[GRAPHIC OMITTED]
[ALLIANT ENERGY]
Alliant Energy
Worldwide Headquarters
222 W. Washington Ave.
P.O. Box 192
Madison, WI 53701-0192
www.alliantenergy.com
News Release
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FOR IMMEDIATE RELEASE Media Contact: Chris Schoenherr (608) 252-3924
Karen Whitmer (608)252-4839
Finance Contact: Eric Mott (608) 252-3391
ALLIANT ENERGY REPORTS STRONG THIRD QUARTER 2001 EARNINGS
On track to meet earnings targets for 2001
MADISON, Wis. - Oct. 19, 2001 - Alliant Energy Corp. (NYSE:
LNT) today reported adjusted net income of $74.9 million, or $0.94
per share, for the third quarter of 2001 compared to adjusted net
income of $73.5 million, or $0.93 per share, for the third quarter
of 2000.
Both periods excluded non-cash valuation adjustments related
to the company's obligation under certain 30-year exchangeable
senior notes - charges of $0.16 per share and $0.02 per share in
the third quarters of 2001 and 2000, respectively. In addition,
adjusted net income for the third quarter of 2000 excludes $204
million of non-cash net income, or $2.58 per share, relating to
the company's adoption of a new accounting pronouncement (SFAS No.
133) on July 1, 2000.
Higher electric utility margins, a lower effective income tax
rate and higher earnings from the company's non-regulated
operations were largely offset by increased utility operating
expenses during the quarter.
"I am pleased to report another solid quarter of financial
performance," said Alliant Energy CEO Erroll B. Davis, Jr.
"Through the successful execution of our Invest, Connect and Grow
strategy, we continue to deliver strong earnings and shareowner
value through both our regulated utility operations and our
portfolio of non-regulated businesses."
Reported net income and earnings per share for the third
quarters of 2001 and 2000 were $62.3 million, or $0.78 per share,
and $276.2 million, or $3.49 per share, respectively.
Alliant Energy is the parent company of three public utility
companies - IES Utilities Inc. (IES), Interstate Power Company
(IPC) and Wisconsin Power and Light Company (WP&L) - and of
Alliant Energy Resources, Inc. (AER), the parent company of
Alliant Energy's non-regulated operations.
A reconciliation of Alliant Energy's unaudited third quarter 2001
versus 2000 earnings per share (EPS) is as follows:
EPS as reported - third quarter 2000 $3.49
Less: SFAS No. 133 adoption non-cash income (2.58)
Plus: non-cash valuation charge .02
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Adjusted third quarter 2000 EPS .93
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3Q 2001 EPS increase/(decrease) versus 2000:
Utility operations:
Electric margins $0.08
Effective income tax rate .07
Operating expenses (.17)
Other .04
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Total utility operations .02
Non-regulated operations:
Integrated Services business unit .02
Investments business unit .01
International business unit .01
Generation and Trading business unit (.05)
Lower short-term debt rates/other .04
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Total non-regulated operations .03
Parent expenses/other (.04)
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Adjusted third quarter 2001 EPS $0.94
Less: non-cash valuation charge (.16)
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EPS as reported - third quarter 2001 $0.78
======
Utility Operations
Third quarter 2001 utility earnings were $69.5 million ($0.88
per share) compared to $68.4 million ($0.86 per share) for the
same period in 2000.
The increase in electric margin was primarily related to
increased residential and commercial sales due to more favorable
weather conditions in the third quarter of 2001 compared to the
same period in 2000 and continued retail customer growth. Higher
energy conservation revenues also contributed to the increase.
The increased operating expenses were largely due to higher
costs in the company's energy delivery and generation business
units (certain increases were timing differences), increased
uncollectible customer account balances, higher operating costs at
the Kewaunee Nuclear Power Plant and costs associated with the
implementation of the company's e-business strategy.
Non-regulated Operations
Alliant Energy's non-regulated operations reported adjusted
net income of $8.2 million ($0.10 per share) in the third quarter
of 2001 compared to adjusted net income of $5.3 million ($0.07 per
share) in the third quarter of 2000.
