Alliant Energy Announces Second Quarter 2018 Results
MADISON, Wis., Aug. 2, 2018 /PRNewswire/ -- Alliant Energy Corporation (NYSE: LNT) today announced U.S. generally accepted accounting principles (GAAP) consolidated unaudited earnings per share (EPS) from continuing operations for the three months ended June 30 as follows:
2018 2017
---- ----
Utilities and Corporate Services $0.41 $0.37
American Transmission Company
(ATC) Holdings 0.03 0.03
Non-utility and Parent (0.01) 0.01
----- ----
Alliant Energy Consolidated $0.43 $0.41
===== =====
"The second quarter results reflect higher than expected earnings due to warmer temperatures," said Patricia Kampling, Alliant Energy Chairman and CEO. "With the solid earnings to date, we are reaffirming 2018 earnings per share guidance."
Utilities and Corporate Services - Alliant Energy's Utilities and Alliant Energy Corporate Services, Inc. (Corporate Services) operations generated $0.41 per share of GAAP EPS from continuing operations in the second quarter of 2018, which was $0.04 per share higher than the second quarter of 2017. The primary drivers of higher EPS were higher retail electric sales due to warmer temperatures in the second quarter of 2018 compared to the same period last year, and higher margins due to Interstate Power and Light Company's (IPL's) and Wisconsin Power and Light Company's (WPL's) increasing rate base. These items were partially offset by higher depreciation expense and the timing of operation and maintenance expenses.
Non-utility and Parent - Alliant Energy's Non-utility and Parent operations generated ($0.01) per share of GAAP EPS from continuing operations in the second quarter of 2018, which was a decline of $0.02 per share compared to the second quarter of 2017. The primary driver of lower EPS is the timing of income tax expense.
Details regarding GAAP EPS from continuing operations variances between the second quarters of 2018 and 2017 for Alliant Energy are as follows:
Q2 2018 Q2 2017 Variance
------- ------- --------
Utilities and Corporate Services:
Estimated temperature impact on retail
electric and gas sales $0.06 $- $0.06
Higher margins primarily from earning on
increasing rate base 0.04
Higher depreciation expense (0.04)
Higher operation and maintenance expenses
(largely due to the timing of generation
expenses) (0.04)
Other 0.02
Total Utilities and Corporate Services $0.04
=====
Non-utility and Parent:
Other (primarily due to the timing of
income tax expense) ($0.02)
Total Non-utility and Parent ($0.02)
======
Estimated temperature impact on retail electric and gas sales - The impact of colder than normal temperatures in the first half, and warmer than normal temperatures in the second half, of the second quarter of 2018 was estimated to be a $0.06 per share increase in margins. By comparison, temperatures were considered normal in the second quarter of 2017, resulting in no impact to margins.
WPL's retail electric and gas rate settlement covering 2018 includes an earnings sharing mechanism whereby WPL must defer a portion of its earnings and return this amount to its retail electric and gas customers if its annual regulatory return on common equity exceeds 10.25% during 2018. As a result, a majority of the higher margins recognized at WPL as a result of the temperature impact on retail electric and gas sales in the first half of 2018 is currently expected to be given back to customers in the future. Year-to-date Alliant Energy's estimated temperature impact on retail electric and gas sales, net of the WPL earnings sharing mechanism, is estimated to be a $0.05 per share increase in margins.
Higher margins primarily from earning on increasing rate base - In April 2017, IPL filed a request with the IUB to increase annual rates for its Iowa retail electric customers. The request was based on a 2016 historical Test Year as adjusted for certain known and measurable changes occurring up to 12 months after the commencement of the proceeding. An interim retail electric rate increase of $102 million, on an annual basis, was implemented effective April 13, 2017. In February 2018, the IUB issued an order approving IPL's settlement reached in September 2017, for an annual electric base rate increase of $130 million, or approximately 9%. Final rates were effective May 1, 2018. IPL recognized $0.02 per share of higher electric margins in the second quarter of 2018 due to the interim and final retail electric rate increases.
