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, 1998
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.)
<PAGE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
FINANCIAL STATEMENTS
AND ADDITIONAL INFORMATION
DECEMBER 31, 1998
<PAGE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
Index to Financial Statements and Additional Information
Financial Statements: Page
Report of Independent Accountants
Statements of Net Assets Available for Benefits 2-17
with Fund Information as of
December 31, 1998 and 1997
Statements of Changes in Net Assets Available 18-33
for Benefits with Fund Information for the
years ended December 31, 1998 and 1997
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.
<PAGE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
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 $ 350,597 $ 0
Investments at Fair Value 25,546,700 43,442,523
----------- -----------
Total Investments 25,897,297 43,442,523
Dividends and Interest Receivable 1,413 0
Employee Contributions Receivable 93,940 73,717
Employer Contributions Receivable 199,698 0
Loan Repayments Receivable 879 15,231
Loans Outstanding 0 0
----------- -----------
Other Assets 295,930 88,948
----------- -----------
Total Assets 26,193,227 43,531,471
----------- -----------
LIABILITIES:
Accrued Expenses 57,906 0
----------- -----------
Total Liabilities 57,906 0
----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $26,135,321 $43,531,471
=========== ===========
See Accompanying Notes to Financial Statements
2
<PAGE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
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 44,622,782 0
----------- ----------
Total Investments 44,622,782 0
Dividends and Interest Receivable 0 0
Employee Contributions Receivable 77,123 0
Employer Contributions Receivable 0 0
Loan Repayments Receivable 16,685 (57,757)
Loans Outstanding 0 4,190,017
----------- ----------
Other Assets 93,809 4,132,260
----------- ----------
Total Assets 44,716,590 4,132,260
----------- ----------
LIABILITIES:
Accrued Expenses 0 0
----------- ----------
Total Liabilities 0 0
----------- ----------
NET ASSETS AVAILABLE FOR BENEFITS $44,716,590 $4,132,260
=========== ==========
See Accompanying Notes to Financial Statements
3
<PAGE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
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 1,918,843 8,025,684
---------- ----------
Total Investments 1,918,843 8,025,684
Dividends and Interest Receivable 0 0
Employee Contributions Receivable 5,524 19,439
Employer Contributions Receivable 0 0
Loan Repayments Receivable 452 3,104
Loans Outstanding 0 0
---------- ----------
Other Assets 5,976 22,543
---------- ----------
Total Assets 1,924,819 8,048,227
---------- ----------
LIABILITIES:
Accrued Expenses 0 0
---------- ----------
Total Liabilities 0 0
---------- ----------
NET ASSETS AVAILABLE FOR BENEFITS $1,924,819 $8,048,227
========== ==========
See Accompanying Notes to Financial Statements
4
<PAGE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
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 10,815,508 3,370,968
---------- ----------
Total Investments 10,815,508 3,370,968
Dividends and Interest Receivable 0 0
Employee Contributions Receivable 21,171 9,263
Employer Contributions Receivable 0 0
Loan Repayments Receivable 3,784 1,729
Loans Outstanding 0 0
---------- ----------
Other Assets 24,955 10,992
---------- ----------
Total Assets 10,840,463 3,381,960
---------- ----------
LIABILITIES:
Accrued Expenses 0 0
---------- ----------
Total Liabilities 0 0
---------- ----------
NET ASSETS AVAILABLE FOR BENEFITS $10,840,463 $3,381,960
========== ==========
See Accompanying Notes to Financial Statements
5
<PAGE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
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 17,502,633 7,493,956
----------- ----------
Total Investments 17,502,633 7,493,956
Dividends and Interest Receivable 0 0
Employee Contributions Receivable 25,854 23,772
Employer Contributions Receivable 0 0
Loan Repayments Receivable 7,087 3,492
Loans Outstanding 0 0
----------- ----------
Other Assets 32,941 27,264
----------- ----------
Total Assets 17,535,574 7,521,220
----------- ----------
LIABILITIES:
Accrued Expenses 0 0
----------- ----------
Total Liabilities 0 0
----------- ----------
NET ASSETS AVAILABLE FOR BENEFITS $17,535,574 $7,521,220
=========== ==========
See Accompanying Notes to Financial Statements
6
