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Alliant Energy Annual Report, Year Ended Dec 31, 1994

Filing Date
Filed March 14, 1995
Period End
December 31, 1994
Security
LNT
In the record · 2016–202610-K1110-Q338-K136

LNT filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 136 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · May ’17May ’17
  2. Leadership change8-K · Dec ’19Dec ’19
  3. Material agreement8-K · Mar ’22Mar ’22
  4. Leadership change8-K · Jan ’26Jan ’26

01—Abstract

Summary

Summary of the 10-K filed March 14, 1995. Cited figures are marked; the original filing is the authoritative source.

WPL Holdings, Inc. is a Wisconsin holding company whose main subsidiary, Wisconsin Power and Light Company (WPL), is a public utility providing electric and natural gas service mainly in south and central Wisconsin.

The other principal subsidiary, Heartland Development Corporation (HDC), runs nonregulated businesses in environmental engineering and consulting, affordable housing, and energy services. For 1994, the company reported operating revenues of $816.2 milliona, net income of $65.3 million, and earnings per share of $2.13, compared with $2.11 in 1993. Management said 1994 results were affected by two non-recurring items: a $5.3 million after-tax benefit from reversing a coal contract penalty and $13.7 million of pre-tax early retirement and severance costs.

Excluding these items, earnings per share were $2.24b versus $2.15 in 1993. A major change for investors is the Wisconsin PSCW's rate order UR-109, effective January 1, 1995. It cut electric revenues by about $12.3 million annually and set an 11.5 percent allowed return on common equity.

The order also eliminated the electric fuel adjustment clause and the automatic purchased gas adjustment clause, so WPL now benefits from fuel cost reductions but bears fuel cost increases. WPL must also keep a utility common equity level of 51.93 percent through 1996, and the PSCW must approve dividends above the $58.1 millionc forecast for 1995 if they would push that ratio below the target. Capital needs are significant.

WPL's estimated construction and total capital requirements are $128.6 milliond in 1995 and $209.7 million in 1997. The company expects to finance part of these needs externally, including $40.5 million of additional equity and $65 million of long-term debt over the next three years. The Kewaunee nuclear plant (WPL owns 41 percent) has steam generator tube corrosion that could reduce its capacity by up to 20 percent by 2013, and the owners decided to continue operating the existing generators rather than replace them.

02—Key points

Key Highlights

  1. 1994 EPS of $2.13 versus $2.11 in 1993; excluding non-recurring items, EPS was $2.24 versus $2.15.
  2. Operating revenues of $816.2 million and net income of $65.3 million for 1994.
  3. Rate order UR-109 effective January 1, 1995 reduced electric revenues by about $12.3 million annually, set an 11.5 percent return on common equity, and eliminated the electric fuel and gas purchased gas adjustment clauses.
  4. WPL must maintain a 51.93 percent utility common equity ratio during the 1995-1996 test year, and dividends above the $58.1 million forecast for 1995 require PSCW approval if they would breach that level.
  5. Estimated WPL capital requirements are $128.6 million in 1995 and $209.7 million in 1997; the company expects $40.5 million of equity and $65 million of long-term debt to be issued over the next three years.
  6. Kewaunee nuclear plant steam generator tube plugging could reduce capacity by as much as 20 percent by 2013; the owners chose to keep the existing generators.
  7. Dividends were $1.92 per share in 1994, up from $1.90, and the company had 30,773,588 common shares outstanding at year-end.

03—Questions

Frequently Asked Questions

  1. How did WPL Holdings perform financially in 1994?

    Net income rose to $65.3 million from $62.5 million, and EPS increased to $2.13 from $2.11. Operating revenues were $816.2 million, up from $771.9 million in 1993. The filing says results were affected by a $5.3 million after-tax benefit from reversing a coal contract penalty and $13.7 million of pre-tax early retirement and severance costs.

  2. What did the January 1995 rate order change for investors?

    Order UR-109 cut electric revenues by about $12.3 million a year and set a return on common equity of 11.5 percent, versus the previously allowed 11.6 percent. It also eliminated the automatic electric fuel adjustment and purchased gas adjustment clauses, so WPL gains from lower fuel costs but is exposed to higher ones. Gas margin exposure is subject to ratepayer sharing capped at $1.1 million.

  3. Are there constraints on dividends paid by WPL to the parent company?

    Yes. The PSCW must approve WPL dividends to the Company that exceed the level forecast for 1995 ($58.1 million) if they would reduce WPL's average common equity ratio below 51.93 percent, which must be maintained during the two-year test year ending December 31, 1996.

  4. What are the company's major capital spending plans?

    WPL's estimated total capital requirements are $128.6 million in 1995, $104.1 million in 1996, $209.7 million in 1997, $145.5 million in 1998 and $127.4 million in 1999. Construction includes an 86-megawatt combustion-turbine generator expected to be operational in 1996, and the company expects to finance part of these needs with $40.5 million of equity and $65 million of long-term debt.

  5. What risks does the Kewaunee nuclear plant pose?

    The steam generator tubes are subject to corrosion, and the equivalent of about 12 percent of tubes are currently plugged. Plugging could reduce Kewaunee's capacity by as much as 20 percent by 2013, when the current operating license expires. The owners concluded that continuing to operate the existing steam generators is the most prudent course for now, and WPL's share of decommissioning costs is estimated at $159 million in 1994 dollars.

04—Continue

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