In December 2016, WPL received an order from the Public Service Commission of Wisconsin authorizing WPL to implement a retail electric rate increase effective January 1, 2017 followed by a freeze of such rates through the end of 2018. To reflect the higher margins in 2018, primarily from earning on increasing rate base, the order lowered the amortization of amounts that WPL previously over-recovered from its customers for electric transmission cost recovery beginning in January 2018. WPL recognized $0.02 per share of higher electric margins in the second quarter of 2018 due to lower transmission cost recovery amortization.
2018 Earnings Guidance
Alliant Energy is reaffirming its EPS guidance for 2018
as follows:
Utilities and Corporate Services $1.92 - $2.02
ATC Holdings 0.12 - 0.14
Non-utility and Parent 0.00 - 0.02
Alliant Energy Consolidated $2.04 - $2.18
Drivers for Alliant Energy's 2018 earnings guidance include, but are not limited to:
-- Ability of IPL and WPL to earn their authorized rates of return
-- Stable economy and resulting implications on utility sales
-- Normal temperatures for the remainder of the year in its utility service
territories
-- Cost controls
-- Execution of IPL's and WPL's capital expenditure and financing plans
-- Consolidated effective tax rate of 12%
The 2018 earnings guidance does not include the impacts of any material non-cash valuation adjustments, regulatory-related charges or credits, reorganizations or restructurings, further impacts from anticipated changes to ATC LLC's authorized return on equity, future changes in laws, regulations or regulatory policies, adjustments made to deferred tax assets and liabilities from valuation allowances, pending lawsuits and disputes, federal and state income tax audits and other Internal Revenue Service proceedings, or changes in GAAP and tax methods of accounting that may impact the reported results of Alliant Energy.
Earnings Conference Call
A conference call to review the second quarter 2018 results is scheduled for Friday, August 3rd at 9:00 a.m. central time. Alliant Energy Chairman and Chief Executive Officer Patricia Kampling, President John Larsen, and Senior Vice President, Chief Financial Officer and Treasurer Robert Durian will host the call. The conference call is open to the public and can be accessed in two ways. Interested parties may listen to the call by dialing 888-394-8218 (United States or Canada) or 323-794-2149 (International), passcode 4175543. Interested parties may also listen to a webcast at www.alliantenergy.com/investors. In conjunction with the information in this earnings announcement and the conference call, Alliant Energy posted supplemental materials on its website. A replay of the call will be available through August 10, 2018, at 888-203-1112 (United States or Canada) or 719-457-0820 (International), passcode 4175543. An archive of the webcast will be available on the Company's Web site at www.alliantenergy.com/investors for 12 months.
About Alliant Energy Corporation
Alliant Energy is the parent company of two public utility companies - Interstate Power and Light Company and Wisconsin Power and Light Company - and of Alliant Energy Finance, LLC, the parent company of Alliant Energy's non-utility operations. Alliant Energy is an energy-services provider with utility subsidiaries serving approximately 960,000 electric and 410,000 natural gas customers. Providing its customers in the Midwest with regulated electricity and natural gas service is the Company's primary focus. Alliant Energy, headquartered in Madison, Wisconsin, is a component of the S&P 500 and is traded on the New York Stock Exchange under the symbol LNT. For more information, visit the Company's Web site at www.alliantenergy.com.
