01—Abstract
Summary
Summary of the 10-Q filed August 2, 2024. Cited figures are marked; the original filing is the authoritative source.
Alliant Energy Corporation's Form 10-Q for the quarter ended June 30, 2024 reports consolidated net income attributable to common shareowners of $87 milliona ($0.34 diluted EPS) for the three months, down from $160 million ($0.64) a year earlier, and $245 million ($0.95 diluted EPS) for the six months versus $323 million ($1.28).
The second-quarter decline was driven mainly by a $60 millionb pre-tax non-cash asset valuation charge for IPL's Lansing Generating Station, following a partial non-unanimous rate settlement that removes a return on the plant's remaining net book value, and a $20 million pre-tax non-cash ARO charge tied to the revised CCR Rule. Operating income fell to $130 million for the quarter from $217 million, and interest expense rose to $108 million from $96 million. The filing also shows a large increase in environmental and asset retirement exposure: the revised CCR Rule led to additional AROs of $355 million for Alliant Energy, $102 million for IPL and $253 million for WPL, with amounts expected to be adjusted as site closure plans are refined.
WPL also disclosed that its approximately 1,100 MW of new solar generation is expected to exceed previously approved construction cost estimates by about $195 millionc, and that it updated plans to convert the coal-fired Edgewater Unit 5 to natural gas in 2028 rather than retire it by June 1, 2025. On the balance sheet, total assets were $21.84 billion and long-term debt was $8.90 billion at June 30, 2024.
Operating cash flow for the six months rose to $562 milliond from $311 million, while construction and acquisition expenditures for utility business were $870 million. IPL's pending retail electric and gas rate review settlement, subject to IUC approval, would provide an annual electric base rate increase of $185 million with final rates expected October 1, 2024, and a retail electric base rate moratorium through September 2029.
02—Key points
Key Highlights
- Q2 2024 net income attributable to Alliant Energy common shareowners was $87 million ($0.34 diluted EPS), versus $160 million ($0.64 diluted EPS) in Q2 2023.
- A $60 million pre-tax non-cash asset valuation charge for IPL's Lansing Generating Station was recorded in Q2 2024 after a partial rate settlement excluded a return on the plant's remaining net book value.
- Additional AROs of $355 million (Alliant Energy), $102 million (IPL) and $253 million (WPL) were recorded in Q2 2024, substantially due to the revised CCR Rule.
- IPL's partial non-unanimous retail electric and gas rate settlement, subject to IUC approval, includes a $185 million annual electric base rate increase and a 9.65% return on common equity, with final rates expected October 1, 2024.
- WPL expects construction costs for its approximately 1,100 MW of new solar generation to exceed PSCW-approved estimates by about $195 million; WPL has filed for judicial review of related orders.
- WPL updated plans to convert the coal-fired Edgewater Unit 5 to natural gas in 2028, subject to regulatory approvals, instead of retiring it by June 1, 2025.
- Six-month operating cash flow was $562 million, up from $311 million, and Alliant Energy had $92 million of cash and $948 million of available credit facility capacity at June 30, 2024.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2024, Alliant Energy kept $0.10.
- Revenue$894.0M100.0%
- Cost of revenue−$147.0M16.4%
- Gross profit$747.0M83.6%
- Operating costs−$617.0M69.0%
- Operating income$130.0M14.5%
- Interest, other & tax−$43.0M4.8%
- Net income$87.0M9.7%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2024filed August 2, 2024Financial Statements
Q2 FY2024 against Q2 FY2023
| Line item | Q2 FY2024Q2 FY2023 | Change |
|---|---|---|
| Revenue | $894.00M$912.00M | −2.0% |
| Cost of Revenue | $147.00M$138.00M | +6.5% |
| Gross Profit | $747.00M$774.00M | −3.5% |
| Operating Expenses | $764.00M$695.00M | +9.9% |
| Operating Income | $130.00M$217.00M | −40.1% |
| Interest Expense | $108.00M$96.00M | +12.5% |
| Net Income | $87.00M$160.00M | −45.6% |
| EPS (Basic) | $0.34$0.64 | −46.9% |
| EPS (Diluted) | $0.34$0.64 | −46.9% |
| Shares Outstanding (Basic) | 256.40M251.70M | +1.9% |
| Shares Outstanding (Diluted) | 256.70M251.90M | +1.9% |
05—Questions
Frequently Asked Questions
Why did Alliant Energy's quarterly earnings decline so sharply compared with the prior year?
The filing attributes the decline in Utilities and Corporate Services net income of $79 million for the quarter mainly to the $60 million Lansing asset valuation charge at IPL, an ARO charge allocated to IPL's steam business due to the revised CCR Rule, the timing of income taxes, higher financing and depreciation expenses, and estimated temperature impacts on sales. Higher revenue requirements from WPL's capital investments partially offset these items.
What is the status of IPL's rate review and what would it mean for customers and earnings?
In June 2024 IPL reached a partial, non-unanimous settlement with certain stakeholders, which is subject to IUC approval, with final rates expected to be effective October 1, 2024. It provides an annual retail electric base rate increase of $185 million, an annual retail gas base rate increase of $10 million, a 9.65% return on common equity, an earnings sharing mechanism beginning in 2025, and a retail electric base rate moratorium through September 2029. A decision from the IUC is expected in the third quarter of 2024.
How significant are the new asset retirement obligations recorded this quarter?
Substantially due to the enactment of the revised CCR Rule in May 2024, Alliant Energy, IPL and WPL recorded additional AROs of $355 million, $102 million and $253 million, respectively. The filing notes these amounts are expected to be adjusted as site closure plans are refined and that changes could have a material impact on recorded amounts. Total Alliant Energy ARO balance rose to $603 million at June 30, 2024 from $246 million at January 1, 2024.
What is the outlook for WPL's solar projects and Edgewater Unit 5?
WPL expects construction costs for its approximately 1,100 MW of new solar generation to exceed previously approved estimates by about $195 million. The PSCW approved deferral of the incremental construction costs but did not authorize a deferral for the return on those costs, and WPL has filed for judicial review. Separately, WPL now plans to convert Edgewater Unit 5 to natural gas in 2028, subject to regulatory approvals, so its net book value of $496 million no longer meets the criteria for probable abandonment, and $806 million was reclassified to utility electric generation plant in service.
06—Continue