SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
April 14, 1998
Commission Registrants; State of Incorporation; IRS Employer
File Number Address; and Telephone Company Identification
No.
1-11327 Illinova Corporation 37-1319890
(an Illinois Corporation)
500 S. 27th Street
Decatur, IL 62525
(217) 424-6600
1-3004 Illinois Power Company 37-0344645
(an Illinois Corporation)
500 S. 27th Street
Decatur, IL 62525
(217) 424-6600
Total number of sequentially numbered pages is 4.
Item 5. Other Events
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First Quarter 1998
Illinova Corporation reported first-quarter earnings (basic and diluted) of $23
million, or $0.32 per share of common stock. This compares to earnings (basic
and diluted) of $44 million, or $0.58 per common share for the same period one
year ago.
The first-quarter 1998 earnings decrease is primarily due to higher Operations
and Maintenance (O&M) expense related to the continued outage at Illinois
Power's Clinton nuclear station (Clinton). These expenses increased by $28
million ($0.23 per share) during the first quarter while other O&M costs for the
quarter were approximately the same as last year.
Near-record mild weather also impacted earnings results for the first quarter by
an estimated $0.05 per share compared to 1997's first quarter results.
1998 Outlook
Based on the following outlook, Illinova expects 1998 earnings to be in the
$1.70 to $1.80 range.
Regulatory reform implementation has begun and 1998's performance will be
impacted by the 15 percent residential rate reduction which becomes effective
August 1.
Although no specific restart date has been established, Clinton is expected to
return to operation by year-end 1998. The Company continues to purchase
replacement power to meet customer and contractual needs during this period.
Although the Company has experienced significant variability in these costs
during the past several months, the Company expects electric margins to be
reasonably consistent with 1997 levels.
Illinova currently expects total Company O&M to be approximately $440 million.
In addition to about $20 million in increased Clinton costs, Year 2000 costs and
regulatory reform implementation costs are expected to account for about $15
million of the increase over 1997's O&M of $402 million.
For the year, Illinova's unregulated subsidiaries are expected to reflect
improved performance.
Illinova views 1998 as a repositioning year for the future - one that
includes intensive efforts to enhance long-term shareholder value. Although
1999 will reflect a full year of the 15 percent residential rate reduction,
financial benefits of Clinton's expected return to service along with
continued growth in earnings contributions from the unregulated businesses
can provide the basis for about a 20 percent growth in earnings in 1999 and
provide a solid foundation for future earnings growth.
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Illinova's management is taking advantage of safe harbor disclosure provisions
by issuing this report which contains estimates, projections and other
forward-looking statements that involve risks and uncertainties. Actual results
or outcomes could differ materially from those provided in the forward-looking
statements as a result of such important factors as: the outcome of state and
federal regulatory proceedings affecting the restructuring of the electric and
gas utility industries; the impacts of new laws and regulations relating to
restructuring, environmental, and other matters have on Illinova and its
subsidiaries; the effects of increased competition on the utility businesses;
risks of owning and operating a nuclear facility; changes in prices and cost of
fuel; factors affecting non-utility investments, such as the risk of doing
business in foreign countries; construction and operation risks; and increases
in financing costs. All forward-looking statements are based upon information
presently available, and Illinova assumes no obligation to update any
forward-looking statements.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ILLINOVA CORPORATION
(Registrant)
By /s/ Larry F. Altenbaumer
---------------------------
Larry F. Altenbaumer
Chief Financial Officer
Treasurer and Controller
on behalf of
Illinova Corporation
Date: April 14, 1998
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ILLINOIS POWER COMPANY
(Registrant)
By /s/ Larry F. Altenbaumer
----------------------------
Larry F. Altenbaumer
Senior Vice President and
Chief Financial Officer
on behalf of
Illinois Power Company
Date: April 14, 1998
