01—Abstract
Summary
Summary of the 10-K filed February 25, 2015. Cited figures are marked; the original filing is the authoritative source.
Alliant Energy Corporation (LNT) is a regulated investor-owned public utility holding company headquartered in Madison, Wisconsin, whose primary subsidiaries are Interstate Power and Light Company (IPL) and Wisconsin Power and Light Company (WPL).
The company serves approximately 1 million electric and approximately 420,000 natural gas customers in the Midwest. For 2014, Alliant Energy reported operating revenues of $3,350.3 milliona, net income attributable to common shareowners of $383.1 million, and earnings per share of $3.46, compared with $3.23 in 2013. Electric utility operations accounted for the largest share of operating revenue, followed by gas.
The company's common stock closed 2014 at $66.42b, and the 2015 targeted annual dividend was raised to $2.20 per share. The filing describes a strategic plan built on competitive costs, safe and reliable service, and responsible resources. Major capital projects include IPL's approximately 650 MW Marshalltown natural gas-fired combined-cycle unit (cost cap of $920 million, expected in service in the second quarter of 2017) and WPL's proposed approximately 650 MW Riverside expansion, with estimated capital expenditures of $725 million to $775 million.
Alliant Energy estimates total utility construction and acquisition expenditures of $1,075 millionc in 2015, and the filing notes forecasted capital expenditures of approximately $4.2 billion over the next four years. Retail base rates are frozen at IPL in Iowa and at WPL in Wisconsin through 2016, and IPL is selling its Minnesota electric and natural gas distribution assets, expected to close in 2015. Key risks highlighted include extensive regulation, pending EPA greenhouse gas and CO2 rules for existing and new fossil-fueled generation, environmental compliance costs, coal and natural gas price exposure, dependence on capital markets, and the loss of wholesale customers.
Three wholesale customers have given notice of termination, and the filing states the company's wholesale supply agreements with Jo-Carroll, WPPI Energy and Great Lakes Utilities will end in 2017 or 2018. Alliant Energy reported Long-term obligations, net of $3,791.1 milliond and total assets of $12,085.9 million at year-end 2014.
02—Key points
Key Highlights
- Alliant Energy 2014 operating revenues of $3,350.3 million, up from $3,276.8 million in 2013; net income attributable to common shareowners of $383.1 million, or $3.46 per share, versus $3.23 in 2013.
- Dividend: 2014 dividends declared were $2.04 per share; the targeted 2015 annual dividend was increased to $2.20 per share ($0.55 quarterly), beginning with the February 2015 payment.
- Marshalltown: IPL began constructing an approximate 650 MW natural gas-fired combined-cycle unit in June 2014 under IUB rate-making principles with a $920 million cost cap; in-service is expected in the second quarter of 2017.
- Riverside expansion: WPL plans to file a CPCN application in early 2015 for an approximate 650 MW natural gas-fired unit in Beloit, Wisconsin, with estimated capital expenditures of $725 million to $775 million and a PSCW decision expected by mid-2016.
- Rate freezes and credits: IPL's Iowa retail electric base rates are frozen through 2016 with $105 million in aggregate customer billing credits; WPL's retail electric base rates are frozen through the end of 2016.
- Capital plan: total utility construction and acquisition expenditures are currently anticipated at $1,025 million for 2015 and $1,065 million for 2016 (Alliant Energy consolidated utility), with forecasted capital spending of about $4.2 billion over four years.
- Wholesale customer losses: Jo-Carroll (IPL, effective April 2018), WPPI Energy (WPL, effective May 2017) and Great Lakes Utilities (WPL, effective December 2017) have given notice to terminate wholesale power supply agreements.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2014filed February 25, 2015Financial Statements
FY2014 against FY2013
| Line item | FY2014FY2013 | Change |
|---|---|---|
| Revenue | $3.35B$3.28B | +2.2% |
| Operating Expenses | $2.81B$2.74B | +2.3% |
| Operating Income | $543.60M$533.90M | +1.8% |
| Interest Expense | $180.60M$172.80M | +4.5% |
| Net Income | $393.30M$376.20M | +4.5% |
| EPS (Basic) | $1.73$3.23 | −46.4% |
| Shares Outstanding (Basic) | 221.70M110.80M | +100.1% |
05—Questions
Frequently Asked Questions
How did Alliant Energy perform financially in 2014?
Alliant Energy reported 2014 operating revenues of $3,350.3 million and net income attributable to common shareowners of $383.1 million, or $3.46 per share, compared with $358.3 million, or $3.23 per share, in 2013. Utilities and Corporate Services contributed $3.37 per share from continuing operations, while non-regulated and parent contributed $0.11. Higher 2014 earnings were primarily driven by lower purchased electric capacity expense related to the previous DAEC PPA, partially offset by retail electric customer billing credits at IPL.
What are the main growth projects Alliant Energy is pursuing?
The main projects are IPL's Marshalltown natural gas-fired combined-cycle unit (approximately 650 MW, cost cap of $920 million, expected in service in 2017) and WPL's proposed Riverside expansion (approximately 650 MW, estimated capital cost of $725 million to $775 million, expected construction 2016 to early 2019). Emission controls projects at coal units, including scrubbers and baghouses at Edgewater Unit 5 and an SCR at Columbia Unit 2, are also part of the plan.
What is the status of IPL's sale of Minnesota assets?
IPL signed agreements in September 2013 to sell its Minnesota electric distribution assets to Southern Minnesota Energy Cooperative and its Minnesota natural gas distribution assets to a subsidiary of Integrys Energy Group. The MPUC approved the natural gas sale in December 2014. Expected proceeds are approximately $130 million for electric and $10 million for natural gas, and the transactions are expected to conclude in 2015 pending remaining approvals and contingencies.
What environmental regulations could affect Alliant Energy's operations?
The filing identifies several pending rules, including EPA's June 2014 proposed Clean Air Act Section 111(d) standards to reduce CO2 emissions from existing fossil-fueled generating units, with final standards expected in 2015 and state plans due by June 30, 2016. Other rules include the MATS Rule, the Industrial Boiler MACT Rule, the final coal combustion residuals rule issued in December 2014, and Section 316(b) cooling water intake rules. Management states it cannot predict with certainty the financial impact of these rules, but expects compliance expenditures to be material.
How is Alliant Energy financing its capital program?
The filing indicates IPL expects to issue up to $300 million of long-term debt in 2015 and Alliant Energy expects to issue approximately $150 million of common stock in 2015. IPL expects capital contributions of $175 million from its parent in 2015. The company had $859 million of available revolving credit capacity at year-end 2014 and credit ratings of A- (S&P) and A3 (Moody's) at the parent, with outlooks listed as stable.
06—Continue