<PAGE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
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 4,372,705 696,540
---------- --------
Total Investments 4,372,705 696,540
Dividends and Interest Receivable 0 0
Employee Contributions Receivable 13,888 3,056
Employer Contributions Receivable 0 0
Loan Repayments Receivable 2,093 432
Loans Outstanding 0 0
---------- --------
Other Assets 15,981 3,488
---------- --------
Total Assets 4,388,686 700,028
---------- --------
LIABILITIES:
Accrued Expenses 0 0
---------- --------
Total Liabilities 0 0
---------- --------
NET ASSETS AVAILABLE FOR BENEFITS $4,388,686 $700,028
========== ========
See Accompanying Notes to Financial Statements
7
<PAGE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
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 1,421,588 3,992,883
-------- ----------
Total Investments 1,421,588 3,992,883
Dividends and Interest Receivable 0 0
Employee Contributions Receivable 5,474 2,471
Employer Contributions Receivable 0 0
Loan Repayments Receivable 921 1,868
Loans Outstanding 0 0
-------- ----------
Other Assets 6,395 4,339
-------- ----------
Total Assets 1,427,983 3,997,222
-------- ----------
LIABILITIES:
Accrued Expenses 0 0
-------- ----------
Total Liabilities 0 0
-------- ----------
NET ASSETS AVAILABLE FOR BENEFITS $1,427,983 $3,997,222
========== ==========
See Accompanying Notes to Financial Statements
8
<PAGE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
Statement of Net Assets Available for Benefits
with Fund Information as of December 31, 1998
Total All
Funds
ASSETS:
Cash and Temporary Cash Investments $ 350,597
Investments at Fair Value 173,223,313
------------
Total Investments 173,573,910
Dividends and Interest Receivable 1,413
Employee Contributions Receivable 374,692
Employer Contributions Receivable 199,698
Loan Repayments Receivable 0
Loans Outstanding 4,190,017
------------
Other Assets 4,765,820
------------
Total Assets 178,339,730
------------
LIABILITIES:
Accrued Expenses 57,906
------------
Total Liabilities 57,906
------------
NET ASSETS AVAILABLE FOR BENEFITS $178,281,824
============
See Accompanying Notes to Financial Statements
9
<PAGE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
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 $ 298,849 $ 0
Investments at Fair Value 25,968,828 41,911,711
----------- -----------
Total Investments 26,267,677 41,911,711
Dividends and Interest Receivable 1,278 0
Employee Contributions Receivable 2,051 67,595
Employer Contributions Receivable 811,796 0
Loan Repayments Receivable 591 15,454
Loans Outstanding 0 0
----------- -----------
Other Assets 815,716 83,049
----------- -----------
Total Assets 27,083,393 41,994,760
----------- -----------
LIABILITIES:
Accrued Expenses 13,999 0
----------- -----------
Total Liabilities 13,999 0
----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $27,069,394 $41,994,760
=========== ===========
See Accompanying Notes to Financial Statements
10
<PAGE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
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 33,106,384 0
----------- ----------
Total Investments 33,106,384 0
Dividends and Interest Receivable 0 0
Employee Contributions Receivable 61,714 0
Employer Contributions Receivable 0 0
Loan Repayments Receivable 13,682 (50,704)
Loans Outstanding 0 3,916,574
----------- ----------
Other Assets 75,396 3,865,870
----------- ----------
Total Assets 33,181,780 3,865,870
----------- ----------
LIABILITIES:
Accrued Expenses 0 0
----------- ----------
Total Liabilities 0 0
----------- ----------
NET ASSETS AVAILABLE FOR BENEFITS $33,181,780 $3,865,870
=========== ==========
See Accompanying Notes to Financial Statements
11
<PAGE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
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 1,181,289 7,373,529
---------- ----------
Total Investments 1,181,289 7,373,529
Dividends and Interest Receivable 0 0
Employee Contributions Receivable 3,244 16,817
Employer Contributions Receivable 0 0
Loan Repayments Receivable 535 2,828
Loans Outstanding 0 0
---------- ----------
Other Assets 3,779 19,645
---------- ----------
Total Assets 1,185,068 7,393,174
---------- ----------
LIABILITIES:
Accrued Expenses 0 0
---------- ----------
Total Liabilities 0 0
---------- ----------
NET ASSETS AVAILABLE FOR BENEFITS $1,185,068 $7,393,174
========== ==========
See Accompanying Notes to Financial Statements
12
<PAGE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
