----------- ---------
Total Assets 1,122,594 5,175,979
----------- ----------
LIABILITIES:
Accrued Expenses 0 0
----------- ----------
Total Liabilities 0 0
----------- ---------
NET ASSETS AVAILABLE FOR BENEFITS $1,122,594 $5,175,979
=========== ===========
See Accompanying Notes to Financial Statements
</TABLE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
<TABLE>
Statement of Net Assets Available for Benefits
As of December 31, 1996
<C> <C> <C>
Asset
Manager International
Fund Fund
ASSETS:
Cash and Temporary Cash Investments $0 $0
Investments at Fair Value 8,191,890 3,742,593
----------- ---------
Total Investments 8,191,890 3,742,593
Dividends and Interest Receivable 0 0
Employee Contributions Receivable 16,253 9,682
Employer Contributions Receivable 0 0
Loan Repayments Receivable 3,067 3,310
Loans Outstanding 0 0
----------- ----------
Other Assets 19,320 12,992
----------- ----------
Total Assets 8,211,210 3,755,585
----------- ----------
LIABILITIES:
Accrued Expenses 0 0
----------- ----------
Total Liabilities 0 0
----------- ----------
NET ASSETS AVAILABLE FOR BENEFITS $8,211,210 $3,755,585
=========== ===========
See Accompanying Notes to Financial Statements
</TABLE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
<TABLE>
Statement of Net Assets Available for Benefits
As of December 31, 1996
<C> <C> <C>
Managed
Income
Portfolio Total All
Fund Funds
ASSETS:
Cash and Temporary Cash Investments $0 $239,867
Investments at Fair Value 15,051,091 120,167,475
----------- ------------
Total Investments 15,051,091 120,407,342
Dividends and Interest Receivable 0 954
Employee Contributions Receivable 19,866 178,788
Employer Contributions Receivable 0 1,166,375
Loan Repayments Receivable 6,611 0
Loans Outstanding 0 3,959,549
----------- ------------
Other Assets 26,477 5,305,666
----------- ------------
Total Assets 15,077,568 125,713,008
----------- ------------
LIABILITIES:
Accrued Expenses 0 1,906
----------- ------------
Total Liabilities 0 1,906
----------- ------------
NET ASSETS AVAILABLE FOR BENEFITS $15,077,568 $125,711,102
=========== ============
See Accompanying Notes to Financial Statements
</TABLE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
<TABLE>
Statement of Net Assets Available for Benefits
As of December 31, 1995
<C> <C> <C>
Guaranteed Illinova
Investment Stock Fund
Fund
ASSETS:
Cash and Temporary Cash Investments $0 $258,505
Investments at Fair Value 4,335,318 24,838,590
----------- ---------
Total Investments 4,335,318 25,097,095
Dividends and Interest Receivable 0 1,066
Employee Contributions Receivable 0 4,794
Employer Contributions Receivable 0 2,154,253
Loan Repayments Receivable 0 27
Loans Outstanding 0 0
----------- ---------
Other Assets 0 2,160,140
----------- ---------
Total Assets 4,335,318 27,257,235
----------- -----------
LIABILITIES:
Accrued Expenses 0 2,312
----------- ----------
Total Liabilities 0 2,312
----------- ----------
NET ASSETS AVAILABLE FOR BENEFITS $4,335,318 $27,254,923
=========== ===========
See Accompanying Notes to Financial Statements
</TABLE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
<TABLE>
Statement of Net Assets Available for Benefits
As of December 31, 1995
<C> <C> <C>
Equity Retirement
Income Growth
Fund Fund
ASSETS:
Cash and Temporary Cash Investments $0 $0
Investments at Fair Value 25,250,883 29,631,770
----------- -----------
Total Investments 25,250,883 29,631,770
Dividends and Interest Receivable 0 0
Employee Contributions Receivable 0 0
Employer Contributions Receivable 0 0
Loan Repayments Receivable 0 0
Loans Outstanding 0 0
----------- ----------
Other Assets 0 0
----------- ----------
Total Assets 25,250,883 29,631,770
----------- -----------
LIABILITIES:
Accrued Expenses 0 0
----------- ----------
Total Liabilities 0 0
----------- ----------
NET ASSETS AVAILABLE FOR BENEFITS $25,250,883 $29,631,770
=========== ===========
See Accompanying Notes to Financial Statements
</TABLE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
<TABLE>
Statement of Net Assets Available for Benefits
As of December 31, 1995
<C> <C> <C>
Asset
Manager
Loan Income
Fund Fund
ASSETS:
Cash and Temporary Cash Investments $0 $0
