Alliant Energy Announces Third Quarter 2020 Results and Increased Annual Common Stock Dividend Target for 2021
Alliant Energy Corporation (NASDAQ: LNT) updated its earnings guidance, raising the 2020 EPS target to $2.40-$2.46. In Q3 2020, GAAP EPS was $0.98, slightly up from $0.94 in Q3 2019, driven by a higher revenue base despite negative impacts from the Derecho storm and increased depreciation. The company announced a 6% dividend increase, bringing the annual target to $1.61 per share for 2021. Key developments included a wind expansion of 1,150 megawatts and plans for additional solar generation.
- Raised 2020 EPS guidance to $2.40-$2.46.
- Q3 2020 GAAP EPS increased to $0.98.
- 6% annual dividend increase to $1.61 for 2021.
- Completion of 1,150 megawatts wind expansion.
- Q3 2020 GAAP EPS $0.03 lower than Q3 2019.
- Higher depreciation expense impacted earnings.
- Lower sales due to the Derecho storm in Iowa.
Updates 2020 earnings guidance and provides 2021 earnings guidance and forecasted 2020 - 2024 capital expenditures
MADISON, Wis., Nov. 02, 2020 (GLOBE NEWSWIRE) -- Alliant Energy Corporation (NASDAQ: LNT) today announced U.S. generally accepted accounting principles (GAAP) and non-GAAP consolidated unaudited earnings per share (EPS) for the three months ended September 30 as follows:
| GAAP EPS | Non-GAAP EPS | ||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||
| Utilities and Corporate Services | $0.89 | $0.89 | |||||||||||||
| American Transmission Company (ATC) Holdings | 0.03 | 0.03 | 0.03 | 0.03 | |||||||||||
| Non-utility and Parent | 0.06 | (0.01 | ) | 0.02 | (0.01 | ) | |||||||||
| Alliant Energy Consolidated | $0.98 | $0.94 | |||||||||||||
“As we continue to achieve major milestones on our purpose-driven plan -- such as completing our 1,150 megawatts wind expansion -- we have kept focus on our customers and Powering What’s Next. We recently released our Iowa Clean Energy Blueprint, which includes the addition of up to 400 megawatts of new solar generation,” said John Larsen, Alliant Energy Chairman, President and CEO. “We narrowed and raised our 2020 earnings guidance to a range of
Utilities and Corporate Services - Alliant Energy’s Utilities and Alliant Energy Corporate Services, Inc. (Corporate Services) operations generated
Non-utility and Parent - Alliant Energy’s Non-utility and Parent operations generated
Earnings Adjustments - Non-GAAP EPS for the three months ended September 30, 2020 excludes
Temperature Impacts to Non-GAAP EPS - The estimated year-to-date impact of temperatures on EPS compared to normal temperatures, is a
Details regarding GAAP EPS variances between the third quarters of 2020 and 2019 for Alliant Energy are as follows:
| Variance | |||
| Timing of income taxes | |||
| Higher revenue requirements primarily due to increasing rate base | 0.07 | ||
| Higher depreciation expense | (0.04 | ) | |
| Equity dilution | (0.04 | ) | |
| Credit loss adjustment on guarantee for affiliate of Whiting Petroleum | 0.04 | ||
| Other (includes lower sales due to the Derecho and COVID-19) | (0.08 | ) | |
| Total | $0.04 | ||
Higher revenue requirements primarily due to increasing rate base - In March 2019, Interstate Power and Light Company (IPL) filed a request with the Iowa Utilities Board (IUB) to increase annual rates for its Iowa retail electric and gas customers, based on a 2020 forward-looking test period. An interim retail electric rate increase was implemented effective April 2019. The IUB approved a settlement agreement to increase retail gas rates, which was implemented on January 10, 2020. The IUB approved a settlement agreement to increase retail electric rates, which was implemented on February 26, 2020. IPL recognized
In December 2018, Wisconsin Power and Light Company (WPL) received an order from the Public Service Commission of Wisconsin approving WPL’s proposed settlement for its retail electric and gas rate review covering the 2019/2020 Test Period. Under the settlement, WPL’s retail electric and gas base rates will not change from 2018 levels through the end of 2020. The retail electric revenue requirement increase, resulting from increasing investments in rate base, was offset by the federal Tax Cuts and Jobs Act of 2017 benefits and lower fuel-related costs. WPL recognized
Timing of income taxes - Tax expenses are recorded based on an estimated annual effective tax rate, which causes fluctuations in the amount of tax expense quarter-over-quarter. The timing variance will be reversed by the end of the year.