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 9,362,941 3,347,530
---------- ----------
Total Investments 9,362,941 3,347,530
Dividends and Interest Receivable 0 0
Employee Contributions Receivable 17,467 9,260
Employer Contributions Receivable 0 0
Loan Repayments Receivable 3,827 1,897
Loans Outstanding 0 0
---------- ----------
Other Assets 21,294 11,157
---------- ----------
Total Assets 9,384,235 3,358,687
---------- ----------
LIABILITIES:
Accrued Expenses 0 0
---------- ----------
Total Liabilities 0 0
---------- ----------
NET ASSETS AVAILABLE FOR BENEFITS $9,384,235 $3,358,687
========== ==========
See Accompanying Notes to Financial Statements
13
<PAGE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
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 15,046,006 2,855,122
----------- ----------
Total Investments 15,046,006 2,855,122
Dividends and Interest Receivable 0 0
Employee Contributions Receivable 20,818 10,869
Employer Contributions Receivable 0 0
Loan Repayments Receivable 6,516 1,975
Loans Outstanding 0 0
----------- ----------
Other Assets 27,334 12,844
----------- ----------
Total Assets 15,073,340 2,867,966
----------- ----------
LIABILITIES:
Accrued Expenses 0 0
----------- ----------
Total Liabilities 0 0
----------- ----------
NET ASSETS AVAILABLE FOR BENEFITS $15,073,340 $2,867,966
=========== ==========
See Accompanying Notes to Financial Statements
14
<PAGE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
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 1,687,490 683,595
---------- --------
Total Investments 1,687,490 683,595
Dividends and Interest Receivable 0 0
Employee Contributions Receivable 6,023 2,407
Employer Contributions Receivable 0 0
Loan Repayments Receivable 1,171 342
Loans Outstanding 0 0
---------- --------
Other Assets 7,194 2,749
---------- --------
Total Assets 1,694,684 686,344
---------- --------
LIABILITIES:
Accrued Expenses 0 0
---------- --------
Total Liabilities 0 0
---------- --------
NET ASSETS AVAILABLE FOR BENEFITS $1,694,684 $686,344
========== ========
See Accompanying Notes to Financial Statements
15
<PAGE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
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 961,687 1,621,382
-------- ----------
Total Investments 961,687 1,621,382
Dividends and Interest Receivable 0 0
Employee Contributions Receivable 3,639 1,469
Employer Contributions Receivable 0 0
Loan Repayments Receivable 757 1,129
Loans Outstanding 0 0
-------- ----------
Other Assets 4,396 2,598
-------- ----------
Total Assets 966,083 1,623,980
-------- ----------
LIABILITIES:
Accrued Expenses 0 0
-------- ----------
Total Liabilities 0 0
-------- ----------
NET ASSETS AVAILABLE FOR BENEFITS $966,083 $1,623,980
======== ==========
See Accompanying Notes to Financial Statements
16
<PAGE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
Statement of Net Assets Available for Benefits
with Fund Information as of December 31, 1997
Total All
Funds
ASSETS:
Cash and Temporary Cash Investments $ 298,849
Investments at Fair Value 145,107,494
------------
Total Investments 145,406,343
Dividends and Interest Receivable 1,278
Employee Contributions Receivable 223,373
Employer Contributions Receivable 811,796
Loan Repayments Receivable 0
Loans Outstanding 3,916,574
------------
Other Assets 4,953,021
------------
Total Assets 150,359,364
------------
LIABILITIES:
Accrued Expenses 13,999
------------
Total Liabilities 13,999
------------
NET ASSETS AVAILABLE FOR BENEFITS $150,345,365
============
See Accompanying Notes to Financial Statements
17
<PAGE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
Statement of Changes in Net Assets Available for Benefits
with Fund Information for the Year Ended December 31, 1998
Illinova Fidelity
Stock Equity Income
Fund Fund
Sources of Participants' Equity:
Contributions:
Employee $ 96,592 $ 2,416,005
Employer 1,599,690 0
----------- -----------
1,696,282 2,416,005
----------- -----------
Plan-to-Plan Transfers 182,169 385,644
Investment Income:
Dividend and Interest Income 1,224,013 2,620,545
Net Change in Fair Value of
Investments (1,770,615) 2,698,795
----------- -----------
(546,602) 5,319,340
----------- -----------
Application of Participants' Equity:
Distributions to Active and
Terminated Participants 1,526,481 2,075,436
Administrative and Miscellaneous
Expenses 27,086 8,313
----------- -----------
1,553,567 2,083,749
----------- -----------
Increase (Decrease) in Net Assets
