Exhibit 99.1
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Alliant Energy
Worldwide Headquarters
4902 North Biltmore Lane
P.O. Box 77007
Madison, WI 53707-1007
www.alliantenergy.com
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News Release
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FOR IMMEDIATE RELEASE Media Contact: Chris Schoenherr (608) 458-3924
Karen Whitmer (608) 458-4839
Investor Relations: Eric Mott (608) 458-3391
ALLIANT ENERGY ANNOUNCES $0.19 PER SHARE INCREASE IN EARNINGS FROM CONTINUING
OPERATIONS IN SECOND QUARTER; REMAINS ON TARGET TO MEET 2003 EARNINGS GUIDANCE
Alliant Energy continues successful execution of its actions to strengthen
its financial profile
MADISON, Wis. - July 28, 2003 - Alliant Energy Corp. (NYSE: LNT) today
reported income (loss) and earnings per share (EPS) from continuing
operations for the second quarter of 2003 of $11.7 million and $0.13,
respectively, compared to ($5.5) million and ($0.06) for the same period in
2002. Alliant Energy's net income and EPS for the second quarter of 2003
were $32.2 million and $0.35, respectively, compared to $6.3 million and
$0.07 for the same period in 2002. Additional details regarding Alliant
Energy's second quarter unaudited earnings are as follows (net income in
millions; totals may not foot due to rounding):
Q2 2003 * Q2 2002
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Earnings from continuing operations: Net Income EPS Net Income EPS
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Utility $ 22.6 $ 0.25 $ 26.9 $ 0.30
Non-regulated (Alliant Energy Resources) (2.2) (0.02) (25.5) (0.28)
Parent and other (primarily taxes, interest and A&G) (8.7) (0.10) (6.9) (0.08)
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Total earnings from continuing operations 11.7 0.13 (5.5) (0.06)
Earnings from discontinued operations: **
Operating results 5.8 0.06 6.0 0.07
Gain on sale of discontinued operations 40.7 0.44 - -
Non-cash valuation and other accounting adjustments:
Southern Hydro SFAS 133 income (loss) (0.1) - 5.8 0.06
Discontinuing depreciation, depletion and amortization
of assets held for sale 6.9 0.07 - -
Valuation adjustments and selling costs (32.9) (0.35) - -
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Total earnings from discontinued operations 20.4 0.22 11.8 0.13
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Net income $ 32.2 $ 0.35 $ 6.3 $ 0.07
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* The 2003 EPS amounts have been computed based on the average shares
outstanding in 2002. Alliant Energy reports the dilutive impact of increased
shares outstanding as a separate earnings variance item if it is material.
** Alliant Energy has classified its oil and gas, affordable housing,
Australian and SmartEnergy businesses as assets held for sale and
discontinued operations.
The lower utility earnings from continuing operations were largely due
to milder weather conditions in the second quarter of 2003 compared to the
same period in 2002. The positive impact on electric utility margin of
several rate increases implemented in the last twelve months was largely
offset by higher utility operating expenses and a higher utility effective
income tax rate. The significant improvement in non-regulated results from
continuing operations was primarily due to a $0.19 per share increase in the
results from Alliant Energy's International business unit and $0.11 per share
of asset valuation charges recorded in the second quarter of 2002.
Alliant Energy - Second Quarter 2003 Earnings
Page 2 of 6
July 28, 2003
Alliant Energy continued to successfully execute its planned asset
divestitures by closing on the sale of its Australian business in April and
its affordable housing and SmartEnergy businesses in July. Alliant Energy
recorded an after-tax gain on the sale of its Australian business of $41
million in the second quarter of 2003. In addition, the second quarter of
2003 results reflect after-tax charges of $33 million for valuation
adjustments to reflect updated estimates of the market value of the $634
million of assets it had classified as assets held for sale as of June 30,
2003 as well as selling costs related to the asset divestitures.
"Clearly we have made significant progress executing on the plan we
announced in November 2002 to strengthen our financial profile," said Erroll
B. Davis, Jr., chairman, president and CEO of Alliant Energy. "This is
evidenced by the recent completion of our $318 million common equity
offering, the closing on three of our asset divestitures resulting in
approximately $430 million in debt reduction and our recent announcement
regarding our plans for the divestiture of our Whiting Petroleum business.
With the divestiture of Whiting and our continued cost control initiatives,
we will have successfully completed all five of the strategic actions. In
addition, we are also pleased with the progress we are making in improving
the financial performance of our core business as our earnings from
continuing operations are $0.43 per share higher for the first six months of
2003 compared to the same period in 2002."
