EXHIBIT 99.1
[GRAPHIC OMITTED]
ALLIANT ENERGY
Alliant Energy
Worldwide Headquarters
222 W. Washington Ave.
P.O. Box 192
Madison, WI 53701-0192
www.alliantenergy.com
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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 7% GROWTH IN 2001 ADJUSTED EARNINGS
Driven by growth in earnings from Alliant Energy's non-regulated
businesses
MADISON, Wis. - Jan. 29, 2002 - Alliant Energy Corp. (NYSE:
LNT) today reported adjusted net income of $195.1 million, or
$2.42 per share, for 2001 compared to adjusted net income of
$179.0 million, or $2.26 per share, for 2000, a 7 percent
increase in adjusted earnings per share.
The 2001 adjusted earnings excluded non-cash SFAS 133
valuation charges of $0.26 and $0.02 per share related to the
company's obligation under certain 30-year exchangeable senior
notes and the valuation of electricity derivatives of one of
Alliant Energy's foreign affiliates (Southern Hydro Partnership),
respectively. The 2000 adjusted earnings excluded $2.58 and
$0.20 per share of income relating to the company's adoption of
SFAS No. 133 and gains on sales of McLeodUSA stock, respectively.
Reported (GAAP) net income and earnings per share for 2001
and 2000 were $172.4 million, or $2.14 per share, and $398.7
million, or $5.03 per share, respectively.
"This past year presented many significant challenges --
extraordinary droughts in both Brazil and New Zealand; a slowing
domestic economy; and pressures on our utility profits given we
were in the final year of our four-year price freezes -- just to
name a few," said Alliant Energy CEO Erroll B. Davis, Jr. "And
while not all our businesses performed as we expected, we
overcame these challenges and managed to deliver adjusted
earnings within the earnings guidance we provided throughout the
year. We said we would achieve 7-10 percent growth in adjusted
earnings and we delivered. This is a testament to our people,
our diversification and our strategy."
The increase in adjusted earnings was driven by an increase
of $0.14 per share from Alliant Energy's non-regulated
businesses, led by record earnings from the company's oil and gas
business, and the impact of lower short-term interest rates.
These items were partially offset by lower earnings from the
company's non-regulated generation and trading business and its
international energy business. Earnings from utility operations
were down $0.07 per share due to increased operating expenses and
lower gas margins, partially offset by higher electric margins
and a lower effective income tax rate. Income from the
resolution of a significant tax case Alliant Energy had pursued
for years also contributed to the increase in adjusted earnings.
"I am pleased to report our non-regulated businesses
contributed $0.36 per share, or 15 percent, of our adjusted
earnings," said Davis. "This is a 64 percent increase versus
2000 adjusted earnings and continues to validate our
diversification and growth strategies and is a significant factor
in the shareowner value we continue to deliver."
-More-
Alliant Energy - 2001 Earnings
Page 2 of 8
January 29, 2002
A reconciliation of Alliant Energy's 2001 versus 2000
earnings per share (EPS) is as follows:
EPS as reported - 2000 $5.03
Less: SFAS 133 adoption non-cash income (2.58)
Less: Gains on sales of McLeodUSA stock (.20)
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Adjusted 2000 EPS 2.26
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2001 EPS increase/(decrease) versus 2000:
Utility operations:
Electric margins $0.07
Gas margins, net of weather hedge income (.06)
Operating expenses (.24)
Effective income tax rate .09
Other (net interest expense/steam margins) .07
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Total utility operations (.07)
Non-regulated operations:
Investments business unit .24
International business unit (.08)
Generation and Trading business unit (.10)
Integrated Services business unit (.04)
Other (primarily lower interest rates) .12
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Total non-regulated operations .14
Parent expenses/other .09
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Adjusted 2001 EPS $2.42
Less: non-cash valuation charge - senior notes (.26)
Less: non-cash SFAS 133 valuation charge (.02)
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EPS as reported - 2001 $2.14
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Total Year Results
Utility Operations - 2001 Compared to 2000
2001 utility earnings were $164.9 million ($2.05 per share)
compared to $167.8 million ($2.12 per share) for the same period
in 2000.
Weather did not have a material impact on Alliant Energy's
2001 results as the benefits from a colder than normal first
quarter, high humidity levels for a portion of the summer and
income realized from a weather hedge the company had in place in
the fourth quarter largely offset the impact of an extremely mild
fourth quarter.
The increase in electric margin was primarily related to
lower purchased power and fuel costs, increased residential and
commercial sales due to more favorable weather conditions in 2001
compared to 2000 and continued retail customer growth. These
items were partially offset by income from a change in estimate
of WP&L's utility services rendered but unbilled at month-end
recorded in 2000 and lower industrial sales, largely due to
impacts of a slowing economy. The decrease in gas margin was due
to lower retail sales primarily related to unusually high gas
prices earlier this year and the impact of the slowing economy.