Available for Benefits prior to
interfund transfers (221,718) 6,037,240
Loans to Participants, net 3,349 (83,626)
Fund-to-Fund Transfers (715,794) (4,416,903)
Net Assets Available for Benefits,
Beginning of Year 27,069,394 41,994,760
----------- -----------
Net Assets Available for Benefits,
End of Year $26,135,321 $43,531,471
=========== ===========
See Accompanying Notes to Financial Statements
18
<PAGE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
Statement of Changes in Net Assets Available for Benefits
with Fund Information for the Year Ended December 31, 1998
Fidelity
Retirement
Growth Loan
Fund Fund
Sources of Participants' Equity:
Contributions:
Employee $ 2,353,790 $ 0
Employer 0 0
----------- ----------
2,353,790 0
----------- ----------
Plan-to-Plan Transfers 214,106 50,743
Investment Income:
Dividend and Interest Income 4,536,780 0
Net Change in Fair Value of
Investments 7,365,614 0
----------- ----------
11,902,394 0
----------- ----------
Application of Participants' Equity:
Distributions to Active and
Terminated Participants 1,762,336 132,341
Administrative and Miscellaneous
Expenses 1,259 0
----------- ----------
1,763,595 132,341
----------- ----------
Increase (Decrease) in Net Assets
Available for Benefits prior to
interfund transfers 12,706,695 (81,598)
Loans to Participants, net (171,523) 347,988
Fund-to-Fund Transfers (1,000,362) 0
Net Assets Available for Benefits,
Beginning of Year 33,181,780 3,865,870
----------- ----------
Net Assets Available for Benefits,
End of Year $44,716,590 $4,132,260
=========== ==========
See Accompanying Notes to Financial Statements
19
<PAGE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
Statement of Changes in Net Assets Available for Benefits
with Fund Information for the Year Ended December 31, 1998
Fidelity Fidelity
Asset Asset
Manager Manager
Income Fund Growth Fund
Sources of Participants' Equity:
Contributions:
Employee $167,485 $646,313
Employer 0 0
---------- ----------
167,485 646,313
---------- ----------
Plan-to-Plan Transfers 4,414 (13,367)
Investment Income:
Dividend and Interest Income 150,728 1,140,846
Net Change in Fair Value of
Investments 7,534 149,993
---------- ----------
158,262 1,290,839
---------- ----------
Application of Participants' Equity:
Distributions to Active and
Terminated Participants 82,692 405,276
Administrative and Miscellaneous
Expenses 15 11
---------- ----------
82,707 405,287
---------- ----------
Increase (Decrease) in Net Assets
Available for Benefits prior to
interfund transfers 247,454 1,518,498
Loans to Participants, net 3,757 (8,174)
Fund-to-Fund Transfers 488,540 (855,271)
Net Assets Available for Benefits,
Beginning of Year 1,185,068 7,393,174
---------- ----------
Net Assets Available for Benefits,
End of Year $1,924,819 $8,048,227
========== ==========
See Accompanying Notes to Financial Statements
20
<PAGE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
Statement of Changes in Net Assets Available for Benefits
with Fund Information for the Year Ended December 31, 1998
Fidelity Fidelity
Asset International
Manager Growth and
Fund Income Fund
Sources of Participants' Equity:
Contributions:
Employee $ 718,061 $ 339,656
Employer 0 0
---------- ----------
718,061 339,656
---------- ----------
Plan-to-Plan Transfers (7,016) (2,962)
Investment Income:
Dividend and Interest Income 1,956,534 123,629
Net Change in Fair Value of
Investments (446,214) 179,095
---------- ----------
1,510,320 302,724
---------- ----------
Application of Participants' Equity:
Distributions to Active and
Terminated Participants 658,278 136,267
Administrative and Miscellaneous
Expenses 89 359
---------- ----------
658,367 136,626
---------- ----------
Increase (Decrease) in Net Assets
Available for Benefits prior to
interfund transfers 1,562,998 502,792
Loans to Participants, net (32,784) 2,243
Fund-to-Fund Transfers (73,986) (481,762)
Net Assets Available for Benefits,
Beginning of Year 9,384,235 3,358,687
---------- ----------
Net Assets Available for Benefits,
End of Year $10,840,463 $3,381,960
========== ==========
See Accompanying Notes to Financial Statements
21
<PAGE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
Statement of Changes in Net Assets Available for Benefits
with Fund Information for the Year Ended December 31, 1998
Fidelity Fidelity
Managed Income US Equity Index
Portfolio Fund Commingled Pool
Sources of Participants' Equity:
Contributions:
Employee $ 1,137,273 $ 694,958
Employer 0 0
----------- ----------