Earnings From Continuing Operations
A summary of Alliant Energy's EPS from continuing operations for the
second quarter is as follows:
2003 2002 Variance
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Utility operations:
Operating expenses ($.17)
Electric margins .16
Effective income tax rate (.03)
Other (.01)
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Total utility operations $ .25 $ .30 (.05)
Non-regulated operations business units:
International .02 (.17) .19
McLeodUSA/PHONES valuation charges - (.06) .06
Investments ($.05 Mexico valuation adjustment in '02) .01 (.03) .04
Integrated Services - (.01) .01
Energy Technologies - - -
Non-regulated Generation (.01) (.01) -
Other (primarily A&G/interest expense) (.04) - (.04)
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Total non-regulated operations (.02) (.28) .26
Parent company and other (.10) (.08) (.02)
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Earnings per share from continuing operations $ 0.13 ($0.06) $ 0.19
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The higher utility operating expenses were due to increases in the
amortization of deferred costs that are now being recovered in rates, the
impact of a planned refueling outage at the Kewaunee Nuclear Power Plant in
the second quarter of 2003 and higher depreciation, uncollectible customer
accounts, employee benefits and insurance expenses. These items were
partially offset by lower property tax and fossil generation expenses. The
higher electric margins resulted from the impact of various rate increases
implemented in the second half of 2002 and the first six months of 2003,
including increased revenues to recover a significant portion of the cost
increases previously discussed, and increased sales resulting from continued
modest retail customer growth. The electric margin comparison was negatively
impacted by milder weather conditions in the second quarter of 2003 compared
to the same period in 2002.
Alliant Energy - Second Quarter 2003 Earnings
Page 3 of 6
July 28, 2003
"Our customers demand safe, reliable and environmentally sound utility
service and we are committed to meeting that demand," said Davis. "Continued
investments in our utility infrastructure are a key component in delivering
on that commitment. These investments, as well as our improved financial
profile, depend on receiving appropriate rate relief. Recent rate decisions
have been fair and balanced and support our commitment to our customers."
The significant increase of $0.19 per share from Alliant Energy's
International business unit was driven by a $0.15 per share increase from the
company's Brazilian investments (losses of $1 million and $15 million in the
second quarter of 2003 and 2002, respectively). The second quarter results
included foreign currency transaction gains (losses) of $0.03 and ($0.04) in
2003 and 2002, respectively, related to $39 million in debt at one of the
Brazilian operating companies. A 4.3% increase in electricity sales in the
second quarter of 2003, compared to the same period in 2002, and rate
increases implemented at four of the Brazilian operating companies in the
first half of 2003 also contributed to the significant improvement in
results. The 2002 second quarter results also included a charge of $0.03 per
share related to the recovery in Brazil of the impacts of rationing and other
prior costs. These items were partially offset by higher interest expense at
the Brazilian companies. Earnings from Alliant Energy's New Zealand and
China investments were up $0.03 and $0.01 per share, respectively.
"Our past challenges in Brazil are well known," said Davis. "However,
energy demand is increasing, several rate increases have been approved and
the macro-economic factors are turning favorable. We are encouraged by the
improved financial performance in the second quarter. Our position regarding
this investment remains unchanged. We have no intentions to invest
additional capital in this market and if we don't see sustained improvement
in financial performance in the second half of the year, we will re-evaluate
our commitment to the Brazil market at that time."
2003 Earnings Guidance
Alliant Energy's 2003 earnings guidance for earnings from continuing
operations remains a range of $1.45-1.65 per share, which includes guidance
for its domestic utility operations of $1.75-1.95 per share. This guidance
does not include any potential asset valuation charges that Alliant Energy
may incur in 2003, the impact of certain non-cash SFAS 133 valuation
adjustments or the impact of any cumulative effects of changes in accounting
principles. Alliant Energy is currently unable to provide meaningful
earnings guidance for its discontinued operations given uncertainties related
to the timing of, and value realized from, the closing of its Whiting
divestiture, the transaction structures Alliant Energy utilizes to exit its
Whiting business and various other accounting adjustments or other charges
and/or income related to the proposed asset sales. The guidance also assumes
the Whiting business continues to be classified as held for sale until sold,
and no additional businesses included in the guidance for continuing
operations are classified as held for sale in 2003.
Drivers for Alliant Energy's earnings from continuing operations 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 their ability to
recover purchased power and fuel costs
o Improved results of its Brazil investments, no material adverse changes
in the rates allowed by the Brazilian regulators or from the expected
utility sector reform currently being considered by Brazil regulators
and the ability of our Brazil investments to refinance certain debt
outstanding
o Improved results from its other non-regulated businesses
Alliant Energy - Second Quarter 2003 Earnings
Page 4 of 6
July 28, 2003
o No 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
o The amount of premiums incurred in connection with our planned debt
reduction
o Ability of Alliant Energy to successfully execute its proposed asset
divestitures at values and timelines that are consistent with the
assumptions underlying its earnings guidance
Quarterly Earnings Conference Call
A conference call to review the second quarter 2003 earnings and other
financial issues is scheduled for Monday, July 28 at 10:00 a.m. central time.
Alliant Energy Chairman, President and CEO Erroll B. Davis, Jr. and Chief
Financial Officer Thomas M. Walker 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 877-668-4404 (no pass code is needed) or by
listening to a webcast of the call on the company's Web site at
www.alliantenergy.com/investors. A replay of the call will be available
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through August 1, 2003, at 800-642-1687 (domestic) or 706-645-9291
(international). Callers should reference conference ID #1313731. An
archive of the webcast will be available on the company's Web site at
www.alliantenergy.com/investors.
