01—Abstract
Summary
Summary of the 10-K filed February 18, 2022. 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, providing electric and natural gas service to approximately 985,000 electric and 425,000 natural gas customers through its utility subsidiaries Interstate Power and Light Company (IPL) and Wisconsin Power and Light Company (WPL).
For 2021, net income attributable to Alliant Energy common shareowners was $659 milliona, or $2.63 per diluted share, up from $614 million, or $2.47 per share, in 2020. The company's Utilities and Corporate Services segment income rose $46 million, driven mainly by increasing rate base, partially offset by higher depreciation and lower AFUDC. Management expects earnings growth in 2022 from rising revenue requirements on utility investments, and it targets a 2022 annual common dividend of $1.71 per share.
The filing centers on a strategy of transitioning away from coal. The company plans roughly 1,100 MW of solar at WPL with in-service dates in 2022 and 2023, roughly 400 MW of solar plus 75 MW of battery storage at IPL, and aims to eliminate all coal-fired EGUs by 2040. Forecasted construction and acquisition expenditures total $1.64 billion for 2022 rising to $2.09 billionb in 2024, and the company has forecasted about $7 billion of capital expenditures over the next four years.
Much of the solar build is expected to be partly financed by tax equity partners. Key risks include regulatory outcomes on rate recovery, supply-chain and cost inflation for solar projects, MISO capacity accreditation changes, pending EPA climate and water rules, and dependence on capital markets and credit ratings. Balance sheet metrics support investment-grade positioning.
At year-end 2021, Alliant Energy had total assets of $18.55 billionc and a debt-to-capital ratio of 57% against a 65% covenant limit, with IPL and WPL each at 49%. Credit ratings were stable, with Alliant Energy at A- (S&P) and Baa2 (Moody's). The company issued $300 million of 3.1% IPL senior debentures due 2051 and $300 million of 1.95% WPL green bonds due 2031 in 2021, and redeemed IPL's 5.1% cumulative preferred stock for $200 million.
02—Key points
Key Highlights
- 2021 net income attributable to Alliant Energy common shareowners of $659 million, or $2.63 per diluted share, compared with $614 million, or $2.47 per share, in 2020.
- Forecasted construction and acquisition expenditures of $1,640 million in 2022, $1,925 million in 2023, $2,085 million in 2024 and $1,755 million in 2025, with renewable projects the largest category.
- Planned renewable buildout includes about 1,100 MW of WPL solar (in-service 2022-2023), about 400 MW of IPL solar and 75 MW of IPL battery storage (2023-2024), with tax equity financing expected to fund part of the solar construction costs.
- Targeted 2022 annual common dividend of $1.71 per share, a 6% increase, with a long-term dividend payout ratio goal of 60% to 70% of consolidated earnings.
- Coal retirement timeline: IPL's Lansing (275 MW) by end of 2022, WPL's Edgewater Unit 5 (414 MW) by early 2023, and Columbia Units 1 and 2 by end of 2023 and 2024; Burlington was fuel-switched to natural gas in December 2021.
- Year-end 2021 liquidity of $39 million in cash plus $485 million of available revolving credit capacity, with debt-to-capital ratios of 57% for Alliant Energy and 49% for both IPL and WPL against a 65% covenant limit.
- WPL's December 2021 PSCW order authorized annual base rate increases of $114 million for electric and $15 million for gas for the 2022/2023 test period.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2021, Alliant Energy kept $0.18.
- Revenue$3.67B100.0%
- Cost of revenue−$537.0M14.6%
- Gross profit$3.13B85.4%
- Operating costs−$2.34B63.7%
- Operating income$795.0M21.7%
- Interest, other & tax−$121.0M3.3%
- Net income$674.0M18.4%
Where FY2021 revenue went
$3.67B- Operating costs: $2.34B, 64% of revenue
- Net income: $674.0M, 18% of revenue
- Cost of revenue: $537.0M, 15% of revenue
- Interest, other & tax: $121.0M, 3.3% of revenue
Kept 18% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2021filed February 18, 2022Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $3.67B$3.42B | +7.4% |
| Cost of Revenue | $537.00M$449.00M | +19.6% |
| Gross Profit | $3.13B$2.97B | +5.6% |
| Operating Expenses | $2.87B$2.68B | +7.4% |
| Operating Income | $795.00M$740.00M | +7.4% |
| Interest Expense | $277.00M$275.00M | +0.7% |
| Net Income | $674.00M$624.00M | +8.0% |
| EPS (Basic) | $2.63$2.47 | +6.5% |
| EPS (Diluted) | $2.63$2.47 | +6.5% |
| Shares Outstanding (Basic) | 250.20M248.40M | +0.7% |
| Shares Outstanding (Diluted) | 250.70M248.70M | +0.8% |
05—Questions
Frequently Asked Questions
How much did Alliant Energy earn in 2021 and what drove the change?
Net income attributable to Alliant Energy common shareowners was $659 million, or $2.63 per diluted share, in 2021, versus $614 million, or $2.47 per share, in 2020. The Utilities and Corporate Services segment income increased $46 million, primarily from higher earnings on IPL's and WPL's growing rate base and higher sales partly due to the August 2020 derecho and COVID-19 sales effects. Higher depreciation expense and lower AFUDC partially offset these gains.
What capital spending does the company plan, and how will it be funded?
Planned construction and acquisition expenditures are $1,640 million in 2022, $1,925 million in 2023, $2,085 million in 2024 and $1,755 million in 2025, and the company has forecasted about $7 billion of capital expenditures over the next four years. Financing plans for 2022 include WPL issuing up to $600 million and AEF up to $800 million of long-term debt, and about $25 million of common stock through the Shareowner Direct Plan. IPL and WPL also expect tax equity partners to finance part of their solar projects, with WPL expecting about $165 million from a tax equity partner in 2022.
What are the main risks to the company's strategy?
The filing highlights risks including the ability to obtain timely rate recovery and earn authorized returns, cost increases and supply shortages for solar and storage projects (including tariffs and solar-market inflation), possible MISO changes to capacity accreditation that could require additional resources, pending EPA rules on CO2 from existing and new fossil units and on water discharges and coal ash, and reliance on capital markets and strong credit ratings. Cyber attacks, severe weather and pension funding requirements are also cited.
What are the company's dividend and credit profile?
Alliant Energy announced a targeted 2022 annual common dividend of $1.71 per share, equal to $0.4275 quarterly beginning with the February 2022 payment, up 6%. Credit ratings as of the report date were A- (S&P) and Baa2 (Moody's) for Alliant Energy, with stable outlooks. Its debt-to-capital ratio was 57% at year-end 2021 against a 65% covenant limit, and management says it plans to maintain investment-grade credit ratings.
What is the company's clean energy plan?
The company's Clean Energy Blueprints strategy plans to transition away from coal-fired generation by incorporating renewables, distributed energy resources, energy efficiency and natural gas-fired units. Stated goals include reducing CO2 emissions from owned fossil-fueled EGUs by 50% by 2030, eliminating all coal-fired EGUs by 2040, and an aspirational net-zero CO2 target for generated electricity by 2050. The filing notes that these goals depend on future economic developments and evolving technologies.
06—Continue