1,137,273 694,958
----------- ----------
Plan-to-Plan Transfers 51,030 142,180
Investment Income:
Dividend and Interest Income 943,409 25,899
Net Change in Fair Value of
Investments 0 1,359,719
----------- ----------
943,409 1,385,618
----------- ----------
Application of Participants' Equity:
Distributions to Active and
Terminated Participants 909,554 97,264
Administrative and Miscellaneous
Expenses 7,139 0
----------- ----------
916,693 97,264
----------- ----------
Increase (Decrease) in Net Assets
Available for Benefits prior to
interfund transfers 1,215,019 2,125,492
Loans to Participants, net (70,630) (7,515)
Fund-to-Fund Transfers 1,317,845 2,535,277
Net Assets Available for Benefits,
Beginning of Year 15,073,340 2,867,966
----------- ----------
Net Assets Available for Benefits,
End of Year $17,535,574 $7,521,220
=========== ==========
See Accompanying Notes to Financial Statements
22
<PAGE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
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 $ 451,359 $202,522
Employer 0 0
---------- --------
451,359 202,522
---------- --------
Plan-to-Plan Transfers 3,600 (1,617)
Investment Income:
Dividend and Interest Income 237,578 32,242
Net Change in Fair Value of
Investments 438,316 (1,507)
---------- --------
675,894 30,735
---------- --------
Application of Participants' Equity:
Distributions to Active and
Terminated Participants 66,827 62,713
Administrative and Miscellaneous
Expenses 0 0
---------- --------
66,827 62,713
---------- --------
Increase (Decrease) in Net Assets
Available for Benefits prior to
interfund transfers 1,064,026 168,927
Loans to Participants, net 11,185 (31,967)
Fund-to-Fund Transfers 1,618,791 (123,276)
Net Assets Available for Benefits,
Beginning of Year 1,694,684 686,344
---------- --------
Net Assets Available for Benefits,
End of Year $4,388,686 $700,028
========== ========
See Accompanying Notes to Financial Statements
23
<PAGE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
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 $254,892 $ 55,473
Employer 0 0
-------- ----------
254,892 55,473
-------- ----------
Plan-to-Plan Transfers 7,415 58,387
Investment Income:
Dividend and Interest Income 5,145 736,932
Net Change in Fair Value of
Investments 70,895 0
-------- ----------
76,040 736,932
-------- ----------
Application of Participants' Equity:
Distributions to Active and
Terminated Participants 21,382 16,510
Administrative and Miscellaneous
Expenses 0 60,613
-------- ----------
21,382 77,123
-------- ----------
Increase (Decrease) in Net Assets
Available for Benefits prior to
interfund transfers 316,965 773,669
Loans to Participants, net 4,657 32,950
Fund-to-Fund Transfers 140,278 1,566,623
Net Assets Available for Benefits,
Beginning of Year 966,083 1,623,980
-------- ----------
Net Assets Available for Benefits,
End of Year $1,427,983 $3,997,222
========= ==========
See Accompanying Notes to Financial Statements
24
<PAGE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
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 $9,534,379
Employer 1,599,690
------------
11,134,069
------------
Plan-to-Plan Transfers 1,074,726
Investment Income:
Dividend and Interest Income 13,734,280
Net Change in Fair Value of
Investments 10,051,625
------------
23,785,905
------------
Application of Participants' Equity:
Distributions to Active and
Terminated Participants 7,953,357
Administrative and Miscellaneous
Expenses 104,884
------------
8,058,241
------------
Increase (Decrease) in Net Assets
Available for Benefits prior to
interfund transfers 27,936,459
Loans to Participants, net 0
Fund-to-Fund Transfers 0
Net Assets Available for Benefits,
Beginning of Year 150,345,365
------------
Net Assets Available for Benefits,
End of Year $178,281,824
============
See Accompanying Notes to Financial Statements
25
<PAGE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
Statement of Changes in Net Assets Available for Benefits
with Fund Information for the Year Ended December 31, 1997
Fidelity
Illinova Equuity
Stock Income
Fund Fund
Sources of Participants' Equity:
Contributions:
Employee $ 138,130 $ 2,330,525
Employer 2,098,559 0
----------- -----------
2,236,689 2,330,525
----------- -----------
Plan-to-Plan Transfers 362,516 173,428
Investment Income:
Dividend and Interest Income 1,171,761 2,414,347
Net Change in Fair Value of
Investments (236,476) 7,457,216
----------- -----------
935,285 9,871,563
----------- -----------