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Alliant Energy is the parent company of two public utility companies -
Interstate Power and Light Company (IP&L) and Wisconsin Power and Light
Company (WP&L) - and of Alliant Energy Resources, Inc., the parent company of
Alliant Energy's non-regulated operations. Alliant Energy is an
energy-services provider that serves more than three million customers
worldwide.
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 "2003 Earnings
Guidance" section of this press release; economic and political conditions in
the domestic and international service territories; federal, state and
international regulatory or governmental actions, including the ability to
obtain adequate and timely rate relief to allow for, among other things, the
recovery of operating costs and the earning of reasonable rates of return, as
well as the payment of expected levels of dividends; Alliant Energy's ability
to complete proposed asset divestitures at expected values and on expected
timelines; unanticipated construction and acquisition expenditures; issues
related to the supply of purchased electricity and price thereof, including
the ability to recover purchased-power and fuel costs through rates; risks
related to the operations of Alliant Energy's nuclear facilities; costs
associated with Alliant Energy's environmental remediation efforts and with
environmental compliance generally; developments that adversely impact
Alliant Energy's ability to implement its strategic plan; Alliant Energy's
ability to identify and successfully complete proposed acquisitions and
development projects; access to technological developments; employee
workforce factors, including changes in key executives, collective bargaining
agreements or work stoppages; 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 "2003 Earnings
Guidance" 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 - Second Quarter 2003 Earnings
Page 5 of 6
July 28, 2003
ALLIANT ENERGY CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
For the Three Months For the Six Months
Ended June 30, Ended June 30,
2003 2002 2003 2002
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(in thousands, except per share amounts)
Operating revenues:
Electric utility $444,108 $412,650 $887,133 $783,412
Gas utility 76,392 65,366 334,273 193,607
Non-regulated and other 125,792 66,444 320,676 138,877
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646,292 544,460 1,542,082 1,115,896
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Operating expenses:
Electric and steam production fuels 87,228 75,148 159,643 137,758
Purchased power 88,053 91,496 218,432 163,833
Cost of utility gas sold 49,744 38,719 238,069 122,475
Other operation and maintenance 265,555 182,936 582,510 368,468
Depreciation and amortization 77,985 70,566 157,584 146,115
Taxes other than income taxes 20,785 25,194 46,861 52,982
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589,350 484,059 1,403,099 991,631
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Operating income 56,942 60,401 138,983 124,265
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Interest expense and other:
Interest expense 56,198 46,036 111,712 90,523
Interest income from loans to discontinued operations, net (27) (4,234) (3,281) (7,600)
Equity (income) loss from unconsolidated investments (9,237) 6,809 (4,983) 3,596
Allowance for funds used during construction (4,572) (1,696) (8,433) (3,350)
Preferred dividend requirements of subsidiaries 3,968 1,682 8,126 3,364
Impairment of available-for-sale securities of McLeodUSA Inc. -- 6,044 -- 27,218
Miscellaneous, net (7,334) 7,402 (4,919) 17,006
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38,996 62,043 98,222 130,757
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Income (loss) from continuing operations before income taxes 17,946 (1,642) 40,761 (6,492)
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Income taxes 6,217 3,866 14,393 6,807
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Income (loss) from continuing operations 11,729 (5,508) 26,368 (13,299)
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Income from discontinued operations, net of tax 20,425 11,823 11,291 29,357
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Income before cumulative effect of changes in
accounting principles, net of tax 32,154 6,315 37,659 16,058
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Cumulative effect of changes in accounting principles, net of tax -- -- (5,983) --
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Net income $32,154 $6,315 $31,676 $16,058
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Average number of common shares outstanding (diluted) 93,022 90,553 92,780 90,304
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Earnings per average common share (basic and diluted):
Income (loss) from continuing operations $0.13 ($0.06) $0.28 ($0.15)
Income from discontinued operations 0.22 0.13 0.12 0.33
Cumulative effect of changes in accounting principles -- -- (0.06) --
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Net income $0.35 $0.07 $0.34 $0.18
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Dividends declared per common share $0.25 $0.50 $0.50 $1.00
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Alliant Energy - Second Quarter 2003 Earnings
Page 6 of 6
July 28, 2003
KEY STATISTICS
For the Twelve Months
Ended June 30,
2003 2002
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(in thousands, except
per share amounts)
Operating revenues $2,864,528 $2,332,789
Income from continuing operations $127,123 $87,731
Net income $122,499 $141,500
Average common shares (diluted) 92,197 86,194
Earnings per share (diluted) $1.33 $1.64
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For the Three Months For the Six Months
Ended June 30, Ended June 30,
2003 2002 2003 2002
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Domestic utility electric sales from ultimate customers 5,930 6,135 12,282 12,150
(thousands of MWh)
Total domestic utility electric sales 7,196 7,396 14,931 14,658
(thousands of MWh)
Utility gas sold & transported 17,454 18,855 59,059 54,387
(thousands of dekatherms)
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Book value per share, June 30, 2003 $20.54
Book value per share, June 30, 2002 $20.23
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