These figures exclude the non-cash valuation charges of $12.6
million ($0.16 per share) and $1.2 million ($0.02 per share) in
2001 and 2000, respectively, and the $204 million of non-cash net
income ($2.58 per share) in 2000 relating to the company's
adoption of a new accounting pronouncement (SFAS No. 133) on July
1, 2000. Reported net income/(loss) and earnings per share for
2001 and 2000 were ($4.4) million, or ($0.06) per share, and
$208.0 million, or $2.63 per share, respectively.
The improved results from the Integrated Services business
unit were largely due to a one-time charge related to a loss on a
contract in the third quarter of 2000. The higher income from the
Investments business unit was from the company's oil and gas
operations and was largely due to increased sales volumes as a
result of the continued acquisition of additional oil and gas
producing properties.
The improved results from the International business unit
were due to increased earnings from the company's China and
Australian investments. The increase for China was largely due to
the addition of five combined heat and power facilities to the
company's China portfolio in the past twelve months and increased
income tax benefits. The earnings from the Australian operations
included non-cash income from the valuation of certain of its
energy agreements. These increases were partially offset by lower
earnings from the company's New Zealand investments due to the
impact of a drought in New Zealand and an asset sale gain the
company realized in the third quarter of 2000. In spite of the
drought conditions in Brazil, the company's results from its
Brazil investments were flat in the third quarter of 2001 compared
to the same period in 2000.
The lower earnings from our Generation and Trading business
unit were largely the result of reduced income from the company's
electricity trading joint venture due to fewer weather-related
trading opportunities in the third quarter of 2001.
The non-cash valuation charge in both periods was related to
the net valuation of the 30-year exchangeable senior notes and the
associated McLeodUSA shares designated as trading securities.
Future Earnings Outlook
Thomas M. Walker, Alliant Energy's Chief Financial Officer
stated, "Alliant Energy's guidance for adjusted earnings per share
for 2001 is in the range of $2.40 - $2.50 per share. Also, our
initial guidance for adjusted earnings per share for 2002 is in
the range of $2.50 - $2.70 per share. By executing our strategic
plan, our goal is to deliver 7%-10% annual earnings growth,
enhanced shareowner value and meet our financial objectives,
including maintaining our stable dividend."
Drivers for Alliant Energy's earnings estimates include, but
are not limited to:
>> Normal weather conditions in its utility service territories
>> Continued economic development and sales growth in its
utility service territories
>> Continued cost control and operational efficiencies in its
utility operations
>> Ability of its utility subsidiaries to recover their
operating costs, and to earn a reasonable rate of return, in
future rate proceedings
>> Ability to recover its purchased power and fuel costs, both
domestically and internationally
>> Ability to offset start-up and growth-related interest
expenses in its non-regulated businesses with sales of
non-strategic assets and to redeploy such proceeds into more
strategic earnings-generating investments
>> Continued improved profitability of its international
investments
>> Continued improved profitability of its non-regulated
businesses as a whole, including oil and gas, electricity
trading, integrated energy and transportation services
>> Stable oil and gas prices
>> Other stable business conditions, including a stable economy
Alliant Energy's strategic plan includes investing in
generation and other energy-related projects; better connecting
with customers through enhanced service reliability, value-added
products and services, and e-business initiatives; and growing the
non-regulated side of its business through partnerships and
acquisitions in generation projects, international markets and
other strategic initiatives. Alliant Energy's goal is to have its
non-regulated businesses contribute more than 25 percent of its
earnings within the next three years and believes that successful
implementation of these strategies will contribute significantly
to the company achieving its targeted annual growth rate of 7-10
percent in adjusted earnings.
--- --- ---
Alliant Energy, through its subsidiaries and partners,
provides electricity, natural gas, water and steam to over three
million customers worldwide. Through its non-regulated
subsidiaries, Alliant Energy also provides energy products and
services to domestic and international markets; provides
integrated services, including environmental, engineering and
transportation services; invests in affordable housing
initiatives; and invests in various other strategic initiatives.
More information about Alliant Energy is available on the World
Wide Web at www.alliantenergy.com.