Forward-Looking Statements
This press release includes forward-looking statements. These forward-looking statements can be identified by words such as "forecast," "expect," "guidance," or other words of similar import. Similarly, statements that describe future financial performance or plans or strategies are forward-looking statements. Such forward looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, such statements. Actual results could be materially affected by the following factors, among others:
-- IPL's and WPL's ability to obtain adequate and timely rate relief to
allow for, among other things, earning a return on rate base additions
and the recovery of costs, including fuel costs, operating costs,
transmission costs, environmental compliance and remediation costs,
deferred expenditures, deferred tax assets, capital expenditures, and
remaining costs related to electric generating units (EGUs) that may be
permanently closed, earning their authorized rates of return, and the
payments to their parent of expected levels of dividends;
-- federal and state regulatory or governmental actions, including the
impact of energy, tax, financial and health care legislation, and
regulatory agency orders;
-- the impact of customer- and third party-owned generation, including
alternative electric suppliers, in IPL's and WPL's service territories
on system reliability, operating expenses and customers' demand for
electricity;
-- the impact of energy efficiency, franchise retention and customer
disconnects on sales volumes and margins;
-- the impact that price changes may have on IPL's and WPL's customers'
demand for electric, gas and steam services and their ability to pay
their bills;
-- the ability to utilize tax credits and net operating losses generated to
date, and those that may be generated in the future, before they expire;
-- the direct or indirect effects resulting from terrorist incidents,
including physical attacks and cyber attacks, or responses to such
incidents;
-- the impact of penalties or third-party claims related to, or in
connection with, a failure to maintain the security of personally
identifiable information, including associated costs to notify affected
persons and to mitigate their information security concerns;
-- employee workforce factors, including changes in key executives, ability
to hire and retain employees with specialized skills, ability to create
desired corporate culture, collective bargaining agreements and
negotiations, work stoppages or restructurings;
-- weather effects on results of utility operations;
-- issues associated with environmental remediation and environmental
compliance, including compliance with the Consent Decree between WPL,
the U.S. Environmental Protection Agency (EPA) and the Sierra Club, the
Consent Decree between IPL, the EPA, the Sierra Club, the State of Iowa
and Linn County in Iowa, the Coal Combustion Residuals Rule, the Clean
Power Plan, future changes in environmental laws and regulations,
including the EPA's regulations for carbon dioxide emissions reductions
from new and existing fossil-fueled EGUs, and litigation associated with
environmental requirements;
-- the ability to defend against environmental claims brought by state and
federal agencies, such as the EPA, state natural resources agencies or
third parties, such as the Sierra Club, and the impact on operating
expenses of defending and resolving such claims;
-- continued access to the capital markets on competitive terms and rates,
and the actions of credit rating agencies;
-- inflation and interest rates;
-- the impact of the economy in IPL's and WPL's service territories and the
resulting impacts on sales volumes, margins and the ability to collect
unpaid bills;
-- changes in the price of delivered natural gas, purchased electricity and
coal due to shifts in supply and demand caused by market conditions and
regulations;
-- disruptions in the supply and delivery of natural gas, purchased
electricity and coal;
-- changes in the price of transmission services and the ability to recover
the cost of transmission services in a timely manner;
-- developments that adversely impact the ability to implement the
strategic plan;
-- ability to obtain regulatory approval for wind projects with acceptable
conditions, to complete construction within the cost caps set by
regulators and to meet all requirements to qualify for the full level of
production tax credits;
-- the direct or indirect effects resulting from breakdown or failure of
equipment in the operation of electric and gas distribution systems,
such as mechanical problems and explosions or fires, and compliance with
electric and gas transmission and distribution safety regulations;
-- issues related to the availability and operations of EGUs, including
start-up risks, breakdown or failure of equipment, performance below
expected or contracted levels of output or efficiency, operator error,
employee safety, transmission constraints, compliance with mandatory
reliability standards and risks related to recovery of resulting
incremental costs through rates;
-- impacts that storms or natural disasters in IPL's and WPL's service
territories may have on their operations and recovery of costs
associated with restoration activities;
-- any material post-closing adjustments related to any past asset
divestitures, including the sales of IPL's Minnesota electric and
natural gas assets, and Whiting Petroleum Corporation, which could
result from, among other things, indemnification agreements, warranties,
parental guarantees or litigation;
-- Alliant Energy's ability to sustain its dividend payout ratio goal;
-- changes to costs of providing benefits and related funding requirements
of pension and OPEB plans due to the market value of the assets that
fund the plans, economic conditions, financial market performance,
interest rates, life expectancies and demographics;
-- material changes in employee-related benefit and compensation costs;
-- risks associated with operation and ownership of non-utility holdings;
-- changes in technology that alter the channels through which customers
buy or utilize Alliant Energy's, IPL's or WPL's products and services;
-- impacts on equity income from unconsolidated investments due to further
potential changes to ATC LLC's authorized return on equity;
-- impacts of IPL's future tax benefits from Iowa rate-making practices,
including deductions for repairs expenditures, allocation of mixed
service costs and state depreciation, and recoverability of the
associated regulatory assets from customers, when the differences
reverse in future periods;
-- the impacts of adjustments made to deferred tax assets and liabilities
from changes in the tax laws;
-- changes to the creditworthiness of counterparties with which Alliant
Energy, IPL and WPL have contractual arrangements, including
participants in the energy markets and fuel suppliers and transporters;
-- current or future litigation, regulatory investigations, proceedings or
inquiries;
-- reputational damage from negative publicity, protests, fines, penalties
and other negative consequences resulting in regulatory and/or legal
actions;
-- the effect of accounting standards issued periodically by
standard-setting bodies;
-- the ability to successfully complete tax audits and changes in tax
accounting methods with no material impact on earnings and cash flows;
and
-- factors listed in the "2018 Earnings Guidance" section of this press
release.
