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 53% INCREASE IN EARNINGS PER SHARE FROM CONTINUING
OPERATIONS IN THIRD QUARTER
Alliant Energy narrows 2003 earnings guidance range
MADISON, Wis. - Oct. 30, 2003 - Alliant Energy Corp. (NYSE: LNT) today
reported income and earnings per share (EPS) from continuing operations for
the third quarter of 2003 of $85.3 million and $0.78, respectively, compared
to $46.7 million and $0.51 for the same period in 2002. Alliant Energy's net
income and EPS for the third quarter of 2003 were $103.2 million and $0.94,
respectively, compared to $44.7 million and $0.49 for the same period in
2002. Additional details regarding Alliant Energy's third quarter unaudited
earnings are as follows (net income in millions; totals may not foot due to
rounding):
Q3 2003 * Q3 2002
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Earnings from continuing operations: Net Income EPS Net Income EPS
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Utility $ 83.9 $ 0.92 $ 62.6 $ 0.69
Non-regulated (Alliant Energy Resources) (2.4) (0.03) (24.0) (0.27)
Parent and other (primarily taxes, interest and A&G) 3.8 0.04 8.1 0.09
Dilutive effect of additional shares outstanding (0.15)
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Total earnings from continuing operations 85.3 0.78 46.7 0.51
Earnings from discontinued operations: **
Operating results 7.4 0.08 7.5 0.08
Non-cash valuation and other accounting adjustments:
Southern Hydro SFAS 133 income (loss) - - (9.4) (0.10)
Discontinuing depreciation, depletion and amortization
of assets held for sale 6.1 0.07 - -
Valuation adjustments and selling costs 4.5 0.05 - -
Dilutive effect of additional shares outstanding (0.04)
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Total earnings from discontinued operations 18.0 0.16 (1.9) (0.02)
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Net income $ 103.2 $ 0.94 $ 44.7 $ 0.49
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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 previously classified its oil and gas, affordable housing,
Australian and SmartEnergy businesses as assets held for sale and
discontinued operations (the oil and gas business was the only business not
yet sold as of Sept. 30, 2003).
The significant increase in utility earnings from continuing operations
was largely due to higher electric and gas margins which were partially offset
by higher utility operating expenses. Alliant Energy also realized a similar
improvement in its non-regulated results from continuing operations which was
primarily due to a $0.18 per share improvement from its International
business unit and the absence of asset valuation charges this quarter
compared with $0.06 per share recorded in the third quarter of 2002.
Alliant Energy - Third Quarter 2003 Earnings
Page 2 of 6
October 30, 2003
"Once again this quarter, I am pleased to report that Alliant Energy
continues to make steady progress in strengthening its financial profile,"
said Erroll B. Davis, Jr., chairman, president and CEO of Alliant Energy.
"In addition to our continued successful execution of the strategic actions we
announced last November, our earnings from continuing operations for the
three and nine months ended Sept. 30, 2003 were $0.27 and $0.76 per share
higher than the comparable periods in 2002, respectively. Our focus remains
on continued improvements in our financial performance while maintaining our
operational excellence and providing our customers with safe, reliable and
environmentally sound utility service."
Earnings From Continuing Operations
A summary of Alliant Energy's unaudited EPS from continuing operations
for the third quarter is as follows:
2003 2002 Variance
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Utility operations:
Electric margins $ 0.31
Gas margins .03
Effective income tax rate .03
Operating expenses (.14)
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Total utility operations $ .92 $ .69 .23
Non-regulated operations business units:
International - (.18) .18
Integrated Services .01 (.02) .03
Energy Technologies (.01) (.04) .03
Investments .01 .01 -
Non-regulated Generation (.03) (.02) (.01)
Other (.01) (.02) .01
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Total non-regulated operations (.03) (.27) .24
Parent company and other .04 .09 (.05)
Dilutive effect of additional shares outstanding (.15) (.15)
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Earnings per share from continuing operations $ 0.78 $ 0.51 $ 0.27
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The higher electric margins resulted from the impact of various rate
increases implemented during the last twelve months, including increased
revenues to recover a significant portion of higher utility operating
expenses, the impact of Alliant Energy's Wisconsin utility subsidiary
implementing seasonal rates in 2003 for the first time which resulted in its
recovery of a larger portion of its annual revenue requirement in the third
quarter of 2003 compared to the same period in 2002, lower purchased power
and fuel costs impacting margins and increased sales resulting from continued
modest retail customer growth. The electric margin comparison was negatively
impacted by milder weather conditions in the third quarter of 2003 compared
to the same period in 2002. The higher gas margins were largely due to the
impact of several rate increases implemented during the last twelve months.