Alliant Energy's transactions with Enron also had a modest
negative impact on electric and gas margins.
-More-
Alliant Energy - 2001 Earnings
Page 3 of 8
January 29, 2002
The increased operating expenses were largely due to higher
transmission wheeling and other costs in the company's energy
delivery business unit, higher depreciation and amortization
expenses, increased nuclear operating costs (partially due to a
planned refueling outage at Kewaunee in 2001) and higher
uncollectible customer account balances largely due to the
unusually high gas prices earlier in the year. The company's
four-year price freezes in all jurisdictions will expire April
2002. Alliant Energy will address the recovery of its cost
increases through rate filings in Wisconsin, Iowa and with FERC
in 2002. Such cost increases are related to Alliant Energy's
investments in reliability, customer service, technology and
environmental upgrades as well as its infrastructure to continue
providing safe and reliable utility service.
Non-regulated Operations - 2001 Compared to 2000
Alliant Energy's non-regulated operations reported adjusted
net income of $28.9 million ($0.36 per share) in 2001 compared to
adjusted net income of $17.1 million ($0.22 per share) in 2000, a
64 percent increase in adjusted earnings per share.
The 2001 adjusted earnings exclude the non-cash SFAS 133
valuation charges related to the company's obligation under
certain 30-year exchangeable senior notes ($0.26 per share) and
Southern Hydro's electricity derivatives ($0.02 per share). The
2000 adjusted earnings excluded income related to the company's
adoption of SFAS No. 133 ($2.58 per share) and gains on sales of
McLeodUSA stock ($0.20 per share). Reported (GAAP) net income
and earnings per share for 2001 and 2000 were $6.1 million ($0.08
per share) and $236.8 million ($2.99 per share), respectively.
The robust increase in earnings from the Investments
business unit was largely due to record earnings from the
company's oil and gas business (Whiting Petroleum Company).
Increased earnings were driven by higher gas prices earlier in
the year, increased oil and gas sales volumes and income of $0.07
per share from a reduction in the estimated dismantlement cost of
an offshore oil and gas platform. The company mitigated some of
the impact of the decrease in prices in the latter half of the
year by locking in a portion of its volumes at prices higher than
the prevailing market prices. Higher sales volumes were largely
due to Whiting's continued acquisitions of proven reserves at
prices that generate significant earnings. The lower
dismantlement cost was due to the successful efforts to have the
facility designated as a permanent facility, therefore
significantly reducing the amount of dismantlement required.
These items were partially offset by higher operating and
interest expenses. Increased earnings from Alliant Energy's
affordable housing business also contributed to higher earnings
from the Investments business unit.
The decrease in income from the International business unit
was due to lower results from its Brazil and New
Zealand/Australian investments, partially offset by increased
income from its investments in China. The company's Brazil
investments did not perform up to expectations, although there
were several extenuating circumstances that contributed to the
disappointing results. Primary drivers of the decreased earnings
were lower sales related to a severe drought; impacts of a
settlement reached in the fourth quarter between the Brazil
government and the distribution companies related to the economic
resolution of the impacts of rationing, the recovery of past
costs and the prices allowed for sales of excess generation into
the spot market; commercial energy losses; higher uncollectible
customer account balances due to revised regulatory requirements
and increased interest expense. Brazil experienced a severe
drought in 2001 and, as a result, the government implemented a
significant electricity rationing program in June given that the
large majority of generation in Brazil is hydroelectric. Brazil
has recently been receiving significant rainfall resulting in the
hydro plant water levels returning to more normal levels. As a
result, the government implemented significant reductions in the
electricity rationing requirements and Alliant Energy expects
such requirements to be fully lifted by this spring.
-More-
Alliant Energy - 2001 Earnings
Page 4 of 8
January 29, 2002
Alliant Energy and its Brazilian partners have developed and
are executing a plan to achieve significant reductions in
commercial energy losses and increases in the collection of
customer receivables. As part of Alliant Energy's strategy to
build much needed additional non-hydro generation in Brazil, Juiz
de Fora, an 80-megawatt thermal power plant and joint venture of
Alliant Energy and its Brazilian partners, was placed in service
in the fourth quarter of 2001. Successful execution of these
initiatives is expected to be a major factor in producing
anticipated increases in the profitability of Alliant Energy's
Brazilian investments later this year. Further, foreign currency
rates in Brazil against the U.S. dollar have rebounded
significantly since the end of the third quarter which would also
have a positive impact on Alliant Energy's anticipated earnings
from its Brazil investments in 2002.