For more information about potential factors that could affect Alliant Energy's business and financial results, refer to Alliant Energy's most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC"), including the section therein titled "Risk Factors," and its other filings with the SEC.
Without limitation, the expectations with respect to 2018 earnings guidance in this press release are forward-looking statements and are based in part on certain assumptions made by Alliant Energy, some of which are referred to in the forward-looking statements. Alliant Energy cannot provide any assurance that the assumptions referred to in the forward-looking statements or otherwise are accurate or will prove to be correct. Any assumptions that are inaccurate or do not prove to be correct could have a material adverse effect on Alliant Energy's ability to achieve the estimates or other targets included in the forward-looking statements. The forward-looking statements included herein are made as of the date hereof and, except as required by law, Alliant Energy undertakes no obligation to update publicly such statements to reflect subsequent events or circumstances.
Use of Non-GAAP Financial Measures
To provide investors with additional information, Alliant Energy included in this press release IPL; WPL; Corporate Services; utilities and Corporate Services; ATC Holdings; and non-utility and parent EPS from continuing operations for the three and six months ended June 30, 2018 and 2017. Alliant Energy believes these non-GAAP financial measures are useful to investors because they facilitate an understanding of segment performance and trends and provide additional information about Alliant Energy's operations on a basis consistent with the measures that management uses to manage its operations and evaluate its performance.
This press release references year-over-year variances in utility electric margins and utility gas margins. Utility electric margins and utility gas margins are non-GAAP financial measures that are reported and reconciled to the most directly comparable GAAP measure, operating income, in our second quarter 2018 Form 10-Q.
Note: Unless otherwise noted, all "per share" references in this release refer to earnings per diluted share.
ALLIANT ENERGY CORPORATION
EARNINGS SUMMARY (Unaudited)
The following tables provide a summary of Alliant Energy's results for the three and six months ended June 30:
EPS: Three Months Six Months
---- ------------ ----------
EPS EPS
2018 2017 2018 2017
---- ---- ---- ----
IPL $0.22 $0.19 $0.42 $0.35
WPL 0.17 0.17 0.40 0.37
Corporate Services 0.02 0.01 0.04 0.02
---- ---- ---- ----
Subtotal for
Utilities and
Corporate
Services 0.41 0.37 0.86 0.74
ATC Holdings 0.03 0.03 0.06 0.06
Non-utility and
Parent (0.01) 0.01 0.04 0.05
----- ---- ---- ----
Alliant Energy
Consolidated $0.43 $0.41 $0.96 $0.85
===== ===== ===== =====
Earnings (in
millions): Three Months Six Months
------------ ------------ ----------
Income (Loss) Income (Loss)
2018 2017 2018 2017
---- ---- ---- ----
IPL $51.7 $42.8 $98.4 $80.0
WPL 39.8 38.1 93.8 83.6
Corporate Services 3.3 3.3 7.0 6.5
--- --- --- ---
Subtotal for
Utilities and
Corporate
Services 94.8 84.2 199.2 170.1
ATC Holdings 6.7 6.7 13.0 13.6
Non-utility and
Parent (1.1) 3.4 9.1 9.6
---- --- --- ---
Earnings from
continuing
operations 100.4 94.3 221.3 193.3
Income from
discontinued
operations - - - 1.4
Alliant Energy
Consolidated $100.4 $94.3 $221.3 $194.7
====== ===== ====== ======
ALLIANT ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
Three Months Ended June 30, Six Months Ended June 30,