Credit loss adjustment on guarantee for affiliate of Whiting Petroleum - A wholly-owned subsidiary of Alliant Energy continues to guarantee the partnership obligations of an affiliate of Whiting Petroleum under multiple general partnership agreements it maintains within the oil industry. The partnership obligations include costs associated with the future abandonment of certain facilities owned by the partnerships. Whiting Petroleum completed its bankruptcy proceedings in the third quarter of 2020. Alliant Energy estimates a decrease in the current expected credit loss related to the guarantees and has recognized
2020 Earnings Guidance
Alliant Energy is updating its EPS guidance for 2020 as follows. The midpoint of the 2020 EPS guidance was increased by
| Revised | Previous | ||
| Alliant Energy Consolidated |
Drivers for Alliant Energy’s 2020 earnings guidance include, but are not limited to:
- Ability of IPL and WPL to earn their authorized rates of return
- Normal temperatures in its utility service territories
- Continued improvement through the remainder of 2020 of COVID-19 and Derecho related sales impacts
- Execution of cost controls
- Execution of capital expenditure and financing plans
- Consolidated effective tax rate of (
9% )
The 2020 earnings guidance does not include the impacts of any material non-cash valuation adjustments, regulatory-related charges or credits, reorganizations or restructurings, future changes in laws, regulations or regulatory policies, adjustments made to deferred tax assets and liabilities from valuation allowances, changes in credit loss liabilities related to guarantees, 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.
2021 Earnings Guidance
Alliant Energy is issuing EPS guidance for 2021 of
- Ability of IPL and WPL to earn their authorized rates of return
- Stable economy and COVID-19 impacts and resulting implications on utility sales
- Normal temperatures in its utility service territories
- Execution of cost controls
- Execution of capital expenditure and financing plans
- Consolidated effective tax rate of (
14% )
The 2021 earnings guidance does not include the impacts of any material non-cash valuation adjustments, regulatory-related charges or credits, reorganizations or restructurings, future changes in laws, regulations or regulatory policies, adjustments made to deferred tax assets and liabilities from valuation allowances, changes in credit loss liabilities related to guarantees, 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.
“With our historic wind expansion of 2019 and 2020 complete, our customers and communities are experiencing the benefits of reliable, low cost, cleaner energy. Our 10-year track record of 5 to
2021 Annual Common Stock Dividend Target
Alliant Energy’s Board of Directors approved a
Projected Capital Expenditures
Alliant Energy has updated its projected net capital expenditures for 2020 through 2024, which total
| 2020 | 2021 | 2022 | 2023 | 2024 | |||||||||||||||
| Generation: | |||||||||||||||||||
| Renewable projects | |||||||||||||||||||
| Other | 150 | 90 | 180 | 175 | 90 | ||||||||||||||
| Distribution: | |||||||||||||||||||
| Electric systems | 675 | 470 | 435 | 535 | 695 | ||||||||||||||
| Gas systems | 170 | 70 | 75 | 70 | 70 | ||||||||||||||
| Other | 120 | 180 | 185 | 190 | 195 | ||||||||||||||
| Gross Capital Expenditures | |||||||||||||||||||
| Solar Project Tax Equity | — | — | (210 | ) | (480 | ) | — | ||||||||||||
| Net Capital Expenditures | |||||||||||||||||||
Earnings Conference Call
A conference call to review the third quarter 2020 results is scheduled for Tuesday, November 3rd at 9:00 a.m. central time. Alliant Energy Chairman, President and Chief Executive Officer John Larsen, and Executive Vice President and Chief Financial Officer 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 November 10, 2020, 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 970,000 electric and 420,000 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 Nasdaq Global Select Market 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, the recovery of and/or the return on costs, including fuel costs, operating costs, transmission costs, deferred expenditures, deferred tax assets, tax expense, capital expenditures, and remaining costs related to electric generating units (EGUs) that may be permanently closed and certain other retired assets, decreases in sales volumes, 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 legislation, and regulatory agency orders;
- the direct or indirect effects resulting from the COVID-19 pandemic on sales volumes, margins, operations, employees, contractors, vendors, the ability to complete construction projects, supply chains, customers’ inability to pay bills, suspension of disconnects and waiving of late fees applied to past due accounts, the market value of the assets that fund pension plans and the potential for additional funding requirements, the ability of counterparties to meet their obligations, compliance with regulatory requirements, the ability to implement regulatory plans, economic conditions and access to capital markets;
- 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;
- any material post-closing payments related to any past asset divestitures, including the sale of Whiting Petroleum Corporation (Whiting Petroleum), which could result from, among other things, indemnification agreements, warranties, guarantees or litigation;
- 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 all environmental and emissions permits, the Coal Combustion Residuals Rule, future changes in environmental laws and regulations, including federal, state or local regulations for carbon dioxide emissions reductions from new and existing fossil-fueled EGUs, and litigation associated with environmental requirements;
- increased pressure from customers, investors and other stakeholders to more rapidly reduce carbon dioxide emissions;
- the ability to defend against environmental claims brought by state and federal agencies, such as the U.S. Environmental Protection Agency, 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 ability to complete construction of solar projects within the cost caps set by regulators and to meet all requirements to qualify for the full level of renewable tax credits;
- 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;
- 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, including regulations promulgated by the Pipeline and Hazardous Materials Safety Administration;
- 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 excessive heat, storms or natural disasters may have on Alliant Energy’s, IPL’s and WPL’s operations and recovery of costs associated with restoration activities, including those related to the August 2020 derecho storm, or on the operations of Alliant Energy’s investments;
- Alliant Energy’s ability to sustain its dividend payout ratio goal;
- changes to costs of providing benefits and related funding requirements of pension and other postretirement benefits plans due to the market value of the assets that fund the plans, economic conditions, financial market performance, interest rates, timing and form of benefits payments, 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 from valuations and 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 changes in tax rates, including adjustments made to deferred tax assets and liabilities;
- 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
- other factors listed in the “2020 Earnings Guidance” and “2021 Earnings Guidance” sections 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 and Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission (“SEC”), including the sections therein titled “Risk Factors,” and its other filings with the SEC.