The comparatively lower results from Alliant Energy's New
Zealand/Australian investments in 2001 were largely due to the
impacts of a drought in New Zealand and gains from asset sales
that were realized in 2000. The increase for China was largely
due to the successful addition of five combined heat and power
facilities to the company's China portfolio in the last fifteen
months. Alliant Energy's China portfolio now includes eight
facilities with an aggregate generating capacity of approximately
450 megawatts.
The lower earnings from Alliant Energy's Generation and
Trading business unit were the result of changes in the energy
marketplace in 2001. The company's electricity trading business
continued to deliver solid returns on its investment. However,
net income was only about half of that realized in 2000 given the
less volatile market prices and fewer weather-related trading
opportunities in 2001. Further, Alliant Energy canceled a
merchant plant project in 2001 that failed to meet the company's
required returns which resulted in charges for development costs
that contributed to the lower earnings in 2001. The generation
market has experienced dramatic volatility recently and Alliant
Energy believes it will be better positioned by being diligent
and patient in waiting for the right opportunities to build its
portfolio of non-regulated generation projects.
The lower results from the Integrated Services business unit
were largely due to the impacts of the slowing economy and
transactions its gas business had with Enron.
Parent Expenses/Other
The federal government decided not to pursue the ruling in
favor of Alliant Energy of the U.S. Court of Appeals for the
Eighth Circuit with respect to two issues in a tax refund case.
Alliant Energy recorded income of $0.13 per share ($0.08 and
$0.05 per share at the parent company and IP&L, respectively) in
2001 related to the ruling. An additional potential refund
remains a contested issue. This income enabled Alliant Energy to
offset the impacts of numerous one-time challenges it faced this
past year. These included the impact of the severe droughts in
Brazil and New Zealand (approximately $0.12 per share); an
incremental increase in the amount of uncollectible utility
accounts due largely to unusually high gas prices ($0.05 per
share); charges incurred as a result of Alliant Energy's modest
transactions with Enron ($0.04 per share); and the development
costs incurred as a result of the canceled non-regulated
generation project ($0.03 per share).
Fourth Quarter Results
Alliant Energy Corp. reported adjusted net income of $62.0
million, or $0.73 per share, for the fourth quarter of 2001
compared to adjusted net income of $51.9 million, or $0.66 per
share, for 2000, an 11 percent increase in adjusted earnings per
share. The 2001 adjusted earnings excluded non-cash SFAS 133
valuation charges of $0.06 and $0.01 per share related to the
valuation of Southern Hydro's electricity derivatives and the
company's obligation under certain
-More-
Alliant Energy - 2001 Earnings
Page 5 of 8
January 29, 2002
30-year exchangeable senior notes, respectively. The 2000
adjusted earnings excluded $0.11 of income from gains on sales of
McLeodUSA stock. Reported (GAAP) net income and earnings per
share for the fourth quarters of 2001 and 2000 were $56.1
million, or $0.66 per share, and $60.8 million, or $0.77 per
share, respectively.
The increase in adjusted earnings was due to the income from
the positive resolution of the tax case, increased earnings from
Alliant Energy's China and New Zealand/Australian investments,
the impact of lower short-term interest rates and a lower
non-regulated effective income tax rate. These items were
partially offset by lower earnings from Alliant Energy's Brazil
investments, electricity trading operations and oil and gas
business; increased nuclear operating costs, largely due to a
planned refueling outage at the Kewaunee Nuclear Power Plant;
lower utility gas margins; and the impact of Alliant Energy's
modest transactions with Enron.
Prior 2001 Quarterly Results
Alliant Energy will be restating its financial statements
for the first three quarters of 2001 in connection with a new
accounting standard (SFAS 133) that its foreign affiliates were
required to adopt in 2001. The restatements reflect a non-cash
valuation adjustment to its earnings as a result of a change in
the accounting treatment of electricity derivatives of Southern
Hydro, which Alliant Energy accounts for under the equity method
of accounting. Alliant Energy prepared its quarterly financial
statements during 2001 based on the independently prepared
financial statements of Southern Hydro, which treated these
derivatives as qualifying for hedge accounting under SFAS No.
133. Upon a further review of the accounting for such
derivatives by Alliant Energy during the fourth quarter, it was
determined the derivatives did not qualify for hedge accounting
and that gains and losses attributable to changes in the fair
value of these derivatives should have been recognized in Alliant
Energy's earnings in the first three quarters of 2001. While
there were some significant swings in earnings between the first
three quarters, the non-cash valuation adjustment to September
2001 year-to-date results was a reduction of net income of $2.7
million, resulting in restated net income of $116.3 million
versus the $119.0 million previously reported. As noted earlier,
Alliant Energy intends to treat these non-cash valuation
adjustments as adjustments to its GAAP earnings, in the same
manner as it currently treats non-cash income or charges relating
to its obligations under its 30-year exchangeable senior notes
and the adoption of SFAS No. 133. The change in accounting
treatment would not have materially impacted Alliant Energy's
adjusted earnings for any of the first three quarters of 2001.