Investments at Fair Value 0 915,918
----------- ----------
Total Investments 0 915,918
Dividends and Interest Receivable 0 0
Employee Contributions Receivable 0 0
Employer Contributions Receivable 0 0
Loan Repayments Receivable 0 0
Loans Outstanding 3,652,148 0
----------- ----------
Other Assets 3,652,148 0
----------- ----------
Total Assets 3,652,148 915,918
----------- ----------
LIABILITIES:
Accrued Expenses 0 0
----------- ----------
Total Liabilities 0 0
----------- ----------
NET ASSETS AVAILABLE FOR BENEFITS $3,652,148 $915,918
=========== ==========
See Accompanying Notes to Financial Statements
</TABLE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
<TABLE>
Statement of Net Assets Available for Benefits
As of December 31, 1995
<C> <C> <C>
Asset
Manager Asset
Growth Manager
Fund Fund
ASSETS:
Cash and Temporary Cash Investments $0 $0
Investments at Fair Value 3,624,997 7,690,492
----------- ----------
Total Investments 3,624,997 7,690,492
Dividends and Interest Receivable 0 0
Employee Contributions Receivable 0 0
Employer Contributions Receivable 0 0
Loan Repayments Receivable 0 0
Loans Outstanding 0 0
----------- ----------
Other Assets 0 0
----------- ----------
Total Assets 3,624,997 7,690,492
----------- -----------
LIABILITIES:
Accrued Expenses 0 0
----------- -----------
Total Liabilities 0 0
----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $3,624,997 $7,690,492
=========== ===========
See Accompanying Notes to Financial Statements
</TABLE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
<TABLE>
Statement of Net Assets Available for Benefits
As of December 31, 1995
<C> <C> <C>
Managed Income
International Portfolio
Fund Fund
ASSETS:
Cash and Temporary Cash Investments $0 $0
Investments at Fair Value 2,815,240 11,506,630
----------- -----------
Total Investments 2,815,240 11,506,630
Dividends and Interest Receivable 0 0
Employee Contributions Receivable 0 0
Employer Contributions Receivable 0 0
Loan Repayments Receivable 0 0
Loans Outstanding 0 0
----------- ----------
Other Assets 0 0
----------- -----------
Total Assets 2,815,240 11,506,630
----------- -----------
LIABILITIES:
Accrued Expenses 0 0
----------- -----------
Total Liabilities 0 0
----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $2,815,240 $11,506,630
=========== ===========
See Accompanying Notes to Financial Statements
</TABLE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
<TABLE>
Statement of Net Assets Available for Benefits
As of December 31, 1995
<C> <C>
Total All
Funds
ASSETS:
Cash and Temporary Cash Investments $258,505
Investments at Fair Value 110,609,838
----------
Total Investments 110,868,343
Dividends and Interest Receivable 1,066
Employee Contributions Receivable 4,794
Employer Contributions Receivable 2,154,253
Loan Repayments Receivable 27
Loans Outstanding 3,652,148
----------
Other Assets 5,812,288
----------
Total Assets 116,680,631
---------
LIABILITIES:
Accrued Expenses 2,312
----------
Total Liabilities 2,312
----------
NET ASSETS AVAILABLE FOR BENEFITS $116,678,319
============
See Accompanying Notes to Financial Statements
</TABLE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
<TABLE>
Statement of Changes in Net Assets Available for Benefits
for the Year Ended December 31, 1996
<C> <C> <C>
Guaranteed Illinova
Investment Stock
Fund Fund
Sources of Participants' Equity:
Contributions:
Employee $0 $113,909
Employer 0 2,427,868
Fund-to-Fund Transfers (4,053,196) (1,117,223)
Plan-to-Plan Transfers 8,632 240,896
Loan Repayments 0 20,276
--------- ---------
(4,044,564) (1,685,726)
----------- ------------
Investment Income:
Dividend and Interest Income 93,555 985,562
Net Change in Fair Value of
Investments 0 (2,123,802)
--------- ----------
93,555 (1,138,240)
--------- -----------
Application of Participants' Equity:
Loans to Participants 34,415 46,161
Distributions to Active and
Terminated Participants 349,894 2,329,230
Administrative and Miscellaneous
Expenses 0 23,361
--------- -----------
384,309 2,398,752
--------- -----------
Increase (Decrease) in Net Assets
Available for Benefits (4,335,318) (1,851,266)
Net Assets Available for Benefits,
