PROSPECTUS FILED PURSUANT TO RULE 424(b)(3)
REGISTRATION NOS. 333-104635 AND 333-104635-01
[ALLIANT ENERGY LOGO]
ALLIANT ENERGY RESOURCES, INC.
OFFER TO EXCHANGE
ALL OUTSTANDING
9.75% SENIOR NOTES DUE 2013
$300,000,000 PRINCIPAL AMOUNT OUTSTANDING
FOR
NEW 9.75% SENIOR NOTES DUE 2013
$300,000,000 PRINCIPAL AMOUNT
-------------------------------
- We are offering to exchange new registered 9.75% Senior Notes due 2013
for all of our outstanding unregistered 9.75% Senior Notes due 2013.
- The exchange offer expires at 11:59 p.m., New York City time, on June 2,
2003, unless we extend it.
- The terms of the new senior notes are substantially identical to those of
the old senior notes, except that the new senior notes will not have
securities law transfer restrictions and registration rights relating to
the old senior notes and the new senior notes will not provide for the
payment of additional interest under circumstances relating to the timing
of the exchange offer.
- Our parent, Alliant Energy Corporation, will fully and unconditionally
guarantee the new senior notes.
- All outstanding senior notes that are validly tendered and not validly
withdrawn will be exchanged.
- You may withdraw your tender of old senior notes any time before the
exchange offer expires.
- We will not receive any proceeds from the exchange offer.
- No established trading market for the new senior notes currently exists.
The new senior notes will not be listed on any securities exchange or
included in any automated quotation system.
- The exchange of senior notes will not be a taxable event for U.S. federal
income tax purposes.
SEE "RISK FACTORS" BEGINNING ON PAGE 9 FOR A DISCUSSION OF RISK FACTORS
THAT YOU SHOULD CONSIDER BEFORE DECIDING TO EXCHANGE YOUR OLD SENIOR NOTES FOR
NEW SENIOR NOTES.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
-------------------------------
THE DATE OF THIS PROSPECTUS IS MAY 1, 2003.
TABLE OF CONTENTS
<Table>
PROSPECTUS SUMMARY.......................................... 1
RISK FACTORS................................................ 9
FORWARD-LOOKING STATEMENTS.................................. 11
WHERE YOU CAN FIND MORE INFORMATION......................... 12
USE OF PROCEEDS............................................. 13
CAPITALIZATION.............................................. 13
THE EXCHANGE OFFER.......................................... 14
BUSINESS.................................................... 22
DESCRIPTION OF OTHER OUTSTANDING INDEBTEDNESS............... 31
DESCRIPTION OF THE NEW SENIOR NOTES......................... 33
UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS............. 48
PLAN OF DISTRIBUTION........................................ 48
LEGAL MATTERS............................................... 49
EXPERTS..................................................... 49
</Table>
-------------------------------
In this prospectus, "we," "us" and "our" refer to Alliant Energy Resources,
Inc.
THIS PROSPECTUS INCORPORATES IMPORTANT BUSINESS AND FINANCIAL INFORMATION
ABOUT US AND ALLIANT ENERGY CORPORATION THAT IS NOT INCLUDED IN OR DELIVERED
WITH THIS PROSPECTUS. WE WILL PROVIDE YOU WITHOUT CHARGE UPON YOUR REQUEST, A
COPY OF ANY DOCUMENTS THAT WE INCORPORATE BY REFERENCE, OTHER THAN EXHIBITS TO
THOSE DOCUMENTS THAT ARE NOT SPECIFICALLY INCORPORATED BY REFERENCE INTO THOSE
DOCUMENTS. YOU MAY REQUEST A COPY OF A DOCUMENT BY WRITING TO F. J. BURI,
CORPORATE SECRETARY, ALLIANT ENERGY CORPORATION, 4902 NORTH BILTMORE LANE,
MADISON, WISCONSIN 53718, OR BY CALLING MR. BURI AT (608) 458-3311. TO ENSURE
TIMELY DELIVERY, YOU MUST REQUEST THE INFORMATION NO LATER THAN FIVE BUSINESS
DAYS BEFORE THE COMPLETION OF THE EXCHANGE OFFER. THEREFORE, YOU MUST MAKE ANY
REQUEST ON OR BEFORE MAY 23, 2003.
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PROSPECTUS SUMMARY
The following summary highlights selected information from this prospectus
and may not contain all of the information that is important to you. This
prospectus includes the specific terms of the senior notes we are offering to
exchange, as well as information regarding our business. We encourage you to
read this prospectus in its entirety.
ALLIANT ENERGY RESOURCES, INC.
We are a wholly-owned subsidiary of Alliant Energy Corporation, which is an
energy-services provider engaged primarily in regulated utility operations in
both the Midwest and, through our company, internationally. Through our company,
Alliant Energy Corporation also has significant non-regulated domestic and
international operations. We manage a portfolio of companies involved in
international utility operations and non-regulated domestic and international
businesses, including the following continuing operations:
- International: We have energy-related operations and investments in
Brazil, China, New Zealand and Mexico. We have strategic investments in
distribution and generation assets in Brazil and combined heat and power
plants in China, an equity investment in hydro and wind generation in New
Zealand and a loan receivable from a Mexican development company.
- Non-regulated Generation: Our long-term strategy is to build a portfolio
of competitive generating assets across the United States, focusing
initially on the Upper Midwest. In February 2003, we announced the
purchase of a 309-megawatt, non-regulated, natural gas-fired power plant
in Wisconsin for $109 million. The entire power output of the facility is
sold under contract to Milwaukee-based We Energies through June 2008.
- Integrated Services: Our Integrated Services division provides a wide
range of energy and environmental services for commercial, industrial,
institutional, educational and governmental customers. Services under the
Integrated Services umbrella include energy infrastructure, energy
procurement, environmental engineering and construction management,
energy planning and gas management.
- Investments: Our existing investments include a short-line railroad,
Cedar Rapids and Iowa City Railway Company; a barge company, IEI Barge
Services, Inc.; various small real estate joint ventures; and several
other passive investments, including an equity interest in McLeodUSA
Incorporated, an integrated telecommunications and services provider.
In November 2002, Alliant Energy Corporation announced its commitment to
pursue the sale of, or other exit strategies for, our oil and gas production
company, Whiting Petroleum Corporation; our investments in hydro-electricity
generation assets in Australia, including Southern Hydro Partnership; and our
affordable housing business, including Heartland Properties, Inc. See
"Business -- Alliant Energy Corporation." We intend to focus on our
International and Non-regulated Generation businesses as our primary long-term
strategic platforms and will continue reviewing ways to narrow our strategic
focus and business platforms.
Our principal executive offices are located at Alliant Energy Tower, 200
First Street SE, Cedar Rapids, Iowa 52401, and our telephone number is (319)
786-4411.
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ALLIANT ENERGY CORPORATION
Alliant Energy Corporation, the guarantor of the senior notes, is a
diversified energy-services provider engaged primarily in regulated utility
operations in both the Midwest, through its domestic regulated utility
subsidiaries, and internationally, through our company. Alliant Energy
Corporation also has significant non-regulated domestic and international
operations through our company. Through its subsidiaries and partners, Alliant
Energy Corporation provides electric, natural gas and steam services to over
three million customers worldwide. Alliant Energy Corporation's domestic
regulated public utility subsidiaries, Interstate Power and Light Company and
Wisconsin Power and Light Company, operate in Iowa, Wisconsin, Minnesota and
Illinois.
Alliant Energy Corporation's principal executive offices are located at
4902 North Biltmore Lane, Madison, Wisconsin 53718, and its telephone number is
(608) 458-3311.
RECENT DEVELOPMENTS
On April 28, 2003, Alliant Energy Corporation announced net income and
earnings per share from continuing operations for the quarter ended March 31,
2003 of $14.6 million and $0.16, respectively, compared to a net loss and loss
per share from continuing operations of $7.8 million and $0.09, respectively,
for the same period in 2002. Alliant Energy Corporation's net loss and loss per
share for the quarter ended March 31, 2003 were $0.5 million and $0.01,
respectively, compared to net income and earnings per share of $9.7 million and
$0.11 for the same period in 2002.
THE EXCHANGE OFFER
Old Senior Notes.................... We sold $300,000,000 of our 9.75% Senior
Notes due 2013, which are fully and
unconditionally guaranteed by Alliant
Energy Corporation, to the initial
purchasers on December 26, 2002. In this
prospectus we refer to those senior
notes as the old senior notes. The
initial purchasers resold those old
senior notes to qualified institutional
buyers pursuant to Rule 144A under the
Securities Act of 1933.
Registration Rights Agreement....... When we sold the old senior notes we
entered into a registration rights
agreement with the initial purchasers in
which we agreed, among other things, to
provide to you and all other holders of
these old senior notes the opportunity
to exchange your unregistered old senior
notes for a new series of substantially
identical new senior notes that we have
registered under the Securities Act.
This exchange offer is being made for
that purpose.
New Senior Notes.................... We are offering to exchange the old
senior notes for 9.75% Senior Notes due
2013 that have been registered under the
Securities Act, which are fully and
unconditionally guaranteed by Alliant
Energy Corporation. In this prospectus
we refer to those registered senior
notes as the new senior notes. The terms
of the new senior
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notes and the old senior notes are
substantially identical except:
- the new senior notes will be issued in
a transaction that will have been
registered under the Securities Act;
- the new senior notes will not contain
securities law restrictions on
transfer; and
- the new senior notes will not provide
for the payment of additional interest
under circumstances relating to the
timing of the exchange offer.
The Exchange Offer.................. We are offering to exchange $1,000
principal amount of the new senior notes
for each $1,000 principal amount of your
old senior notes. As of the date of this
prospectus, $300,000,000 aggregate
principal amount of the old senior notes
are outstanding. For procedures for
tendering, see "The Exchange
Offer -- Procedures for Tendering Old
Senior Notes."
Expiration Date..................... This exchange offer will expire at 11:59
p.m., New York City time, on June 2,
2003, unless we extend it.
Resales of Senior Notes............. We believe that the new senior notes
issued pursuant to the exchange offer in
exchange for old senior notes may be
offered for resale, resold and otherwise
transferred by you without compliance
with the registration and prospectus
delivery provisions of the Securities
Act if:
- you are not our "affiliate" within the
meaning of Rule 405 under the
Securities Act;
- you are acquiring the new senior notes
in the ordinary course of your
business; and
- you have not engaged in, do not intend
to engage in, and have no arrangement
or understanding with any person to
participate in, a distribution of the
new senior notes.
If you are an affiliate of ours, or are
engaging in or intend to engage in, or
have any arrangement or understanding
with any person to participate in, a
distribution of the new senior notes,
then:
- you may not rely on the applicable
interpretations of the staff of the
SEC;
- you will not be permitted to tender
old senior notes in the exchange
offer; and
- you must comply with the registration
and prospectus delivery requirements
of the Securities Act in connection
with any resale of the old senior
notes.
Each participating broker-dealer that
receives new senior notes for its own
account under the exchange
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offer in exchange for old senior notes
that were acquired by the broker-dealer
as a result of market-making or other
trading activity must acknowledge that
it will deliver a prospectus in
connection with any resale of the new
senior notes. See "Plan of
Distribution."
Any broker-dealer that acquired old
senior notes from us may not rely on the
applicable interpretations of the staff
of the SEC and must comply with
registration and prospectus delivery
requirements of the Securities Act
(including being named as a selling
securityholder) in connection with any
resales of the old senior notes or the
new senior notes.
Acceptance of Old Senior Notes and
Delivery of New Senior Notes........ We will accept for exchange any and all
old senior notes that are validly
tendered in the exchange offer and not
withdrawn before the offer expires. The
new senior notes will be delivered
promptly following the exchange offer.
Withdrawal Rights................... You may withdraw your tender of old
senior notes at any time before the
exchange offer expires.
Conditions of the Exchange Offer.... The exchange offer is subject to the
following conditions, which we may
waive:
- the exchange offer, or the making of
any exchange by a holder of old senior
notes, will not violate any applicable
law or interpretation by the staff of
the SEC; and
- no action may be pending or threatened
in any court or before any
governmental agency with respect to
the exchange offer that may impair our
ability to proceed with the exchange
offer.
Consequences of Failure to
Exchange............................ If you are eligible to participate in
the exchange offer and you do not tender
your old senior notes, then you will not
have further exchange or registration
rights and you will continue to hold old
senior notes subject to restrictions on
transfer.
Federal Income Tax Consequences..... The exchange of an old senior note for a
new senior note will not be taxable to a
United States holder for federal income
tax purposes. Consequently, you will not
recognize any gain or loss upon receipt
of the new senior notes. See "United
States Federal Income Tax
Considerations."
Use of Proceeds..................... We will not receive any proceeds from
the exchange offer.
Accounting Treatment................ We will not recognize any gain or loss
on the exchange of senior notes. See
"The Exchange Offer -- Accounting
Treatment."
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Exchange Agent...................... U.S. Bank National Association is the
exchange agent. See "The Exchange
Offer -- Exchange Agent."
THE NEW SENIOR NOTES
The following is a brief summary of some terms of the new senior notes. For
a more complete description of the terms of the new senior notes, see
"Description of the Senior Notes" in this prospectus.
Issuer.............................. Alliant Energy Resources, Inc.
Notes Offered....................... $300,000,000 aggregate principal amount
of 9.75% senior notes due 2013.
Maturity............................ January 15, 2013.
Interest Payment Dates.............. January 15 and July 15 of each year,
beginning July 15, 2003.
Guarantee........................... Our parent, Alliant Energy Corporation,
will fully and unconditionally guarantee
the new senior notes.
Ranking............................. The new senior notes will be unsecured
and rank equally with our unsecured
senior indebtedness. The guarantee will
be unsecured and rank equally with
unsecured senior indebtedness of and
guarantees issued by Alliant Energy
Corporation. The new senior notes will
effectively rank junior to our
subsidiaries' liabilities and the
guarantee will effectively rank junior
to the liabilities of Alliant Energy
Corporation's subsidiaries. See
"Description of Other Outstanding
Indebtedness" for a description of
Alliant Energy Corporation's and our
indebtedness.
Ratings............................. Standard & Poor's Ratings Service has
assigned our senior notes a rating of
BBB. Moody's Investors Service, Inc. has
assigned our senior notes a rating of
Baa3. Ratings are not a recommendation
to buy, sell or hold the senior notes.
We cannot give any assurance that the
ratings will be retained for any time
period or that they will not be revised
downward or withdrawn by the ratings
agencies.
Optional Redemption................. We may redeem some or all of the new
senior notes at any time at a redemption
price equal to the greater of:
- 100% of their principal amount; or
- the sum of the present values of the
remaining scheduled payments of
principal and interest on the new
senior notes, discounted to the
redemption date on a semiannual basis
at the treasury rate plus 50 basis
points.
Denomination........................ The new senior notes will be issued in
integral multiples of $1,000.
Absence of Market for the New Senior
Notes............................... The new senior notes are a new issue of
securities with no established trading
market. We currently have no intention
to apply to list the new senior notes on
any
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securities exchange or to seek their
admission to trading on any automated
quotation system. Accordingly, we cannot
provide any assurance as to the
development or liquidity of any market
for the new senior notes. See "Plan of
Distribution."
No Limit on Debt.................... The indenture governing the new senior
notes does not limit the amount of debt
that we may issue or provide holders any
protection should we be involved in a
highly leveraged transaction.
Covenants........................... The indenture governing the new senior
notes contains covenants that, among
other things, limit our ability and the
ability of our subsidiaries and, for
some limited matters, Alliant Energy
Corporation to:
- issue, assume or guarantee some types
of secured indebtedness;
- engage in sale and lease-back
transactions; and
- consolidate or merge.
Some covenants governing the new senior
notes also limit our ability and the
ability of Alliant Energy Corporation to
issue certain debt, unless specified
consolidated net worth, capitalization
and interest coverage tests or ratios
are satisfied.
All of the covenants are subject to
important exceptions and qualifications,
which are described under the heading
"Description of the New Senior
Notes -- Restrictive Covenants" in this
prospectus.
Risk Factors........................ See "Risk Factors" and other information
included or incorporated by reference in
this prospectus for a discussion of
factors you should carefully consider
before deciding to exchange your old
senior notes for new senior notes.
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SUMMARY CONSOLIDATED FINANCIAL INFORMATION
ALLIANT ENERGY RESOURCES, INC.
Our unaudited summary consolidated financial information set forth below
was derived from Alliant Energy Corporation's consolidated financial statements
and notes.
