Exhibit (99.1)
[GRAPHIC OMITTED][ALLIANT ENERGY]
Alliant Energy
Worldwide Headquarters
4902 North Biltmore Lane
P.O. Box 77007
Madison, WI 53707-1007
www.alliantenergy.com
News Release
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FOR IMMEDIATE RELEASE Media Contacts: Chris Schoenherr (608) 458-3924
Karen Whitmer (608) 458-4839
Investor Relations: Eric Mott (608) 458-3391
ALLIANT ENERGY ANNOUNCES STRATEGIC ACTIONS TO STRENGTHEN FINANCIAL PROFILE
$800 million to $1 billion debt reduction plan, change in dividend policy to
strengthen financial posture
MADISON, Wis. - Nov. 22, 2002 - Alliant Energy Corp. (NYSE: LNT) today
announced that its Board of Directors has approved five strategic actions
designed to maintain a strong credit profile, strengthen its balance sheet
and position the company for improved long-term financial performance.
Alliant Energy also provided updated 2003 adjusted earnings guidance, which
reflects the impact of these actions.
"These actions signal a shift to less aggressive growth targets primarily
driven by our utility operations," said Erroll B. Davis, Jr., chairman,
president and chief executive officer of Alliant Energy. "We expect the
steps we are taking to strengthen our balance sheet and assist us in
maintaining strong credit ratings in the current environment of tighter
capital and credit markets. We have made some difficult decisions, but
believe these efforts will enable us to deliver sustainable, long-term value
for our shareowners."
The five strategic actions are:
1. Realizing the value from the exit of certain non-regulated businesses
2. Reducing the targeted annual common stock dividend from $2.00 to $1.00
per share
3. Reducing anticipated capital expenditures in 2002 and 2003
4. Planning to raise approximately $200-300 million of common equity in
2003, dependent on market conditions at such time
5. Implementing additional cost control measures
"The equity offerings and sale of certain non-regulated assets have been part
of our plan for some time," said Davis. "In order to strengthen our balance
sheet, the asset sales will now be executed on an accelerated schedule and we
anticipate they will reduce our debt levels by approximately $800 million to
$1 billion over the next 12 months. The cost controls will be an extension of
steps we have been putting in place since Alliant Energy was formed and will
be implemented in a manner that will not negatively impact utility service
reliability or safety. The reduction in the dividend policy is a difficult,
but prudent, step we must take in recognition of the current realities of the
credit and capital markets facing all energy companies."
The company announced in its third quarter earnings release in late October
that it would engage in a comprehensive review of possible strategic actions
to maintain strong credit ratings and strengthen the balance sheet, and that
it would release the result of that review within four to six weeks.
Alliant Energy Announces Strategic Actions
November 22, 2002
Page 2 of 5
"The credit ratings in our industry have been under pressure and our ratings
are no exception," said Davis. "The plan we have outlined today clearly
demonstrates our unwavering commitment to maintaining strong credit ratings.
In spite of such strategic actions, a credit rating downgrade remains a
plausible outcome. However, we fully expect today's announced strategic
actions to support a strong balance sheet and credit rating now, and in the
future, without jeopardizing our company's ability to achieve solid earnings
growth in the years to come."
Sale of non-regulated assets
As part of its ongoing and previously stated effort to narrow the number of
business platforms and focus on core, utility-related businesses, Alliant
Energy announced its commitment to pursue the sale of, or other exit
strategies for, a number of non-regulated businesses over the next 12
months. These businesses include Alliant Energy's Whiting (oil and gas),
Australian, affordable housing and several other non-core businesses which
have an aggregate book capitalization, including debt, of approximately $900
million. Alliant Energy anticipates a reduction of approximately $800
million to $1 billion in debt currently outstanding as a result of these
transactions.