Beginning of Year 4,335,318 27,254,923
---------- ----------
Net Assets Available for Benefits,
End of Year $0 $25,403,657
========== ===========
See Accompanying Notes to Financial Statements
</TABLE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
<TABLE>
Statement of Changes in Net Assets Available for Benefits
for the Year Ended December 31, 1996
<C> <C> <C>
Equity Retirement
Income Growth
Fund Fund
Sources of Participants' Equity:
Contributions:
Employee $2,088,452 $2,701,215
Employer 0 0
Fund-to-Fund Transfers 2,267,800 (2,163,022)
Plan-to-Plan Transfers 196,007 132,054
Loan Repayments 492,947 538,025
----------- -----------
5,045,206 1,208,272
----------- -----------
Investment Income:
Dividend and Interest Income 2,018,141 3,751,565
Net Change in Fair Value of
Investments 3,507,230 (1,328,460)
----------- -----------
5,525,371 2,423,105
----------- -----------
Application of Participants' Equity:
Loans to Participants 575,901 654,656
Distributions to Active and
Terminated Participants 2,478,672 2,324,197
Administrative and Miscellaneous
Expenses 3,417 1,113
----------- -----------
3,057,990 2,979,966
----------- -----------
Increase (Decrease) in Net Assets
Available for Benefits 7,512,587 651,411
Net Assets Available for Benefits,
Beginning of Year 25,250,883 29,631,770
----------- -----------
Net Assets Available for Benefits,
End of Year 32,763,470 $30,283,181
=========== ===========
See Accompanying Notes to Financial Statements
</TABLE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
<TABLE>
Statement of Changes in Net Assets Available for Benefits
for the Year Ended December 31, 1996
<C> <C> <C>
Asset Manager
Loan Income
Fund Fund
Sources of Participants' Equity:
Contributions:
Employee $0 $109,994
Employer 0 0
Fund-to-Fund Transfers 0 147,286
Plan-to-Plan Transfers 34,288 1,766
Loan Repayments (1,326,383) 11,577
----------- ----------
(1,292.095) 270,623
----------- -----------
Investment Income:
Dividend and Interest Income 0 71,593
Net Change in Fair Value of
Investments 0 74
----------- ----------
0 71,667
---------- ----------
Application of Participants' Equity:
Loans to Participants (1,776,177) 9,476
Distributions to Active and
Terminated Participants 218,372 126,138
Administrative and Miscellaneous
Expenses 0 0
----------- ----------
(1,557,805) 135,614
----------- ----------
Increase (Decrease) in Net Assets
Available for Benefits 265,710 206,676
Net Assets Available for Benefits,
Beginning of Year 3,652,148 915,918
----------- ----------
Net Assets Available for Benefits,
End of Year $3,917,858 $1,122,594
=========== ===========
See Accompanying Notes to Financial Statements
</TABLE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
<TABLE>
Statement of Changes in Net Assets Available for Benefits
for the Year Ended December 31, 1996
<C> <C> <C>
Asset
Manager Asset
Growth Manager
Fund Fund
Sources of Participants' Equity:
Contributions:
Employee $514,729 $684,488
Employer 0 0
Fund-to-Fund Transfers 412,675 (498,277)
Plan-to-Plan Transfers 45,836 50,856
Loan Repayments 90,739 135,366
--------- ------------
1,063,979 372,433
----------- -----------
Investment Income:
Dividend and Interest Income 427,136 645,695
Net Change in Fair Value of
Investments 259,672 315,713
-------- ---------
686,808 961,408
-------- -----------
Application of Participants' Equity:
Loans to Participants 56,573 129,270
Distributions to Active and
Terminated Participants 143,232 683,807
Administrative and Miscellaneous
Expenses 0 46
----------- ----------
199,805 813,123
----------- ----------
Increase (Decrease) in Net Assets
Available for Benefits 1,550,982 520,718
Net Assets Available for Benefits,
Beginning of Year 3,624,997 7,690,492
----------- ----------
Net Assets Available for Benefits,
End of Year $5,175,979 $8,211,210
=========== ===========
See Accompanying Notes to Financial Statements
</TABLE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
<TABLE>
Statement of Changes in Net Assets Available for Benefits
for the Year Ended December 31, 1996
<C> <C> <C>
Managed Income
International Portfolio
Fund Fund
Sources of Participants' Equity:
Contributions:
Employee $408,751 $752,112
Employer 0 0
Fund-to-Fund Transfers 240,279 4,763,678
Plan-to-Plan Transfers 59,534 69,627
Loan Repayments 107,694 241,553
----------- ----------
816,258 5,826,970
----------- -----------
Investment Income:
Dividend and Interest Income 120,391 752,344
Net Change in Fair Value of
Investments 288,207 0
----------- ----------
408,598 752,344
----------- ----------
Application of Participants' Equity:
Loans to Participants 48,042 221,683
Distributions to Active and
Terminated Participants 236,330 2,781,257
Administrative and Miscellaneous
Expenses 139 5,436
----------- ----------
284,511 3,008,376
----------- ----------
Increase (Decrease) in Net Assets
Available for Benefits 940,345 3,570,938
Net Assets Available for Benefits,
Beginning of Year 2,815,240 11,506,630
----------- ---------
Net Assets Available for Benefits,
End of Year $3,755,585 $15,077,568
=========== ===========
See Accompanying Notes to Financial Statements
</TABLE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
<TABLE>
Statement of Changes in Net Assets Available
for Benefits for the Year Ended December 31, 1996
<C> <C>
Total All
Funds
Sources of Participants' Equity:
Contributions:
Employee $7,373,650
Employer 2,427,868
Fund-to-Fund Transfers 0
Plan-to-Plan Transfers 839,496
Loan Repayments 311,794
--------
10,952,808
-----------
Investment Income:
Dividend and Interest Income 8,865,982
Net Change in Fair Value of
Investments 918,634
----------
9,784,616
----------
Application of Participants' Equity:
Loans to Participants 0
Distributions to Active and
Terminated Participants 11,671,129
Administrative and Miscellaneous
Expenses 33,512
----------
11,704,641
----------
Increase (Decrease) in Net Assets
Available for Benefits 9,032,783
Net Assets Available for Benefits,
Beginning of Year 116,678,319
-----------
Net Assets Available for Benefits,
End of Year $125,711,102
============
See Accompanying Notes to Financial Statements
</TABLE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
<TABLE>
Statement of Changes in Net Assets Available for Benefits
for the Year Ended December 31, 1995
<C> <C> <C>
Guaranteed Illinova
Investment Stock
Fund Fund
Sources of Participants' Equity:
Contributions:
Employee $28 $96,143
Employer 0 3,611,411
Fund-to-Fund Transfers (366,643) (1,028,030)
Plan-to-Plan Transfers (6,871) (36,800)
Loan Repayments 941 16,670
----------- ----------
(372,545) 2,659,394
----------- -----------
Investment Income:
Dividend and Interest Income 230,794 774,505
Net Change in Fair Value of
Investments 0 6,475,694
----------- ----------
230,794 7,250,199
----------- ----------
Application of Participants' Equity:
Loans to Participants 120,348 45,412
Distributions to Active and
Terminated Participants 139,398 461,970
Administrative and Miscellaneous
Expenses 0 21,881
----------- ----------
259,746 529,263
------------ ----------
Increase (Decrease) in Net Assets
Available for Benefits (401,497) 9,380,330
Net Assets Available for Benefits,
Beginning of Year 4,736,815 17,874,593
---------- ----------
Net Assets Available for Benefits,
End of Year $4,335,318 $27,254,923
=========== ===========
See Accompanying Notes to Financial Statements
</TABLE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
<TABLE>
Statement of Changes in Net Assets Available for Benefits
for the Year Ended December 31, 1995
<C> <C> <C>
Equity Retirement
Income Growth
Fund Fund
Sources of Participants' Equity:
Contributions:
Employee $2,133,437 $2,837,866
Employer 0 0
Fund-to-Fund Transfers 906,422 237,749
Plan-to-Plan Transfers 107,547 182,004
Loan Repayments 400,791 440,944
---------- ---------
3,548,197 3,698,563
----------- ----------
Investment Income:
Dividend and Interest Income 1,404,753 2,820,129
Net Change in Fair Value of
Investments 4,292,734 2,621,406
----------- ----------
5,697,487 5,441,535
----------- ----------
Application of Participants' Equity:
Loans to Participants 449,648 586,249
Distributions to Active and
Terminated Participants 198,264 291,399
Administrative and Miscellaneous
Expenses 0 0
----------- ----------
647,912 877,648
----------- ----------
Increase (Decrease) in Net Assets
