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
February 13, 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 5.
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<PAGE>
Item 5. Other Events
- --------------------------
Illinova today announced a loss of $90.4 million, or $1.22 per share (Basic
and Diluted), for 1997. This compares to earnings of $190.3 million, or $2.51
per share, for the previous year. 1997's loss reflects an extraordinary charge
of $2.63 per share for the write-off of regulatory assets recorded in December.
Without these charges, 1997 earnings per share would have been $1.41.
Losses for the fourth quarter were $0.46 per share, excluding the
fourth-quarter extraordinary item, compared to earnings of $0.26 per share for
the fourth quarter of 1996.
Mild weather, the outage at the Clinton Power Station (Clinton), and
increased purchases of replacement power contributed to the drop in 1997
earnings. Moderate temperatures during both summer and winter lowered earnings
by $0.11 per share compared to 1996. Higher expenses accounted for the majority
of the earnings decline: $0.27 per share in increased operation and maintenance
expense for the outage at Clinton and $0.29 per share in additional expenditures
for replacement power due to Clinton's outage. These declines were partially
offset by a $0.06 per share earnings increase in gas margins, excluding the
effects of weather.
The year-end figures do not reflect one component of a fourth-quarter
write-off the company announced in the 8-K filed January 8, 1998. Subject to the
Securities and Exchange Commission's concurrence, Illinova had intended to
accrue approximately $40 million, net of income taxes, in estimated incremental
operation and maintenance expenses for a recovery plan to bring Clinton back to
full operation. The Commission did not concur with this proposed accounting
treatment because it believes such expenses should be recorded in the period in
which the operations and maintenance activities are carried out.
Please see the attached Illinova Consolidated Statements of Income.
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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: February 13, 1998
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<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.
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: February 13, 1998
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<TABLE>
<CAPTION>
Condensed Consolidated Statements of Income
Three Months Ended * Twelve Months Ended
December 31, December 31,
------------------------------ ----------------------------
<S> <C> <C> <C> <C> <C> <C>
% Change % Change
Fav/ Fav/
1997 1996** (Unfav) 1997 1996** (Unfav)
____ ______ ________ ____ ______ _____
(Millions) (Millions)
Operating Revenues
Electric $ 266.5 $ 264.5 1 % $ 1,244.4 $ 1,202.9 3%
Electric interchange 34.2 28.8 19 175.6 137.6 28
Gas 88.0 124.6 (29) 353.9 348.2 2
Diversified enterprises 165.7 22.8 - 735.6 57.6 -
-------- ------- -------- ---------
Total 554.4 440.7 26 2,509.5 1,746.3 44
-------- ------- -------- ---------
Operating Expenses
Fuel for electric plants 68.5 62.2 (10) 232.4 248.1 6
Power purchased 62.3 17.1 - 217.9 65.2 -
Gas purchased for resale 67.1 84.0 20 207.7 202.6 (3)
Diversified enterprises 179.7 29.9 - 792.3 87.5 -
Other operating and
maintenance 127.7 101.8 (25) 402.2 349.6 (15)
Depreciation and amortization 50.4 45.1 (12) 198.8 190.0 (5)
General taxes 28.0 29.3 4 133.8 131.3 (2)
-------- ------- -------- ---------
Total 583.7 369.4 (58) 2,185.1 1,274.3 (71)
-------- ------- -------- ---------
Operating Income (Loss) (29.3) 71.3 (141) 324.4 472.0 (31)
-------- ------- -------- ---------
Other Income and Deductions
Miscellaneous - net (1.5) (2.6) 42 (3.9) (9.0) 57
Equity earnings in affiliates 6.4 0.1 - 17.5 6.4 173
-------- ------- -------- ---------
Total 4.9 (2.5) - 13.6 (2.6) -
-------- ------- -------- ---------
Income (Loss) Before Interest
Charges and Income (24.4) 68.8 (135) 338.0 469.4 (28)
-------- ------- -------- ---------
Interest Charges
Interest expense 33.8 33.2 (2) 136.8 134.7 (2)
Allowance for borrowed funds
used during construction (1.6) (1.3) 23 (5.0) (6.5) (23)
Preferred dividend requirements
of subsidiary 5.1 5.5 7 21.5 22.3 4
-------- ------- -------- ---------
Total 37.3 37.4 - 153.3 150.5 (2)
-------- ------- -------- ---------
Income (Loss) Before Income Taxes (61.7) 31.4 - 184.7 318.9 (42)
-------- ------- -------- ---------
Income Taxes (27.4) 11.4 - 80.3 127.9 37
-------- ------- -------- ---------
Net Income (Loss) Before
Extraordinary Item (34.3) 20.0 - 104.4 191.0 (45)
Extraordinary Item Net of Income
Tax Benefit of $118.0 Million (195.0) - - (195.0) - -
-------- ------- -------- ---------
Net Income (Loss) (229.3) 20.0 - (90.6) 191.0 (147)
Carrying amount over (under)
consideration paid for
redeemed preferred stock
of subsidiary (0.9) 0.1 - 0.2 (0.7) 129
-------- ------- -------- ---------
Net Income (Loss) Applicable
to Common Stock $ (230.2) $ 20.1 - $ (90.4) $ 190.3 (148)
======== ======= ======== =========
Weighted average common shares 74.0 75.7 - 74.0 75.7 -
Earnings (loss) per common shar
before extraordinary item
(basic and diluted) ($0.46) $0.26 - $1.41 $2.51 (44)
Extraordinary item per common
share (basic and diluted) ($2.63) $0.00 - ($2.63) $0.00 -
- ----------------------------------------------------------------------------------------------
Earnings (loss) per common share
(basic and diluted) ($3.09) $0.26 - ($1.22) $2.51 (149)
Cash dividends declared $0.00 0
per common share $0.31 $0.31 - $1.24 $1.15 8 $0.00 0
Cash dividends paid
per common share $0.31 $0.28 11 $1.24 $1.12 11 $0.03 0
</TABLE>
* Unaudited
** Restated to conform to new financial format
These statements are submitted as a matter of general information and are not
intended to induce, or to be used in connection with, any sale or purchase of
securities. These statements should be read in conjunction with Illinova's and
Illinois Power Company's 1997 Quarterly Reports on Form 10-Q and Form 8-K
filings to the Securities and Exchange Commission, Illinova's 1997 Annual Report
to Shareholders (included in the Proxy Statement) and Illinova and Illinois
Power Company's 1997 Form 10-K filings to the Securities and Exchange
Commission.
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