<Table>
<Caption>
YEAR ENDED DECEMBER 31,
------------------------------
2000 2001 2002
-------- -------- --------
(IN THOUSANDS)
INCOME STATEMENT DATA:
Operating revenues.......................................... $185,952 $348,611 $431,819
Income (loss) from continuing operations.................... 159,498 (44,686) (91,217)
Income from discontinued operations, net of tax(1).......... 51,039 58,985 30,612
Net income (loss)........................................... 227,210 1,431 (60,605)
</Table>
<Table>
<Caption>
AS OF DECEMBER 31,
-----------------------
2001 2002
---------- ----------
(IN THOUSANDS)
BALANCE SHEET DATA:
Total assets................................................ $1,832,477 $2,260,440
Long-term obligations, net.................................. 1,115,921 1,334,664
</Table>
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(1) At December 31, 2002, the assets and liabilities of our oil and gas
production company, Whiting Petroleum; our investments in hydro-electricity
generation assets in Australia, including Southern Hydro; and our affordable
housing business, including Heartland Properties, Inc.; were classified as
held for sale. The operating results for these businesses for all periods
presented have been separately classified and reported as discontinued
operations in Alliant Energy Corporation's consolidated financial statements
and related notes. See "Business -- Alliant Energy Resources -- Alliant
Energy Resources Operations -- Businesses Held for Sale."
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ALLIANT ENERGY CORPORATION
The summary consolidated financial information of Alliant Energy
Corporation set forth below was selected or derived from the consolidated
financial statements of Alliant Energy Corporation. The information set forth
below is qualified in its entirety by and should be read in conjunction with
Alliant Energy Corporation's Management's Discussion and Analysis of Financial
Condition and Results of Operations and consolidated financial statements and
related notes incorporated by reference into this prospectus. See "Where You Can
Find More Information."
<Table>
<Caption>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------
1998 1999 2000 2001 2002
---------- ---------- ---------- ---------- ----------
(DOLLARS IN THOUSANDS)
INCOME STATEMENT DATA:
Operating revenues............... $2,053,318 $2,048,158 $2,279,674 $2,624,676 $2,608,812
Income from continuing
operations..................... 95,437 154,334 330,915 126,245 76,269
Income from discontinued
operations, net of tax(1)...... 1,238 42,247 51,039 58,985 30,612
Net income....................... 96,675 196,581 398,662 172,362 106,881
RATIO OF EARNINGS TO FIXED
CHARGES(2)..................... 2.08 2.64 3.78 1.77 1.48
PER SHARE DATA:
Income from continuing operations
per average common share
(diluted)...................... $ 1.24 $ 1.98 $ 4.18 $ 1.57 $ 0.84
Income from discontinued
operations per average common
share (diluted)(1)............. 0.02 0.53 0.64 0.73 0.34
Net income per average common
share (diluted)................ 1.26 2.51 5.03 2.14 1.18
Dividends declared per common
share(3)....................... 2.00 2.00 2.00 2.00 2.00
</Table>
<Table>
<Caption>
AS OF DECEMBER 31,
--------------------------------------------------------------
1998 1999 2000 2001 2002
---------- ---------- ---------- ---------- ----------
BALANCE SHEET DATA:
Total assets..................... $4,959,337 $6,075,683 $6,733,766 $6,237,925 $7,001,395
Long-term obligations, net....... 1,713,649 1,660,558 2,128,496 2,586,044 2,784,216
</Table>
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(1) At December 31, 2002, the assets and liabilities of our oil and gas
production company, Whiting Petroleum; our investments in hydro-electricity
generation assets in Australia, including Southern Hydro; and our affordable
housing business, including Heartland Properties, Inc.; were classified as
held for sale. The operating results for these businesses for all periods
presented have been separately classified and reported as discontinued
operations in Alliant Energy Corporation's consolidated financial statements
and related notes. See "Business -- Alliant Energy Resources -- Alliant
Energy Resources Operations -- Businesses Held for Sale."
(2) The ratio of earnings to fixed charges calculation relates to Alliant Energy
Corporation's continuing operations.
(3) In November 2002, Alliant Energy announced a reduction in its targeted
annual common stock dividend from $2.00 per share to $1.00 per share,
effective with the dividend declared and paid in the first quarter of 2003.
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RISK FACTORS
You should carefully consider the risk factors described below, as well as
the other information included or incorporated by reference in this prospectus,
before deciding to exchange your old senior notes for new senior notes. The
risks and uncertainties described below are not the only ones facing our company
or Alliant Energy Corporation.
THE ENERGY INDUSTRY IS RAPIDLY CHANGING AND BECOMING INCREASINGLY COMPETITIVE,
WHICH MAY ADVERSELY AFFECT ALLIANT ENERGY CORPORATION'S ABILITY TO OPERATE
PROFITABLY.
The energy industry is in a period of fundamental change resulting from
legislative and regulatory changes. Although Alliant Energy Corporation expects
that deregulation in its domestic retail service territories will likely be
delayed due to recent developments in the industry, regulatory changes and other
developments will continue to increase competitive pressures on electric and gas
utility companies. Generally, increased competition could threaten Alliant
Energy Corporation's market share in some segments of its business and could
reduce its profit margins. Such competitive pressures could cause Alliant Energy
Corporation to lose customers and incur additional costs that might not be
recovered from customers.
IF ALLIANT ENERGY CORPORATION IS UNABLE TO RECOVER THE COST OF FUEL, PURCHASED
POWER AND NATURAL GAS FROM ITS CUSTOMERS, OR IF ALLIANT ENERGY CORPORATION DOES
NOT OBTAIN THE AMOUNT OF EXPECTED RATE RELIEF REQUESTED IN ITS PENDING RATE
CASES, THEN ALLIANT ENERGY CORPORATION'S PROFITABILITY, FINANCIAL CONDITION AND
CASH FLOWS MAY BE ADVERSELY IMPACTED.
In 2002, approximately 50% of Alliant Energy Corporation's domestic
electric and gas utility operating revenues were from its Iowa operations and
approximately 44% of its domestic electric and gas utility operating revenues
were from its Wisconsin operations. Alliant Energy Corporation's Iowa utility is
entitled, subject to regulatory review, to automatically recover increases in
the cost of fuel, purchased energy and natural gas purchased for resale through
electric and natural gas rates. Purchased power capacity costs in Iowa are not
recovered from electric customers through these energy adjustment clauses.
Recovery of these costs must be addressed in a formal rate proceeding. Retail
electric rates of Alliant Energy Corporation's Wisconsin utility are based on
annual forecasted fuel and purchased power costs. Alliant Energy Corporation can
seek emergency rate increases in Wisconsin if the annual costs are more than 3%
higher than the estimated costs used to establish rates. As described under
"Business -- Alliant Energy Corporation Domestic Utility Operations -- Rates and
Regulatory Environment," Alliant Energy Corporation's utility subsidiaries
currently have pending several rate cases. If Alliant Energy Corporation does
not receive the amount of rate relief that it expects, the increased rates are
not approved on a timely basis or it is otherwise unable to recover its costs
through rates, then it may experience an adverse impact on its results of
operations and cash flows. We and Alliant Energy Corporation are also subject to
international rate regulation in some of the foreign markets in which we
operate.
WE AND ALLIANT ENERGY CORPORATION MAY HAVE DIFFICULTY ACCESSING CAPITAL ON
ATTRACTIVE TERMS OR AT ALL.
Our and Alliant Energy Corporation's businesses are capital intensive and
the fulfillment of our respective long-term strategies depends, at least in
part, upon our and Alliant Energy Corporation's ability to access capital at
attractive rates and terms. In response to the occurrence of several events, the
U.S. financial markets have been disrupted in general, and the availability and
cost of capital for our business and that of our and Alliant Energy
Corporation's competitors in the energy industry have been adversely affected.
In addition, the financial difficulties of many energy companies and other
issues affecting the energy industry have caused the credit ratings agencies to
more thoroughly review the capital structure, cash flows and earnings potential
of energy companies, including us and Alliant Energy Corporation. Standard &
Poor's and Moody's downgraded our and Alliant Energy Corporation's credit
ratings in December 2002 and January 2003, respectively. See "Summary -- Recent
Developments -- Rating Downgrades." As a result of those downgrades or any
future downgrades in credit ratings, our and Alliant Energy Corporation's
borrowing costs may increase and our and Alliant Energy Corporation's access to
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capital may be limited. If access to capital becomes significantly constrained,
then our and Alliant Energy Corporation's results of operations and financial
condition could be significantly adversely affected.
AS HOLDING COMPANIES, WE AND ALLIANT ENERGY CORPORATION ARE EACH SUBJECT TO
RESTRICTIONS ON OUR ABILITY TO SERVICE DEBT.
We and Alliant Energy Corporation are both holding companies with no
significant operations of our own. Accordingly, the primary source of funds for
us and Alliant Energy Corporation to service debt, including interest on and
principal of the senior notes, is dividends our subsidiaries pay to us and
dividends Alliant Energy Corporation's subsidiaries pay to it. Our and Alliant
Energy Corporation's subsidiaries are separate and distinct legal entities and
have no obligation to pay any amounts to us or Alliant Energy Corporation,
whether by dividends, loans or other payments. The ability of our subsidiaries
and Alliant Energy Corporation's subsidiaries to pay dividends or make
distributions to us and Alliant Energy Corporation, and accordingly, our and
Alliant Energy Corporation's ability to service debt, will depend on the
earnings, capital requirements and general financial condition of our and
Alliant Energy Corporation's subsidiaries and on regulatory limitations. Alliant
Energy Corporation's domestic utility subsidiaries each have dividend payment
restrictions based on their respective bond indentures, the terms of their
outstanding preferred stock and regulatory limitations applicable to them.
ALLIANT ENERGY CORPORATION MAY NOT BE ABLE TO SUCCESSFULLY IMPLEMENT ITS
STRATEGIC ACTIONS, INCLUDING THE SALE OF A NUMBER OF OUR BUSINESSES, IN A TIMELY
MANNER OR AT ALL.
Alliant Energy Corporation's ability to successfully implement its
strategic actions that it announced in November 2002 depends on several factors,
some of which are beyond its or our control, including our ability to raise cash
from the sales of, or other exit from, Whiting Petroleum, our investments in
Australia, our affordable housing business and other non-core businesses. Our
ability to sell these businesses may be adversely affected should we be unable
to locate potential buyers in a timely fashion and obtain a reasonable price or
by competing asset sale programs by our competitors. Many of our competitors'
strategic plans also include the sale of assets. If we are unable to complete
these asset sales on the timetable we expect or if we are unable to obtain the
proceeds that we expect from these asset sales, then our and Alliant Energy
Corporation's financial condition and cash flows could be significantly
adversely affected.
WE HAVE MADE SUBSTANTIAL INTERNATIONAL INVESTMENTS, WHICH MAY PRESENT ADDITIONAL
RISKS TO OUR BUSINESS.
As of December 31, 2002, we had $535 million in net investments in foreign
countries related to our continuing operations, primarily in electric utility
companies and generation facilities, and we may make additional new
international investments in the future. International operations are subject to
various risks, including political and economic instability, local labor market
conditions, the impact of foreign government regulations and taxation, and
differences in business practices. In particular, we had $214 million in net
investments in Brazil as of December 31, 2002, which has been reduced by $210
million of pre-tax cumulative foreign currency translation losses. Our
operations in Brazil recently have faced significant regulatory and political
uncertainties. Unfavorable changes in the international political, regulatory or
business climate could have a material adverse effect on our growth plans for
our international investments and, in turn, our results of operations and
financial condition. In addition, the results of operations and financial
condition of our subsidiaries that conduct operations in foreign countries will
be reported in the relevant foreign currencies and then translated into U.S.
dollars at the applicable exchange rates for inclusion in our consolidated
financial statements. Fluctuations between these currencies and the U.S. dollar
may have a material adverse effect on our results of operations and financial
condition and may also significantly affect the comparability of our results
between financial periods.
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COSTS OF COMPLIANCE WITH ENVIRONMENTAL LAWS ARE SIGNIFICANT AND THE COSTS OF
COMPLIANCE WITH NEW ENVIRONMENTAL LAWS AND THE INCURRENCE OF ENVIRONMENTAL
LIABILITIES COULD ADVERSELY AFFECT OUR AND ALLIANT ENERGY CORPORATION'S
PROFITABILITY.
Our and Alliant Energy Corporation's operations are subject to extensive
regulation relating to environmental protection. To comply with these legal
requirements, we and Alliant Energy Corporation must spend significant sums on
environmental monitoring, pollution control equipment and emission fees. New
environmental laws and regulations affecting our or Alliant Energy Corporation's
operations may be adopted, and new interpretations of existing laws and
regulations could be adopted or become applicable to us or Alliant Energy
Corporation or our and Alliant Energy Corporation's facilities, which may
substantially increase environmental expenditures made by us and Alliant Energy
Corporation in the future. In addition, we and Alliant Energy Corporation may
not be able to recover all of our respective costs for environmental
expenditures related to regulated utility operations through electric and
natural gas rates in the future. Under current law, we and Alliant Energy
Corporation may also be responsible for any on-site liabilities associated with
the environmental condition of the facilities that we or Alliant Energy
Corporation have previously owned or operated, regardless of whether the
liabilities arose before, during or after the time we owned or operated the
facilities. The incurrence of a material environmental liability could have a
material adverse effect on our and Alliant Energy Corporation's results of
operations and financial condition.
FORWARD-LOOKING STATEMENTS
This prospectus, including the information we incorporate by reference,
contains forward-looking statements that are intended to qualify for the safe
harbors from liability established by the Private Securities Litigation Reform
Act of 1995. All statements other than statements of historical fact, including
statements regarding anticipated financial performance, business strategy and
management's plans and objectives for future operations, are forward-looking
statements. These forward-looking statements can be identified as such because
the statements generally include words such as "expect," "intend," "believe,"
"anticipate," "estimate," "plan" or "objective" or other similar expressions.
These forward-looking statements are subject to risks and uncertainties that
could cause actual results to differ materially from those expressed in, or
implied by, these statements. Some, but not all, of the risks and uncertainties
include those described in the "Risk Factors" section of this prospectus and the
following:
- weather effects on sales and revenues;
- economic and political conditions in Alliant Energy Corporation's
domestic and international service territories;
- federal, state and international regulatory and government actions,
including the ability to obtain adequate and timely rate relief,
including the recovery of operating costs and earning reasonable rates of
return, and to pay expected levels of dividends;
- our 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 Corporation's nuclear
facilities;
- costs associated with Alliant Energy Corporation's environmental
remediation efforts and with environmental compliance generally;
- developments that adversely impact Alliant Energy Corporation's ability
to implement its strategic plan;
-11-
- results of our Brazil investments and material adverse changes in the
rates allowed by the Brazilian regulators;
- performance by our businesses as a whole;
- material permanent declines in the fair value of, or expected cash flows
from, our investments;
- continued access to the capital markets;
- Alliant Energy Corporation's ability to continue cost controls and
operational efficiencies;
- Alliant Energy Corporation'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
- changes in the rate of inflation.
WHERE YOU CAN FIND MORE INFORMATION
Alliant Energy Corporation, our parent corporation and the guarantor of the
senior notes, files annual, quarterly and current reports, proxy statements and
other information with the SEC. You may read and copy any document that Alliant
Energy Corporation files at the SEC's public reference room at 450 Fifth Street,
N.W., Washington D.C. You can call the SEC at 1-800-SEC-0330 for further
information on the operation of the public reference rooms. You can also find
Alliant Energy Corporation's public filings with the SEC on the internet at a
web site maintained by the SEC located at http://www.sec.gov.
We are "incorporating by reference" specified documents that Alliant Energy
Corporation files with the SEC, which means:
- incorporated documents are considered part of this prospectus;
- we are disclosing important information to you by referring you to those
documents; and
- information Alliant Energy Corporation files with the SEC will
automatically update and supersede information contained in this
prospectus.
We incorporate by reference Alliant Energy Corporation's Annual Report on
Form 10-K for the year ended December 31, 2002 and any future filings Alliant
Energy Corporation makes with the SEC under Sections 13(a), 13(c), 14 or 15(d)
of the Securities Exchange Act of 1934 after the date of this prospectus and
before the completion of the exchange offer. Some of these reports are filed on
a combined basis with Alliant Energy Corporation's subsidiaries, Interstate
Power and Light Company and Wisconsin Power and Light Company. Information
contained in these reports relating to these entities is filed by them on their
own behalf and not by Alliant Energy Corporation.
YOU MAY REQUEST A COPY OF ANY OF THESE FILINGS, AT NO COST, BY WRITING TO
F. J. BURI, CORPORATE SECRETARY, ALLIANT ENERGY CORPORATION, 4902 NORTH BILTMORE
LANE, MADISON, WISCONSIN 53718, OR BY CALLING MR. BURI AT (608) 458-3311.
-12-
USE OF PROCEEDS
This exchange offer is intended to satisfy our obligations under the
registration rights agreement entered into in connection with the issuance of
the old senior notes. We will not receive any cash proceeds from the issuance of
the new senior notes. We used the net proceeds of approximately $288.8 million
from the sale of the old senior notes to repay our short-term debt.
CAPITALIZATION
The following table sets forth the consolidated capitalization of Alliant
Energy Corporation, including short-term debt, as of December 31, 2002.
