Alliant Energy Announces Third Quarter 2010 Results

Increases 2010 Guidance

Oct 29, 2010, 06:00 ET from Alliant Energy Corporation

MADISON, Wis., Oct. 29 /PRNewswire-FirstCall/ -- Alliant Energy Corporation (NYSE: LNT) today announced third quarter U.S. generally accepted accounting principles (GAAP) and non-GAAP consolidated earnings from continuing operations as follows:

Third Quarter

2010

2009

Adjusted (non-GAAP) Operating Results from Continuing Operations:

Net Income ($ millions)

$144.4

$84.6

Earnings per share (EPS)

$1.31

$0.76

GAAP Earnings from Continuing Operations:

Net Income (Loss) ($ millions)

$150.9

($43.6)

Earnings per share (EPS)

$1.37

($0.40)

Alliant Energy's 2010 third quarter non-GAAP EPS were $1.31 per share, which was $0.55 per share higher than the third quarter of 2009.  Earnings for Alliant Energy's utility business were positively impacted by higher revenues due to retail rate increases and warmer weather in the summer of 2010 compared to the summer of 2009. The positive EPS driver was partially offset by higher transmission service expense, higher depreciation and operating expenses due to placing the Whispering Willow - East wind project in service in late 2009 and lower allowance for funds used during construction (AFUDC) due to lower wind construction work in progress balances.

"Our company produced solid financial results in the third quarter," said Bill Harvey, Alliant Energy Chairman, President, and CEO.  "With one quarter remaining in 2010, we have increased our annual earnings guidance to reflect the warmer than normal weather in the summer of 2010."

GAAP EPS were adjusted to exclude $0.06 per share of income recognized in the third quarter of 2010 from the completion of Federal income tax audits.  Non-regulated and Parent EPS were adjusted to exclude ($1.16) per share of charges from Alliant Energy's tender offer for its exchangeable senior notes in the third quarter of 2009.  These non-GAAP adjustments, which relate to significant charges or credits that are not normally associated with ongoing operations, are provided as a supplement to results reported in accordance with GAAP.  Adjusted, or non-GAAP, operating earnings for the third quarter of 2010 and 2009 do not include the following items (after tax) that were included in reported GAAP earnings:

Q3 non-GAAP Income

(Loss) Adjustments

Q3 non-GAAP EPS

(in millions)

Adjustments

2010

2009

2010

2009

Completion of Federal income tax audits

$6.5

$--

$0.06

$--

Charges from tender offer

--

(128.2)

--

($1.16)

$6.5

($128.2)

$0.06

($1.16)

EPS and income (loss) in the third quarter of 2010 and 2009 are as follows:

EPS:

Q3 GAAP EPS

Non-GAAP Adjustments

Q3 non-GAAP EPS

2010

2009

2010

2009

2010

2009

Interstate Power and Light Co. (IPL)

$0.88

$0.63

($0.05)

$--

$0.83

$0.63

Wisconsin Power and Light Co. (WPL)

0.44

0.18

--

--

0.44

0.18

  Subtotal for Utilities

1.32

0.81

(0.05)

--

1.27

0.81

Non-regulated and Parent

0.05

(1.21)

(0.01)

1.16

0.04

(0.05)

EPS from continuing operations

1.37

(0.40)

(0.06)

1.16

1.31

0.76

Loss from discontinued operations

(0.02)

--

--

--

(0.02)

--

$1.35

($0.40)

($0.06)

$1.16

$1.29

$0.76

Income (Loss): (in millions)

Q3 GAAP Income (Loss)

Non-GAAP adjustments

Q3 non-GAAP Income (Loss)

2010

2009

2010

2009

2010

2009

IPL

$96.8

$69.0

($5.1)

$--

$91.7

$69.0

WPL

49.2

20.2

(0.2)

---

49.0

20.2

  Subtotal for Utilities

146.0

89.2

(5.3)

--

140.7

89.2

Non-regulated and Parent

4.9

(132.8)