Application of Participants' Equity:
Distributions to Active and
Terminated Participants 1,337,976 2,104,579
Administrative and Miscellaneous
Expenses 27,756 4,587
----------- -----------
1,365,732 2,109,166
----------- -----------
Increase (Decrease) in Net Assets
Available for Benefits prior to
interfund transfers 2,168,758 10,266,350
Loans to Participants, net 4,991 16,188
Fund-to-Fund Transfers (508,012) (1,051,248)
Net Assets Available for Benefits,
Beginning of Year 25,403,657 32,763,470
----------- -----------
Net Assets Available for Benefits,
End of Year $27,069,394 $41,994,760
=========== ===========
See Accompanying Notes to Financial Statements
26
<PAGE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
Statement of Changes in Net Assets Available for Benefits
with Fund Information for the Year Ended December 31, 1997
Fidelity
Retirement
Growth Loan
Fund Fund
Sources of Participants' Equity:
Contributions:
Employee $ 2,324,724 $ 0
Employer 0 0
----------- ----------
2,324,724 0
----------- ----------
Plan-to-Plan Transfers 329,329 51,768
Investment Income:
Dividend and Interest Income 5,818,457 0
Net Change in Fair Value of
Investments (309,142) 0
----------- ----------
5,509,315 0
----------- ----------
Application of Participants' Equity:
Distributions to Active and
Terminated Participants 1,375,393 138,629
Administrative and Miscellaneous
Expenses 923 0
----------- ----------
1,376,316 138,629
----------- ----------
Increase (Decrease) in Net Assets
Available for Benefits prior to
interfund transfers 6,787,052 (86,861)
Loans to Participants, net (12,030) 34,873
Fund-to-Fund Transfers (3,876,423) 0
Net Assets Available for Benefits,
Beginning of Year 30,283,181 3,917,858
----------- ----------
Net Assets Available for Benefits,
End of Year $33,181,780 $3,865,870
=========== ==========
See Accompanying Notes to Financial Statements
27
<PAGE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
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 $ 115,604 $ 613,537
Employer 0 0
---------- ----------
115,604 613,537
---------- ----------
Plan-to-Plan Transfers 8,077 73,516
Investment Income:
Dividend and Interest Income 78,070 785,862
Net Change in Fair Value of
Investments 51,147 727,905
---------- ----------
129,217 1,513,767
---------- ----------
Application of Participants' Equity:
Distributions to Active and
Terminated Participants 209,150 279,652
Administrative and Miscellaneous
Expenses 46 4
---------- ----------
209,196 279,656
---------- ----------
Increase (Decrease) in Net Assets
Available for Benefits prior to
interfund transfers 43,702 1,921,164
Loans to Participants, net 3,384 (8,120)
Fund-to-Fund Transfers 15,388 304,151
Net Assets Available for Benefits,
Beginning of Year 1,122,594 5,175,979
---------- ----------
Net Assets Available for Benefits,
End of Year $1,185,068 $7,393,174
========== ==========
See Accompanying Notes to Financial Statements
28
<PAGE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
Statement of Changes in Net Assets Available for Benefits
with Fund Information for the Year Ended December 31, 1997
Fidelity Fidelity
Asset International
Manager Growth and
Fund Income Fund
Sources of Participants' Equity:
Contributions:
Employee $606,566 $374,621
Employer 0 0
---------- ----------
606,566 374,621
---------- ----------
Plan-to-Plan Transfers 51,709 (3,351)
Investment Income:
Dividend and Interest Income 843,549 225,250
Net Change in Fair Value of
Investments 931,548 60,787
---------- ----------
1,775,097 286,037
---------- ----------
Application of Participants' Equity:
Distributions to Active and
Terminated Participants 790,382 257,952
Administrative and Miscellaneous
Expenses 4 104
---------- ----------
790,386 258,056
---------- ----------
Increase (Decrease) in Net Assets
Available for Benefits prior to
interfund transfers 1,642,986 399,251
Loans to Participants, net (29,578) 6,375
Fund-to-Fund Transfers (440,383) (802,524)
Net Assets Available for Benefits,
Beginning of Year 8,211,210 3,755,585
---------- ----------
Net Assets Available for Benefits,
End of Year $9,384,235 $3,358,687
========== ==========
See Accompanying Notes to Financial Statements
29
<PAGE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
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 $805,198 $210,662
Employer 0 0
----------- ----------
805,198 210,662
----------- ----------
Plan-to-Plan Transfers 79,844 (26,171)
Investment Income:
Dividend and Interest Income 936,837 4,704