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# # #
This press release includes forward-looking statements. These
forward-looking statements can be identified as such because the
statements include words such as "expects" or "estimates" or other
words of similar import. Similarly, statements that describe
future financial performance or plans or strategies are also
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 such factors as: the factors listed in the "Future
Earnings Outlook" section of this press release; weather
conditions; regulatory or governmental actions; economic and
political conditions in Alliant Energy's domestic and
international service territories; unanticipated issues related to
Alliant Energy's ability to implement its strategic plan,
especially as it relates to international investments; Alliant
Energy's ability to identify and successfully complete
acquisitions and development projects; material changes in the
value of Alliant Energy's investments; technological developments;
and inflation rates. These factors should be considered when
evaluating the forward-looking statements and undue reliance
should not be placed on such statements. Without limitation, the
expectations with respect to projected earnings in the "Future
Earnings Outlook" section of 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
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
2001 2000 2001 2000
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(in thousands, except per share amounts)
Operating revenues:
Electric utility $519,851 $480,763 $1,367,281 $1,248,228
Gas utility 42,979 41,369 396,229 226,156
Non-regulated and other 103,435 81,060 367,309 226,755
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666,265 603,192 2,130,819 1,701,139
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Operating expenses:
Electric and steam production fuels 94,894 80,605 248,040 213,990
Purchased power 108,177 85,553 318,024 222,690
Cost of utility gas sold 23,660 22,660 303,984 136,642
Other operation and maintenance 194,663 168,522 629,845 526,562
Depreciation and amortization 85,502 79,625 256,278 233,506
Taxes other than income taxes 25,643 26,206 83,628 79,171
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532,539 463,171 1,839,799 1,412,561
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Operating income 133,726 140,021 291,020 288,578
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Interest expense and other:
Interest expense 46,169 45,040 143,500 127,452
Equity income from unconsolidated investments (11,688) (9,890) (30,766) (12,598)
Allowance for funds used during construction (3,373) (2,186) (8,845) (6,825)
Preferred dividend requirements of subsidiaries 1,680 1,679 5,040 5,035
Gain on reclassification of investments -- (321,349) -- (321,349)
Gain on sale of McLeodUSA Inc. stock -- -- -- (10,206)
Miscellaneous, net 8,518 (8,216) 3,412 (27,948)
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41,306 (294,922) 112,341 (246,439)
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Income before income taxes 92,420 434,943 178,679 535,017
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Income taxes 30,135 175,403 59,709 213,879
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Income before cumulative effect of a change in
accounting principle, net of tax 62,285 259,540 118,970 321,138
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Cumulative effect of a change in accounting
principle, net of tax -- 16,708 -- 16,708
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Net income $62,285 $276,248 $118,970 $337,846
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Average number of common shares outstanding - basic 79,240 79,004 79,107 79,001
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Earnings per average common share - basic:
Income before cumulative effect of a change
in accounting principle $0.79 $3.29 $1.50 $4.07
Cumulative effect of a change in accounting principle -- 0.21 -- 0.21
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Net income $0.79 $3.50 $1.50 $4.28
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Average number of common shares outstanding - diluted 79,350 79,160 79,241 79,202
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Earnings per average common share - diluted:
Income before cumulative effect of a change
in accounting principle $0.78 $3.28 $1.50 $4.06
Cumulative effect of a change in accounting principle -- 0.21 -- 0.21
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Net income $0.78 $3.49 $1.50 $4.27
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Dividends declared per common share $0.50 $0.50 $1.50 $1.50
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KEY STATISTICS
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For the Twelve Months
Ended September 30,
2001 2000
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(in thousands, except
per share amounts)
Operating revenues $2,834,664 $2,232,827
Net income $179,786 $382,643
Average common shares (diluted) 79,222 79,153
Earnings per share (diluted) $2.27 $4.83
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For the Three Months For the Nine Months
Ended September 30, Ended September 30,
2001 2000 2001 2000
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Utility electric sales from ultimate customers 6,877 6,846 19,257 19,227
(thousands of MWh)
Total utility electric sales 8,194 8,139 23,163 22,974
(thousands of MWh)
Utility gas sold & transported 16,233 14,332 73,849 66,780
(thousands of dekatherms)
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Book value per share, September 30, 2001 $20.17 **
Book value per share, September 30, 2000 $26.30
** The decline in book value per share is largely due to the decline in value of Alliant Energy's publicly-traded
investments, which are adjusted to their fair market value on a quarterly basis, and foreign currency translation
adjustments.