(1.2)

128.2

3.7

(4.6)

Earnings from continuing operations

150.9

(43.6)

(6.5)

128.2

144.4

84.6

Loss from discontinued operations

(1.8)

(0.7)

--

--

(1.8)

(0.7)

$149.1

($44.3)

($6.5)

$128.2

$142.6

$83.9

Additional details regarding third quarter GAAP EPS variances for Alliant Energy's Utility operations are as follows:

IPL

WPL

Total

Utility operations:

Electric and gas retail rate increases effective in 2010

$0.24

$0.15

$0.39

Negative weather impact on electric sales in Q3 2009

0.13

0.06

0.19

Positive weather impact on electric sales in Q3 2010

0.05

0.06

0.11

Completion of Federal income tax audits

0.05

--

0.05

Higher electric transmission service expense

(0.11)

(0.01)

(0.12)

AFUDC (primarily due to wind projects)

(0.06)

0.01

(0.05)

Higher incentive compensation expense

(0.03)

(0.02)

(0.05)

Whispering Willow-East depreciation and operating expenses in Q3 2010

(0.04)

--

(0.04)

Other

0.02

0.01

0.03

        Total utility operations

$0.25

$0.26

$0.51

The following comments further explain selected drivers of earnings performance during the third quarter of 2010 versus 2009:

Electric and gas retail rate increases:  On March 20, 2010, IPL implemented an annualized interim rate increase of $119 million as part of its retail electric rate case in Iowa filed on March 10, 2010.  On July 6, 2010, IPL implemented an annualized interim rate increase of $14 million as part of its retail electric rate case in Minnesota filed on May 7, 2010.  These interim rate increases are expected to recover higher electric transmission service expenses and a return on the investment in and recovery of expenses for, the Whispering Willow - East wind project, which was placed in service at the end of 2009, as well as other infrastructure investments.

On January 1, 2010, WPL implemented new retail electric and gas rates as a result of its rate case filed in May 2009.  The $65 million annualized rate increase includes an adjustment for lower sales net of variable fuel expenses, return on one-half of the average 2010 Bent Tree – Phase I wind project construction costs, and higher pension costs incurred in 2009.

Weather:  Cooling degree days in the service territories of IPL and WPL were above normal for the third quarter of 2010 and significantly below normal for the third quarter of 2009. These weather conditions are estimated to have increased electric margins by approximately $0.11 per share in the third quarter of 2010 and decreased electric margins by approximately $0.19 per share in the third quarter of 2009 compared to electric margins that would result from normal weather in the third quarter.  Alliant Energy did not have summer weather hedges in 2010 and 2009.

Completion of Federal income tax audits: In September 2010, Alliant Energy recorded the impacts of its completed Federal income tax audits for calendar years 2005 through 2008 and reversed reserves for uncertain tax positions related to those audits.  The net impact of these items resulted in Alliant Energy's utility business and non-regulated businesses recording income tax benefits in continuing operations of $0.05 per share and $0.01 per share, respectively, in the third quarter of 2010.  

Electric transmission service expenses:  Higher electric transmission expenses reduced EPS $0.12 per share in the third quarter of 2010.  The IPL interim rate increases mentioned above recovered the higher transmission expenses in the third quarter of 2010 and are expected to recover the higher electric transmission expense for the remainder of 2010.

2010 Earnings Guidance

Alliant Energy is increasing its 2010 earnings guidance, which excludes tax income associated with the non-GAAP adjustment discussed in this release.

Current

Previous

Utility

$2.55 – $2.65

$2.45 – $2.55

Non-regulated and Parent

0.10 – 0.15

0.10 – 0.15

Alliant Energy

$2.65 – $2.80

$2.55 – $2.70

The guidance does not include the impacts of any non-cash valuation adjustments, charges resulting from federal health care legislation, future regulatory-related charges or credits resulting from decisions by regulators, reorganization or restructuring charges, future changes in laws or regulations, future adjustments made to deferred tax asset valuation allowances, adverse impacts of pending lawsuits and disputes, depreciation adjustments, impacts from completing federal and state income tax audits or changes in accounting principles that may impact the reported results of Alliant Energy.