Future Earnings Outlook
Thomas M. Walker, Alliant Energy's Chief Financial Officer
stated, "Given the potential downward pressures on earnings from
recent decreases in oil and gas prices, the slowing economy and
risks associated with the level of rate recovery we will realize
in 2002, we have lowered our guidance for estimated adjusted
earnings per share for 2002 by $0.05 per share to a range of
$2.45 - $2.65 per share. We expect to mitigate these downward
pressures by the continued improved profitability of our
non-regulated investments, including recovery of oil and gas
prices later in 2002, a rigorous cost and capital control program
and the continued successful execution of our strategic plan. In
spite of the potential downward pressures on earnings, our goal
remains delivering 7-10 percent annual adjusted earnings growth
and enhanced shareowner value as well as meeting our financial
objectives, including maintaining our stable dividend and
investment grade credit ratings."
Drivers for Alliant Energy's earnings estimates include, but
are not limited to:
>> Normal weather conditions in its domestic and international
utility service territories
>> Continued economic development and sales growth in its
utility service territories
>> Continued cost control and operational efficiencies in its
utility operations
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Alliant Energy - 2001 Earnings
Page 6 of 8
January 29, 2002
>> 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
>> Improved profitability of its Brazil investments through
factors discussed earlier as well as the continued growth in
earnings from its China investments
>> Continued strong earnings from Whiting Petroleum, including
the recovery and stability of oil and gas prices and continued
successful execution of its acquisition strategy
>> Continued improved profitability of its other non-regulated
businesses as a whole, including the Integrated Services and
Generation and Trading business units
>> No material permanent declines in the fair market value of,
or expected cash flows from, Alliant Energy's investments
>> 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 is the parent company of two public utility
companies - Interstate Power & Light Company (IP&L) 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. 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 - 2001 Earnings
Page 7 of 8
January 29, 2002
ALLIANT ENERGY CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
Year Ended December 31,
2001 2000
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(in thousands, except per share amounts)
Operating revenues:
Electric utility $1,756,556 $1,648,036
Gas utility 487,877 414,948
Non-regulated and other 532,907 342,000
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2,777,340 2,404,984
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Operating expenses:
Electric and steam production fuels 310,689 288,621
Purchased power 403,166 294,818
Cost of utility gas sold 360,911 278,734
Other operation and maintenance 887,733 734,675
Depreciation and amortization 334,149 322,334
Taxes other than income taxes 110,668 104,746
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2,407,316 2,023,928
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Operating income 370,024 381,056
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Interest expense and other:
Interest expense 190,472 173,614
Equity income from unconsolidated investments (35,882) (19,138)
Allowance for funds used during construction (11,144) (8,761)
Preferred dividend requirements of subsidiaries 6,720 6,713
Gain on reclassification of investments -- (321,349)
Gains on sales of McLeodUSA Inc. stock -- (23,773)
Miscellaneous, net (25,212) (47,020)
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124,954 (239,714)
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Income before income taxes 245,070 620,770
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Income taxes 59,840 238,816
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Income before cumulative effect of a change in
accounting principle, net of tax 185,230 381,954
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Cumulative effect of a change in accounting
principle, net of tax (12,868) 16,708
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Net income $172,362 $398,662
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Average number of common shares outstanding - basic 80,498 79,003
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Earnings per average common share - basic:
Income before cumulative effect of a change
in accounting principle $2.30 $4.84
Cumulative effect of a change in accounting principle (0.16) 0.21
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Net income $2.14 $5.05
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Average number of common shares outstanding - diluted 80,636 79,193
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Earnings per average common share - diluted:
Income before cumulative effect of a change
in accounting principle $2.30 $4.82
Cumulative effect of a change in accounting principle (0.16) 0.21
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Net income $2.14 $5.03
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Dividends declared per common share $2.00 $2.00
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Alliant Energy - 2001 Earnings
Page 8 of 8
January 29, 2002
KEY STATISTICS
For the Year Ended December 31,
2001 2000
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Utility electric sales from ultimate customers 25,277 25,617
(thousands of MWh)
Total utility electric sales 30,381 30,697
(thousands of MWh)
Utility gas sold & transported 101,518 101,003
(thousands of dekatherms)
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Whiting's volumes sold (in thousands):
Oil (barrels) 2,087 1,562
Gas (thousand cubic feet) 19,751 16,905
Whiting's product prices:
Oil $23.85 $26.96
Gas $3.82 $3.51
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Book value per share at December 31 $21.39 * $25.79
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* The decline in book value per share is largely due to the decline in value of Alliant
Energy's publicly-traded investments (primarily McLeodUSA) which are adjusted to
fair market value on a quarterly basis.