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ALLIANT ENERGY
Alliant Energy
Worldwide Headquarters
222 W. Washington Ave.
P.O. Box 192
Madison, WI 53701-0192
www.alliant-energy.com
News Release
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FOR IMMEDIATE RELEASE Media Contact: Melanie Schmidt at (608) 252-3187
Finance Contact: Bob Rusch at (608) 252-3470
ALLIANT ENERGY ANNOUNCES 1999 EARNINGS OF $2.51 PER SHARE
MADISON, Wis.--Feb. 1, 2000--Alliant Energy Corporation (NYSE:LNT)
today reported net income for 1999 of $196.6 million, or $2.51 per share,
compared to $96.7 million, or $1.26 per share for 1998, a 99% increase in
earnings per share. After excluding 1998 merger expenses, earnings in 1999
increased 47 percent.
The significant increase in Alliant Energy's 1999 earnings was due to
increased earnings from diversified operations of $0.60 per share, higher
electric and natural gas margins from utility operations and lower utility
operating expenses. Higher interest expense partially offset these items. The
1998 results also included approximately $54 million of pre-tax merger-related
expenses ($0.45 per share).
"We are very pleased with the financial results our team produced in
1999," said Alliant Energy President and CEO Erroll B. Davis, Jr. "The results
confirm our capacity to move forward with strength from our merger and build
exceptional value for our customers and shareowners."
The following are selected summaries of the results of operations as
reported for the periods shown:
Quarter Ended Twelve Months Ended
December 31 December 31
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1999 1998 1999 1998
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(in thousands, except per share amounts)
Operating revenues $566,658 $528,266 $2,197,963 $2,130,874
Net income $44,796 $25,194 $196,581 $96,675
Average number of common
shares outstanding 78,847 77,262 78,352 76,912
Earnings per average common
share (basic and diluted) $0.57 $0.33 $2.51 $1.26
Pre-tax merger expenses ----- $2,735 ----- $54,045
-- more --
Alliant Energy--Fourth Quarter Earnings
February 1, 2000
Page 2 of 5
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., the parent
company of Alliant Energy's diversified operations.
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Fourth Quarter Results
Alliant Energy reported net income of $44.8 million, or $0.57 per
share, for the fourth quarter of 1999 compared to net income of $25.2 million,
or $0.33 per share, for the fourth quarter of 1998, a 78% increase in earnings.
The primary contributors to the earnings increase were lower utility operation
and maintenance expenses and gains realized from the sales of certain properties
at Alliant Energy's oil and gas subsidiary, Whiting Petroleum Corporation, as
well as 150,000 shares of McLeodUSA stock. These items were partially offset by
a higher effective income tax rate. The lower utility operation and maintenance
expenses were largely due to decreased operating costs, a $9 million write-off
of certain regulatory assets in the fourth quarter of 1998 and a decrease in
insurance-related expenses.
Total Year Results
Utility Operations - 1999 compared to 1998
The 1999 utility earnings were approximately $161.1 million ($2.06 per
share) compared to $109.5 million ($1.42 per share) for the same period in 1998.
The increase in utility earnings resulted primarily from higher electric and
natural gas margins ($0.24 and $0.04 per share, respectively), lower operation
and maintenance expenses ($0.09 per share) and income realized from weather
hedges ($0.04 per share). Higher depreciation and interest expenses ($0.10 and
$0.02 per share, respectively) and a higher effective income tax rate ($0.02 per
share) partially offset these items. The 1998 results included approximately
$0.42 per share of merger-related expenses.
The higher electric margins resulted from: rate recovery adjustments
implemented at WP&L to recover higher purchased-power and transmission costs; a
change in estimate of the company's utility services rendered but unbilled at
month-end ($0.07 per share); and, an increase in sales to retail customers of
approximately 3 percent. These items were partially offset by lower sales to
off-system and wholesale customers and higher purchased-power capacity costs in
Iowa. The retail sales increase was due to continued economic growth in the
company's service territory and more favorable weather conditions during 1999
compared to 1998.
The decrease in operation and maintenance expenses resulted primarily
from lower operating costs, a $9 million write-off of certain regulatory assets
in the fourth quarter of 1998, a decrease in insurance-related expenses and
lower costs due to merger-related operating efficiencies. These items were
partially offset by higher costs for energy conservation and employee benefits
as well as increased expenses relating to Alliant Energy's Year 2000 readiness
program.