Drivers for Alliant Energy's 2010 earnings guidance include, but are not limited to:

  • No refund reserves related to IPL's interim rates in Iowa and Minnesota
  • Stable economy and resulting implications on utility sales
  • Normal weather and operating conditions in its utility service territories
  • Ability of IPL and WPL to recover future purchased power, fuel and fuel-related costs through rates in a timely manner
  • Ability of IPL and WPL to recover their operating costs, deferred expenditures and capital expenditures, and to earn a reasonable rate of return
  • Continuing cost controls and operational efficiencies
  • Execution of IPL's and WPL's wind projects and environmental expenditure plans
  • Ability to utilize federal net operating losses and federal credit carry forwards
  • RMT, Inc.'s (RMT's) estimated market share and project execution

Earnings Conference Call

A conference call to review the third quarter of 2010 results is scheduled for Friday, October 29th at 9:00 a.m. central daylight time.  Alliant Energy Chairman, President and Chief Executive Officer Bill Harvey and Executive Vice President - Chief Financial Officer Patricia Kampling will host the call.  The conference call is open to the public and can be accessed in two ways.  Interested parties may listen to the call by dialing 888-221-9591 (United States or Canada) or 913-312-1434 (International), passcode 8244179.  Interested parties may also listen to a webcast at www.alliantenergy.com/investors.  In conjunction with the information in this earnings announcement and the conference call, Alliant Energy posted supplemental materials on its website.  A replay of the call will be available through November 5, 2010, at 888-203-1112 (United States or Canada) or 719-457-0820 (International), passcode 8244179.  An archive of the webcast will be available on the Company's Web site at www.alliantenergy.com/investors for 12 months.

Alliant Energy is the parent company of two public utility companies – Interstate Power and Light Company and Wisconsin Power and Light Company – and of Alliant Energy Resources, LLC, the parent company of Alliant Energy's non-regulated operations.  Alliant Energy is an energy-services provider with subsidiaries serving approximately 1 million electric and 412,000 natural gas customers.  Providing its customers in the Midwest with regulated electricity and natural gas service is the Company's primary focus.  Alliant Energy, headquartered in Madison, Wis., is a Fortune 1000 company traded on the New York Stock Exchange under the symbol LNT.  For more information, visit the Company's Web site at www.alliantenergy.com.

This press release includes forward-looking statements.  These forward-looking statements can be identified as such because the statements include words such as "expect" or other words of similar import.  Similarly, statements that describe future financial performance or plans or strategies are forward-looking statements.  Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those currently anticipated.  Actual results could be affected by the following factors, among others:

  • federal and state regulatory or governmental actions, including the impact of energy, tax, financial and health care legislation, and of regulatory agency orders;
  • IPL's and WPL's ability to obtain adequate and timely rate relief to allow for, among other things, the recovery of operating costs, fuel costs, deferred expenditures, capital expenditures, including any construction costs incurred over the predetermined level included in the advanced rate making principles for IPL's Whispering Willow - East wind project, costs related to the remaining 100 MW of Vestas wind turbine generator sets and related equipment and costs related to generating units that may be permanently closed, the earning of reasonable rates of return, and the payments to their parent of expected levels of dividends;
  • IPL's potential rate refunds to customers resulting from final rates set by the state commissions that are less than the interim rate increases IPL is currently collecting from its customers;
  • the state of the economy in IPL's and WPL's service territories and resulting implications on sales, margins and ability to collect unpaid bills;
  • weather effects on results of operations;
  • developments that adversely impact the ability to implement strategic plans including unanticipated issues in connection with construction and operation or regulatory approval of IPL's and WPL's new wind generating facilities, WPL's potential purchases of the Riverside Energy Center and Wisconsin Electric Power Company's 25% interest in the Edgewater Generating Station Unit 5, and Alliant Energy's ability to complete the proposed divestiture of its Industrial Energy Applications, Inc. business;
  • successful resolution of the pending challenge to the approval by the Public Service Commission of Wisconsin of WPL's Bent Tree - Phase I wind project;
  • issues related to the availability of generating facilities and the supply and delivery of fuel and purchased electricity and price thereof, including the ability to recover and to retain the recovery of purchased power, fuel and fuel-related costs through rates in a timely manner;
  • the impact that fuel and fuel-related prices may have on IPL's and WPL's customers' demand for utility services;
  • impacts that storms or natural disasters in IPL's and WPL's service territories may have on their operations and recovery of and rate relief for costs associated with restoration activities;
  • issues associated with environmental remediation efforts and with environmental compliance generally, including changing environmental laws and regulations,
  • potential impacts of changing regulations on the ability to utilize already-purchased emission allowances and forward contracts to purchase additional emission allowances;
  • the ability to defend against environmental claims brought by state and federal agencies, such as the U.S. Environmental Protection Agency, or third parties, such as the Sierra Club;
  • the ability to recover through rates all environmental compliance costs, including costs for projects put on hold due to uncertainty of future environmental laws and regulations;
  • the ability to continue cost controls and operational efficiencies;
  • potential impacts of any future laws or regulations regarding global climate change or carbon emissions reductions, including those that contain a proposed greenhouse gas cap-and-trade program;
  • continued access to the capital markets on competitive terms and rates;
  • inflation and interest rates;
  • financial impacts of risk hedging strategies, including the impact of weather hedges or the absence of weather hedges on earnings;
  • sales and project execution for RMT, the level of growth in the wind and solar development market and the impact of the American Recovery and Reinvestment Act of 2009, and future legislation;
  • issues related to electric transmission, including operating in Regional Transmission Organization (RTO) energy and ancillary services markets, the impacts of potential future billing adjustments and cost allocation changes from RTOs and recovery of costs incurred;
  • unplanned outages, transmission constraints or operational issues impacting fossil or renewable generating facilities and risks related to recovery of resulting incremental costs through rates;
  • Alliant Energy's ability to successfully pursue appropriate appeals with respect to, and any liabilities arising out of, the alleged violation of the Employee Retirement Income Security Act of 1974 by Alliant Energy's Cash Balance Pension Plan;
  • current or future litigation, regulatory investigations, proceedings or inquiries;
  • Alliant Energy's ability to sustain its dividend payout ratio goal;
  • employee workforce factors, including changes in key executives, collective bargaining agreements and negotiations, work stoppages or additional restructurings;
  • access to technological developments;
  • any material post-closing adjustments related to any past asset divestitures;
  • increased retirement and benefit plan costs;
  • the impact of necessary accruals for the terms of incentive compensation plans;
  • the effect of accounting pronouncements issued periodically by standard-setting bodies;
  • the ability to utilize tax capital losses, tax credits and net operating losses generated to date, and those that may be generated in the future, before they expire;
  • the ability to successfully complete ongoing tax audits and appeals with no material impact on earnings and cash flows;
  • the direct or indirect effects resulting from terrorist incidents or responses to such incidents; and
  • factors listed in the "2010 Earnings Guidance" section of this press release.

Without limitation, the expectations with respect to 2010 Earnings Guidance in this press release are forward-looking statements and are based in part on certain assumptions made by Alliant Energy, some of which are referred to in the forward-looking statements.  Alliant Energy cannot provide any assurance that the assumptions referred to in the forward-looking statements or otherwise are accurate or will prove to be correct.  Any assumptions that are inaccurate or do not prove to be correct could have a material adverse effect on Alliant Energy's ability to achieve the estimates or other targets included in the forward-looking statements.  The forward-looking statements included herein are made as of the date hereof and Alliant Energy undertakes no obligation to update publicly such statements to reflect subsequent events or circumstances.

