XNYS:LNT Alliant Energy Corp Quarterly Report 10-Q Filing - 6/30/2012

Effective Date 6/30/2012

XNYS:LNT (Alliant Energy Corp): Fair Value Estimate
Premium
XNYS:LNT (Alliant Energy Corp): Consider Buying
Premium
XNYS:LNT (Alliant Energy Corp): Consider Selling
Premium
XNYS:LNT (Alliant Energy Corp): Fair Value Uncertainty
Premium
XNYS:LNT (Alliant Energy Corp): Economic Moat
Premium
XNYS:LNT (Alliant Energy Corp): Stewardship
Premium
 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
 
 
 
 
FORM 10-Q
 
 
 
 
 
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2012
 
or
 
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                    to                    
 
Commission
File Number
  
Name of Registrant, State of Incorporation,
Address of Principal Executive Offices and Telephone Number
  
IRS Employer
Identification Number
1-9894
  
ALLIANT ENERGY CORPORATION
  
39-1380265
 
  
(a Wisconsin corporation)
  
 
 
  
4902 N. Biltmore Lane
  
 
 
  
Madison, Wisconsin 53718
  
 
 
  
Telephone (608) 458-3311
  
 
 
 
 
0-4117-1
  
INTERSTATE POWER AND LIGHT COMPANY
  
42-0331370
 
  
(an Iowa corporation)
  
 
 
  
Alliant Energy Tower
  
 
 
  
Cedar Rapids, Iowa 52401
  
 
 
  
Telephone (319) 786-4411
  
 
 
 
 
0-337
  
WISCONSIN POWER AND LIGHT COMPANY
  
39-0714890
 
  
(a Wisconsin corporation)
  
 
 
  
4902 N. Biltmore Lane
  
 
 
  
Madison, Wisconsin 53718
  
 
 
  
Telephone (608) 458-3311
  
 
This combined Form 10-Q is separately filed by Alliant Energy Corporation, Interstate Power and Light Company and Wisconsin Power and Light Company. Information contained in the Form 10-Q relating to Interstate Power and Light Company and Wisconsin Power and Light Company is filed by such registrant on its own behalf. Each of Interstate Power and Light Company and Wisconsin Power and Light Company makes no representation as to information relating to registrants other than itself.
Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days.    Yes x  No  ¨
Indicate by check mark whether the registrants have submitted electronically and posted on their corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrants were required to submit and post such files).    Yes  x    No  ¨
Indicate by check mark whether the registrants are large accelerated filers, accelerated filers, non-accelerated filers, or smaller reporting companies. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
 
Large Accelerated Filer
  
Accelerated Filer
  
Non-accelerated Filer
  
Smaller Reporting Company Filer
Alliant Energy Corporation
x
  
 
  
 
  
 
Interstate Power and Light Company
 
  
 
  
x
  
 
Wisconsin Power and Light Company
 
  
 
  
x
  
 
Indicate by check mark whether the registrants are shell companies (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x
Number of shares outstanding of each class of common stock as of June 30, 2012:
Alliant Energy Corporation
Common stock, $0.01 par value, 110,976,142 shares outstanding
 
 
Interstate Power and Light Company
Common stock, $2.50 par value, 13,370,788 shares outstanding (all of which are owned beneficially and of record by Alliant Energy Corporation)
 
 
Wisconsin Power and Light Company
Common stock, $5 par value, 13,236,601 shares outstanding (all of which are owned beneficially and of record by Alliant Energy Corporation)




TABLE OF CONTENTS
 
Page
Alliant Energy Corporation:
 
Interstate Power and Light Company:
 
Wisconsin Power and Light Company:
 