-- more --
Alliant Energy--Fourth Quarter Earnings
February 1, 2000
Page 3 of 5
Diversified Operations - 1999 compared to 1998
Alliant Energy's diversified (non-regulated) operations reported net
income of $37.8 million ($0.48 per share) in 1999 compared to a net loss of $8.9
million (($0.12) per share) for 1998. The 1999 earnings included gains realized
from several asset sales, including, approximately 7 percent of Alliant Energy's
investment in McLeodUSA ($0.32 per share), oil and gas properties at Whiting
Petroleum Corporation ($0.08 per share) and certain New Zealand electric
distribution investments ($0.05 per share). Earnings from the company's
electricity trading joint venture ($0.06 per share), improved operating results
from Whiting ($0.03 per share) and improved earnings from Alliant Energy's other
non-regulated businesses ($0.03 per share) also contributed to the increased
earnings. The 1998 results also included merger-related expenses ($0.03 per
share).
As part of Alliant Energy's strategic growth plan, the company will
continue to harvest various investments and redeploy the proceeds into other
more strategic investments. "We are very pleased that this strategy generated
significant gains for our shareowners in 1999," stated Davis. "In addition, we
are excited that our remaining McLeodUSA holdings have a current market value of
well over $1 billion compared to a cost of approximately $30 million. This value
gives us financing flexibility as we continue executing our strategic growth
plan."
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Alliant Energy provides electricity, natural gas, water and steam to
over two million customers worldwide. Through its diversified subsidiaries,
Alliant Energy also provides energy products and services to domestic and
international markets; provides industrial 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.alliant-energy.com.
# # #
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This press release includes forward-looking statements. These
forward-looking statements can be identified as such because the statement
includes words such as "expects" or "estimates" or other words of similar
import. Similarly, statements that describe future plans or strategies are also
forward-looking statements. Such statements are subject to certain risks and
uncertainties which could cause actual results to differ materially from those
currently anticipated. Factors which could affect actual results include, among
others, weather conditions; regulatory or governmental actions, including
utility industry restructuring; general economic and political conditions in
Alliant Energy's relevant domestic and international service territories;
material changes in the value of Alliant Energy's investment in McLeodUSA; the
ability of Alliant Energy to successfully introduce new products and services;
technological developments; and inflation rates. These factors should be
considered in evaluating the forward-looking statements and undue reliance
should not be placed on such 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.
Alliant Energy--Fourth Quarter Earnings
February 1, 2000
Page 4 of 5
ATTACHMENT: Consolidated Income Statement with Key Statistics (1 page)
Alliant Energy--Fourth Quarter Earnings
February 1, 2000
Page 5 of 5
ALLIANT ENERGY CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
Year Ended December 31,
1999 1998
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(in thousands, except per share amounts)
Operating revenues:
Electric utility $1,548,938 $1,567,442
Gas utility 314,319 295,590
Non-regulated and other 334,706 267,842
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2,197,963 2,130,874
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Operating expenses:
Electric and steam production fuels 262,305 297,685
Purchased power 255,446 255,332
Cost of utility gas sold 180,519 166,453
Other operation 623,687 620,234
Maintenance 115,414 122,737
Depreciation and amortization 279,088 279,505
Taxes other than income taxes 104,969 105,626
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1,821,428 1,847,572
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Operating income 376,535 283,302
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Interest expense and other:
Interest expense 136,229 129,363
Allowance for funds used during construction (7,292) (6,812)
Preferred dividend requirements of subsidiaries 6,706 6,699
Gains on sales of McLeodUSA Inc. stock (40,272) --
Miscellaneous, net (35,903) * (736)
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59,468 128,514
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Income before income taxes 317,067 154,788
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Income taxes 120,486 58,113
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Net income $196,581 $96,675
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Average number of common shares outstanding 78,352 76,912
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Earnings per average common share (basic and diluted) $2.51 $1.26
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* Includes gains of $10 million and $6 million realized from the sales of certain Whiting and New
Zealand investments, respectively.
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KEY STATISTICS
Year Ended December 31,
1999 1998
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Utility electric sales from ultimate customers 25,320 24,487
(thousands of MWH)
Total utility electric sales 31,048 31,834
(thousands of MWH)
Utility gas sold & transported 101,575 104,034
(thousands of dekatherms)
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December 31,
1999 1998
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Book value per share $27.29 $20.69
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