The higher utility operating expenses were due to increases in the
amortization of deferred costs that are now being recovered in rates and
higher depreciation and amortization, employee benefits and other
administrative and general expenses. These items were partially offset by
lower property tax expenses.
Alliant Energy - Third Quarter 2003 Earnings
Page 3 of 6
October 30, 2003
The significant increase of $0.18 per share from Alliant Energy's
International business unit was driven by a $0.15 per share improvement from
the company's Brazilian investments (losses of $5 million and $19 million in
the third quarter of 2003 and 2002, respectively). The improved results were
primarily due to rate increases implemented at all five of the Brazilian
operating companies throughout 2003 and a 3.2% increase in electricity sales
in the third quarter of 2003 compared to the same period in 2002. Third
quarter 2002 results also included the following two items: 1) a charge
resulting from the receipt of a regulatory order, 2) foreign currency
transaction losses of $0.05 per share related to approximately $40 million in
debt at one of the Brazilian operating companies. Earnings from Alliant
Energy's New Zealand investment were up $0.02 per share primarily due to
higher energy prices.
The improved results from the Energy Technologies and Integrated
Services business units were largely due to asset valuation charges of $0.04
and $0.02 per share incurred in the third quarter of 2002, respectively.
2003 Earnings Guidance
Alliant Energy has narrowed its 2003 earnings guidance for earnings from
continuing operations to a range of $1.50-1.60 per share, which includes
guidance for its domestic utility operations of $1.80-1.90 per share. This
guidance does not include any potential asset valuation charges that Alliant
Energy may incur in the fourth quarter of 2003, the impact of certain
non-cash SFAS 133/149 valuation adjustments or the impact of any cumulative
effects of changes in accounting principles. 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.
In addition, assuming Alliant Energy's initial public offering (IPO) of
its Whiting business is completed in the fourth quarter of 2003, the company
currently expects to incur charges to continuing operations in the fourth
quarter related to debt repayment premiums it anticipates paying as it
applies the proceeds from the sale of its Whiting stock to reduce debt. While
the ultimate amount of these potential premiums is impacted by numerous
variables, Alliant Energy currently estimates it could incur charges of at
least $0.06 - $0.10 per share in the fourth quarter. This estimate is
included in Alliant Energy's current guidance for its 2003 earnings from
continuing operations.
The company plans to announce its 2004 earnings guidance, 2004-2005
capital expenditure projections and updates regarding its domestic utility
generation strategy in a series of communications the company currently
anticipates issuing later in 2003. Additional details will be released at a
later date.
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,
stable foreign exchange rates and the ability of our Brazil investments
to refinance certain debt outstanding
o Improved results from its other non-regulated businesses
o No material permanent declines in the fair market value of, or expected
cash flows from, Alliant Energy's investments
Alliant Energy - Third Quarter 2003 Earnings
Page 4 of 6
October 30, 2003
o Other stable business conditions, including an improving economy
o The amount of premiums charged to expense incurred in connection with
our planned debt reduction
o Ability of Alliant Energy to successfully execute its proposed
divestiture of its oil and gas business at values and timelines that are
consistent with the underlying assumptions
Quarterly Earnings Conference Call
A conference call to review the third quarter 2003 earnings and other
financial issues is scheduled for Thursday, Oct. 30 at 9:00 a.m. central time.