FORWARD-LOOKING STATEMENTS

Statements contained in this report that are not of historical fact are forward-looking statements intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified as such because the statements include words such as “expect,” “anticipate,” “plan” 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. Some, but not all, of the risks and uncertainties of Alliant Energy Corporation (Alliant Energy), Interstate Power and Light Company (IPL) and Wisconsin Power and Light Company (WPL) that could materially affect actual results include:

federal and state regulatory or governmental actions, including the impact of energy, tax, financial and health care legislation, and of regulatory agency orders;
IPL’s and WPL’s ability to obtain adequate and timely rate relief to allow for, among other things, the recovery of operating costs, fuel costs, transmission costs, deferred expenditures, capital expenditures, and remaining costs related to generating units that may be permanently closed, earning their authorized rates of return, and the payments to their parent of expected levels of dividends;
weather effects on results of utility operations including impacts of temperature changes and drought conditions in IPL’s and WPL’s service territories on customers’ demand for electricity and gas;
the ability to continue cost controls and operational efficiencies;
the impact of IPL’s retail electric base rate freeze in Iowa through 2013;
the impact of WPL’s retail electric and gas rate freeze in Wisconsin through 2014;
the state of the economy in IPL’s and WPL’s service territories and resulting implications on sales, margins and ability to collect unpaid bills;
developments that adversely impact Alliant Energy’s, IPL’s and WPL’s ability to implement their strategic plans, including unanticipated issues with new emission control equipment for various coal-fired generating facilities of IPL and WPL, WPL’s purchase of the Riverside Energy Center (Riverside), IPL’s construction of a new natural gas-fired electric generating facility in Iowa, IPL’s new purchased power agreement (PPA) with NextEra Energy Resources, LLC (NER), Alliant Energy Resources, LLC’s (Resources’) construction of and selling price of the electricity output from its new 100 megawatt (MW) Franklin County wind project, and the potential decommissioning of certain generating facilities of IPL and WPL;
issues related to the availability of generating facilities and the supply and delivery of fuel and purchased electricity and the price thereof, including the ability to recover and to retain the recovery of purchased power, fuel and fuel-related costs through rates in a timely manner;
the impact that fuel and fuel-related prices may have on IPL’s and WPL’s customers’ demand for utility services;
the ability to defend against environmental claims brought by state and federal agencies, such as the United States of America (U.S.) Environmental Protection Agency (EPA), or third parties, such as the Sierra Club;
issues associated with environmental remediation efforts and with environmental compliance generally, including changing environmental laws and regulations and litigations associated with changing environmental laws and regulations;
the ability to recover through rates all environmental compliance and remediation costs, including costs for projects put on hold due to uncertainty of future environmental laws and regulations;
impacts of future tax benefits from deductions for repairs expenditures and mixed service costs and temporary differences from historical tax benefits from such deductions that are reversing into income tax expense in future periods;
the impact of changes to governmental incentive elections for wind projects;

1


the ability to find a purchaser for RMT, Inc. (RMT), to successfully negotiate a purchase agreement and to close the sale of RMT;
continued access to the capital markets on competitive terms and rates, and the actions of credit rating agencies;
inflation and interest rates;
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;
issues related to electric transmission, including operating in Regional Transmission Organization (RTO) energy and ancillary services markets, the impacts of potential future billing adjustments and cost allocation changes from RTOs and recovery of costs incurred;
unplanned outages, transmission constraints or operational issues impacting fossil or renewable generating facilities and risks related to recovery of resulting incremental costs through rates;
Alliant Energy’s ability to successfully pursue appropriate appeals with respect to, and any liabilities arising out of, the alleged violation of the Employee Retirement Income Security Act of 1974 (ERISA) by Alliant Energy’s Cash Balance Pension Plan (Cash Balance Plan);
current or future litigation, regulatory investigations, proceedings or inquiries;
Alliant Energy’s ability to sustain its dividend payout ratio goal;
employee workforce factors, including changes in key executives, collective bargaining agreements and negotiations, work stoppages or additional restructurings;
impacts that storms or natural disasters in IPL’s and WPL’s service territories may have on their operations and recovery of, and rate relief for, costs associated with restoration activities;
access to technological developments;
any material post-closing adjustments related to any past asset divestitures;
material changes in retirement and benefit plan costs;
the impact of incentive compensation plans accruals;
the effect of accounting pronouncements issued periodically by standard-setting bodies;
the impact of adjustments made to deferred tax assets and liabilities from state apportionment assumptions;
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 ability to successfully complete tax audits and appeals with no material impact on earnings and cash flows;
the direct or indirect effects resulting from terrorist incidents, including cyber terrorism, or responses to such incidents; and
factors listed in Management’s Discussion and Analysis of Financial Condition and Results of Operations and in Item 1A Risk Factors in the combined Annual Report on Form 10-K filed by Alliant Energy, IPL and WPL for the year ended December 31, 2011 (2011 Form 10-K).

