01—Abstract
Summary
Summary of the 10-K filed February 26, 2013. Cited figures are marked; the original filing is the authoritative source.
Alliant Energy Corporation (LNT), a regulated investor-owned public utility holding company headquartered in Madison, Wisconsin, filed this combined Form 10-K for fiscal 2012 together with its subsidiaries Interstate Power and Light Company (IPL) and Wisconsin Power and Light Company (WPL).
The company reported 2012 net income of $335.7 milliona, or $319.8 million attributable to common shareowners ($2.89 per diluted share), compared with $2.74 in 2011. Operating revenues were $3,094.5 million in 2012 versus $3,221.4 million in 2011. Utility electric and gas operations supply about 1 million electric and about 415,000 natural gas customers, and electric margins were $1,605.5 million.
Income from continuing operations per share was $2.93b, and the company declared dividends of $1.80 per share, with a 2013 annual dividend target raised to $1.88. The filing describes a large capital program. Construction and acquisition expenditures totaled $1,158.1 million in 2012, and management estimates $780 million to $955 million of annual utility spending for 2013 through 2016 at the Alliant Energy level.
Key projects include IPL's proposed approximately 600 MW Marshalltown natural gas combined-cycle plant, environmental emission controls at several coal units, WPL's purchase of the 600 MW Riverside Energy Center for $403.5 millionc, and the Franklin County wind project. The company also expects to retire or fuel-switch several older coal units by 2016 and 2018. Regulatory developments include base rate freezes at IPL's Iowa electric rates through 2013 and WPL's Wisconsin electric and gas rates through 2014, and a January 2013 Iowa order allowing IPL to proceed with a purchased power agreement for the Duane Arnold Energy Center.
Investors should weigh several risks disclosed in the filing: regulatory outcomes on rate recovery, rising transmission costs (electric transmission service expenses expected to rise by approximately $70 milliond at Alliant Energy in 2013), pending federal environmental rules affecting coal-fired generation, dependence on access to capital markets and credit ratings, and an ERISA class-action judgment of $18.7 million against the Cash Balance Plan that is under appeal. Liquidity at year-end included $21.2 million of cash and $733 million of available revolving credit capacity.
02—Key points
Key Highlights
- Alliant Energy reported 2012 net income attributable to common shareowners of $319.8 million, or $2.89 per diluted share, up from $2.74 in 2011.
- Operating revenues were $3,094.5 million in 2012, down from $3,221.4 million in 2011, with electric revenues of $2,589.3 million and gas revenues of $396.3 million.
- Construction and acquisition expenditures were $1,158.1 million in 2012, including the $403.5 million purchase of the 600 MW Riverside Energy Center by WPL in December 2012.
- The 2013 annual common dividend target was increased to $1.88 per share, and the dividend payout ratio was 61% of 2012 consolidated earnings from continuing operations.
- IPL plans a proposed approximately 600 MW natural gas-fired combined-cycle Marshalltown Generating Station with a $700 million fixed cost cap, with regulatory decisions expected in Q4 2013.
- Utility regulation includes IPL's retail electric base rate freeze in Iowa through 2013 and WPL's retail electric and gas base rate freeze in Wisconsin through 2014.
- Management expects electric transmission service expenses to rise in 2013 by about $70 million at Alliant Energy, $60 million at IPL and $10 million at WPL, and an ERISA class-action judgment of $18.7 million against the Cash Balance Plan is under appeal.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2012filed February 26, 2013Financial Statements
FY2012 against FY2011
| Line item | FY2012FY2011 | Change |
|---|---|---|
| Revenue | $3.09B$3.22B | −3.9% |
| Operating Expenses | $2.57B$2.71B | −4.9% |
| Operating Income | $519.70M$513.30M | +1.2% |
| Interest Expense | $156.70M$158.30M | −1.0% |
| Net Income | $335.70M$321.90M | +4.3% |
| EPS (Basic) | $2.89$2.74 | +5.5% |
| Shares Outstanding (Basic) | 110.75M110.63M | +0.1% |
| Shares Outstanding (Diluted) | 110.77M110.68M | +0.1% |
05—Questions
Frequently Asked Questions
How did Alliant Energy perform financially in 2012?
Net income attributable to Alliant Energy common shareowners was $319.8 million, or $2.89 per diluted share, compared with $303.6 million, or $2.74 per share, in 2011. Income from continuing operations was $2.93 per share, versus $2.92 in 2011. Operating revenues declined to $3,094.5 million from $3,221.4 million, mainly because cost of gas sold and electric production fuel costs fell.
What are the company's main capital spending plans?
Alliant Energy, IPL and WPL currently anticipate utility construction and acquisition expenditures of $780 million in 2013, $795 million in 2014, $955 million in 2015 and $820 million in 2016. Major items include environmental emission controls totaling $355 million in 2013 across the company, the proposed Marshalltown gas plant at IPL beginning construction in 2014, and generation performance improvements.
What regulatory risks should investors consider?
Rate relief is subject to regulator approval, and the filing notes that IPL and WPL may not receive adequate rate relief or earn authorized returns. IPL's Iowa electric base rates are frozen through 2013 and WPL's Wisconsin electric and gas base rates through 2014. Pending FERC matters include IPL's complaint against ITC's Attachment FF tariff, which IPL says could cost customers $138 million in incremental costs for 2012 through 2016.
What environmental issues could affect future results?
The company faces pending federal rules on mercury and air toxics (Utility MACT), greenhouse gas standards for new and existing power plants, coal ash management, and cooling water intake structures. Management states that compliance costs will be material and that it expects prudently incurred costs to be recoverable in rates, but it cannot predict the final financial impact of several rules still subject to legal challenge.
Are there significant legal proceedings?
WPL is negotiating a consent decree with the EPA, Sierra Club and other parties to settle air permitting violation claims at Edgewater, Nelson Dewey and Columbia. Separately, a class-action lawsuit over the Alliant Energy Cash Balance Pension Plan resulted in a final judgment of $18.7 million, which the plan has appealed to the Seventh Circuit. In February 2013 the court awarded $6.4 million in attorney fees and costs, paid from the judgment amount.
06—Continue