01—Abstract
Summary
Summary of the 10-K filed February 24, 2023. Cited figures are marked; the original filing is the authoritative source.
Alliant Energy Corporation (Nasdaq: LNT) is a regulated investor-owned public utility holding company headquartered in Madison, Wisconsin, providing regulated electric and natural gas service to approximately 995,000 electric and approximately 425,000 natural gas customers through its utility subsidiaries Interstate Power and Light Company (IPL) and Wisconsin Power and Light Company (WPL).
For 2022, net income attributable to Alliant Energy common shareowners was $686 milliona, or $2.73 per share, up from $659 million, or $2.63 per share, in 2021. Operating income rose to $928 million from $795 million, driven largely by higher WPL revenue requirements from rate base growth and higher electric and gas margins. The company's Utilities and Corporate Services segment contributed $690 million, or $2.74 per share.
The company's strategy centers on its Clean Energy Blueprint, with planned development of approximately 1,100 MW of solar generation at WPL and approximately 400 MW of solar at IPL, plus battery storage projects, alongside planned retirements of coal-fired units. Management forecasts total construction and acquisition expenditures of $1.85 billionb in 2023, $2.41 billion in 2024, $2.02 billion in 2025 and $2.20 billion in 2026. The company expects higher earnings in 2023 on increasing rate base, and a 6% increase in its targeted 2023 annual dividend to $1.81 per share.
Alliant Energy also expects to issue up to $1.2 billion of long-term debt and up to $250 millionc of common stock in 2023. Investors should weigh the company's large capital program against regulatory risk.
The IUB denied IPL's advance rate-making principles for 400 MW of solar and 75 MW of battery storage, with IPL pursuing judicial review, and the Inflation Reduction Act of 2022 is expected to shift financing toward long-term debt and common stock. The auditor, Deloitte & Touche LLP, issued an unqualified opinion dated February 24, 2023, and identified the impact of rate regulation as a critical audit matter.
02—Key points
Key Highlights
- 2022 net income attributable to Alliant Energy common shareowners of $686 million ($2.73 per share), compared with $659 million ($2.63 per share) in 2021.
- Operating income of $928 million in 2022, compared with $795 million in 2021, with WPL's higher revenue requirements from rate base growth a key driver.
- Forecasted construction and acquisition expenditures of $1.85 billion (2023), $2.41 billion (2024), $2.02 billion (2025) and $2.20 billion (2026), focused on renewables, battery storage and grid resiliency.
- Planned renewable buildout includes approximately 1,100 MW of solar at WPL (in-service 2022-2024) and approximately 400 MW of solar at IPL (in-service 2023-2024), plus battery storage projects.
- Dividend target for 2023 increased to $1.81 per share, a 6% increase, with quarterly payments of $0.4525 per share starting February 2023.
- Expected 2023 financing includes up to $1.2 billion of long-term debt and up to $250 million of common stock issuance; the company's credit facility totals $1 billion.
- IUB denied advance rate-making principles for 400 MW of IPL solar and 75 MW of battery storage in November 2022; IPL filed for judicial review in January 2023.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2022, Alliant Energy kept $0.16.
- Revenue$4.21B100.0%
- Cost of revenue−$573.0M13.6%
- Gross profit$3.63B86.4%
- Operating costs−$2.70B64.3%
- Operating income$928.0M22.1%
- Interest, other & tax−$242.0M5.8%
- Net income$686.0M16.3%
Where FY2022 revenue went
$4.21B- Operating costs: $2.70B, 64% of revenue
- Net income: $686.0M, 16% of revenue
- Cost of revenue: $573.0M, 14% of revenue
- Interest, other & tax: $242.0M, 5.8% of revenue
Kept 16% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2022filed February 24, 2023Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $4.21B$3.67B | +14.6% |
| Cost of Revenue | $573.00M$537.00M | +6.7% |
| Gross Profit | $3.63B$3.13B | +16.0% |
| Operating Expenses | $3.28B$2.87B | +14.0% |
| Operating Income | $928.00M$795.00M | +16.7% |
| Interest Expense | $325.00M$277.00M | +17.3% |
| Net Income | $686.00M$674.00M | +1.8% |
| EPS (Basic) | $2.73$2.63 | +3.8% |
| EPS (Diluted) | $2.73$2.63 | +3.8% |
| Shares Outstanding (Basic) | 250.90M250.20M | +0.3% |
| Shares Outstanding (Diluted) | 251.20M250.70M | +0.2% |
05—Questions
Frequently Asked Questions
What drove the increase in Alliant Energy's 2022 earnings?
Net income attributable to common shareowners rose to $686 million ($2.73 per share) from $659 million ($2.63 per share). The filing attributes the increase in Utilities and Corporate Services net income primarily to higher revenue requirements and AFUDC from WPL capital investments and higher electric and gas margins, partially offset by higher depreciation expense.
How large is the company's capital spending plan?
The filing forecasts construction and acquisition expenditures of $1.85 billion in 2023, $2.41 billion in 2024, $2.02 billion in 2025 and $2.20 billion in 2026. Renewables and battery storage make up the largest share of planned generation spending. The company notes that cost pressures in the solar and battery markets could affect timing and estimated costs.
What regulatory risks could affect future returns?
IPL's advance rate-making principles for 400 MW of solar and 75 MW of battery storage were denied in part by the IUB, and IPL has sought judicial review. IPL may proceed with construction subject to other approvals and seek recovery in future rate reviews. WPL plans a retail electric and gas rate review in the second quarter of 2023, and MISO's new seasonal resource adequacy process may affect how new solar is accredited.
What is the company's dividend and financing outlook for 2023?
Alliant Energy announced a targeted 2023 annual common stock dividend of $1.81 per share, a 6% increase, and a dividend payout ratio goal of approximately 60% to 70% of consolidated earnings from continuing operations. The company expects to issue up to $250 million of common stock and up to $1.2 billion of long-term debt in 2023, and AEF has $400 million of long-term debt maturing in 2023.
How strong are the company's credit ratings and liquidity?
At the filing date, Alliant Energy's corporate issuer ratings were A- (S&P) and Baa2 (Moody's) with stable outlooks; WPL was rated A (S&P) and A3 (Moody's) with negative outlooks. At December 31, 2022, Alliant Energy had $20 million of cash and $358 million of available capacity under its single revolving credit facility, and its debt-to-capital ratio was 58% against a 65% requirement.
06—Continue