2018 2017 2018 2017
---- ---- ---- ----
(in millions, except per share amounts)
Revenues:
Electric utility $726.3 $680.9 $1,435.0 $1,358.5
Gas utility 68.6 62.6 254.2 216.9
Other utility 10.7 11.5 23.9 23.2
Non-utility 10.5 10.3 19.3 20.6
---- ---- ---- ----
816.1 765.3 1,732.4 1,619.2
----- ----- ------- -------
Operating expenses:
Electric production fuel
and purchased power 208.5 184.3 411.7 392.1
Electric transmission
service 119.7 117.6 246.1 242.3
Cost of gas sold 27.5 28.3 138.7 120.5
Other operation and
maintenance:
Energy efficiency costs 15.7 17.2 38.8 37.5
Other 142.3 123.5 281.6 251.8
Depreciation and
amortization 127.0 115.0 247.4 222.0
Taxes other than income
taxes 24.2 25.7 51.2 52.1
---- ---- ---- ----
664.9 611.6 1,415.5 1,318.3
----- ----- ------- -------
Operating income 151.2 153.7 316.9 300.9
----- ----- ----- -----
Other (income) and
deductions:
Interest expense 61.3 52.8 120.5 105.1
Equity income from
unconsolidated
investments, net (10.5) (11.3) (31.8) (22.8)
Allowance for funds used
during construction (18.1) (10.1) (33.0) (27.1)
Other 2.0 4.3 4.4 8.5
--- --- --- ---
34.7 35.7 60.1 63.7
---- ---- ---- ----
Income from continuing
operations before income
taxes 116.5 118.0 256.8 237.2
Income taxes 13.6 21.2 30.4 38.8
---- ---- ---- ----
Income from continuing
operations, net of tax 102.9 96.8 226.4 198.4
Income from discontinued
operations, net of tax - - - 1.4
--- --- --- ---
Net income 102.9 96.8 226.4 199.8
Preferred dividend
requirements of IPL 2.5 2.5 5.1 5.1
--- --- --- ---
Net income attributable to
Alliant Energy common
shareowners $100.4 $94.3 $221.3 $194.7
====== ===== ====== ======
Weighted average number of
common shares outstanding
(basic and diluted) 232.0 229.0 231.7 228.3
===== ===== ===== =====
Earnings per weighted
average common share
attributable to Alliant
Energy common shareowners
(basic and diluted) $0.43 $0.41 $0.96 $0.85
===== ===== ===== =====
Amounts attributable to
Alliant Energy common
shareowners:
Income from continuing
operations, net of tax $100.4 $94.3 $221.3 $193.3
Income from discontinued
operations, net of tax - - - 1.4
--- --- --- ---
Net income $100.4 $94.3 $221.3 $194.7
====== ===== ====== ======
Dividends declared per
common share $0.335 $0.315 $0.67 $0.63
====== ====== ===== =====
ALLIANT ENERGY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
June 30, December 31,
2018 2017
---- ----
(in millions)
ASSETS:
Current assets:
Cash and cash
equivalents $5.0 $27.9
Other current
assets 800.9 877.2
Property, plant and
equipment, net 11,695.7 11,234.5
Investments 420.5 396.1
Other assets 1,692.9 1,652.1
------- -------
Total assets $14,615.0 $14,187.8
========= =========
LIABILITIES AND
EQUITY:
Current
liabilities:
Current maturities
of long-term debt $356.1 $855.7
Commercial paper 82.5 320.2
Other short-term
borrowings - 95.0
Other current
liabilities 818.8 878.1
Long-term debt,
net (excluding
current portion) 5,127.5 4,010.6
Other liabilities 3,679.4 3,646.0
Equity:
Alliant Energy
Corporation common
equity 4,350.7 4,182.2
Cumulative
preferred stock of
Interstate Power
and Light Company 200.0 200.0
----- -----
Total equity 4,550.7 4,382.2
------- -------
Total liabilities
and equity $14,615.0 $14,187.8
========= =========
ALLIANT ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Six Months Ended June 30,
2018 2017
---- ----
(in millions)
Cash flows from (used
for) operating
activities:
Cash flows from
operating activities
excluding accounts
receivable sold to a
third party $489.9 $460.9
Accounts receivable
sold to a third party (554.9) (333.4)