Net Change in Fair Value of
Investments 0 258,350
----------- ----------
936,837 263,054
----------- ----------
Application of Participants' Equity:
Distributions to Active and
Terminated Participants 1,310,245 12,634
Administrative and Miscellaneous
Expenses 5,793 0
----------- ----------
1,316,038 12,634
----------- ----------
Increase (Decrease) in Net Assets
Available for Benefits prior to
interfund transfers 505,841 434,911
Loans to Participants, net (35,616) 8,888
Fund-to-Fund Transfers (474,453) 2,424,167
Net Assets Available for Benefits,
Beginning of Year 15,077,568 0
----------- ----------
Net Assets Available for Benefits,
End of Year $15,073,340 $2,867,966
=========== ==========
See Accompanying Notes to Financial Statements
30
<PAGE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
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 $209,244 $72,604
Employer 0 0
---------- --------
209,244 72,604
---------- --------
Plan-to-Plan Transfers 3,189 1,035
Investment Income:
Dividend and Interest Income 228,086 54,230
Net Change in Fair Value of
Investments (144,840) (42,418)
---------- --------
83,246 11,812
---------- --------
Application of Participants' Equity:
Distributions to Active and
Terminated Participants 12,303 0
Administrative and Miscellaneous
Expenses 0 0
---------- --------
12,303 0
---------- --------
Increase (Decrease) in Net Assets
Available for Benefits prior to
interfund transfers 283,376 85,451
Loans to Participants, net (4,856) (1,727)
Fund-to-Fund Transfers 1,416,164 602,620
Net Assets Available for Benefits,
Beginning of Year 0 0
---------- --------
Net Assets Available for Benefits,
End of Year $1,694,684 $686,344
========== ========
See Accompanying Notes to Financial Statements
31
<PAGE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
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 $123,549 $ 26,967
Employer 0 0
-------- ----------
123,549 26,967
-------- ----------
Plan-to-Plan Transfers 1,376 0
Investment Income:
Dividend and Interest Income 58,962 4,439
Net Change in Fair Value of
Investments 29,727 0
-------- ----------
88,689 4,439
-------- ----------
Application of Participants' Equity:
Distributions to Active and
Terminated Participants 0 0
Administrative and Miscellaneous
Expenses 0 62,738
-------- ----------
0 62,738
-------- ----------
Increase (Decrease) in Net Assets
Available for Benefits prior to
interfund transfers 213,614 (31,332)
Loans to Participants, net 176 17,052
Fund-to-Fund Transfers 752,293 1,638,260
Net Assets Available for Benefits,
Beginning of Year 0 0
-------- ----------
Net Assets Available for Benefits,
End of Year $966,083 $1,623,980
======== ==========
See Accompanying Notes to Financial Statements
32
<PAGE>
ILLINOIS POWER COMPANY
INCENTIVE SAVINGS PLAN
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 $7,951,931
Employer 2,098,559
------------
10,050,490
------------
Plan-to-Plan Transfers 1,106,265
Investment Income:
Dividend and Interest Income 12,624,554
Net Change in Fair Value of
Investments 8,783,804
------------
21,408,358
------------
Application of Participants' Equity:
Distributions to Active and
Terminated Participants 7,828,895
Administrative and Miscellaneous
Expenses 101,955
------------
7,930,850
------------
Increase (Decrease) in Net Assets
Available for Benefits prior to
interfund transfers 24,634,263
Loans to Participants, net 0
Fund-to-Fund Transfers 0
Net Assets Available for Benefits,
Beginning of Year 125,711,102
------------
Net Assets Available for Benefits,
End of Year $150,345,365
============
See Accompanying Notes to Financial Statements
33
<PAGE>
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. 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.
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:
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
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.
34
<PAGE>
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; increase the
maximum Company Incentive Contribution; 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 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 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 Stock Fund.
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 Illinova stock if specified performance goals are met. Units
35
<PAGE>
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, 350,841 and 339,205 shares have been allocated
to salaried employees for Matching Contribution and Company Incentive
Contributions.