<Table>
<Caption>
BALANCE % OF TOTAL
---------- ----------
(IN THOUSANDS)
Common stock................................................ $ 923
Additional paid-in capital.................................. 1,293,919
Retained earnings........................................... 758,187
Accumulated other comprehensive loss........................ (209,943)
Shares in deferred compensation trust....................... (6,896)
----------
Total common equity.................................... 1,836,190 36.1%
Cumulative preferred stock of subsidiaries, net............. 205,063 4.0
Long-term debt (excluding current maturities)............... 2,637,803 51.8
Short-term debt:
Current maturities of long-term debt...................... 46,591 0.9
Other short-term borrowings............................... 364,321 7.2
---------- -----
Total capitalization (including short-term debt)....... $5,089,968 100.0%
========== =====
</Table>
-13-
THE EXCHANGE OFFER
PURPOSE AND EFFECT; REGISTRATION RIGHTS
We sold the old senior notes on December 26, 2002 in transactions exempt
from the registration requirements of the Securities Act. Therefore, the old
senior notes are subject to significant restrictions on resale. In connection
with the issuance of the old senior notes, we entered into a registration rights
agreement, which required that we and Alliant Energy Corporation:
- file with the SEC a registration statement under the Securities Act
relating to the exchange offer and the issuance and delivery of new
senior notes in exchange for the old senior notes;
- use our reasonable best efforts to cause the SEC to declare the exchange
offer registration statement effective under the Securities Act; and
- use our reasonable best efforts to consummate the exchange offer not
later than 45 days following the effective date of the exchange offer
registration statement.
If you participate in the exchange offer, you will, with limited
exceptions, receive new senior notes that are freely tradeable and not subject
to restrictions on transfer. You should read this prospectus under the heading
"-- Resales of New Senior Notes" for more information relating to your ability
to transfer new senior notes.
If you are eligible to participate in the exchange offer and do not tender
your old senior notes, you will continue to hold the untendered old senior
notes, which will continue to be subject to restrictions on transfer under the
Securities Act.
The exchange offer is intended to satisfy our exchange offer obligations
under the registration rights agreement. The above summary of the registration
rights agreement is not complete and is subject to, and qualified by reference
to, all the provisions of the registration rights agreement. A copy of the
registration rights agreement has been filed as an exhibit to the registration
statement that includes this prospectus.
TERMS OF THE EXCHANGE OFFER
We are offering to exchange $300,000,000 in aggregate principal amount of
our 9.75% Senior Notes due 2013 that have been registered under the Securities
Act for a like principal amount of our outstanding unregistered 9.75% Senior
Notes due 2013.
Upon the terms and subject to the conditions set forth in this prospectus
and in the accompanying letter of transmittal, we will accept all old senior
notes validly tendered and not withdrawn before 11:59 p.m., New York City time,
on the expiration date of the exchange offer. We will issue $1,000 principal
amount of new senior notes in exchange for each $1,000 principal amount of
outstanding old senior notes we accept in the exchange offer. You may tender
some or all of your old senior notes under the exchange offer. However, the old
senior notes are issuable in authorized denominations of $1,000 and integral
multiples thereof. Accordingly, old senior notes may be tendered only in
denominations of $1,000 and integral multiples thereof. The exchange offer is
not conditioned upon any minimum amount of old senior notes being tendered.
The form and terms of the new senior notes will be the same as the form and
terms of the old senior notes, except that:
- the new senior notes will be registered with the SEC and thus will not be
subject to the restrictions on transfer or bear legends restricting their
transfer;
-14-
- all of the new senior notes will be represented by global notes in
book-entry form unless exchanged for notes in definitive certificated
form under the limited circumstances described under "Description of the
New Senior Notes -- Book-Entry Procedures and Form;" and
- the new senior notes will not provide for the payment of additional
interest under circumstances relating to the timing of the exchange
offer.
The new senior notes will evidence the same debt as the old senior notes
and will be issued under, and be entitled to the benefits of, the indenture, as
supplemented, governing the old senior notes.
The new senior notes will accrue interest from the most recent date to
which interest has been paid on the old senior notes or, if no interest has been
paid, from the date of issuance of the old senior notes. Accordingly, registered
holders of new senior notes on the record date for the first interest payment
date following the completion of the exchange offer will receive interest
accrued from the most recent date to which interest has been paid on the old
senior notes or, if no interest has been paid, from the date of issuance of the
old senior notes. However, if that record date occurs prior to completion of the
exchange offer, then the interest payable on the first interest payment date
following the completion of the exchange offer will be paid to the registered
holders of the old senior notes on that record date.
In connection with the exchange offer, you do not have any appraisal or
dissenters' rights under the Wisconsin Business Corporation Law or the
indenture, as supplemented. We intend to conduct the exchange offer in
accordance with the registration rights agreement and the applicable
requirements of the Securities Exchange Act of 1934 and the rules and
regulations of the SEC. The exchange offer is not being made to, nor will we
accept tenders for exchange from, holder of the old senior notes in any
jurisdiction in which the exchange offer or the acceptance of it would not be in
compliance with the securities or blue sky laws of the jurisdiction.
We will be deemed to have accepted validly tendered old senior notes when
we have given oral or written notice of our acceptance to the exchange agent.
The exchange agent will act as agent for the tendering holders for the purpose
of receiving the new senior notes from us.
If we do not accept any tendered old senior notes because of an invalid
tender or for any other reason, then we will return certificates for any
unaccepted old senior notes without expense to the tendering holder as promptly
as practicable after the expiration date.
EXPIRATION DATE; AMENDMENTS
The exchange offer will expire at 11:59 p.m., New York City time, on June
2, 2003, unless we, in our sole discretion, extend the exchange offer.
If we determine to extend the exchange offer, then we will notify the
exchange agent of any extension by oral or written notice and give each
registered holder notice of the extension by means of a press release or other
public announcement before 9:00 a.m., New York City time, on the next business
day after the previously scheduled expiration date.
We reserve the right, in our sole discretion, to delay accepting any old
senior notes, to extend the exchange offer or to amend or terminate the exchange
offer if any of the conditions described below under "-- Conditions" have not
been satisfied or waived by giving oral or written notice to the exchange agent
of the delay, extension, amendment or termination. Further, we reserve the
right, in our sole discretion, to amend the terms of the exchange offer in any
manner. We will notify you as promptly as practicable of any extension,
amendment or termination. We will also file a post-effective amendment to the
registration statement of which this prospectus is a part with respect to any
fundamental change in the exchange offer.
PROCEDURES FOR TENDERING OLD SENIOR NOTES
Any tender of old senior notes that is not withdrawn prior to the
expiration date will constitute a binding agreement between the tendering holder
and us upon the terms and subject to the conditions set
-15-
forth in this prospectus and in the accompanying letter of transmittal. A holder
who wishes to tender old senior notes in the exchange offer must do either of
the following:
- properly complete, sign and date the letter of transmittal, including all
other documents required by the letter of transmittal; have the signature
on the letter of transmittal guaranteed if the letter of transmittal so
requires; and deliver that letter of transmittal and other required
documents to the exchange agent at the address listed below under
"-- Exchange Agent" on or before the expiration date; or
- if the old senior notes are tendered under the book-entry transfer
procedures described below transmit to the exchange agent on or before
the expiration date an agent's message.
In addition, one of the following must occur:
- the exchange agent must receive certificates representing your old senior
notes along with the letter of transmittal on or before the expiration
date;
- the exchange agent must receive a timely confirmation of book-entry
transfer of the old senior notes into the exchange agent's account at The
Depository Trust Company of New York City, or DTC, under the procedure
for book-entry transfers described below along with the letter of
transmittal or a properly transmitted agent's message, on or before the
expiration date; or
- the holder must comply with the guaranteed delivery procedures described
below.
The term "agent's message" means a message, transmitted by a book-entry
transfer facility to and received by the exchange agent and forming a part of
the book-entry confirmation, which states that the book-entry transfer facility
has received an express acknowledgement from the tendering DTC participant
stating that the participant has received and agrees to be bound by the letter
of transmittal and that we may enforce the letter of transmittal against the
participant.
The method of delivery of old senior notes, the letter of transmittal and
all other required documents to the exchange agent is at your election and risk.
Rather than mail these items, we recommend that you use an overnight or hand
delivery service. In all cases, you should allow sufficient time to assure
timely delivery to the exchange agent before the expiration date. Do not send
letters of transmittal or old senior notes to us.
Generally, an eligible institution must guarantee signatures on a letter of
transmittal or a notice of withdrawal unless the old senior notes are tendered:
- by a registered holder of the old senior notes who has not completed the
box entitled "Special Issuance Instructions" or "Special Delivery
Instructions" on the letter of transmittal; or
- for the account of an eligible institution.
If signatures on a letter of transmittal or a notice of withdrawal are
required to be guaranteed, the guarantee must be by a firm which is:
- a member of a registered national securities exchange;
- a member of the National Association of Securities Dealers, Inc.;
- a commercial bank or trust company having an office or correspondent in
the United States; or
- another "eligible institution" within the meaning of Rule l7Ad-15 under
the Securities Exchange Act.
If the letter of transmittal is signed by a person other than the
registered holder of any outstanding old senior notes, the original notes must
be endorsed or accompanied by appropriate powers of attorney. The power of
attorney must be signed by the registered holder exactly as the registered
holder(s) name(s) appear(s) on the old senior notes and an eligible institution
must guarantee the signature on the power of attorney.
-16-
If the letter of transmittal, or any old senior notes or powers of attorney
are signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, these persons should so indicate when signing. Unless waived by us,
they should also submit evidence satisfactory to us of their authority to so
act.
If you wish to tender old senior notes that are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee, you should
promptly instruct the registered holder to tender on your behalf. If you wish to
tender on your behalf, you must, before completing the procedures for tendering
old senior notes, either register ownership of the old senior notes in your name
or obtain a properly completed bond power from the registered holder. The
transfer of registered ownership may take considerable time.
We will determine in our sole discretion all questions as to the validity,
form, eligibility, including time of receipt, and acceptance of old senior notes
tendered for exchange. Our determination will be final and binding on all
parties. We reserve the absolute right to reject any and all tenders of old
senior notes not properly tendered or old senior notes our acceptance of which
might, in the judgment of our counsel, be unlawful. We also reserve the absolute
right to waive any defects, irregularities or conditions of tender as to any
particular old senior notes. Our interpretation of the terms and conditions of
the exchange offer, including the instructions in the letter of transmittal,
will be final and binding on all parties. Unless waived, any defects or
irregularities in connection with tenders of old senior notes must be cured
within the time period we determine. Neither we, the exchange agent nor any
other person will incur any liability for failure to give you notification of
defects or irregularities with respect to tenders of your old senior notes.
By tendering, you will represent to us that:
- any new senior notes that the holder receives will be acquired in the
ordinary course of its business;
- the holder has no arrangement or understanding with any person or entity
to participate in the distribution of the new senior notes;
- if the holder is not a broker-dealer, that it is not engaged in and does
not intend to engage in the distribution of the new senior notes;
- if the holder is a broker-dealer, that the holder's old senior notes were
acquired as a result of market-making activities or other trading
activities (see "Plan of Distribution"); and
- the holder is not our "affiliate," as defined in Rule 405 of the
Securities Act, or, if the holder is our affiliate, it will comply with
any applicable registration and prospectus delivery requirements of the
Securities Act.
If any holder or any such other person is our "affiliate," or is engaged in
or intends to engage in or has an arrangement or understanding with any person
to participate in a distribution of the new senior notes to be acquired in the
exchange offer, then that holder or any such other person:
- may not rely on the applicable interpretations of the staff of the SEC;
- is not entitled and will not be permitted to tender old senior notes in
the exchange offer; and
- must comply with the registration and prospectus delivery requirements of
the Securities Act in connection with any resale transaction.
Each broker-dealer who acquired its old senior notes as a result of
market-making activities or other trading activities and thereafter receives new
senior notes issued for its own account in the exchange offer, must acknowledge
that it will deliver a prospectus in connection with any resale of such new
senior notes issued in the exchange offer. The letter of transmittal states that
by so acknowledging and by delivering a prospectus, a broker-dealer will not be
deemed to admit that it is an "underwriter" within the meaning of the Securities
Act. See "Plan of Distribution" for a discussion of the exchange and resale
obligations of broker-dealers in connection with the exchange offer.
-17-
Any broker-dealer that acquired old senior notes directly from us may not
rely on the applicable interpretations of the staff of the SEC and must comply
with the registration and delivery requirements of the Securities Act (including
being named as a selling securityholder) in connection with any resales of the
old senior notes or the new senior notes.
ACCEPTANCE OF OLD SENIOR NOTES FOR EXCHANGE; DELIVERY OF NEW SENIOR NOTES
Upon satisfaction of all conditions to the exchange offer, we will accept,
promptly after the expiration date, all old senior notes properly tendered and
will issue the new senior notes promptly after acceptance of the old senior
notes.
For purposes of the exchange offer, we will be deemed to have accepted
properly tendered old senior notes for exchange when we have given oral or
written notice of that acceptance to the exchange agent. For each old senior
note accepted for exchange, you will receive a new senior note having a
principal amount equal to that of the surrendered old senior note.
In all cases, we will issue new senior notes for old senior notes that we
have accepted for exchange under the exchange offer only after the exchange
agent timely receives:
- certificates for your old senior notes or a timely confirmation of
book-entry transfer of your old senior notes into the exchange agent's
account at DTC; and
- a properly completed and duly executed letter of transmittal and all
other required documents or a properly transmitted agent's message.
If we do not accept any tendered old senior notes for any reason set forth
in the terms of the exchange offer or if you submit old senior notes for a
greater principal amount than you desire to exchange, we will return the
unaccepted or non-exchanged old senior notes without expense to you. In the case
of old senior notes tendered by book-entry transfer into the exchange agent's
account at DTC under the book-entry procedures described below, we will credit
the non-exchanged old senior notes to your account maintained with DTC.
BOOK-ENTRY TRANSFER
We understand that the exchange agent will make a request within two
business days after the date of this prospectus to establish accounts for the
old senior notes at DTC for the purpose of facilitating the exchange offer, and
any financial institution that is a participant in DTC's system may make
book-entry delivery of old senior notes by causing DTC to transfer the old
senior notes into the exchange agent's account at DTC in accordance with DTC's
procedures for transfer. Although delivery of old senior notes may be effected
through book-entry transfer at DTC, the exchange agent must receive a properly
completed and duly executed letter of transmittal with any required signature
guarantees, or an agent's message instead of a letter of transmittal, and all
other required documents at its address listed below under "-- Exchange Agent"
on or before the expiration date, or if you comply with the guaranteed delivery
procedures described below, within the time period provided under those
procedures.
GUARANTEED DELIVERY PROCEDURES
If you wish to tender your old senior notes and your old senior notes are
not immediately available, or you cannot deliver your old senior notes, the
letter of transmittal or any other required documents or
-18-
comply with DTC's procedures for transfer before the expiration date, then you
may participate in the exchange offer if:
- the tender is made through an eligible institution;
- before the expiration date, the exchange agent receives from the eligible
institution a properly completed and duly executed notice of guaranteed
delivery, substantially in the form provided by us, by facsimile
transmission, mail or hand delivery, containing:
- the name and address of the holder and the principal amount of old
senior notes tendered,
- a statement that the tender is being made thereby, and
- a guarantee that within three New York Stock Exchange trading days after
the expiration date, the certificates representing the old senior notes
in proper form for transfer or a book-entry confirmation and any other
documents required by the letter of transmittal will be deposited by the
eligible institution with the exchange agent; and
- the exchange agent receives the properly completed and executed letter of
transmittal as well as certificates representing all tendered old senior
notes in proper form for transfer, or a book-entry confirmation, and all
other documents required by the letter of transmittal within three New
York Stock Exchange trading days after the expiration date.
WITHDRAWAL RIGHTS
You may withdraw your tender of old senior notes at any time before the
exchange offer expires.
For a withdrawal to be effective, the exchange agent must receive a written
notice of withdrawal at its address listed below under "-- Exchange Agent." The
notice of withdrawal must:
- specify the name of the person who tendered the old senior notes to be
withdrawn;
- identify the old senior notes to be withdrawn, including the principal
amount, or, in the case of old senior notes tendered by book-entry
transfer, the name and number of the DTC account to be credited, and
otherwise comply with the procedures of DTC; and
- if certificates for old senior notes have been transmitted, specify the
name in which those old senior notes are registered if different from
that of the withdrawing holder.
If you have delivered or otherwise identified to the exchange agent the
certificates for old senior notes, then, before the release of these
certificates, you must also submit the serial numbers of the particular
certificates to be withdrawn and a signed notice of withdrawal with the
signatures guaranteed by an eligible institution, unless the holder is an
eligible institution.
We will determine in our sole discretion all questions as to the validity,
form and eligibility, including time of receipt, of notices of withdrawal. Our
determination will be final and binding on all parties. Any old senior notes so
withdrawn will be deemed not to have been validly tendered for purposes of the
exchange offer. We will return any old senior notes that have been tendered but
that are not exchanged for any reason to the holder, without cost, as soon as
practicable after withdrawal, rejection of tender or termination of the exchange
offer. In the case of old senior notes tendered by book-entry transfer into the
exchange agent's account at DTC, the old senior notes will be credited to an
account maintained with DTC for the old senior notes. You may retender properly
withdrawn old senior notes by following one of the procedures described under
"-- Procedures for Tendering Old Senior Notes" at any time on or before the
expiration date.