Alliant Energy Chairman, President and CEO Erroll B. Davis, Jr. and Chief
Financial Officer Eliot G. Protsch 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 Nov. 6, 2003, at 800-642-1687 (domestic) or 706-645-9291
(international). Callers should reference conference ID #3161192. 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 impact of
pending energy-related legislation in Congress, 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 its proposed divestiture of its oil and gas business 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; continued access to the capital
markets; 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 - Third Quarter 2003 Earnings
Page 5 of 6
October 30, 2003
ALLIANT ENERGY CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
2003 2002 2003 2002
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(in thousands, except per share amounts)
Operating revenues:
Electric utility $580,054 $546,885 $1,467,187 $1,330,297
Gas utility 62,254 44,594 396,527 238,201
Non-regulated and other 117,244 67,948 437,920 206,825
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759,552 659,427 2,301,634 1,775,323
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Operating expenses:
Electric and steam production fuels 89,796 92,501 249,439 230,259
Purchased power 110,620 125,153 329,052 288,986
Cost of utility gas sold 39,874 26,917 277,943 149,392
Other operation and maintenance 251,361 184,363 833,871 552,831
Depreciation and amortization 80,698 71,580 238,282 217,695
Taxes other than income taxes 21,170 26,494 68,031 79,476
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593,519 527,008 1,996,618 1,518,639
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Operating income 166,033 132,419 305,016 256,684
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Interest expense and other:
Interest expense 50,512 46,203 162,224 136,726
Interest income from loans to discontinued operations, net (228) (4,819) (3,509) (12,419)
Equity (income) loss from unconsolidated investments (5,084) 13,028 (10,067) 16,624
Allowance for funds used during construction (5,881) (1,941) (14,314) (5,291)
Preferred dividend requirements of subsidiaries 4,087 1,602 12,213 4,966
Impairment of available-for-sale securities of McLeodUSA Inc. -- -- -- 27,218
Miscellaneous, net (4,654) 3,923 (9,573) 20,929
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38,752 57,996 136,974 188,753
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Income from continuing operations before income taxes 127,281 74,423 168,042 67,931
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Income taxes 42,029 27,767 56,422 34,574
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Income from continuing operations 85,252 46,656 111,620 33,357
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Income (loss) from discontinued operations, net of tax 17,980 (1,926) 29,271 27,431
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Income before cumulative effect of changes in
accounting principles, net of tax 103,232 44,730 140,891 60,788
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Cumulative effect of changes in accounting principles, net of tax -- -- (5,983) --
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Net income $103,232 $44,730 $134,908 $60,788
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Average number of common shares outstanding (basic) 109,221 91,182 98,214 90,539
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Earnings per average common share (basic):
Income from continuing operations $0.78 $0.51 $1.13 $0.37
Income (loss) from discontinued operations 0.17 (0.02) 0.30 0.30
Cumulative effect of changes in accounting principles -- -- (0.06) --
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Net income $0.95 $0.49 $1.37 $0.67
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Average number of common shares outstanding (diluted) 109,433 91,258 98,331 90,622
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Earnings per average common share (diluted):
Income from continuing operations $0.78 $0.51 $1.13 $0.37
Income (loss) from discontinued operations 0.16 (0.02) 0.30 0.30
Cumulative effect of changes in accounting principles -- -- (0.06) --
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Net income $0.94 $0.49 $1.37 $0.67
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Dividends declared per common share $0.25 $0.50 $0.75 $1.50
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Alliant Energy - Third Quarter 2003 Earnings
Page 6 of 6
October 30, 2003
KEY STATISTICS
For the Twelve Months
Ended September 30,
2003 2002
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(in thousands, except
per share amounts)
Operating revenues $2,964,653 $2,368,316
Income from continuing operations $165,719 $81,131
Net income $181,001 $116,899
Average common shares (diluted) 96,741 89,171
Earnings per share (diluted) $1.87 $1.31
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For the Three Months For the Nine Months
Ended September 30, Ended September 30,
2003 2002 2003 2002
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Domestic utility electric sales to retail customers 6,950 7,091 19,233 19,241
(thousands of MWh)
Total domestic utility electric sales 8,449 8,533 23,380 23,191
(thousands of MWh)
Utility gas sold & transported 16,091 16,453 75,150 70,840
(thousands of dekatherms)
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Book value per share, September 30, 2003 $20.91
Book value per share, September 30, 2002 $19.33
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