Without limitation, the expectations with respect to 2020 and 2021 earnings guidance, 2021 annual common stock dividend target and 2020-2024 capital expenditures 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 regarding Alliant Energy’s financial results, this press release includes reference to certain non-GAAP financial measures. These measures include income and EPS for the three and nine months ended September 30, 2020 excluding a credit loss adjustment on guarantees for an affiliate of Whiting Petroleum. Alliant Energy believes this non-GAAP financial measure is useful to investors because it provides an alternate measure to better understand and compare across periods the operating performance of Alliant Energy without the distortion of items that management believes are not normally associated with ongoing operations, and also provides 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. Alliant Energy’s management also uses income, as adjusted, to determine performance-based compensation.
In addition, Alliant Energy included in this press release IPL; WPL; Corporate Services; Utilities and Corporate Services; ATC Holdings; and Non-utility and Parent EPS for the three and nine months ended September 30, 2020 and 2019. 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 will be reported and reconciled to the most directly comparable GAAP measure, operating income, in our third quarter 2020 Form 10-Q.
The tax impact adjustment represents the impact of the tax effect of the pre-tax non-GAAP adjustment excluded from non-GAAP net income. The tax impact of the non-GAAP adjustment is calculated based on the estimated consolidated statutory tax rate.
This press release also includes temperature-normalized non-GAAP EPS guidance for the year ended December 31, 2020. Alliant Energy believes this non-GAAP guidance measure is useful to investors because the measure facilitates period-to-period comparison of Alliant Energy’s operating performance and provides investors with information on a basis consistent with measures that management uses to assess Alliant Energy’s earnings growth rate.
Reconciliations of the non-GAAP financial measures included in this press release to the most directly comparable GAAP financial measures are included in the earnings summaries that follow, and in the case of temperature normalized non-GAAP EPS guidance, in the press release above.
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 months ended September 30:
| EPS: | Three Months | ||||||||||||||||||||||
| GAAP EPS | Adjustments | Non-GAAP EPS | |||||||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||
| IPL | $0.59 | $— | $— | $0.59 | |||||||||||||||||||
| WPL | 0.29 | 0.31 | — | — | 0.29 | 0.31 | |||||||||||||||||
| Corporate Services | 0.01 | 0.02 | — | — | 0.01 | 0.02 | |||||||||||||||||
| Subtotal for Utilities and Corporate Services | 0.89 | 0.92 | — | — | 0.89 | 0.92 | |||||||||||||||||
| ATC Holdings | 0.03 | 0.03 | — | — | 0.03 | 0.03 | |||||||||||||||||
| Non-utility and Parent | 0.06 | (0.01 | ) | (0.04 | ) | — | 0.02 | (0.01 | ) | ||||||||||||||
| Alliant Energy Consolidated | $0.98 | ($0.04 | ) | $— | $0.94 |
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FAQ
What is Alliant Energy's updated EPS guidance for 2020?
Alliant Energy raised its 2020 EPS guidance to a range of $2.40 to $2.46.
What was the GAAP EPS for Alliant Energy in Q3 2020?
In Q3 2020, Alliant Energy reported a GAAP EPS of $0.98.
What is the new dividend target for Alliant Energy in 2021?
The Board approved a 6% increase in the annual common stock dividend target to $1.61 per share for 2021.
How has the Derecho storm impacted Alliant Energy's earnings?
The Derecho storm in Iowa contributed to lower sales, negatively impacting Alliant Energy's earnings.
What is the significance of Alliant Energy's wind expansion?
Alliant Energy completed a 1,150 megawatts wind expansion, a major milestone in their clean energy strategy.
Alliant Energy Corporation
NASDAQ:LNTLNT RankingsLNT Latest NewsLNT Stock Data
16.30B
256.01M
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81.23%
2.88%
Utilities - Regulated Electric
Electric & Other Services Combined
United States of America
MADISON
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