-19-
CONDITIONS
Notwithstanding any other term of the exchange offer, we will not be
required to accept for exchange, or to exchange new senior notes for, any old
senior notes if:
- the exchange offer, or the making of any exchange by a holder of old
senior notes, would violate any applicable law or applicable
interpretation by the staff of the SEC; or
- any action or proceeding is instituted or threatened in any court or by
or before any governmental agency with respect to the exchange offer
which, in our judgment, would reasonably be expected to impair our
ability to proceed with the exchange offer.
The conditions listed above are for our sole benefit and we may assert them
regardless of the circumstances giving rise to any condition. Subject to
applicable law, we may waive these conditions in our discretion in whole or in
part at any time and from time to time. If we waive these conditions, then we
intend to continue the exchange offer for at least five business days after the
waiver. If we fail at any time to exercise any of the above rights, the failure
will not be deemed a waiver of those rights, and those rights will be deemed
ongoing rights which may be asserted at any time and from time to time.
EXCHANGE AGENT
U.S. Bank National Association is the exchange agent for the exchange
offer. You should direct any questions and requests for assistance and requests
for additional copies of this prospectus, the letter of transmittal or the
notice of guaranteed delivery to the exchange agent addressed as follows:
By Hand, Overnight Mail, Courier, or Registered or Certified Mail:
U.S. Bank National Association
180 East Fifth Street
St. Paul, MN 55101
Attention: Specialized Finance Group
By Facsimile:
(651) 244-0711
Attention: Specialized Finance Group
Delivery of the letter of transmittal to an address other than as listed
above or transmission via facsimile other than as listed above will not
constitute a valid delivery of the letter of transmittal.
FEES AND EXPENSES
We will pay the expenses of the exchange offer. We will not make any
payments to brokers, dealers or others soliciting acceptances of the exchange
offer. We are making the principal solicitation by mail; however, our officers
and employees may make additional solicitations by facsimile transmission,
e-mail, telephone or in person. You will not be charged a service fee for the
exchange of your senior notes, but we may require you to pay any transfer or
similar government taxes in certain circumstances.
TRANSFER TAXES
You will not be obligated to pay any transfer taxes, unless you instruct us
to register new senior notes in the name of, or request that old senior notes
not tendered or not accepted in the exchange offer be returned to, a person
other than the registered tendering holder.
ACCOUNTING TREATMENT
We will record the new senior notes at the same carrying values as the old
senior notes, which is the aggregate principal amount of the old senior notes,
as reflected in our accounting records on the date of
-20-
exchange. Accordingly, we will not recognize any gain or loss on the exchange of
senior notes. We will amortize the expenses of the offer over the term of the
new senior notes.
CONSEQUENCES OF FAILURE TO EXCHANGE OLD SENIOR NOTES
If you are eligible to participate in the exchange offer but do not tender
your old senior notes, you will not have any further registration rights, except
in limited circumstances with respect to specific types of holders of old senior
notes. Old senior notes that are not tendered or are tendered but not accepted
will, following the consummation of the exchange offer, continue to be subject
to the provisions in the indenture regarding the transfer and exchange of the
old senior notes and the existing restrictions on transfer set forth in the
legend on the old senior notes and in the offering memorandum dated December 20,
2002, relating to the old senior notes. Accordingly, you may resell the old
senior notes that are not exchanged only:
- to us;
- so long as the old senior notes are eligible for resale under Rule 144A
under the Securities Act, to a person whom you reasonably believe is a
"qualified institutional buyer" within the meaning of Rule 144A
purchasing for its own account or for the account of a qualified
institutional buyer in a transaction meeting the requirements of Rule
144A;
- in accordance with another exemption from the registration requirements
of the Securities Act; or
- under an effective registration statement under the Securities Act;
in each case in accordance with all other applicable securities laws. We do not
intend to register the old senior notes under the Securities Act.
Old senior notes that are not exchanged in the exchange offer will remain
outstanding and continue to accrue interest and will be entitled to the rights
and benefits their holders have under the indenture relating to the old senior
notes and the new senior notes. Holders of the new senior notes and any old
senior notes that remain outstanding after consummation of the exchange offer
will vote together as a single class for purposes of determining whether holders
of the requisite percentage of the class have taken certain actions or exercised
certain rights under the indenture.
RESALES OF NEW SENIOR NOTES
Based on interpretations of the staff of the SEC, as set forth in no-action
letters to third parties, we believe that new senior notes issued under the
exchange offer in exchange for old senior notes may be offered for resale,
resold and otherwise transferred by any old senior note holder without further
registration under the Securities Act and without delivery of a prospectus that
satisfies the requirements of Section 10 of the Securities Act if:
- the holder is not our "affiliate" within the meaning of Rule 405 under
the Securities Act;
- the new senior notes are acquired in the ordinary course of the holder's
business; and
- the holder does not intend to participate in a distribution of the new
senior notes.
Any holder who exchanges old senior notes in the exchange offer with the
intention of participating in any manner in a distribution of the new senior
notes must comply with the registration and prospectus delivery requirements of
the Securities Act in connection with a secondary resale transaction.
This prospectus may be used for an offer to resell, resale or other
retransfer of new senior notes. With regard to broker-dealers, only
broker-dealers that acquire the old senior notes as a result of market-making
activities or other trading activities may participate in the exchange offer.
Each broker-dealer that receives new senior notes for its own account in
exchange for old senior notes, where the old senior notes were acquired by the
broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of the new senior notes. Please see "Plan of Distribution" for
more details regarding the transfer of new senior notes.
-21-
BUSINESS
We are a wholly-owned subsidiary of Alliant Energy Corporation, which is an
energy-services provider engaged primarily in regulated utility operations in
both the Midwest and, through our company, internationally. Alliant Energy
Corporation also has significant non-regulated domestic and international
operations through our company.
[ALLIANT ENERGY CORPORATION ORGANIZATION CHART]
ALLIANT ENERGY RESOURCES
We manage a portfolio of companies involved in international utility
operations and non-regulated domestic and international businesses:
- International: We have energy-related operations and investments in
Brazil, China, New Zealand and Mexico. We have strategic investments in
distribution and generation assets in Brazil and combined heat and power
plants in China, an equity investment in hydro and wind generation in New
Zealand and a loan receivable from a Mexican development company.
- Non-regulated Generation: We maintain a long-term strategy to build a
portfolio of competitive generating assets across the United States,
focusing initially on the Upper Midwest. In February 2003, we announced
the purchase of a 309-megawatt, non-regulated, natural gas-fired power
plant in Wisconsin for $109 million. The entire power output of the
facility is sold under contract to Milwaukee-based We Energies through
June 2008.
- Integrated Services: Our Integrated Services division provides a wide
range of energy and environmental services for commercial, industrial,
institutional, educational and governmental customers. Services under the
Integrated Services umbrella include energy infrastructure, energy
procurement, environmental engineering and construction management,
energy planning and gas management.
- Investments: Our existing investments include a short-line railroad,
Cedar Rapids and Iowa City Railway Company; a barge company, IEI Barge
Services, Inc.; various small real estate joint
-22-
ventures; and several other passive investments, including an equity
interest in McLeodUSA Incorporated, an integrated telecommunications and
services provider.
In November 2002, Alliant Energy Corporation announced its commitment to
pursue the sale of, or other exit strategies for, our oil and gas production
company, Whiting Petroleum; our investments in hydro-electricity generation
assets in Australia, including Southern Hydro, and our affordable housing
business, including Heartland Properties. See "-- Alliant Energy Corporation"
and "Alliant Energy Resources Operations -- Businesses Held for Sale." We intend
to focus on our International and Non-regulated Generation businesses as our
primary long-term strategic platforms and will continue reviewing ways to narrow
our strategic focus and business platforms.
ALLIANT ENERGY RESOURCES OPERATIONS
We manage a portfolio of companies involved in international utility
operations and domestic and international non-regulated businesses. Our
divisions include International, Non-regulated Generation, Integrated Services
and Investments.
INTERNATIONAL
We have energy-related operations and investments in Brazil, China, New
Zealand and Mexico. Our international operations include the following:
- We hold a non-controlling interest in five Brazilian electric utility
companies through several direct investments. These investments include a
49.9% direct ownership interest in GIPAR, S.A., an electric utility
holding company; a 39.4% direct ownership interest in Companhia Forca e
Luz Cataguazes -- Leopoldina, S.A., an electric utility; a 45.6% direct
ownership interest in Energisa, S.A., an energy development company; a
49.9% direct ownership interest in Pbpart -- SE 1 Ltda., an electric
utility holding company; and a 50.0% direct ownership interest in Usina
Termeletrica de Juiz de Fora S.A., a thermal power plant. As of December
31, 2002, our total investment in Brazil was $214 million, which has been
reduced by $210 million of pre-tax cumulative foreign currency
translation losses.
- Our consolidated investments in China include a controlling interest in
Peak Pacific Investment Company, Ltd., a company that develops investment
opportunities in generation infrastructure projects in China; and Anhui
New Energy Heat & Power Co., Ltd., a combined heat and power facility.
Our unconsolidated investments include a 50.0% ownership interest in
Jiaxing JIES Power & Heat Co., Ltd. and a 30.0% ownership interest in
Tongxiang TIES Power & Heat Co., Ltd. As of December 31, 2002, our total
investment in China was $180 million.
- Our investments in New Zealand include a 20.4% ownership interest in
TrustPower Ltd., a New Zealand hydro and wind generation utility company,
and several other smaller investments. As of December 31, 2002, our total
investment in New Zealand was $86 million.
- Our investment in Mexico consists of a loan receivable, including accrued
interest income, from a Mexican development company, which was $55
million as of December 31, 2002. Under provisions of the loan, we have
agreed to lend up to $65 million to support the development of a resort
community near the Baja peninsula.
NON-REGULATED GENERATION
Given the status of the current non-regulated generation market, our
initial investments in this market will focus on facilities with underlying
long-term purchased power agreements. While we believe there are strong
acquisition opportunities in the existing non-regulated generation market, we
will continue to be patient, prudent and diligent in our pursuit of such
opportunities. Consistent with this approach, in February 2003, we announced our
purchase from Mirant Corporation of a 309-megawatt, non-regulated, natural
gas-fired power plant in Neenah, Wisconsin for $109 million, which we financed
with a $73 million
-23-
8-year secured credit facility, which is non-recourse to Alliant Energy
Corporation. The entire power output of the facility is sold under contract to
Milwaukee-based We Energies through June 2008.
INTEGRATED SERVICES
Alliant Energy Integrated Services Company is a national energy-services
company that offers a wide range of energy and environmental services for
businesses to commercial, industrial, institutional, educational and
governmental customers. It offers large energy users an array of services to
maximize customers' productivity, profitability and energy efficiency, and
provides solutions for waste remediation and other environmental engineering and
consulting services. Integrated Services includes:
- Cogenex Corporation and Industrial Energy Applications, Inc., which
provide business customers with on-site energy services;
- Heartland Energy Group, Inc., a provider of commodities-based energy
services primarily related to supplying natural gas; and
- RMT, Inc., an environmental and engineering consulting company that
serves clients nationwide in a variety of industrial market segments and
specializes in consulting on solid and hazardous waste management, ground
water quality protection, industrial design and hygiene engineering, and
air and water pollution control.
INVESTMENTS
Our subsidiaries and investments include Alliant Energy Transportation,
Inc. and Alliant Energy Investments, Inc. Alliant Energy Transportation is a
holding company whose wholly-owned subsidiaries include the Cedar Rapids and
Iowa City Railway Company, which is a short-line railway that provides freight
service between Cedar Rapids and Iowa City; Williams Bulk Transfer Inc. and
Transfer Services, Inc., which provide transfer and storage services; and IEI
Barge Services, Inc., which provides barge terminal and hauling services on the
Mississippi River. Alliant Energy Investments is a holding company whose
subsidiaries include Iowa Land and Building Company, which is organized to
pursue real estate and economic development activities in Interstate Power and
Light Company's service territory. Alliant Energy Investments also has direct
and indirect equity interests in various other real estate and economic
development ventures, primarily concentrated in Cedar Rapids, Iowa, and holds
other passive investments, including an equity interest in McLeodUSA
Incorporated, an integrated telecommunications and services provider.
BUSINESSES HELD FOR SALE
In November 2002, Alliant Energy Corporation announced its commitment to
pursue the sale of, or other exit strategies for, our oil and gas production
company, Whiting Petroleum; our investments in hydro-electricity generation
assets in Australia, including Southern Hydro; and our affordable housing
business, including Heartland Properties. See "-- Alliant Energy Corporation."
For accounting purposes, such businesses have been classified as available for
sale, and the operating results of these businesses have been separately
classified and reported as discontinued operations, in Alliant Energy's
consolidated financial statements. The estimated sales proceeds, less costs to
sell, for each business exceeded the carrying value of each business as of
December 31, 2002. Alliant Energy will continue to monitor the estimated sales
proceeds of its assets held for sale as they relate to the respective carrying
values.
- Whiting Petroleum is based in Denver, Colorado and is organized to
purchase, develop and produce crude oil and natural gas, with an emphasis
on the acquisition of proven reserves and the production of natural gas.
Whiting Petroleum sells gas to a variety of customers, including
pipelines, utilities, industrial users and local distribution companies,
and sells its oil to refiners, re-marketers and other companies in the
United States. Whiting Petroleum does not own gathering or pipeline
facilities for the transportation of gas and must pay the purchasers or
processors of the gas for this service.
-24-
- Alliant Energy Australia owns 100% of Southern Hydro Partnership, a
528-megawatt hydro-electricity generation business that supplies energy
in the state of Victoria. On April 30, 2003, we closed on the sale of our
Australian assets to New Zealand-based Meridian Energy. The sale price
was approximately $365 million. This amount includes the repayment of
approximately $150 million in debt in Australia. On an after-tax basis,
the sale resulted in net cash proceeds to us of approximately $170
million and provides us with approximately $320 million to be applied
toward debt reduction.
- Heartland Properties performs asset management and facilitates the
development and financing of high-quality, affordable housing in Alliant
Energy Corporation's domestic utility service territory.
In January 2003, Alliant Energy decided to sell SmartEnergy, our
internet-based energy retailer, which was classified as held and used, and its
operating results were included in continuing operations, in Alliant Energy's
December 31, 2002 consolidated financial statements.
ALLIANT ENERGY CORPORATION
Alliant Energy Corporation is an energy-services provider engaged primarily
in regulated utility operations in both the Midwest and through our company,
internationally. Alliant Energy Corporation also has significant non-regulated
domestic and international operations through our company. Through its
subsidiaries and partners, Alliant Energy Corporation provides electric, natural
gas and steam services to over three million customers worldwide. Its domestic
utilities operate in Iowa, Wisconsin, Minnesota and Illinois. Through our
company, Alliant Energy Corporation has energy-related operations and
investments throughout the United States as well as in Brazil, China, New
Zealand and Mexico. Alliant Energy Corporation's mission is to create energy
partnerships and solutions that exceed its customers' expectations for comfort,
security and productivity in its service territories and around the world.
In November 2002, Alliant Energy Corporation announced that its board of
directors had approved five strategic actions designed to maintain a strong
credit profile, strengthen its balance sheet and position Alliant Energy
Corporation for improved long-term financial performance. The five strategic
actions are:
- A commitment to pursue the sale of, or other exit strategies for, a
number of our non-regulated businesses, including our oil and gas
production company, Whiting Petroleum, our investments in
hydro-electricity generation assets in Australia and our affordable
housing business. For accounting purposes, such businesses have been
classified as available for sale, and the operating results of these
businesses have been separately classified and reported as discontinued
operations, in Alliant Energy Corporation's consolidated financial
statements. Alliant Energy Corporation anticipates strengthening its
liquidity position by up to $800 million to $1 billion from reductions in
consolidated debt and increasing its cash and temporary cash investment
balances as a result of these transactions. The amount of proceeds
ultimately received from these divestitures, and the timing of the
completion of the transactions, are subject to a variety of factors,
including the transaction structures Alliant Energy Corporation utilizes
to exit these businesses. In January 2003, Alliant Energy Corporation
decided to sell SmartEnergy, our internet-based energy retailer, which
was classified as held and used, and its operating results were included
in continuing operations, in Alliant Energy Corporation's December 31,
2002 consolidated financial statements.
- A reduction in Alliant Energy Corporation's targeted annual common stock
dividend from $2.00 per share to $1.00 per share, effective with the
dividend declared and paid in the first quarter of 2003.
- Reductions in Alliant Energy Corporation's aggregated 2002 and 2003
anticipated construction and acquisition expenditures by approximately
$400 million.
- A plan to raise approximately $200 million to $300 million of common
equity in 2003, dependent on market conditions at that time. Alliant
Energy Corporation expects to direct the majority of the
-25-
proceeds towards additional capital investments in its regulated domestic
utilities. See "Registration of Additional Securities."