Available for Benefits 8,597,772 8,262,450
Net Assets Available for Benefits,
Beginning of Year 16,653,111 21,369,320
----------- ----------
Net Assets Available for Benefits,
End of Year $25,250,883 $29,631,770
=========== ===========
See Accompanying Notes to Financial Statements
</TABLE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
<TABLE>
Statement of Changes in Net Assets Available for Benefits
for the Year Ended December 31, 1995
<C> <C> <C>
Asset Manager
Loan Income
Fund Fund
Sources of Participants' Equity:
Contributions:
Employee $0 $148,251
Employer 0 0
Fund-to-Fund Transfers 20,808 105,046
Plan-to-Plan Transfers 34,644 (2,659)
Loan Repayments (1,180,108) 20,964
----------- ----------
(1,124,656) 271,602
----------- ----------
Investment Income:
Dividend and Interest Income 183 36,105
Net Change in Fair Value of
Investments 0 74,529
----------- ----------
183 110,634
----------- ----------
Application of Participants' Equity:
Loans to Participants (1,738,789) 4,266
Distributions to Active and
Terminated Participants 0 490
Administrative and Miscellaneous
Expenses 0 0
----------- ----------
(1,738,789) 4,756
----------- ---------
Increase (Decrease) in Net Assets
Available for Benefits 614,316 377,480
Net Assets Available for Benefits,
Beginning of Year 3,037,832 538,438
----------- ----------
Net Assets Available for Benefits,
End of Year $3,652,148 $915,918
=========== ==========
See Accompanying Notes to Financial Statements
</TABLE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
<TABLE>
Statement of Changes in Net Assets Available for Benefits
for the Year Ended December 31, 1995
<C> <C> <C>
Asset
Manager Asset
Growth Manager
Fund Fund
Sources of Participants' Equity:
Contributions:
Employee $556,204 $867,453
Employer 0 0
Fund-to-Fund Transfers (268,372) (356,465)
Plan-to-Plan Transfers 17,009 23,195
Loan Repayments 90,447 122,926
----------- ------------
395,288 657,109
----------- -----------
Investment Income:
Dividend and Interest Income 53,431 209,737
Net Change in Fair Value of
Investments 520,998 931,074
----------- -----------
574,429 1,140,811
----------- ----------
Application of Participants' Equity:
Loans to Participants 55,863 168,271
Distributions to Active and
Terminated Participants 56,917 92,168
Administrative and Miscellaneous
Expenses 0 0
----------- ----------
112,780 260,439
----------- ----------
Increase (Decrease) in Net Assets
Available for Benefits 856,937 1,537,481
Net Assets Available for Benefits,
Beginning of Year 2,768,060 6,153,011
---------- ----------
Net Assets Available for Benefits,
End of Year $3,624,997 $7,690,492
=========== ===========
See Accompanying Notes to Financial Statements
</TABLE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
<TABLE>
Statement of Changes in Net Assets Available for Benefits
for the Year Ended December 31, 1995
<C> <C> <C>
Managed
Income
International Portfolio
Fund Fund
Sources of Participants' Equity:
Contributions:
Employee $482,433 $1,114,609
Employer 0 0
Fund-to-Fund Transfers (237,029) 986,514
Plan-to-Plan Transfers 18,334 (2,991)
Loan Repayments 89,873 225,546
----------- ----------
353,611 2,323,678
----------- ----------
Investment Income:
Dividend and Interest Income 87,053 561,947
Net Change in Fair Value of
Investments 202,882 0
----------- ----------
289,935 561,947
----------- ----------
Application of Participants' Equity:
Loans to Participants 49,157 259,575
Distributions to Active and
Terminated Participants 52,086 268,487
Administrative and Miscellaneous
Expenses 0 0
----------- ----------
101,243 528,062
----------- ----------
Increase (Decrease) in Net Assets
Available for Benefits 542,303 2,357,563
Net Assets Available for Benefits,
Beginning of Year 2,272,937 9,149,067
----------- ----------
Net Assets Available for Benefits,
End of Year $2,815,240 $11,506,630
=========== ===========
See Accompanying Notes to Financial Statements
</TABLE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
<TABLE>
Statement of Changes in Net Assets Available for Benefits
for the Year Ended December 31, 1995
<C> <C>
Total All
Funds
Sources of Participants' Equity:
Contributions:
Employee $8,236,424
Employer 3,611,411
Fund-to-Fund Transfers 0
Plan-to-Plan Transfers 333,412
Loan Repayments 228,994
----------
12,410,241
----------
Investment Income:
Dividend and Interest Income 6,178,637
Net Change in Fair Value of
Investments 15,119,317
----------
21,297,954
----------
Application of Participants' Equity:
Loans to Participants 0
Distributions to Active and
Terminated Participants 1,561,179
Administrative and Miscellaneous
Expenses 21,881
---------
1,583,060
---------
Increase (Decrease) in Net Assets
Available for Benefits 32,125,135
Net Assets Available for Benefits,
Beginning of Year 84,553,184
-----------
Net Assets Available for Benefits,
End of Year $116,678,319
============
See Accompanying Notes to Financial Statements
</TABLE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - DESCRIPTION OF PLAN:
General:
The Illinois Power Company Incentive Savings Plan (the Plan)
is sponsored and administered by Illinois Power Company (the Company).
The Plan became effective as of June 1, 1984. Assets of the
Plan are held and managed by a Trustee. For the first six months of 1995,
the Trustee was State Street Bank and Trust Company of Boston, Massachusetts.
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 taxdeferred
savings as allowed by the Internal Revenue Code. The Plan is subject to and
in compliance with the provisions of the Employee Retirement Income Security
Act of 1974 (ERISA) as amended.
Participation:
All salaried employees of the Company are eligible to participate in the
Plan. In addition, all employees of Illinois Power Company's parent company,
Illinova Corporation (Illinova), are eligible to participate, as are employees
of Illinova's other subsidiary companies. 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:
As of June 30, 1994, the administrator started phasing out the Guaranteed
Investment Contract option. No funds were contributed or transferred to the
GIC after that date. Funds in the guaranteed investment contract were
eligible to remain there until June 30, 1996, at which time the contract
matured and the remaining funds were transferred to the Managed Income
Portfolio.
Contributions:
Participants may make before-tax contribution 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 directing their contributions into any or
all of the investment funds in the proportions they choose. They may change
their direction options or transfer amounts from fund to fund at any time.
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 invested in the Stock Fund and increase
the unit value of the Fund.
The Company has an Incentive Compensation arrangement in which employees can
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 invested in the Stock Fund and
increase its unit value.
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 the ESOP and 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, 1996, 232,818 and 314,955 shares have been allocated to
salaried employees for Company Match and Incentive Compensation, respectively.
Distributions:
Distributions as provided for in the Plan are made to Plan participants or
their beneficiaries no later than 120 days following the close of the Plan
year in which the participant reaches age 70 1/2 unless an earlier distribution
is requested. All distributions are made in the form of cash and/or Illinova
common stock.
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 1996,
the interest rate was 9.25%. The range for 1995 was 9.5% to 10%.
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 their 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.
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 actual cost; however, current value is used at
the time of distribution to participants and results in a realized gain or
loss as reflected in the Statement of Changes in Net Assets Available
for Benefits.
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 Plan obtained its latest determination letter on January 8, 1996, in
which the Internal Revenue Service stated that the Plan as designed was in
compliance with the applicable requirements of the Internal Revenue Code.