Note: Unless otherwise noted, all "per share" references in this release refer to earnings per diluted share.

ALLIANT ENERGY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

Three Months Ended Sep. 30,

Nine Months Ended Sep. 30,

2010

2009

2010

2009

(dollars in millions)

Operating revenues:

Utility:

Electric

$842.0

$725.3

$2,074.2

$1,901.2

Gas

46.5

39.1

330.9

361.8

Other

15.9

20.1

48.9

69.4

Non-regulated

47.3

99.5

129.5

241.2

951.7

884.0

2,583.5

2,573.6

Operating expenses:

Utility:

Electric production fuel and energy purchases

238.8

251.5

642.4

695.4

Purchased electric capacity

86.0

84.8

221.8

227.5

Electric transmission service

77.1

55.1

210.5

172.1

Cost of gas sold

19.8

13.9

204.9

240.5

Other operation and maintenance

143.4

130.0

446.1

437.3

Non-regulated operation and maintenance

40.4

94.9

111.7

228.9

Depreciation and amortization

75.4

69.5

214.9

200.2

Taxes other than income taxes

24.2

24.9

74.9

76.2

705.1

724.6

2,127.2

2,278.1

Operating income

246.6

159.4

456.3

295.5

Interest expense and other:

Interest expense

41.9

42.4

122.2

113.8

Loss on early extinguishment of debt

--

202.8

--

202.8

Equity income from unconsolidated investments, net

(9.3)

(9.5)

(28.7)

(27.3)

Allowance for funds used during construction

(5.0)

(13.9)

(14.4)

(34.7)

Interest income and other

(0.6)

(1.2)

(0.9)

(4.4)

27.0

220.6

78.2

250.2

Income (loss) from continuing operations before income taxes

219.6

(61.2)

378.1

45.3

Income tax expense (benefit)

64.1

(22.2)

121.8

(26.6)

Income (loss) from continuing operations, net of tax

155.5

(39.0)

256.3

71.9

(Loss) from discontinued operations, net of tax

(1.8)

(0.7)

(2.0)

(0.5)

Net income (loss)

153.7

(39.7)

254.3

71.4

Preferred dividend requirements of subsidiaries

4.6

4.6

14.0

14.0

Net income (loss) attributable to Alliant Energy common shareowners

$149.1

($44.3)

$240.3

$57.4

ALLIANT ENERGY CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

Sep. 30,

Dec. 31,

2010

2009

(in millions)

ASSETS:

Property, plant and equipment:

Utility plant in service, net of accumulated depreciation

$5,743.0

$5,448.3

Utility construction work in progress

467.3

404.0

Other property, plant and equipment, net of accumulated depreciation

346.6

340.6

Current assets:

Cash and cash equivalents

137.0

175.3

Other current assets

1,030.6

1,214.7

Investments

287.2

281.5

Other assets

1,214.1

1,171.6

Total assets

$9,225.8

$9,036.0

CAPITALIZATION AND LIABILITIES:

Capitalization:

Alliant Energy Corporation common equity

$2,887.8

$2,772.6

Cumulative preferred stock of subsidiaries, net

243.8

243.8

Noncontrolling interest

2.0

2.1

Long-term debt, net (excluding current portion)

2,703.8

2,404.5

Total capitalization

5,837.4

5,423.0

Current liabilities:

Current maturities of long-term debt

1.4

101.5

Commercial paper

--

190.0

Other current liabilities

690.5

785.1

Other long-term liabilities and deferred credits

2,696.5

2,536.4

Total capitalization and liabilities

$9,225.8

$9,036.0

ALLIANT ENERGY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

Nine Months Ended Sep. 30,

2010

2009

(in millions)

Cash flows from operating activities

$695.6

$590.5

Cash flows used for investing activities:

Construction and acquisition expenditures:

Utility business

(587.6)

(900.2)

Alliant Energy Corporate Services, Inc. and non-regulated businesses

(22.4)

(44.0)