"This portfolio of businesses has been profitable and represents assets from
which we are confident we can harvest value in 2003," said Davis. "While we
expect each of these businesses will deliver positive earnings in 2002, they
are either not in line with our core business strategy and/or produce
significant earnings volatility. These are necessary decisions as we seek to
focus on a narrower core of utility-related businesses and manage through our
near-term financial challenges. In aggregate, we believe we can exit these
businesses at a gain in 2003. We will also continue to evaluate the
potential sales of other non-strategic assets in our continuing quest to
narrow our existing strategic platforms," said Davis.
Dividend Reduction
Alliant Energy's recent dividend yield and payout ratios have been
significantly higher than industry averages. More importantly, the existing
dividend exceeds Alliant Energy's current regulated utility earnings. In
order to strengthen the company's balance sheet, enhance credit quality and
improve the company's financial flexibility, Alliant Energy's Board of
Directors has decided to reduce the targeted annual common stock dividend
from $2.00 per share to $1.00 per share, effective with the dividend to be
declared and paid in the first quarter of 2003.
"Our previous dividend policy presumed we could grow into a more typical
dividend payout ratio over time," said Davis. "While we were willing to
exercise that patience, the market was not. We understand the importance of
the dividend to our income-oriented investors and this was not a decision the
Board took lightly. However, reducing the dividend is an important factor in
enhancing Alliant Energy's financial strength and flexibility, which we
believe is one of our primary responsibilities to our shareowners. The
adjusted dividend level also provides Alliant Energy with a more sustainable
dividend payout ratio based upon utility earnings and comparable utility
industry average payout ratios."
Capital Expenditures
Alliant Energy has reduced its aggregated 2002 and 2003 anticipated
construction and acquisition expenditures by approximately $400 million
compared to the amounts most recently disclosed. Anticipated capital
expenditures (in millions) are shown in the following table:
Alliant Energy Announces Strategic Actions
November 22, 2002
Page 3 of 5
2002 2003
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Domestic utility business:
Utility infrastructure and reliability investments $ 409 $ 400
Power Iowa 19 * 210 *
Non-regulated domestic generation 109 130
Oil and gas 162 80
Energy-related international 72 -
Other non-regulated business development 44 80
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Total $ 815 $ 900
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* Excludes approximately $60 million and $49 million in 2002 and 2003,
respectively, for potential purchase of turbines and related equipment from
affiliates
"Our domestic utilities have always been the foundation of our company and we
are maintaining our anticipated utility capital expenditures at or above our
historical levels," said Davis. "We are committed to continuing to provide
safe, reliable and environmentally sound service to our utility customers.
However, we must continue to receive fair and timely rate relief in order to
continue an appropriate level of capital expenditure in our utilities."
Davis reiterated that the company does not plan to invest any additional
capital in Brazil or any other international operations through 2003.
Common Equity Offering
Alliant Energy is currently reviewing various alternatives to lower its
current debt-to-capitalization ratios. In addition to the debt reductions
resulting from the successful execution of the other strategic actions,
Alliant Energy currently plans to raise additional common equity of
approximately $200-300 million in 2003, dependent on market conditions at
such time.
"The vast majority of the proceeds from any common stock offerings will be
directed towards additional capital investments into our regulated domestic
utilities, including the company's Power Iowa initiative," said Davis. "This
is yet another sign of our strong commitment to safe, reliable and
environmentally sound utility service."
Alliant Energy is addressing its needs for additional equity within its
utility businesses in several rate cases in its various jurisdictions.
Cost Controls
The company expects its recently announced Six Sigma program will enhance its
aggressive ongoing cost control efforts. Additionally, Alliant Energy also
expects to begin realizing cost savings from the implementation of a new
enterprise resource planning system that was placed in service in October
2002. Alliant Energy will also heighten its focus on operating its domestic
utility business in a manner that ensures alignment of operating expenses
with the revenues granted in its various rate filings.