- The implementation of additional cost control measures to be accomplished
through Alliant Energy Corporation's new Six Sigma program, its new
enterprise resource planning system that was placed in service in October
2002 and by a heightened focus on operating its domestic utility business
in a manner that aligns operating expenses with the revenues granted in
its various rate filings.
ALLIANT ENERGY CORPORATION DOMESTIC UTILITY OPERATIONS
Alliant Energy Corporation's domestic utility operations consist of its
regulated public utility subsidiaries, Interstate Power and Light Company and
Wisconsin Power and Light Company.
- Interstate Power and Light Company, or IP&L, is a public utility
operating in Iowa, Minnesota and Illinois engaged principally in the
generation, transmission, distribution and sale of electric energy to
approximately 526,000 customers; the purchase, distribution,
transportation and sale of natural gas to approximately 235,000
customers; and the delivery of steam services in selected markets.
- Wisconsin Power and Light Company, or WP&L, is a Wisconsin utility
engaged principally in the generation, distribution and sale of electric
energy to approximately 430,000 customers; and the purchase,
distribution, transportation and sale of natural gas to approximately
170,000 customers.
DOMESTIC UTILITY OPERATIONS
Alliant Energy Corporation's domestic utility operations consist of
regulated electric, natural gas and steam service businesses. Alliant Energy
Corporation serves more than 1.3 million customers in more than 1,000
communities in Iowa, southern and central Wisconsin, southern Minnesota and
northern and northwestern Illinois. In 2002, approximately 50% of both its
domestic electric and gas utility operating revenues were from its Iowa
operations and approximately 44% of both its domestic electric and gas utility
operating revenues were from its Wisconsin operations. Alliant Energy
Corporation believes sales of electric and gas commodities to end user customers
will continue to grow across its domestic service territories as new customers
are added and the consumption of electricity and gas by existing residential and
business customers expands.
Alliant Energy Corporation had $2.2 billion in domestic utility operating
revenues in 2002, including $1.8 million in electric revenues, or 80% of
domestic utility revenues, $394 million in gas revenues, or 18% of domestic
utility revenues, and $37 million in steam and other revenues, or 2% of domestic
utility revenues.
The composition of Alliant Energy Corporation's electric and gas domestic
utility operating revenues for the year ended December 31, 2002 was as follows:
<Table>
<Caption>
ELECTRIC GAS
------------------------ ------------------------
PERCENT OF PERCENT OF
REVENUES REVENUES REVENUES REVENUES
----------- ---------- ----------- ----------
(THOUSANDS) (THOUSANDS)
Residential.............................. $ 626,947 36% $218,746 56%
Commercial............................... 376,365 21% 111,343 28%
Industrial............................... 526,804 30% 25,177 6%
Other.................................... 222,418 13% 38,720 10%
---------- ---- -------- ----
Total.................................... $1,752,534 100% $393,986 100%
========== ==== ======== ====
</Table>
Alliant Energy Corporation believes that its capacity will allow it to meet
its expected load requirements. Furthermore, Alliant Energy Corporation has
transmission interconnections at various locations with 12 other
transmission-owning utilities in the Midwest. Alliant Energy Corporation
believes these interconnections enhance the overall reliability of its
transmission systems and provide access to
-26-
multiple sources of economic and emergency power and energy. Alliant Energy
Corporation manages its supply portfolio to maintain an 18% reserve margin and
it believes that its proximity to transmission and generating capacity in the
upper Midwest region provides it additional access to a low-cost supply of
power. During 2002, Alliant Energy Corporation obtained 57% of its power supply
from its coal or gas plants, 27% from purchases from third party sources, 15%
from its nuclear plants and 1% from other sources.
Alliant Energy Corporation has entered into an agreement with Calpine
Corporation to purchase capacity of 453 megawatts from a 600-megawatt natural
gas-fired power plant to be constructed near Beloit, Wisconsin. The capacity
under contract is expected to be available prior to the time of the 2004 summer
peak demand.
TRANSMISSION ASSETS
On 2001, IP&L and five other electric utilities filed an application with
the Federal Energy Regulatory Commission to create TRANSLink Transmission Co.
LLC, a for-profit, transmission-only company. In April 2002, the Federal Energy
Regulatory Commission conditionally approved TRANSLink's formation and
TRANSLink's participation in the Midwest Independent System Operator. In June
2002, TRANSLink Development Co. LLC was formed to oversee the start-up
activities for TRANSLink. In the fourth quarter of 2002, three additional
electric utilities joined TRANSLink. IP&L expects to contribute transmission
assets of 69 kilovolts and greater, which have an estimated net book value of
approximately $226 million, to TRANSLink in exchange for a to be determined
combination of a corresponding ownership interest in TRANSLink and cash.
On January 1, 2001, WP&L contributed its transmission assets, with an
approximate net book value of $186 million, in exchange for an equity investment
in and a tax-free distribution of $75 million from American Transmission Company
LLC. American Transmission Company is a for-profit, transmission company owned
by WP&L and other electric utilities. WP&L did not recognize any gain or loss on
the transfer of assets, and the transfer has not resulted in a significant
impact on WP&L's financial condition or results of operations because the
Federal Energy Regulatory Commission allows the American Transmission Company to
earn a return comparable to the return formerly allowed WP&L by the Federal
Energy Regulatory Commission and the Public Service Commission of Wisconsin.
During 2002, American Transmission Company returned approximately 80% of its
earnings to its equity holders and, although no assurance can be given, Alliant
Energy anticipates the American Transmission Company will continue with this
policy in the future. American Transmission Company is a transmission-owning
member of the Midwest Independent System Operator and the Mid-America
Interconnected Network, Inc. Regional Reliability Council.
POWER IOWA
In 2001, IP&L announced its Power Iowa plan to develop new electric
generation capacity in Iowa. IP&L will seek to take a series of actions that
creatively uses a mix of resources and efforts to meet Iowa's growing energy
needs. The Power Iowa plan includes adding approximately 550 megawatts of
natural gas-fired generation, including 500 megawatts by 2004; 100 megawatts of
capacity generated from renewable energy sources by December 2003; researching
options for an additional 500-600 megawatts of generation; and increases in
energy efficiency through energy conservation and process improvements at
various commercial and industrial customer locations.
In January 2003, IP&L began construction on a 500 megawatt natural
gas-fired plant in Mason City, Iowa. In December 2002, IP&L began purchasing
approximately 57 megawatts of capacity from a wind generation facility in Iowa.
NUCLEAR MANAGEMENT COMPANY
Through its direct, non-utility subsidiary, Alliant Energy Nuclear LLC,
Alliant Energy Corporation owns 20% of Nuclear Management Company, LLC. Nuclear
Management Company was formed to
-27-
consolidate the operation of its owners' nuclear plants and to provide similar
capabilities for other nuclear operators and owners. Combined, the Nuclear
Management Company operates eight nuclear generating units at six sites. Alliant
Energy Corporation and the other Nuclear Management Company partners continue to
own their respective plants and are entitled to the energy generated at the
plants. Each partner retains the financial obligations for the safe operation,
maintenance and the decommissioning of its plants.
Alliant Energy Corporation owns interests in two nuclear facilities,
Kewaunee Nuclear Power Plant and Duane Arnold Energy Center. Kewaunee, a
532-megawatt plant, is operated by Nuclear Management Company under contract to
Wisconsin Public Service Corporation and is jointly owned by Wisconsin Public
Service Corporation (59%) and WP&L (41%). The Kewaunee operating license expires
in 2013. IP&L owns a 70% interest in Duane Arnold, a 580-megawatt plant, which
is also operated by Nuclear Management Company under contract to IP&L. The Duane
Arnold operating license expires in 2014.
RATES AND REGULATORY ENVIRONMENT
Alliant Energy Corporation operates as a registered public utility holding
company subject to regulation by the Securities and Exchange Commission under
the Public Utility Holding Company Act of 1935. Alliant Energy Corporation and
its subsidiaries are subject to the regulatory provisions of the Public Utility
Holding Company Act, including provisions relating to the issuance and sales of
securities, acquisitions and sales of some utility properties and acquisitions
and retention of interests in non-utility businesses.
As a utility holding company incorporated in Wisconsin, Alliant Energy
Corporation is subject to regulation by the Public Service Commission of
Wisconsin, or the PSCW. The PSCW regulates the type and amount of Alliant Energy
Corporation's investments in non-utility businesses. WP&L, also subject to
regulation by the PSCW, is generally required to file a rate case with the PSCW
at least every two years based on a forward-looking test year basis. WP&L's
retail electric rates are based on forecasted fuel and purchased power costs.
Under the PSCW rules, WP&L can seek a fuel only rate increase or decrease if the
annual fuel and purchased power costs are more or less than 3% higher than the
estimated costs used to establish rates. WP&L has a gas performance incentive
that includes a sharing mechanism under which 50% of all gains and losses
relative to current commodity prices, as well as other benchmarks, are retained
or incurred by WP&L, with the remainder refunded to or recovered from customers.
The PSCW has recently issued new rules relating to the collection of fuel
and purchased power costs by Wisconsin utilities, including WP&L. The new rules
are intended, among other things, to significantly reduce regulatory lag for the
utilities and customers related to the timing of the recovery of increased or
decreased fuel and purchased power costs. Purchased power capacity costs will
now be included in base rates. A process will also exist whereby the utilities
can seek deferral treatment of capacity, transmission and emergency costs
between base rate cases. The new rules were implemented for WP&L with its 2003
retail rate order effective April 15, 2003.
IP&L operates under the jurisdiction of the Iowa Utilities Board, or the
IUB. Requests for rate relief are based on historical test periods, adjusted for
some known and measurable changes. IP&L's retail tariffs provide for subsequent
adjustments to its electric and natural gas rates for changes in the cost of
fuel, purchased energy and natural gas purchased for resale. Purchased power
capacity costs are not recovered from electric customers through this energy
adjustment clause mechanism. Recovery of these capacity costs must be addressed
in formal rate proceedings.
Alliant Energy Corporation's merger-related rate price freezes expired in
April 2002 in all of its primary domestic utility jurisdictions and it is
currently addressing the recovery of its utility cost increases
-28-
through several rate filings. Alliant Energy Corporation's recent rate cases,
three of which are currently outstanding, are summarized as follows (dollars in
millions):
<Table>
<Caption>
EXPECTED
INTERIM INTERIM FINAL FINAL FINAL
FILING INCREASE INCREASE EFFECTIVE INCREASE EFFECTIVE EFFECTIVE
CASE UTILITY TYPE DATE REQUESTED GRANTED(1) DATE GRANTED(2) DATE DATE
- ---- ------------- ------ --------- ---------- --------- ---------- --------- ---------
WP&L:
2002 Retail........ Electric, Gas 8/01 $104 $49 4/02 $ 82 9/02 --
and Water
2003 Retail........ Electric, Gas 5/02 101 * * 81 4/03 --
and Water
2004 Retail........ Electric, Gas 3/03 65 * * * * 1/04
and Water
Wholesale.......... Electric 2/02 6 6 4/02 3(3) 1/03 --
Wholesale.......... Electric 3/03 5 N/A N/A * * 7/03(4)
IP&L:
Retail............. Electric 3/02 82 15(5) 7/02 26 * 6/03
Retail............. Gas 7/02 20 17 10/02 * * 7/03
--------- ---------- ----------
Total................ $383 $87 $192
========= ========== ==========
</Table>
- ---------------
* To be determined.
(1) Interim rate relief is implemented, subject to refund, pending determination
of final rates.
(2) The final rate relief granted includes the amount of interim rate relief
granted.
(3) In the fourth quarter of 2002, WP&L reached a settlement agreement with
certain wholesale customers for an annual increase of $3 million and a
refund of amounts previously collected in excess of the settlement. The
settlement agreement was approved by the Federal Energy Regulatory
Commission in January 2003. At December 31, 2002, WP&L had reserved all
amounts related to the anticipated refund.
(4) WP&L has a rate change moratorium agreement with a wholesale customer group
which will expire in July 2003. The requested rates are expected to go into
effect in July 2003, subject to refund.
(5) In accordance with interim rate relief rules in Iowa, IP&L only requested
interim rate relief of $22 million.
South Beloit Water, Gas and Electric Company, a wholly-owned subsidiary of
WP&L, is subject to regulation by the Illinois Commerce Commission. IP&L is also
subject to regulation by the Minnesota Public Utilities Commission and the
Illinois Commerce Commission.
The Federal Energy Regulatory Commission has jurisdiction under the Federal
Power Act over some of the electric utility facilities and operations, wholesale
rates and accounting practices of IP&L and WP&L, and in some other respects.
IP&L and WP&L are indirectly and directly subject to the jurisdiction of
the Nuclear Regulatory Commission, or NRC, with respect to the Kewaunee Nuclear
Power Plant and the Duane Arnold Energy Center, respectively, and to the
jurisdiction of the U.S. Department of Energy with respect to the disposal of
nuclear fuel and other radioactive wastes from such plants. The NRC has broad
supervisory and regulatory jurisdiction over the construction and operation of
nuclear reactors, particularly with regard to public health, safety and
environmental considerations. The operation and design of nuclear power plants
is under constant review by the NRC.
-29-
REGISTRATION OF ADDITIONAL SECURITIES
On April 2, 2003, we and Alliant Energy filed a registration statement with
the SEC covering up to $400 million of new securities. Also on that date, IP&L
filed a registration statement with the SEC relating to up to $150 million of
new securities.
Under our registration statement when declared effective by the SEC,
Alliant Energy will be entitled to issue and sell from time to time its common
stock, stock purchase contracts and related stock purchase units, and we will be
entitled to issue and sell from time to time our senior unsecured debt
securities under the indenture, which debt securities would be fully and
unconditionally guaranteed by Alliant Energy. Under its registration statement
when declared effective by the SEC, IP&L will be entitled to issue and sell from
time to time its preferred stock, senior unsecured debt securities and
collateral trust bonds. The securities may be offered in amounts and at prices
and terms to be determined at the time of the sale.
Unless otherwise specified at the time of the offering, Alliant Energy is
expected to use the net proceeds from any offering of its securities to make
capital contributions to its domestic utility subsidiaries, which may use these
capital contributions for financing the development and construction of new
generation and distribution facilities, funding additional working capital,
financing other capital expenditures and other general corporate purposes. We
and Alliant Energy may also use the net proceeds from any offering to repay
debt. IP&L is expected to use the net proceeds from any offering for general
corporate purposes, including financing the development and construction of new
generation and distribution facilities, funding additional working capital,
financing other capital expenditures and the repayment of its debt.
-30-
DESCRIPTION OF OTHER OUTSTANDING INDEBTEDNESS
The following is information about our indebtedness and the indebtedness of
Alliant Energy Corporation (at the parent company level only) other than
indebtedness outstanding under our indenture. See "Description of the New Senior
Notes."
In October 2002, Alliant Energy Corporation completed the syndication of a
$565 million 364-day revolving credit facility, which was reduced to $450
million at the end of 2002, available for direct borrowing or to support
commercial paper. Availability under this credit facility will be further
reduced by the proceeds of asset sales in excess of 5% of Alliant Energy
Corporation's consolidated assets in any 12-month period commencing October 2002
and up to $50 million from the proceeds of an issuance of equity securities in
excess of $300 million. The new credit facility agreement contains various
covenants, including the following:
<Table>
<Caption>
STATUS AT
COVENANT DESCRIPTION COVENANT REQUIREMENT DECEMBER 31, 2002
- -------------------- --------------------- -----------------
Consolidated debt-to-capital ratio............... Less than 65% 59.6%
Consolidated net worth........................... At least $1.4 billion $1.8 billion
EBITDA interest coverage ratio................... At least 2.5x 3.6x
</Table>
In compliance with the agreement, results of discontinued operations have
been included in the covenant calculations. The debt component of the capital
ratio includes long- and short-term debt (excluding trade payables), capital
lease obligations, letters of credit and guarantees of the foregoing and
unfunded vested benefits under pension plans. The equity component excludes
accumulated other comprehensive income (loss).
Information regarding Alliant Energy Corporation's commercial paper and
bank facility borrowings at December 31, 2002 was as follows (dollars in
millions):
<Table>
Commercial paper outstanding................................ $135.5
Weighted average maturity of commercial paper............... 2 days
Discount rates on commercial paper.......................... 1.95%
Bank facility borrowings.................................... $85.0
Interest rates on bank facility borrowings.................. 2.3-2.4%
</Table>
In December 2002, we secured a 364-day $250 million standby credit
facility. Designed as a bridge to enhance Alliant Energy Corporation's
short-term liquidity position until it receives the expected proceeds from the
assets it plans to sell in 2003, the availability under the facility is reduced
by amounts realized on such asset sales. At December 31, 2002, there were no
borrowings outstanding under this credit facility.
As of December 31, 2002:
- we had outstanding $1,252.5 million of senior indebtedness, none of which
was secured;
- our consolidated subsidiaries had outstanding $517.9 million of
indebtedness; and
- Alliant Energy Corporation had outstanding $244.5 million of senior
indebtedness, none of which was secured, and $1,825.7 million of
guarantees, none of which were secured and $1,506.9 million of which
represented guarantees of our senior indebtedness, including guarantees
of undrawn credit facilities.