Other

3.5

61.0

Net cash flows used for investing activities

(606.5)

(883.2)

Cash flows (used for) from financing activities:

Proceeds from the issuance of long-term debt

500.0

550.2

Payments to retire long-term debt

(307.1)

(377.0)

Common stock dividends

(130.9)

(124.1)

Net change in short-term borrowings

(190.0)

83.9

Other

0.6

(10.5)

Net cash flows (used for) from financing activities

(127.4)

122.5

Net decrease in cash and cash equivalents

(38.3)

(170.2)

Cash and cash equivalents at beginning of period

175.3

346.9

Cash and cash equivalents at end of period

$137.0

$176.7

KEY FINANCIAL STATISTICS

Sep. 30, 2010

Sep. 30, 2009

Common shares outstanding (000s)

110,855

110,634

Book value per share

$26.05

$24.94

Quarterly common dividend rate per share

$0.395

$0.375

KEY OPERATING STATISTICS

Three Months Ended

Nine Months Ended

Sep. 30,

Sep. 30,

2010

2009

2010

2009

Utility electric sales (000s of MWh)

 Residential

2,248

1,910

5,986

5,622

 Commercial

1,705

1,567

4,706

4,550

 Industrial

2,992

2,755

8,445

8,199

   Retail subtotal

6,945

6,232

19,137

18,371

 Sales for resale:

   Wholesale

898

767

2,535

2,488

   Bulk power and other

279

601

1,059

1,606

 Other

35

35

112

116

   Total

8,157

7,635

22,843

22,581

Utility retail electric customers (at Sep. 30)

 Residential

841,244

840,513

 Commercial

135,613

134,898

 Industrial

2,846

2,877

   Total

979,703

978,288

Utility gas sold and transported (000s of Dth)

 Residential

1,339

1,477

18,089

19,031

 Commercial

1,676

1,701

12,296

13,222

 Industrial

1,095

596

2,960

2,457

   Retail subtotal

4,110

3,774

33,345

34,710

 Transportation / other

12,696

11,202

37,603

39,387

   Total

16,806

14,976

70,948

74,097

Utility retail gas customers (at Sep. 30)

 Residential

363,861

363,137

 Commercial

45,059

45,000

 Industrial

552

560

   Total

409,472

408,697

Margin increases (decreases) from net    impacts of weather (in millions) -

 Electric margins -

   Weather impacts on demand

      compared to normal

      weather

$22

($35)

$26

($36)

   Losses from weather derivatives

--

--

--

(3)

      Net weather impact

$22

($35)

$26

($39)

 Gas margins -

   Weather impacts on demand

      compared to normal

      weather

$--

($1)

($1)

$3

   Losses from weather derivatives

--

--

--

(3)

      Net weather impact

$--

($1)

($1)

$--

Three Months Ended Sep. 30,

Nine Months Ended Sep. 30,

2010

2009

Normal (b)

2010

2009

Normal (b)

Cooling degree days (CDDs) (a)

 Cedar Rapids, Iowa (IPL)

629

224

523

918

406

741

 Madison, Wisconsin (WPL)

623

222

442

825

368

616

Heating degree days (HDDs) (a)

 Cedar Rapids, Iowa (IPL)

110

143

149

4,290

4,492

4,239

 Madison, Wisconsin (WPL)

151

170

186

4,217

4,764

4,528

(a) Alliant Energy entered into weather derivatives based on CDDs during the months of January through

March in 2009 to reduce potential volatility on its margins from the impacts of weather.

(b) CDDs and HDDs are calculated using a simple average of the high and low temperatures each day

compared to a 65 degree base.  Normal degree days are calculated using a rolling 20-year average

of historical CDDs and HDDs.

(Logo:  http://photos.prnewswire.com/prnh/20020405/LNTLOGO)

(Logo:  http://www.newscom.com/cgi-bin/prnh/20020405/LNTLOGO)

SOURCE Alliant Energy Corporation



RELATED LINKS

http://www.alliantenergy.com