Skip to content
AnalystLens

Alliant Energy Annual Report, Year Ended Dec 31, 2006

Filing Date
Filed March 1, 2007
Period End
December 31, 2006
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 1, 2007. Cited figures are marked; the original filing is the authoritative source.

Alliant Energy Corporation (LNT), a regulated investor-owned public utility holding company, filed this combined Form 10-K for fiscal 2006 with its subsidiaries Interstate Power and Light Company (IPL) and Wisconsin Power and Light Company (WPL).

Consolidated net income was $315.7 milliona, or $2.69 per diluted share, compared with a net loss of $7.7 million in 2005, which had included $334.3 million of pre-tax Brazil asset valuation charges. Income from continuing operations was $338.3 million ($2.89 per diluted share). Utility net income was $259.0 million, and non-regulated (Resources) net income was $69.0 million, helped by a $254 million pre-tax gain on the sale of its New Zealand investment.

Operating revenues were $3,359.4 millionb. The company completed the sale of its Duane Arnold Energy Center interest in January 2006 and its New Zealand and Brazil investments, and it has signed agreements to sell IPL's electric transmission assets to ITC Midwest LLC for approximately $750 million in cash and its Mexico investment. The company's strategy centers on its utility business, which it expects to provide the majority of future earnings and cash flows.

Alliant plans substantial new generation investment over 2007 through 2013, including a 300 MW clean-coal base-load unit at Nelson Dewey, a 250 MW share of a proposed Sutherland facility, and wind projects, with 2007 and 2008 construction expenditures projected at $535 millionc and $1,085 million respectively. Consolidated cash and cash equivalents were $265.2 million at year-end, with $471 million of available revolving credit capacity.

The Board increased the share repurchase authorization to $400 milliond in February 2007, and the annual dividend rate was raised to $1.27 per share. Key risks flagged in the filing include regulatory outcomes affecting rate recovery, coal and natural gas price volatility, the expiration in May 2007 of WPL's collective bargaining agreement covering 1,312 employees, the Calpine bankruptcy affecting certain power purchase agreements, weather exposure, and an unquantified ice storm impact on IPL's transmission and distribution system in February 2007.

02—Key points

Key Highlights

  1. Net income of $315.7 million ($2.69 per diluted share) in 2006, versus a net loss of $7.7 million in 2005 that included $334.3 million of pre-tax Brazil asset valuation charges.
  2. Income from continuing operations rose to $338.3 million ($2.89 per diluted share) from $56.4 million in 2005, aided by a $254 million pre-tax ($150 million after-tax) gain on the sale of Alliant Energy New Zealand Ltd. stock.
  3. Operating revenues were $3,359.4 million, up from $3,279.6 million, with electric revenues of $2,443.0 million (73% of the total) and gas revenues of $633.3 million.
  4. Non-regulated divestitures generated substantial proceeds: $186 million from New Zealand, $82 million from Chinese generating facilities, $150 million from Brazil, and $23 million from gas gathering systems; the Mexico sale is expected to close at the end of Q1 2007.
  5. Proposed sale of IPL's electric transmission assets to ITC Midwest LLC for approximately $750 million in cash, with estimated after-tax net proceeds of $475 million to $525 million expected by late 2007.
  6. Planned utility generation investment includes a 300 MW clean-coal unit (estimated $717 million) and wind projects, with 2007 and 2008 construction and acquisition expenditures of $535 million and $1,085 million.
  7. Board increased the share repurchase authorization to $400 million in February 2007 and raised the 2007 annual dividend to $1.27 per share from $1.15.

03—Questions

Frequently Asked Questions

  1. Why did Alliant's earnings swing so sharply from a loss in 2005 to a profit in 2006?

    The 2005 results included $334.3 million of pre-tax asset valuation charges related to the Brazil investments, which were $202 million after tax, or $1.73 per share. In 2006 Alliant recorded no comparable charge and instead recognized a $150 million after-tax gain on the sale of its New Zealand investment. Utility earnings also rose, to $259.0 million from $251.7 million, mainly due to lower nuclear-related operating expenses after the DAEC and Kewaunee sales.

  2. What is the company's plan for future generation capacity?

    Alliant's current utility generation plan for 2007 to 2013 calls for base-load generation in Iowa and Wisconsin, reducing reliance on purchased power. Planned projects include a 300 MW clean-coal unit at Nelson Dewey, Wisconsin, with an estimated cost of $717 million in current dollars, and a proposed facility at Sutherland, Iowa, in which IPL would own at least 250 MW at an estimated total cost of about $1 billion. Wind projects of 60 to 100 MW and 200 MW are also planned, and regulatory approval decisions are expected in 2007 and 2008.

  3. What are the main risks facing investors?

    The filing highlights regulatory risk on rate recovery and authorized returns; commodity price exposure, particularly WPL's retail electric margins, which are more exposed to fuel-cost changes under Wisconsin's recovery mechanisms; coal supply from the Powder River Basin; the expiration in May 2007 of WPL's collective bargaining agreement with IBEW Local 965, covering 1,312 employees; the Calpine bankruptcy, which affects the RockGen and Riverside PPAs; and weather and MISO market settlement adjustments. It also cites an ice storm in February 2007 whose financial effect could not yet be determined.

  4. How much cash and liquidity does the company have?

    At December 31, 2006, Alliant had $265.2 million of cash and cash equivalents and $471 million of available capacity under its revolving credit facilities. The three facilities totaling $650 million were extended to November 2011. Commercial paper outstanding was $178.8 million. Operating cash flows from continuing operations were $420.7 million in 2006, down from $600.2 million in 2005, mainly due to higher pension contributions.

  5. How is the company returning capital to shareholders?

    Alliant paid $134.4 million in common dividends in 2006 and repurchased $105.1 million of common stock. In February 2007 the Board increased the share repurchase authorization by $200 million to $400 million total, of which $239.5 million remained available for the rest of 2007 as of February 28, 2007. The 2007 annual dividend rate rises to $1.27 per share, equal to a quarterly payment of $0.3175 beginning February 15, 2007.

04—Continue

← View all 10-K filings