-31-
Access to the long-term and short-term capital and credit markets, and
costs of external financing, are dependent on our and Alliant Energy
Corporation's creditworthiness. In December 2002 and January 2003, Standard &
Poor's and Moody's, respectively, issued revised credit ratings as follows:
<Table>
<Caption>
STANDARD & POOR'S MOODY'S
----------------- -------
Alliant Energy Resources:
Unsecured long-term debt.................................. BBB Baa3
Commercial paper.......................................... A-2 P-3
Corporate credit/issuer rating(1)......................... BBB+ Baa3
Alliant Energy Corporation:
Unsecured long-term debt.................................. BBB (2)
Commercial paper.......................................... A-2 P-3
Corporate credit/issuer rating(1)......................... BBB+ (2)
</Table>
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(1) The Standard & Poor's outlook for both entities is negative and the Moody's
outlook for both entities is stable.
(2) Not rated.
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DESCRIPTION OF THE NEW SENIOR NOTES
The old senior notes were, and the new senior notes will be, issued as a
series of debt securities under and governed by an indenture, dated as of
November 4, 1999, between us and U.S. Bank National Association, as trustee and
paying agent, as supplemented and amended by supplemental indentures for our
prior issuances of debt securities under the indenture and the fourth
supplemental indenture executed in connection with the issuance of the old
senior notes. We refer to the indenture, as so supplemented and amended, as the
indenture. We refer to the old senior notes and the new senior notes
collectively as the senior notes.
The following is a summary of some provisions of the indenture, the senior
notes and the guarantees. Since this is only a summary, it does not contain all
of the information that may be important to you. The summary is subject to and
qualified in its entirety by the indenture, which is filed as an exhibit to the
registration statement of which this prospectus is a part and incorporated by
reference into this prospectus. See "Where You Can Find More Information."
Except as otherwise noted, parenthetical references under this heading are
references to sections of the indenture.
GENERAL
The indenture does not limit the aggregate principal amount of debt
securities that we may issue and provides that we may issue debt securities
under the indenture from time to time in one or more series as provided in a
supplemental indenture or a resolution of our Board of Directors. The senior
notes will be fully and unconditionally guaranteed by Alliant Energy
Corporation, will be issued in the aggregate principal amount of $300,000,000
and will mature on January 15, 2013, at their principal amount unless we redeem
them before that date.
As of the date of this prospectus, the debt securities outstanding under
the indenture are $250 million aggregate principal amount of our 7 3/8% senior
notes due 2009, $300 million aggregate principal amount of our 7% senior notes
due 2011 and $402.5 million aggregate principal amount of our exchangeable
senior notes due 2030. Our exchangeable notes due 2030 currently have a stated
interest rate of 2.5% and are exchangeable for cash based upon a percentage on
the value of McLeodUSA Class A Common Stock. The senior notes will rank equally
with these notes.
We will pay interest on the senior notes at an initial rate of 9.75% per
annum from the date of original issuance or from the most recent interest
payment date to which interest has been paid or provided for. We will pay
interest on the senior notes semiannually in arrears on January 15 and July 15
of each year, commencing on July 15, 2003, until the principal amount has been
paid or made available for payment, to the persons in whose names the senior
notes are registered at the close of business on January 1 or July 1, as the
case may be, before each interest payment date. Interest on the senior notes
will be computed on the basis of a 360-day year of twelve 30-day months. The
principal of and interest on the senior notes will be payable in U.S. dollars or
in such other currency of the United States that at the time of payment is legal
tender for the payment of public and private debts.
INTEREST RATE ADJUSTMENT
The interest rate payable on the senior notes will be subject to increase
at any time through January 1, 2004, in the event of a rating change by Moody's
or Standard & Poor's announced on or prior to such date that causes the ratings
of the senior notes by either agency to be below the investment grade category,
which is below Baa3 for Moody's and below BBB- for Standard & Poor's.
The senior notes will bear interest at the initial interest rate from the
date of issuance of the senior notes until the date on which this rating
downgrade is announced (the "Step-Up Date"). Beginning with and including the
Step-Up Date, the rate at which the senior notes will bear interest will be
increased by 1.00% per year.
If, on any date through January 1, 2004 (the "Step-Down Date"), subsequent
to a Step-Up Date, a new rating change by Moody's or Standard & Poor's causes
the ratings of both agencies of the senior notes
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to be above the non-investment grade category, which is above Ba1 for Moody's
and above BB+ for Standard & Poor's, the interest rate payable on the senior
notes will be decreased by 1.00% per year effective from and including the
Step-Down Date.
There is no limit on the number of times through January 1, 2004, that the
interest rate payable on the senior notes can be adjusted up or down based on
rating changes by Moody's and Standard & Poor's during this period. After
January 1, 2004, however, the interest rate will no longer be subject to
increase or decrease. The interest rate in effect on January 1, 2004, will
remain in effect during the remaining life of the senior notes. (Supplemental
Indenture).
ALLIANT ENERGY CORPORATION GUARANTEE
Alliant Energy Corporation has agreed to fully and unconditionally
guarantee the payment of the principal of, and premium, if any, and interest on,
the senior notes as these items become due and payable, whether at maturity,
upon redemption or otherwise, according to the terms of the senior notes and the
indenture. Alliant Energy Corporation will determine, at least one business day
prior to the date upon which a payment of principal of, and premium, if any, or
interest on, the senior notes is due and payable, whether we have available the
funds to make these payments as they become due and payable. If we fail to pay
principal, premium, if any, or interest, then Alliant Energy Corporation will
cause these payments to be made as they become due and payable, whether at
maturity, upon redemption, or otherwise, as if these payments were made by us.
Alliant Energy Corporation's obligations will be unconditional regardless of the
validity or enforceability of, or the absence of any action to enforce, the
senior notes or the indenture, any waiver or consent by a holder of senior
notes, the recovery of any judgment against us or any action to enforce a
judgment against us. Alliant Energy Corporation will be subrogated to all rights
of a holder of senior notes against us with respect to any amounts paid by
Alliant Energy Corporation pursuant to the guarantee.
RANKING
The senior notes will be senior, unsecured and unsubordinated obligations
of ours, ranking equally and ratably with all our other senior, unsecured and
unsubordinated obligations. Because we are a holding company and conduct
substantially all of our operations through our subsidiaries, the rights of our
creditors, including those under the senior notes, to participate in any
distributions of the assets of any of our subsidiaries or joint ventures, upon
liquidation or reorganization or otherwise, are necessarily subject, and
therefore will be effectively subordinated, to the prior claims of creditors of
any of our subsidiaries or joint ventures, except to the extent our claims as a
creditor may be recognized.
In addition, the guarantees will be unsecured obligations of Alliant Energy
Corporation and will rank equally with all other unsecured and unsubordinated
indebtedness of Alliant Energy Corporation. Because Alliant Energy Corporation
is a holding company that conducts substantially all of its operations through
subsidiaries, including us, the right of Alliant Energy Corporation, and hence
the right of creditors of Alliant Energy Corporation, including holders of the
senior notes through the guarantees, to participate in any distribution of
assets of any subsidiary upon its liquidation or reorganization or otherwise is
necessarily subject to the prior claims of creditors of such subsidiaries,
except to the extent that claims of Alliant Energy Corporation itself as a
creditor of the subsidiary may be recognized.
The senior notes will also be effectively subordinated to all of our future
secured indebtedness, and the related guarantees will be effectively
subordinated to all future secured indebtedness of Alliant Energy Corporation.
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BOOK-ENTRY PROCEDURES AND FORM
GLOBAL NOTES: BOOK-ENTRY FORM
Except as provided below, the senior notes will be issued in fully
registered book-entry form and will be represented by one or more global notes.
The global notes will be deposited with, or on behalf of, The Depository Trust
Company of New York City, or DTC, and registered in the name of a nominee of
DTC.
We expect that pursuant to procedures established by DTC:
- upon the issuance of the senior notes in the form of one or more global
notes, DTC or its custodian will credit, on its book-entry registration
and transfer system, the principal amount of senior notes of the
individual beneficial interests represented by these global notes to the
respective accounts of persons who have accounts with DTC; and
- ownership of beneficial interests in the global notes will be shown on,
and the transfer of this ownership will be effected only through, records
maintained by DTC or its nominee with respect to interests of
participants and the records of participants with respect to interests of
persons other than participants. These accounts initially will be
designated by or on behalf of the initial purchasers and ownership of
beneficial interests in the global notes will be limited to participants
or persons who hold interests through participants. QIBs, may hold their
interests in the global notes directly through DTC if they are
participants in this system, or indirectly through organizations which
are participants in this system. The laws of some states of the United
States may require that some purchasers of securities take physical
delivery of the senior notes in definitive registered form. Such limits
and such laws may impair the ability of such purchasers to own, transfer
or pledge interests in the global notes.
So long as DTC, or its nominee, is the registered owner or holder of senior
notes, DTC or its nominee, as the case may be, will be considered the sole owner
or holder of senior notes represented by the global notes for all purposes under
the indenture. No beneficial owner of an interest in the global notes will be
able to transfer that interest except in accordance with DTC's procedures, in
addition to those provided for under the indenture with respect to the senior
notes.
We will make payments of the principal of, and premium, if any, and
interest on, the global notes to DTC or its nominee, as the case may be, as the
registered owner of the global notes. None of us, the trustee or any paying
agent will have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership interests in the
global notes or for maintaining, supervising or reviewing any records relating
to such beneficial ownership interest.
We expect that DTC or its nominee, upon receipt of any payment of principal
of and premium, if any, and interest on the global notes, will credit
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of the global notes as
shown on the records of DTC or its nominee. We also expect that payments by
participants to owners of beneficial interests in the global notes held through
such participants will be governed by standing instructions and customary
practice, as is now the case with securities held for the accounts of customers
registered in the names of nominees for such customers. These payments will be
the responsibility of such participants. Transfers between participants in DTC
will be effected in the ordinary way through DTC's settlement system in
accordance with DTC rules and will be settled in same day funds.
DTC has advised us that it will take any action permitted to be taken by a
holder of senior notes only at the direction of one or more participants to
whose account the DTC interests in the global notes are credited and only in
respect of such portion of the aggregate principal amount of senior notes as to
which such participant or participants has or have given such direction.
DTC has advised us that:
- DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve
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System, a "clearing corporation" within the meaning of the New York
Uniform Commercial Code and a "clearing agency" registered under Section
17A of the Securities Exchange Act of 1934;
- DTC holds securities that its direct participants deposit with DTC and
facilitates the settlement among direct participants of securities
transactions, such as transfers and pledges, in deposited securities
through electronic computerized book-entry changes in direct
participants' accounts, thereby eliminating the need for physical
movement of securities certificates;
- direct participants include securities brokers and dealers, trust
companies, clearing corporations and other organizations;
- DTC is owned by a number of its direct participants and by the New York
Stock Exchange, Inc., the American Stock Exchange LLC and the National
Association of Securities Dealers, Inc.;
- access to the DTC system is also available to indirect participants such
as securities brokers and dealers, banks and trust companies that clear
through or maintain a custodial relationship with a direct participant,
either directly or indirectly; and
- the rules applicable to DTC and its direct and indirect participants are
on file with the SEC.
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interests in the global notes among participants of DTC, it is
under no obligation to perform such procedures, and such procedures may be
discontinued at any time. None of us, the trustee or any of our respective
agents will have any responsibility for the performance by DTC or its
participants or indirect participants of their respective obligations under the
rules and procedures governing their operations, including maintaining,
supervising or reviewing the records relating to, payments made on account of,
or beneficial ownership interests in, global notes.
According to DTC, the foregoing information with respect to DTC has been
provided to its participants and other members of the financial community for
informational purposes only and is not intended to serve as a representation,
warranty or contract modification of any kind. We have provided the foregoing
descriptions of the operations and procedures of DTC solely as a matter of
convenience. DTC's operations and procedures are solely within DTC's control and
are subject to change by DTC from time to time. Neither we, the initial
purchasers nor the trustee take any responsibility for these operations or
procedures, and you are urged to contact DTC or its participants directly to
discuss these matters.
CERTIFICATED NOTES
We will issue senior notes in certificated form in exchange for global
notes if:
- DTC or any successor depository notifies us that it is unwilling or
unable to continue as a depository for the global notes or ceases to be a
"clearing agency" registered under the Securities Exchange Act of 1934
and a successor depository is not appointed by us within 90 days of such
notice; or
- we determine that the senior notes will no longer be represented by
global notes. (Section 2.15).
The holder of a senior note in certificated form may transfer such note by
surrendering it at the office or agency maintained by us for such purpose in
Milwaukee, Wisconsin or New York, New York.
PAYMENT AND PAYING AGENT
We have appointed the trustee to act as paying agent with respect to the
senior notes. We may at any time designate additional paying agents, rescind the
designation of any paying agents or approve a change in the office through which
any paying agent acts, except that we will be required to maintain a paying
agent in each place of payment for the senior notes. (Section 2.04).
All moneys paid by us to the paying agent for the payment of the principal
of, or premium, if any, or interest on, any senior notes that remain unclaimed
at the end of two years after such principal, premium,
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if any, or interest has become due and payable will be repaid to us and the
holder of the senior notes will thereafter look only to us for payment of any
such amounts. (Section 4.05).
PURCHASE AND CANCELLATION
We may at any time purchase senior notes in the open market or otherwise at
any price, subject to applicable U.S. securities laws. Any senior notes so
purchased must be promptly surrendered to the trustee for cancellation.
All senior notes that we redeem or purchase will promptly be canceled. Any
senior notes in certificated form so canceled will be forwarded to or to the
order of the trustee and may not be reissued or resold. (Section 2.13).
RESTRICTIVE COVENANTS
Except as otherwise set forth under "-- Defeasance and Covenant Defeasance"
below, for so long as any senior notes remain outstanding or any amount remains
unpaid on any of the senior notes, we will comply with the terms of the
covenants set forth below. For purposes of these covenants, "debt" is defined in
the indenture as all of our obligations evidenced by bonds, debentures, notes or
similar evidences of indebtedness in each case for money borrowed. For purposes
of these covenants, "lien" is defined in the indenture as any mortgage, lien,
pledge, security interest or other encumbrance. The term "lien" does not include
any easements, rights-of-way, restrictions and other similar encumbrances and
encumbrances consisting of zoning restrictions, leases, subleases, licenses,
sublicenses, restrictions on the use of property or defects in the title to
property. (Section 1.01).
GUARANTOR FINANCIAL COVENANTS
Neither Alliant Energy Corporation nor we, nor any of its or our
consolidated subsidiaries other than Alliant Energy Corporation's utility
subsidiaries, will incur any new Indebtedness, other than Permitted
Indebtedness, if, after giving effect to the incurrence of such Indebtedness,
any of the following is true:
- Consolidated Net Worth. Alliant Energy Corporation's consolidated net
worth would be less than $1.2 billion;
- Capitalization Ratio. The ratio of the Consolidated Indebtedness of
Alliant Energy Corporation to its Consolidated Total Capitalization would
exceed 0.70 to 1.00; or
- Interest Coverage Ratio. The ratio of (1) EBITDA for the period of the
most recent four consecutive fiscal quarters of Alliant Energy
Corporation to (2) Interest Expense for such period, would be less than
2.0 to 1.0. (Supplemental Indenture).
"Consolidated Indebtedness" means, at any date of determination, the
aggregate Indebtedness of Alliant Energy Corporation and its consolidated
subsidiaries determined on a consolidated basis in accordance with generally
accepted accounting principles, but will not include Nonrecourse Indebtedness of
any subsidiary of Alliant Energy Corporation.
"Consolidated Total Capitalization" means, at any date of determination,
the sum of:
- Consolidated Indebtedness of Alliant Energy Corporation;
- consolidated equity of the common shareowners of Alliant Energy
Corporation and its consolidated subsidiaries;
- consolidated equity of the preference shareowners of Alliant Energy
Corporation and its consolidated subsidiaries; and
- consolidated equity of the preferred shareowners of Alliant Energy
Corporation and its consolidated subsidiaries,
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in each case determined at such date in accordance with generally accepted
accounting principles, excluding, however, from such calculation, the amounts
identified as "Accumulated Other Comprehensive Income (Loss)" in the financial
statements of Alliant Energy Corporation set forth in its Report on Form 10-K or
10-Q, as the case may be, filed most recently with the SEC prior to the date of
such determination.
"EBITDA" means, with respect to any period, the sum of operating income of
Alliant Energy Corporation and its consolidated subsidiaries for such period, as
determined on a consolidated basis in accordance with generally accepted
accounting principles, plus all amounts deducted in the computation thereof on
account of depreciation and amortization.