------ ------
Net cash flows from
(used for) operating
activities (65.0) 127.5
----- -----
Cash flows used for
investing activities:
Construction and
acquisition
expenditures:
Utility business (699.6) (565.6)
Other (33.7) (41.9)
Cash receipts on sold
receivables 571.9 374.5
Other (17.1) (18.9)
----- -----
Net cash flows used
for investing
activities (178.5) (251.9)
------ ------
Cash flows from
financing activities:
Common stock dividends (154.8) (143.1)
Proceeds from issuance
of common stock, net 100.1 137.3
Proceeds from issuance
of long-term debt 1,000.0 -
Payments to retire
long-term debt (503.0) (2.4)
Net change in
commercial paper and
other short-term
borrowings (207.7) 164.5
Other (13.0) (32.8)
----- -----
Net cash flows from
financing activities 221.6 123.5
----- -----
Net decrease in cash,
cash equivalents and
restricted cash (21.9) (0.9)
Cash, cash equivalents
and restricted cash
at beginning of
period 33.9 13.1
---- ----
Cash, cash equivalents
and restricted cash
at end of period $12.0 $12.2
===== =====
KEY FINANCIAL AND OPERATING STATISTICS
June 30, 2018 June 30, 2017
------------- -------------
Common shares outstanding
(000s) 233,773 231,062
Book value per share $18.61 $17.53
Quarterly common dividend
rate per share $0.335 $0.315
Three Months Ended June 30, Six Months Ended June 30,
2018 2017 2018 2017
---- ---- ---- ----
Utility electric sales (000s of megawatt-
hours)
Residential 1,697 1,537 3,577 3,301
Commercial 1,532 1,506 3,143 3,091
Industrial 2,712 2,626 5,341 5,257
Industrial - co-generation
customers 230 267 446 480
--- --- --- ---
Retail subtotal 6,171 5,936 12,507 12,129
Sales for resale:
Wholesale 642 906 1,429 1,909
Bulk power and other 1,119 217 1,453 265
Other 22 24 48 50
--- --- --- ---
Total 7,954 7,083 15,437 14,353
===== ===== ====== ======
Utility retail electric customers (at June
30)
Residential 813,932 810,419
Commercial 142,067 141,658
Industrial 2,607 2,563
Total 958,606 954,640
======= =======
Utility gas sold and transported (000s of
dekatherms)
Residential 4,100 3,300 18,046 15,044
Commercial 3,191 2,807 12,108 10,651
Industrial 672 560 1,657 1,532
--- --- ----- -----
Retail subtotal 7,963 6,667 31,811 27,227
Transportation / other 20,612 15,954 44,673 35,062
Total 28,575 22,621 76,484 62,289
====== ====== ====== ======
Utility retail gas customers (at June 30)
Residential 368,075 366,650
Commercial 44,411 44,465
Industrial 361 373
Total 412,847 411,488
======= =======
Estimated margin increases (decreases) from impacts of temperatures (in millions) -
Three Months Ended June 30, Six Months Ended June 30,
2018 2017 2018 2017
---- ---- ---- ----
Electric margins $20 $- $21 ($9)
Gas margins 1 - 2 (5)
--- --- --- ---
Total temperature impact on
margins $21 $- $23 ($14)
=== === === ====
Three Months Ended June 30, Six Months Ended June 30,
2018 2017 Normal 2018 2017 Normal
---- ---- ------ ---- ---- ------
Heating degree days
(HDDs) (a)
Cedar Rapids, Iowa
(IPL) 740 624 674 4,164 3,543 4,076
Madison, Wisconsin
(WPL) 937 757 813 4,523 3,887 4,308
Cooling degree days
(CDDs) (a)
Cedar Rapids, Iowa
(IPL) 417 244 228 417 244 230
Madison, Wisconsin
(WPL) 250 172 180 250 172 182
(a) HDDs and CDDs are calculated
using a simple average of the
high and low temperatures each
day compared to a 65 degree
base. Normal degree days are
calculated using a rolling
20-year average of historical
HDDs and CDDs.
View original content with multimedia:http://www.prnewswire.com/news-releases/alliant-energy-announces-second-quarter-2018-results-300691424.html
SOURCE Alliant Energy Corporation
