01—Abstract
Summary
Summary of the 10-K filed February 25, 2014. Cited figures are marked; the original filing is the authoritative source.
Alliant Energy Corporation (NYSE: LNT) is a regulated investor-owned public utility holding company headquartered in Madison, Wisconsin, serving approximately 1 million electric and approximately 418,000 natural gas customers in the Midwest through its utility subsidiaries Interstate Power and Light Company (IPL) and Wisconsin Power and Light Company (WPL).
Its 2013 consolidated operating revenues were $3,276.8 milliona, up from $3,094.5 million in 2012, and income from continuing operations attributable to common shareowners was $364.2 million, or $3.29 per share, compared with $2.93 per share in 2012. Utility operations remain the primary source of earnings and cash flow, with electric operations representing the largest segment. Results were helped by higher weather-normalized sales, a revenue requirement adjustment at IPL, and lower energy conservation amortizations at WPL, partly offset by higher depreciation and transmission costs.
The company's strategic plan centers on competitive costs, safe and reliable service, and balanced generation. Major initiatives include construction of the approximately 600 MW Marshalltown natural gas-fired combined-cycle plant at IPL, subject to a $920 millionb cost cap; emission controls projects at several coal-fired units, including scrubbers and baghouses at Columbia Units 1 and 2, Edgewater Unit 5, and Ottumwa Unit 1; and planned retirements of older coal units. IPL also agreed to sell its Minnesota electric and natural gas distribution assets for approximately $128 million in aggregate, with closing expected in the second half of 2014 pending regulatory approvals.
Planned 2014 through 2017 construction and acquisition expenditures total $945 millionc, $950 million, $880 million and $780 million for Alliant Energy, respectively. Key risks highlighted in the filing include extensive regulation and the timing of rate recovery, environmental regulation including pending greenhouse gas rules and mercury and air toxics standards, dependence on capital markets and credit ratings, rising transmission costs, and the uncertain outcome of a FERC complaint on transmission return on equity. Investors should also note that WPL's retail electric and gas base rates are frozen through 2014, that IPL's Iowa retail electric base rate case is expected to be filed in late March 2014, and that Alliant Energy's targeted 2014 annual dividend was increased to $2.04 per share.
02—Key points
Key Highlights
- Consolidated operating revenues rose to $3,276.8 million in 2013 from $3,094.5 million in 2012; net income attributable to Alliant Energy common shareowners was $358.3 million, or $3.23 per share.
- Income from continuing operations attributable to common shareowners was $364.2 million, or $3.29 per share, versus $2.93 per share in 2012, driven by a $0.32 per share lapse of the 2012 Riverside PPA capacity expense and higher weather-normalized sales.
- Marshalltown: IUB approved a siting certificate and rate-making principles for a roughly 600 MW natural gas-fired combined-cycle plant with a $920 million cost cap, an 11% return on common equity, and expected 2017 in-service.
- IPL agreed in September 2013 to sell its Minnesota electric and natural gas distribution assets for approximately $128 million in aggregate, expected to close in the second half of 2014.
- Planned construction and acquisition expenditures for 2014 through 2017 total $945 million, $950 million, $880 million and $780 million for Alliant Energy, including $185 million in 2014 for Marshalltown and $185 million for environmental compliance at IPL and WPL.
- Common equity ratio was 46% and dividend payout ratio was 57% of 2013 consolidated earnings from continuing operations; the targeted 2014 annual dividend was increased to $2.04 per share.
- Purchased electric capacity expenses are expected to fall significantly in 2014 due to expiration of the DAEC PPA's existing terms in February 2014 and the Kewaunee PPA in December 2013.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2013filed February 25, 2014Financial Statements
FY2013 against FY2012
| Line item | FY2013FY2012 | Change |
|---|---|---|
| Revenue | $3.28B$3.09B | +5.9% |
| Operating Expenses | $2.74B$2.57B | +6.5% |
| Operating Income | $533.90M$519.70M | +2.7% |
| Interest Expense | $172.80M$156.70M | +10.3% |
| Net Income | $376.20M$335.70M | +12.1% |
| EPS (Basic) | $3.23$2.89 | +11.8% |
| Shares Outstanding (Basic) | 110.80M110.75M | 0.0% |
05—Questions
Frequently Asked Questions
How did Alliant Energy perform in 2013 compared with 2012?
Operating revenues increased to $3,276.8 million from $3,094.5 million. Income from continuing operations attributable to common shareowners was $364.2 million, or $3.29 per share, compared with $2.93 per share in 2012. Net income attributable to common shareowners was $358.3 million, or $3.23 per share.
What major capital projects is the company pursuing?
The company is building the Marshalltown natural gas-fired combined-cycle plant at IPL, with a cost cap of $920 million and expected in-service in 2017. It is also installing scrubbers and baghouses at Columbia Units 1 and 2, Edgewater Unit 5 and Ottumwa Unit 1, an SCR at Columbia Unit 2, and evaluating a WPL generation investment with capital spending expected to begin in 2016.
What regulatory developments could affect future rates?
WPL's retail electric and gas base rates are frozen through 2014, and WPL expects a retail rate filing in late March 2014 that could be effective in early 2015. IPL plans an Iowa retail electric base rate case in late March 2014 with a decision expected by the end of 2014. A FERC complaint filed in November 2013 seeks to reduce the base return on equity used by MISO transmission owners, including ITC and ATC.
What are the key environmental risks?
The filing identifies pending rules including the EPA's greenhouse gas new source performance standards, expected proposed rules for existing generating units in 2014, the Mercury and Air Toxics Standard with an April 2015 compliance deadline subject to legal challenge, CSAPR's vacatur at the Supreme Court, and proposed effluent guidelines and coal combustion residual rules. Management says it cannot predict the full financial impact but expects future capital investments could be significant.
What is the outlook for financing and dividends?
Alliant Energy, IPL and WPL plan to issue up to $600 million, $300 million and $300 million, respectively, of long-term debt in 2014, and Alliant Energy expects to issue about $150 million of common stock through 2016. The targeted 2014 annual common dividend is $2.04 per share, and the company had $721 million of available revolving credit capacity at year-end 2013.
06—Continue