01—Abstract
Summary
Summary of the 10-K filed March 29, 2000. Cited figures are marked; the original filing is the authoritative source.
Alliant Energy Corporation's 1999 combined Form 10-K (filed jointly with IES Utilities Inc. and Wisconsin Power and Light Company) reports net income of $196.6 milliona, or $2.51 per share, up from $96.7 million, or $1.26 per share, in 1998, which included $54 million of pre-tax merger-related expenses.
Operating revenues were $2.20 billionb. Results were helped by $40.3 million of pre-tax gains on sales of McLeodUSA stock, higher electric and gas margins, and lower operation and maintenance expenses. Utility earnings were $161.1 million ($2.06 per share) versus $109.5 million in 1998, and non-regulated Resources earned $37.8 million versus a $8.9 million loss.
The balance sheet grew substantially, with total assets of $6.08 billionc at year-end 1999 versus $4.96 billion, driven largely by the McLeodUSA investment, which was carried at $1.12 billion. Common equity rose to $2.16 billion. Management expects construction and acquisition expenditures of approximately $939 million in 2000, including about $484 million for international investments tied to the January 2000 Brazil acquisition, a roughly $347 million stake in four Brazilian electric utilities.
The company also issued $402.5 milliond of exchangeable senior notes in February 2000, whose accounting can cause non-cash earnings swings tied to McLeodUSA's share price. Key regulatory and structural items include a four-year rate freeze following the 1998 merger, a proposed Iowa electric restructuring bill, planned formation of American Transmission Company, and a proposed merger of IES Utilities and Interstate Power Company into Interstate Power and Light Company. The filing also notes the 2000 earnings growth target of 4-6% from business operations.
02—Key points
Key Highlights
- Net income of $196.6 million ($2.51 per share) in 1999, versus $96.7 million ($1.26 per share) in 1998, which included $54 million of pre-tax merger-related expenses
- Pre-tax gains of $40.3 million from sales of McLeodUSA stock, which contributed $0.32 per share to 1999 earnings
- Utility earnings of $161.1 million ($2.06 per share) versus $109.5 million in 1998; Resources reported net income of $37.8 million versus a net loss of $8.9 million
- Total assets of $6.08 billion at December 31, 1999, including a $1.12 billion investment in McLeodUSA stock
- Planned 2000 construction and acquisition expenditures of approximately $939 million, of which about $484 million is for international investments
- Brazil investment of approximately $347 million acquired January 25, 2000, expected to dilute 2000 EPS by approximately 3%
- Issued $402.5 million of exchangeable senior notes in February 2000, which may cause non-cash swings in reported net income tied to McLeodUSA's share price
03—Questions
Frequently Asked Questions
What drove the increase in Alliant Energy's 1999 earnings?
Earnings rose to $2.51 per share from $1.26 in 1998, which included about $0.45 per share of merger expenses. The filing cites higher non-regulated earnings of $0.60 per share (of which $0.32 came from McLeodUSA stock sales), higher electric and natural gas margins, and lower utility operation and maintenance expenses, partially offset by higher depreciation and interest expense.
How significant is the McLeodUSA investment to the company?
The McLeodUSA stock was carried at $1.12 billion at year-end 1999, versus $320 million a year earlier. A 10% change in its quoted price would have changed the investment's value by approximately $112 million. Changes in McLeodUSA's share price also affect reported net income through the exchangeable senior notes, which the filing notes could significantly increase or decrease reported earnings.
What are the major investment plans for 2000 and beyond?
Alliant Energy estimates 2000 construction and acquisition expenditures of about $939 million: roughly $484 million for international investments, $319 million for utility operations, and $136 million for new business development at Resources. The company expects to spend about $1.4 billion on utility construction during 2001-2004.
What regulatory and industry changes could affect the company?
The filing discusses a proposed Iowa electric restructuring bill that would allow customer choice in October 2002 and freeze Iowa prices at January 2000 levels, Wisconsin's planned transfer of transmission assets to American Transmission Company, and FERC Order 2000 on regional transmission organizations. It also notes a four-year rate freeze at the utilities following the 1998 merger, and a proposed merger of IES Utilities and Interstate Power Company into Interstate Power and Light Company expected by late 2000 or early 2001.
04—Continue