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:
<TABLE>
<C> <C> <C> <C>
December 31, 1996
Investments at Fair
Value as Determined by
Quoted Market Price Units Value Cost
Fidelity Equity Income
Fund 763,402 32,696,498 25,136,636
Fidelity Retirement
Growth Fund 1,747,251 30,209,967 30,809,480
Illinova Common Stock 872,551 23,995,153 19,065,430
Fidelity Asset Manager
Fund 497,383 8,191,890 7,457,184
Fidelity Managed Income
Portfolio 15,051,091 15,051,091 15,051,091
December 31, 1995
Investments at Fair
Value as Determined by
Quoted Market Price Units Value Cost
Fidelity Equity Income
Fund 665,723 25,250,883 20,233,153
Fidelity Retirement
Growth Fund 1,629,014 29,631,770 28,552,931
Illinova Common Stock 827,953 24,838,590 17,965,506
Fidelity Asset Manager
Fund 485,204 7,690,492 7,096,354
Fidelity Managed Income
Portfolio 11,506,630 11,506,630 11,506,630
</TABLE>
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 $4,146,784 in 323 transactions
and sold shares, the proceeds of which totaled $3,906,425, in 308
transactions. The net gain on these sales was $805,123. The transactions
are allowable party-in interest transactions under Section 408(3) of the ERISA
regulations.
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 the ERISA regulations. The number of purchase transactions with
each fund and the dollar amount of purchases for each fund as of December 31,
1996 are listed below:
<TABLE>
<C> <C> <C>
Purchase
Fund Transactions Purchase Amount
Equity Income Fund 234 $8,562,277
Retirement Growth Fund 236 8,682,436
International Fund 155 1,249,307
Asset Manager Fund 184 1,852,578
Asset Manager Growth Fund 165 1,930,774
Asset Manager Income Fund 97 483,405
Managed Income Portfolio 189 9,597,739
Cash Portfolio 152 4,823,012
</TABLE>
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,
1996 are shown below:
<TABLE>
<C> <C> <C> <C>
Sales
Trans- Sales
Fund actions Amount Gain
Equity Income Fund 185 $4,623,892 $965,099
Retirement Growth Fund 209 6,775,778 349,892
International Fund 109 610,162 28,324
Asset Manager Fund 150 1,666,893 175,145
Asset Manager Growth Fund 99 54,560 70,233
Asset Manager Income Fund 44 279,997 5,248
Managed Income Portfolio 190 6,053,278 0
Cash Portfolio 258 4,841,649 0
</TABLE>
<TABLE>
Schedule I
Item 27a
Illinois Power Company
Incentive Savings Plan
Schedule of Assets Held for Investment Purposes
December 31, 1996
<C> <C> <C>
Identity of Issue/ Current
Description of Investment Cost Value
*Fidelity Equity Income Fund $25,136,636 $32,696,498
*Fidelity Retirement Growth Fund 30,809,480 30,209,967
*Illinova Common Stock 19,065,430 23,995,153
*Fidelity Asset Manager Income
Fund 1,079,421 1,119,400
*Fidelity Asset Manager Growth
Fund 4,625,953 5,160,883
*Fidelity Asset Manager Fund 7,457,184 8,191,890
*Fidelity International Growth
and Income Fund 3,397,456 3,742,593
*Fidelity Managed Income
Portfolio 15,051,091 15,051,091
**Participant Loans 3,959,549 3,959,549
---------- ----------
$110,582,200 $124,127,024
*A party-in-interest to the Plan
**Interest rates on loans range
from 7% to 11%
</TABLE>
<TABLE>
Schedule II
Item 27d
Illinois Power Company
Incentive Savings Plan
Schedule of Reportable Transactions for
the Year Ended December 31, 1996
<C> <C> <C> <C> <C>
Net Gain
Identity of Party Involved/ Purchase Selling Cost of or
Description of Asset Price Price Asset (Loss)
Fidelity Equity Income Fund 8,562,277 4,623,892 3,658,793 965,099
Fidelity Retirement Growth Fund 8,682,436 6,775,778 6,425,886 349,892
Fidelity Managed Income 9,597,739 6,053,278 6,053,278 0
Portfolio
</TABLE>
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
/s/ David W. Butts
-------------------------
David W. Butts
Senior Vice-President
Date: June 17, 1997
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 on
the Illinois Power Company Incentive Savings Plan for the year ended December
31, 1996, dated June 13, 1997, which is incorporated by reference in this
Form 11-K.
by /s/ Price Waterhouse LLP
St. Louis, Missouri
June 17, 1997
