01—Abstract
Summary
Summary of the 10-K filed February 21, 2020. Cited figures are marked; the original filing is the authoritative source.
Alliant Energy Corporation (Nasdaq: LNT) is a Wisconsin-incorporated regulated investor-owned public utility holding company providing regulated electric and natural gas service to approximately 970,000 electric and 420,000 natural gas customers in the Midwest through its two utility subsidiaries, Interstate Power and Light Company (IPL) and Wisconsin Power and Light Company (WPL).
In 2019, consolidated revenues were $3,647.7 milliona and net income attributable to Alliant Energy common shareowners was $557.2 million, or $2.33 per diluted share, compared with $512.1 million, or $2.19 per diluted share, in 2018. Utilities and Corporate Services income rose $44 million, primarily on higher earnings from increasing rate base, partly offset by higher depreciation and interest expense. The company's strategy centers on affordable energy, customer-focused investments in cleaner generation, and growing customer demand.
Construction and acquisition expenditures were $1,640.1 millionb in 2019, and management forecasts capital expenditures of approximately $5 billion over the next four years. Key projects include completed IPL wind projects, WPL's 730 MW West Riverside gas-fired facility expected in the first half of 2020, and a plan for up to 1,000 MW of WPL solar generation by 2023. Management expects higher 2020 earnings from increasing revenue requirements, offset in part by returning excess deferred tax credits from Federal Tax Reform, and expects to issue up to $250 million of common stock in 2020.
Investors should note the company's dependence on regulatory outcomes for rate relief, its large net operating loss and tax credit carryforwards that it plans to use, and climate-related pressure on its fossil-fueled generation, which the filing says could raise costs or affect stock and debt pricing. Total assets at year-end were $16,700.7 millionc and long-term obligations, net, were $6,190.8 million. The 2020 dividend target was raised to $1.52 per share, a quarterly rate of $0.38.
02—Key points
Key Highlights
- 2019 net income attributable to common shareowners of $557.2 million ($2.33 diluted EPS), up from $512.1 million ($2.19) in 2018.
- Revenues of $3,647.7 million in 2019, up from $3,534.5 million in 2018; electric utility revenues were $3,063.6 million.
- Targeted 2020 annual common dividend increased to $1.52 per share ($0.38 quarterly), with a 2019 dividend payout ratio of 61%.
- Capital plan of approximately $5 billion over the next four years, with 2020 construction and acquisition expenditures forecast at $1,425 million.
- WPL's 730 MW West Riverside natural gas facility expected to be completed in the first half of 2020; IPL's Whispering Willow Expansion (201 MW) placed in service January 2020.
- IPL retail electric rate settlement provides $35 million of billing credits to Iowa electric customers starting in 2020; WPL base rates held flat through 2020.
- Dividend-to-earnings and debt targets: consolidated debt about 55% of total capital; cumulative Iowa and Wisconsin credit facility totaling $1 billion.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2019, Alliant Energy kept $0.16.
- Revenue$3.65B100.0%
- Cost of revenue−$481.0M13.2%
- Gross profit$3.17B86.8%
- Operating costs−$2.39B65.5%
- Operating income$778.0M21.3%
- Interest, other & tax−$211.0M5.8%
- Net income$567.0M15.5%
Where FY2019 revenue went
$3.65B- Operating costs: $2.39B, 65% of revenue
- Net income: $567.0M, 16% of revenue
- Cost of revenue: $481.0M, 13% of revenue
- Interest, other & tax: $211.0M, 5.8% of revenue
Kept 16% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2019filed February 21, 2020Financial Statements
FY2019 against FY2018
| Line item | FY2019FY2018 | Change |
|---|---|---|
| Revenue | $3.65B$3.53B | +3.2% |
| Cost of Revenue | $481.00M$496.00M | −3.0% |
| Gross Profit | $3.17B$3.04B | +4.2% |
| Operating Expenses | $2.87B$2.84B | +1.1% |
| Operating Income | $778.00M$694.00M | +12.1% |
| Interest Expense | $273.00M$247.00M | +10.5% |
| Net Income | $567.00M$522.00M | +8.6% |
| EPS (Basic) | $2.34$2.19 | +6.8% |
| EPS (Diluted) | $2.33$2.19 | +6.4% |
| Shares Outstanding (Basic) | 238.50M233.60M | +2.1% |
| Shares Outstanding (Diluted) | 239.00M233.60M | +2.3% |
05—Questions
Frequently Asked Questions
How did Alliant Energy perform financially in 2019?
Net income attributable to Alliant Energy common shareowners rose to $557.2 million, or $2.33 per diluted share, from $512.1 million, or $2.19 per diluted share, in 2018. Revenues increased to $3,647.7 million from $3,534.5 million. The filing attributes the Utilities and Corporate Services increase mainly to higher earnings from IPL's and WPL's increasing rate base.
What are the company's main growth drivers?
Growth is expected from rate base additions, including IPL's wind expansion of up to 1,000 MW, WPL's West Riverside gas-fired plant, planned WPL solar generation of up to 1,000 MW by 2023, and electric and gas distribution upgrades. Management expects higher 2020 earnings from increasing revenue requirements, partly offset by returning excess deferred income tax credits to customers.
What regulatory risks should investors consider?
IPL and WPL depend on timely regulatory rate relief from the IUB, PSCW and FERC to recover costs and earn authorized returns, and rates may be reduced or refunded. The filing also cites MISO transmission owner return-on-equity refunds expected later in 2020, and WPL's earnings sharing mechanism that defers earnings above certain return levels.
How is the company financing its capital program?
The company plans to issue up to $250 million of common stock in 2020 through equity forward agreements and its Shareowner Direct Plan, and expects IPL, WPL and AEF to issue up to $300 million, $350 million and $300 million of long-term debt, respectively. It relies on operating cash flows, a single $1 billion revolving credit facility, and IPL's accounts receivable sales program. Credit ratings were A- (S&P) and Baa2 (Moody's) at the parent.
What environmental and tax issues could affect results?
The filing notes significant regulatory uncertainty around CO2 rules, including the Affordable Clean Energy rule that repealed the Clean Power Plan, and CCR and effluent guideline requirements. Coal-fired plants are slated for fuel switching or retirement under IPL's Consent Decree. On taxes, the company holds substantial federal net operating loss and credit carryforwards that it expects to use, and any inability to generate sufficient taxable income could lead to material charges.
06—Continue