Alliant Energy Announces Strategic Actions
November 22, 2002
Page 4 of 5
Adjusted Earnings Guidance Update
The company acknowledges that the potential sale of certain non-regulated
assets, the dilutive impact of planned common equity offerings and reduced
capital expenditures will impact 2003 earnings. Based on the strategic
actions announced today, Alliant Energy is issuing adjusted earnings guidance
of $1.65 to $1.90 per diluted share for 2003. This earnings guidance does
not include any potential gains, losses, restructuring charges or other
potential accounting adjustments related to the proposed asset sales, the
impact of certain non-cash SFAS 133 valuation adjustments or any asset
valuation charges that Alliant Energy may incur in 2003. The guidance
includes $0.20 to $0.30 per diluted share of expected adjusted earnings from
the businesses Alliant Energy is committed to exiting in 2003 prior to the
respective estimated transaction dates. This last assumption is highly
dependent on the accuracy of Alliant Energy's estimates as to the closing
dates of the proposed asset transactions.
The guidance assumes adjusted earnings from the regulated domestic utilities
to be between $1.75 and $1.95 per diluted share in 2003. The company expects
these results to be offset somewhat in 2003 by the results from its
non-regulated operations.
"We do not expect our Brazil investments to be profitable in 2003," said
Davis. "However, with continued operational improvements, increased sales,
more stable political, regulatory and economic environments, and the benefit
of a strong partnership, we believe we are positioned to see improved results
in 2003."
Drivers for Alliant Energy's earnings estimates include, but are not limited
to:
o Normal weather conditions in its domestic and international utility
service territories
o Economic development and sales growth in its utility service territories
o Continuing cost controls and operational efficiencies
o Ability of its domestic and international utility subsidiaries to
recover their operating costs, and to earn a reasonable rate of return,
in current and future rate proceedings as well as recover their
purchased-power and fuel costs
o Improved results of its Brazil investments and no material adverse
changes in the rates allowed by the Brazilian regulators
o Improved results of its other non-regulated businesses
o No additional material permanent declines in the fair market value of,
or expected cash flows from, Alliant Energy's investments
o Other stable business conditions, including an improving economy
o Continued access to the capital markets to execute Alliant Energy's
strategic plan
o Ability of Alliant Energy to successfully execute its proposed asset
sales at values and timelines that are consistent with the assumptions
underlying its earnings guidance
"With our commitment to a stronger financial profile and the dedication of
our employees, we believe Alliant Energy is poised for future success, which
includes a continued excellent energy value for our customers and improved
long-term value for our shareowners," said Davis.
Alliant Energy Announces Strategic Actions
November 22, 2002
Page 5 of 5
Conference Call
A conference call to discuss the results of the comprehensive review is
scheduled for Friday, November 22 at 9:00 a.m. central time. Alliant Energy
Chairman, President and CEO Erroll B. Davis 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 1-800-441-0022 (no pass
code is needed) or by listening to a webcast of the call on the company's
Website at www.alliantenergy.com/investors. A replay of the call will be
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available until November 29, 2002 at 1-800-839-0860 (pass code 1105). An
archive of the webcast will be available on the company's website at
www.alliantenergy.com/investors.
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ANR254-02
Alliant Energy Corporation (www.alliantenergy.com; NYSE:LNT), headquartered
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in Madison, Wis., is a growing energy-services provider with operations both
domestically and internationally. Alliant Energy, through its subsidiaries
and partners, provides electric, natural gas, water and steam services to
over three million customers worldwide. Alliant Energy Resources, Inc., home
of the company's non-utility businesses, has operations and investments
throughout the United States as well as in Australia, Brazil, China and New
Zealand.
# # #
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 "Adjusted Earnings Guidance Update"
section of this press release; weather conditions; regulatory or governmental
actions, including with respect to rates and payment of dividends; 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
proposed asset divestitures and development projects; material changes in the
value of Alliant Energy's investments; continued access to the capital
markets to execute the company's strategic plan, including common stock
offerings; access to 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
"Adjusted Earnings Guidance Update" 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.