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
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
36
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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 1,021,868 $25,546,700 $21,420,783
Fidelity Equity Income
Fund 782,044 $43,442,523 $29,612,286
Fidelity Retirement
Growth Fund 2,175,660 $44,622,782 $39,077,299
Fidelity Asset Manager
Fund 621,938 $10,815,508 $10,111,240
Fidelity Managed Income
Portfolio Fund 17,502,633 $17,502,633 $17,502,633
December 31, 1997
Investments at Fair
Value as Determined by
Quoted Market Price
Units Value Cost
Illinova Common Stock 964,040 $25,968,828 $20,374,849
Fidelity Equity Income
Fund 799,689 $41,911,711 $28,462,446
Fidelity Retirement
Growth Fund 1,964,771 $33,106,384 $34,459,220
Fidelity Asset Manager
Fund 510,242 $ 9,362,941 $ 7,937,016
Fidelity Managed Income
Portfolio Fund 15,046,006 $15,046,006 $15,046,006
40
<PAGE>
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 $3,773,625 in 268 transactions and
sold shares, the proceeds of which totaled $3,535,604, in 238 transactions. The
net gain on these sales was $916,076. 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 230 $ 8,007,695
Fidelity Retirement Growth Fund 229 $10,361,828
Fidelity Asset Manager Income Fund 123 $ 1,447,349
Fidelity Asset Manager Growth Fund 169 $ 2,273,648
Fidelity Asset Manager Fund 172 $ 3,565,259
Fidelity International Growth and
Income Fund 145 $ 716,172
Fidelity Managed Income Portfolio
Fund 184 $ 8,792,668
Fidelity US Equity Index
Commingled Pool 188 $ 5,309,214
Founders Growth Fund 163 $ 3,069,832
USAA International Fund 112 $ 584,698
Warburg Pincus Emerging Growth 147 $ 996,298
Fidelity Brokerage Link 80 $ 2,406,796
Cash Portfolio 134 $ 4,063,789
41
<PAGE>
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
Fidelity Equity Income Fund 204 $9,175,677 $2,317,821
Fidelity Retirement Growth
Fund 201 $6,211,043 $467,294
Fidelity Asset Manager Income
Fund 58 $717,330 $ 15,196
Fidelity Asset Manager Growth
Fund 120 $1,771,486 $267,679
Fidelity Asset Manager Fund 128 $1,666,478 $275,443
Fidelity International Growth
and Income Fund 104 $871,829 $ 68,018
Fidelity Managed Income
Portfolio Fund 187 $6,336,041 0
Fidelity US Equity Index
Commingled Pool 90 $2,030,099 $161,427
Founders Growth Fund 75 $882,933 $ (13,110)
USAA International Fund 52 $570,246 $(9,526)
Warburg Pincus Emerging
Growth 68 $607,291 $ 23,688
Fidelity Brokerage Link 252 $ 35,295 0
Cash Portfolio 198 $4,012,042 0
42
<PAGE>
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
<PAGE>
Line 27a Schedule I
Illinois Power Company
Incentive Savings Plan
Schedule of Assets Held for Investment Purposes
December 31, 1998
Identity of Issue/ Current
Description of Investment Cost Value
*Illinova Common Stock $21,420,783 $25,546,700
*Fidelity Equity Income Fund 29,612,286 43,442,523
*Fidelity Retirement Growth Fund 39,077,290 44,622,782
*Fidelity Asset Manager Income Fund 1,854,894 1,918,843
*Fidelity Asset Manager Growth Fund 7,028,069 8,025,684
*Fidelity Asset Manager Fund 10,111,240 10,815,508
*Fidelity International Growth and
Income Fund 3,025,196 3,370,968
*Fidelity Managed Income Portfolio
Fund 17,502,633 17,502,633
*Fidelity US Equity Index
Commingled Pool 6,059,024 7,493,956
*Founders Growth Fund 4,073,841 4,372,705
*USAA International Fund 743,050 696,540
*Warburg Pincus Emerging Growth 1,363,254 1,421,588
*Fidelity Brokerage Link 3,992,883 3,992,883
*Participant Loans** 4,190,017 4,190,017
--------- ---------
$150,054,460 $177,413,330
============ ============
*A party-in-interest to the Plan
**Interest rates on loans range
from 7% to 11%
<PAGE>
<TABLE>
<CAPTION>
Line 27d Schedule II
Illinois Power Company
Incentive Savings Plan
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
- -------------------- ----------- ---------- ------ -------- ----------- ---------- -----------
Fidelity Equity
<S> <C> <C> <C> <C> <C> <C> <C>
Income Fund $ 8,007,695 $9,175,677 N/A N/A $6,857,856 $9,175,677 $2,317,821
Fidelity Retirement
Growth Fund $10,361,828 $6,211,043 N/A N/A $5,743,749 $6,211,043 $467,294
Fidelity Managed
Income Portfolio Fund $ 8,792,668 $6,336,041 N/A N/A $6,336,041 $6,336,041 0
</TABLE>
* 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.
<PAGE>
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
by/s/Kim B. Leftwith
Kim B. Leftwich
Vice-President
Date: June 28, 1999
EXHIBIT INDEX
Exhibits Filed Herewith
Exhibit No. Description
- --------------------------------------------------------------------------------
1 Consent of Independent Accountants
<PAGE>
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 the year ended December 31, 1998, which appears in
this Form 11-K.
by /s/ PricewaterhouseCoopers LLP
St. Louis, Missouri
June 28, 1999