"Indebtedness" means, for any person, any and all indebtedness, liabilities
and other monetary obligations of such person:
(1) for borrowed money or evidenced by bonds, debentures, notes or
other similar instruments;
(2) to pay the deferred purchase price of property or services, except
trade accounts payable arising and repaid in the ordinary course of
business;
(3) capitalized lease obligations;
(4) under reimbursement or similar agreements with respect to letters
of credit, other than trade letters of credit, issued to support
indebtedness or obligations of such person or of others of the kinds
referred to in clauses (1) through (3) above and clause (5) below;
(5) reasonably quantifiable obligations under direct guaranties or
indemnities, or under support agreements, in respect of, and reasonably
quantifiable obligations to purchase or otherwise acquire, or otherwise to
assure a creditor against loss in respect of, or to assure an obligee
against failure to make payment in respect of, indebtedness or obligations
of others of the kinds referred to in clauses (1) through (4) above; and
(6) in respect of unfunded vested benefits under certain employee
benefit plans.
In determining Indebtedness for any person, there will be included accrued
interest on the principal amount thereof to the extent such interest has accrued
for more than six months.
"Interest Expense" means, with respect to any period, interest expense of
Alliant Energy Corporation and its consolidated subsidiaries for such period,
including both capitalized and noncapitalized interest and the interest
component of capital lease obligations and all debt discount and expense
amortized during such period, as determined on a consolidated basis in
accordance with generally accepted accounting principles.
"Nonrecourse Indebtedness" means Indebtedness of any person that finances
the acquisition, development, ownership or operation of an asset in respect of
which the obligee of such Indebtedness has no recourse whatsoever to such person
or any of its affiliates other than:
- recourse to the named obligor with respect to such Indebtedness, or the
debtor, for amounts limited to the cash flow or net cash flow, other than
historic cash flow or historic net cash flow, from the asset;
- recourse to the debtor for the purposes only of enabling amounts to be
claimed in respect of such Indebtedness in an enforcement of any security
interest or lien given by the debtor over the asset or the income, cash
flow or other proceeds deriving from the asset (or given by any
shareholder or the like in the debtor over its share or like interest in
the capital of the debtor) to secure the Indebtedness, but only if the
extent of the recourse to the debtor is limited solely to the amount of
any recoveries made on any such enforcement; and
- recourse to the debtor generally or indirectly to any affiliate of the
debtor, under any form of assurance, undertaking or support, which
recourse is limited to a claim for damages, other than liquidated damages
and damages required to be calculated in a specified way, for a breach of
an
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obligation, other than a payment obligation or an obligation to comply or
to procure compliance by another with any financial ratios or other tests
of financial condition, by the person against which such recourse is
available.
"Permitted Indebtedness" means:
- Indebtedness of Alliant Energy Corporate Services, Inc., a mutual service
company that provides services to utility and non-utility subsidiaries of
Alliant Energy Corporation pursuant to the Public Utility Holding Company
Act of 1935;
- intercompany Indebtedness owed to us, to Alliant Energy Corporation or to
any of our or its consolidated subsidiaries;
- Indebtedness to the Alliant Energy Corporation utility money pool or
non-utility money pool;
- Nonrecourse Indebtedness;
- Indebtedness incurred to fund Alliant Energy Corporate Services, Inc. or
the utility money pool;
- Indebtedness permitted to be incurred to refinance or replace other
Indebtedness permitted to be incurred by the indenture;
- Indebtedness arising from the deposit and collection of checks and
similar items in the ordinary course of business;
- Indebtedness arising from the guarantee of other Indebtedness permitted
by the indenture;
- Indebtedness represented by letters of credit issued in order to provide
security for workers' compensation claims, payment obligations in
connection with self-insurance or similar requirements in the ordinary
course of business;
- Indebtedness in respect of bid, payment and performance bonds, bankers'
acceptances, workers' compensation claims, surety or appeal bonds,
payment obligations in connection with self-insurance or similar
obligations, and bank overdrafts and letters of credit in respect of such
overdrafts in the ordinary course of business;
- Indebtedness consisting of guarantees, indemnities or obligations in
respect of purchase price adjustments in connection with the acquisition
or disposition of assets; and
- additional Indebtedness in an aggregate principal amount not to exceed
$100 million at any one time outstanding.
LIMITATION ON LIENS
The indenture provides that we will not, we will not permit any of our
subsidiaries to, and Alliant Energy Corporation will not, issue, assume or
guarantee any debt if the debt is secured by any lien upon any of our, our
subsidiaries' or Alliant Energy Corporation's property or assets other than
cash, without effectively securing the outstanding senior notes, together with
any other indebtedness or obligation then existing or thereafter created ranking
equally with the senior notes, equally and ratably with the debt. This
limitation does not apply to:
- liens in existence on the date of original issuance of the senior notes;
- subject to some conditions, any lien created or arising over any property
or assets that we, Alliant Energy Corporation or any of our subsidiaries
acquire, construct or create;
- any lien to secure the debt incurred by us, Alliant Energy Corporation or
our subsidiaries in connection with a specifically identifiable project
where the lien relates and is confined to a property involved in that
project and acquired by us, Alliant Energy Corporation or our
subsidiaries after the date of original issuance of the senior notes and
the recourse of the creditors in respect of the debt is limited to any or
all of that project and property;
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- any lien securing amounts not more than 90 days overdue or otherwise
being contested in good faith;
- rights of financial institutions to offset credit balances in connection
with the operation of cash management programs established for our,
Alliant Energy Corporation's or any of our subsidiaries' benefit or in
connection with the issuance of letters of credit for our, Alliant Energy
Corporation's or any of our subsidiaries' benefit;
- any lien securing debt incurred by us, Alliant Energy Corporation or any
of our subsidiaries in connection with the financing of accounts
receivable;
- any lien incurred in the ordinary course of business, including any
mechanics', materialmen's, carriers', workmen's, vendors' or other like
liens and any liens securing amounts in connection with workers'
compensation, unemployment insurance and other types of social security;
- any lien upon specific items of our, Alliant Energy Corporation's or any
of our subsidiaries' inventory or other goods and proceeds securing our,
Alliant Energy Corporation's or any of our subsidiaries' obligations in
respect of bankers' acceptances issued or created to facilitate the
purchase, shipment or storage of inventory or other goods;
- any lien incurred or deposits made securing the performance of tenders,
bids, leases, trade contracts other than for borrowed money, statutory
obligations, surety bonds, appeal bonds, government contracts,
performance bonds, return-of-money bonds and other obligations of like
nature incurred by us, Alliant Energy Corporation or any of our
subsidiaries in the ordinary course of business;
- any lien constituted by a right of set off or right over a margin call
account or any form of cash or cash collateral or any similar arrangement
for obligations incurred by us, Alliant Energy Corporation or any of our
subsidiaries in respect of the hedging or management of risks involving
derivative instruments;
- any lien arising out of title retention or like provisions in connection
with the purchase of goods and equipment by us, Alliant Energy
Corporation or any of our subsidiaries in the ordinary course of
business;
- any lien securing reimbursement obligations under letters of credit,
guarantees and other forms of credit enhancement given in connection with
the purchase of goods and equipment by us, Alliant Energy Corporation or
any of our subsidiaries in the ordinary course of business;
- liens on any property or assets acquired from an entity with which we,
Alliant Energy Corporation or any of our subsidiaries merge and that is
not created in anticipation of any such transaction, unless the lien was
created to secure or provide for the payment of any part of the purchase
price of the entity;
- any lien on any property or assets existing at the time of acquisition by
us, Alliant Energy Corporation or any of our subsidiaries and which is
not created in anticipation of the acquisition, unless the lien was
created to secure or provide for the payment of any part of the purchase
price of the property or assets;
- liens required by any contract or statute to permit us, Alliant Energy
Corporation or any of our subsidiaries to perform any contract or
subcontract made by us, Alliant Energy Corporation or any of our
subsidiaries with a governmental entity, or to secure payments by us,
Alliant Energy Corporation or any of our subsidiaries to a governmental
entity under the provisions of any contract or statute;
- any lien securing industrial revenue, development or similar bonds issued
by us, Alliant Energy Corporation or any of our subsidiaries or for our,
Alliant Energy Corporation's or any of our subsidiaries' benefit,
provided that these bonds are nonrecourse to us, Alliant Energy
Corporation or any of our subsidiaries;
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- any lien securing taxes or assessments or other applicable governmental
charges or levies;
- any lien that arises under any order of attachment, or similar legal
process arising in connection with court proceedings and any lien that
secures the reimbursement obligation for any bond obtained in connection
with an appeal taken in any court proceeding, so long as the enforcement
of the lien arising in connection with such legal process is effectively
stayed and the claims secured by the lien are being contested in good
faith, or any lien in favor of a plaintiff or defendant in any action
before a court or tribunal as security for costs or expenses;
- any lien arising by operation of law or by order of a court or any lien
arising by an agreement of similar effect, including judgment liens; or
- any extension, renewal or replacement of any liens referred to in the
clauses above, for amounts not exceeding the principal amount of the debt
secured by the lien so extended, renewed or replaced, so long as the
extension, renewal or replacement lien is limited to all or a part of the
same property or assets that were covered by the lien that was extended,
renewed or replaced, plus improvements on such property or assets.
(Section 4.03 and Supplemental Indenture).
Although the indenture limits our, our subsidiaries' and Alliant Energy
Corporation's ability to incur liens as set forth above, the indenture
nevertheless provides that we, our subsidiaries or Alliant Energy Corporation
may create or permit to exist liens over any of our, our subsidiaries' and
Alliant Energy Corporation's property or assets so long as the aggregate amount
of debt secured by all liens that we, our subsidiaries or Alliant Energy
Corporation incur, excluding the amount of debt secured by liens set forth in
the clauses above, does not exceed 10% of Alliant Energy Corporation's
Consolidated Net Tangible Assets. "Consolidated Net Tangible Assets" is defined
in the indenture as the total of all assets, including revaluations thereof as a
result of commercial appraisals, price level restatement or otherwise, appearing
on the most recent consolidated balance sheet of Alliant Energy Corporation as
of the date of determination, net of applicable reserves and deductions, but
excluding goodwill, trade names, trademarks, patents, unamortized debt discount
and all other like intangible assets, less the aggregate of the consolidated
current liabilities of Alliant Energy Corporation appearing on such balance
sheet. (Section 1.01 and Supplemental Indenture).
LIMITATION ON SALE AND LEASE-BACK TRANSACTIONS
The indenture provides that we will not enter into any arrangement with any
entity providing for the lease by us of any of the assets that we have sold,
transferred or agreed to sell or transfer to that entity unless:
- the transaction involves a lease for a temporary period not to exceed
three years;
- the transaction is between us and one of our affiliates;
- we would be entitled to incur debt secured by a lien on the assets or
property involved in the transaction at least equal to the Attributable
Debt with respect to the transaction, without equally and ratably
securing the senior notes, as described under "-- Limitation on Liens"
above, other than as described in the second paragraph of that
description;
- we enter into the transaction within 270 days after our initial
acquisition of the assets or property subject to the transaction;
- the aggregate amount of all Attributable Debt with respect to all sale
and lease-back transactions then in effect does not exceed 10% of Alliant
Energy Corporation's Consolidated Net Tangible Assets; or
- within the 12 months preceding or following the sale or transfer,
regardless of whether we make any sale or transfer, we apply, in the case
of a sale or transfer for cash, an amount equal to the net proceeds of
the sale or transfer and, in the case of a sale or transfer other than
for cash, an amount equal to the fair value of the assets so leased at
the time that we enter into such arrangement, to
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the retirement of debt, incurred or assumed by us which by its terms
matures at, or is extendible or renewable at the option of the obligor
to, a date more than 12 months after the date of incurring, assuming or
guaranteeing such debt, or to an investment in any of our assets.
(Section 4.04).
"Attributable Debt" is defined in the indenture as, with respect to any
particular sale and lease-back transaction, at the time of determination, the
present value of the obligation of the lessee for net rental payments during the
remaining term of the lease included in the sale and lease-back transaction,
including any period for which such lease has been extended or may, at the
option of the lessor, be extended. The present value of this obligation is
discounted at the rate of interest implicit in the transaction determined in
accordance with U.S. generally accepted accounting principles. (Section 1.01).
CONSOLIDATION, MERGER, CONVEYANCE, SALE OR LEASE
The indenture provides that we may, without the consent of any holders of
the senior notes, consolidate or merge with, or convey, transfer or lease
substantially all of our assets to, another U.S. entity so long as:
- if we are not the surviving entity, the surviving entity expressly
assumes by supplemental indenture all of our applicable obligations under
the senior notes and the indenture;
- immediately after giving effect to the transaction, no event of default
under the senior notes and no event which, after notice or lapse of time
or both, would become an event of default under the senior notes, has
occurred and is continuing; and
- either we or our successor delivers to the trustee an officers'
certificate and an opinion of counsel stating that such consolidation,
merger, conveyance, transfer or lease, and if a supplemental indenture is
required by the transaction, the supplemental indenture, comply with the
indenture and all conditions precedent in the indenture relating to such
transaction. (Section 5.01).
In addition, we may assign and delegate all of our rights and obligations
under the indenture, the senior notes, the supplemental indenture relating to
the senior notes and all other related documents, agreements and instruments to
Alliant Energy Corporation or a subsidiary of Alliant Energy Corporation, any
person that owns all of our capital stock or any person that owns all of the
capital stock of a person that owns all of our capital stock. Upon the
assumption of these rights and obligations by that person, we will be
automatically released from the obligations, provided that immediately after
giving effect to the transaction, no event of default under the senior notes,
and no event which, after notice or lapse of time or both, would become an event
of default under the senior notes, has occurred and is continuing. (Section
5.05).
The indenture also provides that Alliant Energy Corporation may, without
the consent of any holders of the senior notes, consolidate or merge with, or
convey, transfer or lease substantially all of its assets to, another U.S.
entity so long as:
- if Alliant Energy Corporation is not the surviving entity, the surviving
entity assumes by supplemental indenture all of Alliant Energy
Corporation's obligations under the guarantees and the indenture;
- immediately after giving effect to the transaction, no event of default
under the senior notes, and no event which, after notice or lapse of time
or both, would become an event of default under the senior notes, has
occurred and is continuing; and
- each of Alliant Energy Corporation and the successor person delivers to
the trustee an officers' certificate and an opinion of counsel stating
that such consolidation, merger, conveyance, transfer or lease, and if a
supplemental indenture is required by the transaction, the supplemental
indenture, comply with the indenture and all conditions precedent in the
indenture, relating to such transaction. (Section 5.03).
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MODIFICATION OF THE INDENTURE
We, Alliant Energy Corporation and the trustee generally may modify and
amend the indenture or any supplemental indenture with the consent of the
holders of a majority of the principal amount of the outstanding debt securities
of each affected series, with each series voting as a class. These majority
holders may also waive compliance by us or Alliant Energy Corporation with any
provision of the indenture, any supplemental indenture or the debt securities of
any series. However, without the consent of a holder of each debt security
affected, an amendment or waiver may not:
- reduce the amount of debt securities whose holders must consent to an
amendment or waiver;
- change the rate or the time for payment of interest;
- change the principal or the fixed maturity;
- waive a default in the payment of principal, premium or interest;
- make any debt securities payable in a different currency;
- make any change in the provisions of the indenture concerning waiver of
existing defaults, right of holders of debt securities to receive payment
or amendments and waivers with consent of holders of debt securities;
- impair the right to institute suit for the enforcement of any payment on
or after the stated maturity of such payment or, in the case of
redemption, on or after the redemption date; or
- modify or effect in any manner adverse to the holders the terms and
conditions of Alliant Energy Corporation's obligations regarding due and
punctual payment of principal of, or any premium or interest on, or any
sinking fund requirements of, any debt securities subject to guarantees.
(Section 9.02).
We, Alliant Energy Corporation and the trustee may amend or supplement the
indenture without the consent of any holder of any of the debt securities:
- to cure any ambiguity, defect or inconsistency in the indenture, any
supplemental indenture, the debt securities or guarantees;
- to provide for the assumption of all of our obligations under the debt
securities, the indenture, any supplemental indenture or of Alliant
Energy Corporation's obligations under the guarantees and the indenture
or any supplemental indenture by any corporation in connection with a
merger or consolidation of us or Alliant Energy Corporation or transfer
or lease of substantially all of our or Alliant Energy Corporation's
property and assets;
- make any change that does not adversely affect the rights of any holder
of debt securities;
- to add to the rights of holders of any of the debt securities;
- to secure any debt securities as provided under the heading
"-- Restrictive Covenants -- Limitation on Liens;"
- to evidence the succession of another person to us or Alliant Energy
Corporation, and the assumption by the successor person of the covenants
of us and Alliant Energy Corporation, as the case may be, provided in the
indenture or the senior notes;
- to establish the form or terms of any debt securities;
- to evidence and provide for the acceptance of appointment under the
indenture by a successor trustee with respect to the debt securities and
to add to or change any of the provisions of the indenture necessary to
facilitate the administration of the indenture by more than one trustee;
or
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- to supplement any of the provisions of the indenture to the extent
necessary to permit or facilitate defeasance and discharge of any debt
securities, provided that such action will not adversely affect the
interests of any holder of any debt security in any material respect.
(Section 9.01).
EVENTS OF DEFAULT
Any one of the following is an event of default with respect to the senior
notes:
(a) if we or Alliant Energy Corporation default in the payment of any
interest on the senior notes, and such default continues for 30 days;
(b) if we or Alliant Energy Corporation default in payment of
principal of or premium, if any, on the senior notes when the same become
due at maturity, upon redemption, by declaration or otherwise;
(c) if we or Alliant Energy Corporation materially default in the
performance or materially breach any of our respective covenants or
obligations in the indenture, any supplemental indenture or the senior
notes and this material default or breach continues for a period of 90 days
after we or Alliant Energy Corporation receive written notice from the
trustee or the holders of at least 25% in aggregate principal amount of the
outstanding senior notes;
(d) if we or Alliant Energy Corporation default in the payment of the
principal of any bond, debenture, note or other indebtedness or in the
payment of principal under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced any
indebtedness for money borrowed, which default for payment of principal is
in an aggregate principal amount exceeding $25,000,000 when such
indebtedness becomes due and payable, if such default continues unremedied
or unwaived for more than 30 business days and the time for payment of such
amount has not been expressly extended;
(e) our failure or the failure by Alliant Energy Corporation generally
to pay our respective debts as they become due, or the admission in writing
of our inability or Alliant Energy Corporation's inability to pay our
respective debts generally, or the making of a general assignment for the
benefit of our respective creditors, or the institution of any proceeding
by or against Alliant Energy Corporation or us that is dismissed within 180
days from its commencement seeking to adjudicate us or Alliant Energy
Corporation bankrupt or insolvent, or seeking insolvent liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief or
composition, of us or Alliant Energy Corporation or our respective debts
under any law relating to bankruptcy, insolvency, reorganization,
moratorium or relief of debtors, or seeking the entry of an order for
relief or appointment of an administrator, receiver, trustee, intervenor or
other similar official for us or Alliant Energy Corporation or for any
substantial part of our property or the property of Alliant Energy
Corporation, or the taking of any action by Alliant Energy Corporation or
us to authorize any of the actions set forth in this clause; and
(f) a material default in the performance or material breach by
Alliant Energy Corporation of any covenant or obligation of Alliant Energy
Corporation contained in its guarantee, and the continuance of such
material default or breach for a period of 90 days after which we or
Alliant Energy Corporation receive written notice from the trustee or the
holders of at least 25% in aggregate principal amount of the senior notes.
(Section 6.01).
If an event of default with respect to the senior notes occurs and is
continuing, either the trustee or the holders of at least 25% in aggregate
principal amount of the outstanding senior notes may declare the principal
amount of the outstanding senior notes, and any interest accrued on the senior
notes, to be due and payable immediately by delivering a written notice to us
and Alliant Energy Corporation and to the trustee if given by the holders. At
any time after that declaration of acceleration has been made, but before a
judgment or decree for payment of money has been obtained, the holders of a
majority in principal amount of all of the senior notes, by notice to the
trustee, may rescind this declaration and all its consequences if all events of
default have been cured or waived, other than the non-payment of principal of
the outstanding senior notes which has become due solely by reason of the
declaration of acceleration,
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and that declaration of acceleration and its consequences will be automatically
annulled and rescinded. (Section 6.02).
Holders of the senior notes may not enforce the indenture, the senior notes
or any guarantees, if applicable, unless:
- the holder has previously given written notice to the trustee of a
continuing event of default with respect to the senior notes;
- the holders of not less than 25% in aggregate principal amount of the
senior notes have made written request to the trustee to institute
proceedings in respect of such event of default under the senior notes in
its own name as trustee;
- the holder or holders have offered the trustee indemnity satisfactory to
the trustee against the costs, expenses and liabilities to be incurred in
compliance with such request;
- the trustee, for 60 days after its receipt of such notice, request and
offer of indemnity, has failed to institute any such proceedings; and
- no direction inconsistent with such written request has been given to the
trustee during the 60-day period by the holders of a majority of the
outstanding aggregate principal amount of the senior notes. (Section
6.06).
However, these limitations do not apply to a suit instituted by a holder of
any senior notes for the enforcement of the payment of the principal of or
premium, if any, or interest on the senior notes on or after the applicable due
date specified in the senior notes. (Section 6.07).
If the trustee collects any money pursuant to an event of default under the
senior notes, it will pay out the money in the following order:
- first, to the trustee for amounts due to it as compensation for its
services and any indemnities owed to it;
- second, to holders of the senior notes in respect of which or for the
benefit of which such money has been collected for amounts due and unpaid
on the senior notes for principal and interest, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the senior notes for principal and interest; and
- third, to the person or persons lawfully entitled thereto, or as a court
of competent jurisdiction may direct. (Section 6.10).
The trustee may fix a record date with respect to registered securities and
payment date for any such payment to holders of the senior notes. This record
date will not be less than 10 days nor more than 60 days prior to the applicable
payment date. (Section 6.10).
We and Alliant Energy Corporation must deliver to the trustee annually a
written statement stating that we and Alliant Energy Corporation have complied
with all applicable conditions and covenants under the indenture or, if we or
Alliant Energy Corporation are in default, specifying that default. We and
Alliant Energy Corporation are required under the indenture to deliver to the
trustee, within five days after its occurrence, written notice of any event of
default under the senior notes or any event that, after notice or lapse of time
or both, would become an event of default under the senior notes. (Sections 4.07
and 4.08).
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OPTIONAL REDEMPTION
We may redeem the senior notes at our option in whole or in part at any
time, on at least 30 days' but not more than 60 days' prior written notice
mailed to the registered holders of the senior notes, at a price equal to the
greater of:
- 100% of the principal amount of the senior notes being redeemed; and
- the sum of the present values of the principal amount of the senior notes
to be redeemed and the remaining scheduled payments of interest on the
senior notes from the redemption date to January 15, 2013, discounted
from their respective scheduled payment dates to the redemption date
semi-annually, assuming a 360-day year consisting of twelve 30-day months
at a discount rate equal to the Treasury Yield plus 50 basis points, plus
accrued interest on the senior notes to the redemption date.
(Supplemental Indenture).
"Treasury Yield" means, with respect to any redemption date, the annual
rate equal to the semi-annual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue expressed as
a percentage of its principal amount equal to the Comparable Treasury Price for
such redemption date.
"Comparable Treasury Issue" means the United States treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the senior notes to be redeemed that would be utilized, at
the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of the senior notes.
"Comparable Treasury Price" means, with respect to any date of redemption:
- the average of the bid and asked prices for the Comparable Treasury
Issue, expressed in each case as a percentage of its principal amount, on
the third business day preceding the redemption date, as set forth in the
daily statistical release published by the Federal Reserve Bank of New
York and designated "Composite 3:30 p.m. Quotations for U.S. Government
Securities;" or
- if this release is not published or does not contain such prices on the
business day in question, the Reference Treasury Dealer Quotation for the
redemption date.
"Independent Investment Banker" means an independent investment banking
institution of national standing appointed by us and reasonably acceptable to
the trustee.
"Reference Treasury Dealer Quotation" means, with respect to the Reference
Treasury Dealer and redemption date, the average, as determined by us, of the
bid and asked prices for the Comparable Treasury Issue expressed in each case as
a percentage of its principal amount and quoted in writing to us by the
Reference Treasury Dealer at 5:00 p.m. on the third business day preceding the
redemption date.
"Reference Treasury Dealer" means a primary United States government
securities dealer in New York City appointed by us and reasonably acceptable to
the trustee.
Notice of redemption will be mailed by first class mail at least 30 but not
more than 60 days before the redemption date to each holder of the senior notes
to be redeemed at its registered address. (Section 3.03).
If fewer than all the senior notes are to be redeemed, selection of senior
notes for redemption will be made by the trustee in any manner the trustee deems
fair and appropriate and that complies with applicable legal and securities
exchange requirements. (Section 3.02).
Unless we default in payment of the redemption price, from and after the
date of redemption, the senior notes or portions thereof called for redemption
will cease to bear interest, and the holders of the senior notes will have no
right in respect of the senior notes except the right to receive the redemption
price. (Section 3.04).
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DEFEASANCE AND COVENANT DEFEASANCE
The indenture provides that we and Alliant Energy Corporation may elect:
- to be discharged from any and all of our respective obligations in
respect of the senior notes ("defeasance"), except in each case for the
obligations to register the transfer or exchange of the senior notes,
replace stolen, lost or mutilated senior notes, maintain paying agencies
and hold moneys for payments in trust; or
- not to comply with certain covenants ("covenant defeasance") of the
indenture with respect to the senior notes described above under
"-- Restrictive Covenants"
if we and Alliant Energy Corporation irrevocably deposit with the trustee cash
or U.S. government securities or a combination of cash or U.S. government
securities, in an amount sufficient, together with interest paid on the U.S.
government securities, to pay, when due, the principal of, premium, if any, and
interest on the outstanding senior notes to maturity or redemption. (Sections
8.02 and 8.03). We and Alliant Energy Corporation must satisfy certain other
conditions before we may effect defeasance or covenant defeasance. These
conditions include:
- that no event of default or event, which with notice or lapse of time
would become an event of default with respect to the senior notes, will
have occurred and be continuing on the date of the deposit or insofar as
an event of default described in clause (e) of the first paragraph under
"-- Events of Default" is concerned, at any time during the period ending
on the 181st day of the deposit; and
- that the defeasance or covenant defeasance will not result in the breach
or violation of, or constitute a default under, the indenture or any
other material agreement or instrument under which we are bound or under
which Alliant Energy Corporation is bound. (Section 8.04).
To exercise any such option, we or Alliant Energy Corporation, as
applicable, will be required to deliver to the trustee:
- an opinion of counsel of to the effect that the holders of the senior
notes will not recognize income, gain or loss for U.S. federal income tax
purposes as a result of such deposit, and will be subject to U.S. federal
income tax on the same amounts, in the same manner and at the same times
as would have been the case absent the deposit, which in the case of
defeasance must be based on a change in law or a published ruling by the
U.S. Internal Revenue Service, and the deposit will not result in us or
Alliant Energy Corporation being deemed an "investment company" required
to be registered under the Investment Company Act of 1940; and
- an officer's certificate as to compliance with all conditions precedent
provided for in the indenture relating to the satisfaction and discharge
of the senior notes. (Section 8.04).
If we or Alliant Energy Corporation wish to deposit or cause to be
deposited money or U.S. government securities to pay or discharge the principal
of, premium, if any, and interest on the outstanding senior notes to and
including a redemption date on which all of the outstanding senior notes are to
be redeemed, the redemption date will be irrevocably designated by a resolution
of our Board of Directors or a resolution of the Board of Directors of Alliant
Energy Corporation delivered to the trustee on or prior to the date of deposit
of such money or U.S. government securities, and such Board resolution will be
accompanied by an irrevocable notice of the defeasance to the trustee. (Section
8.04).
If the trustee is unable to apply any money or U.S. government securities
deposited in trust to effect a defeasance or covenant defeasance by reason of
any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, then any obligations from
which we or Alliant Energy Corporation had been discharged or released will be
revived and reinstated as though no such deposit of moneys in trust had
occurred, until the time that the trustee is permitted so to apply all of the
money or U.S. government securities deposited in trust. (Section 8.06).
GOVERNING LAW
The indenture and the senior notes will be governed by, and construed in
accordance with, the laws of the State of Wisconsin. (Section 10.09).
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UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
THIS SUMMARY IS OF A GENERAL NATURE AND IS INCLUDED HEREIN SOLELY FOR
INFORMATIONAL PURPOSES. IT IS NOT INTENDED TO BE, NOR SHOULD IT BE CONSTRUED AS
BEING, LEGAL OR TAX ADVICE. NO REPRESENTATION WITH RESPECT TO THE CONSEQUENCES
TO ANY PARTICULAR PURCHASER OF THE SENIOR NOTES IS MADE. PROSPECTIVE PURCHASERS
SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THEIR PARTICULAR
CIRCUMSTANCES.
The following is a summary of certain material United States federal income
tax consequences of the exchange offer to holders of the old senior notes. The
discussion does not consider the aspects of the ownership and disposition of the
old senior notes or the new senior notes. A discussion of the U.S. federal
income tax consequences of holding and disposing of the senior notes is
contained in the offering memorandum with respect to the old senior notes.
The following summary deals only with senior notes held as capital assets
by purchasers at the issue price who are United States holders and not with
special classes of holders, such as dealers in securities or currencies,
financial institutions, partnerships or other entities treated as partnerships
for United States federal income tax purposes, life insurance companies,
tax-exempt entities, persons holding senior notes as part of a hedge,
conversion, constructive sale transaction, straddle or other risk reduction
strategy, and persons whose functional currency is not the U.S. dollar. Persons
considering the purchase of senior notes should consult their own tax advisors
concerning these matters and as to the tax treatment under foreign, state and
local tax laws and regulations. We cannot provide any assurance that the
Internal Revenue Service will not challenge the conclusions stated below. We
have not sought and will not seek a ruling from the IRS on any of the matters
discussed below.
This summary is based upon the Internal Revenue Code of 1986, Treasury
Regulations, IRS rulings and pronouncements and judicial decisions now in
effect, all of which are subject to change at any time. Changes in this area of
law may be applied retroactively in a manner that could cause the income tax
consequences to vary substantially from the consequences described below,
possibly adversely affecting a United States Holder. The authorities on which
this discussion is based are subject to various interpretations, and it is
therefore possible that the federal income tax treatment of the purchase,
ownership and disposition of the senior notes may differ from the treatment
described below.
The exchange of old senior notes for the new senior notes under the terms
of the exchange offer should not constitute a taxable exchange. As a result:
- A holder should not recognize taxable gain or loss as a result of
exchanging old senior notes for the new senior notes under the terms of
the exchange offer;
- The holder's holding period of the new senior notes should include the
holding period of the old senior notes exchanged for the new senior
notes; and
- A holder's adjusted tax basis in the new senior notes should be the same
as the adjusted tax basis, immediately before the exchange, of the old
senior notes exchanged for the new senior notes.
PLAN OF DISTRIBUTION
If you are a broker-dealer and hold old senior notes for your own account
as a result of market-making activities or other trading activities and you
receive new senior notes in exchange for old senior notes in the exchange offer,
then you may be a statutory underwriter and must acknowledge that you will
deliver a prospectus in connection with any resale of these new senior notes.
This prospectus, as it may be amended or supplemented from time to time, may be
used by a broker-dealer in connection with resales of new senior notes received
in exchange for old senior notes where such old senior notes were acquired as a
result of market-making activities or other trading activities. Unless you are a
broker-dealer, you must acknowledge that you are not engaged in, do not intend
to engage in, and have no arrangement or understanding with any person to
participate in a distribution of new senior notes. We have agreed that we will
make this prospectus, as amended or supplemented, available to any broker-dealer
for use in connection with any such resale.
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We will not receive any proceeds in connection with the exchange offer or
any sale of new senior notes by broker-dealers. New senior notes received by
broker-dealers for their own account pursuant to the exchange offer may be sold
from time to time in one or more transactions in the over-the-counter market, in
negotiated transactions, through the writing of options on the new senior notes
or a combination of these methods of resale, at market prices prevailing at the
time of resale, at prices related to such prevailing market prices or negotiated
prices. Any resale may be made directly to purchasers or to or through brokers
or dealers who may receive compensation in the form of commissions or
concessions from any such broker-dealers or the purchasers of any such new
senior notes. Any broker-dealer that resells new senior notes that were received
by it for its own account pursuant to the exchange offer and any broker-dealer
that participates in a distribution of such new senior notes may be deemed to be
an "underwriter" within the meaning of the Securities Act and any profit on any
such resale of new senior notes and any commissions or concessions received by
any such persons may be deemed to be underwriting compensation under the
Securities Act. The letter of transmittal states that by acknowledging that it
will deliver, and by delivering, a prospectus, a broker-dealer will not be
deemed to admit that it is an "underwriter" within the meaning of the Securities
Act. See "The Exchange Offer -- Resales of the New Senior Notes."
LEGAL MATTERS
The validity of the new senior notes and guarantees will be passed upon by
Foley & Lardner.
EXPERTS
The consolidated financial statements and the related financial statement
schedule of Alliant Energy Corporation incorporated in this registration
statement by reference from Alliant Energy Corporation's Annual Report on Form
10-K for the year ended December 31, 2002 have been audited by Deloitte & Touche
LLP, independent auditors, as stated in their report, which is incorporated by
reference (which report expresses an unqualified opinion and includes an
explanatory paragraph relating to the adoption of a new accounting principle),
and have been so incorporated in reliance upon the report of such firm given
upon their authority as experts in accounting and auditing.
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$300,000,000
[ALLIANT ENERGY LOGO]
ALLIANT ENERGY RESOURCES, INC.
9.75% SENIOR NOTES DUE 2013
UNCONDITIONALLY GUARANTEED BY
ALLIANT ENERGY CORPORATION
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PROSPECTUS
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MAY 1, 2003
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