Alliant Energy, IPL and WPL assume no obligation, and disclaim any duty, to update the forward-looking statements in this report.


2


PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
ALLIANT ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
 
For the Three Months
 
For the Six Months
 
Ended June 30,
 
Ended June 30,
 
2012
 
2011
 
2012
 
2011
 
(dollars in millions, except per share amounts)
Operating revenues:
 
 
 
 
 
 
 
Utility:
 
 
 
 
 
 
 
Electric

$612.6

 

$620.5

 

$1,185.0

 

$1,240.8

Gas
50.0

 
67.1

 
217.1

 
296.1

Other
13.8

 
13.3

 
27.5

 
30.0

Non-regulated
13.9

 
11.6

 
26.4

 
22.8

Total operating revenues
690.3

 
712.5

 
1,456.0

 
1,589.7

Operating expenses:
 
 
 
 
 
 
 
Utility:
 
 
 
 
 
 
 
Electric production fuel and energy purchases
168.9

 
180.7

 
328.8

 
374.7

Purchased electric capacity
70.7

 
67.2

 
132.2

 
125.0

Electric transmission service
79.4

 
80.1

 
160.8

 
153.7

Cost of gas sold
18.6

 
34.8

 
123.4

 
191.2

Other operation and maintenance
137.9

 
168.9

 
287.9

 
329.5

Non-regulated operation and maintenance
0.7

 
4.0

 
4.9

 
8.6

Depreciation and amortization
80.8

 
81.5

 
163.8

 
159.3

Taxes other than income taxes
24.5

 
24.7

 
49.8

 
49.8

Total operating expenses
581.5

 
641.9

 
1,251.6

 
1,391.8

Operating income
108.8

 
70.6

 
204.4

 
197.9

Interest expense and other:
 
 
 
 
 
 
 
Interest expense
38.6

 
40.4

 
77.5

 
80.9

Equity income from unconsolidated investments, net
(10.6
)
 
(9.6
)
 
(20.0
)
 
(19.5
)
Allowance for funds used during construction
(4.8
)
 
(2.7
)
 
(8.6
)
 
(5.8
)
Interest income and other
(0.6
)
 
(0.8
)
 
(1.7
)
 
(1.6
)
Total interest expense and other
22.6

 
27.3

 
47.2

 
54.0

Income from continuing operations before income taxes
86.2

 
43.3

 
157.2

 
143.9

Income tax expense (benefit)
16.8

 
(11.2
)
 
44.5

 
11.2

Income from continuing operations, net of tax
69.4

 
54.5

 
112.7

 
132.7

Income (loss) from discontinued operations, net of tax
0.4

 
0.8

 
(4.0
)
 
2.3

Net income
69.8

 
55.3

 
108.7

 
135.0

Preferred dividend requirements of subsidiaries
3.9

 
4.2

 
7.9

 
10.4

Net income attributable to Alliant Energy common shareowners

$65.9

 

$51.1

 

$100.8

 

$124.6

Weighted average number of common shares outstanding (basic) (000s)
110,756

 
110,624

 
110,736

 
110,596

Weighted average number of common shares outstanding (diluted) (000s)
110,769

 
110,677

 
110,755

 
110,654

Earnings per weighted average common share attributable to Alliant Energy common shareowners (basic and diluted):
 
 
 
 
 
 
 
Income from continuing operations, net of tax

$0.60

 

$0.45

 

$0.95

 

$1.11

Income (loss) from discontinued operations, net of tax

 
0.01

 
(0.04
)
 
0.02

Net income

$0.60

 

$0.46

 

$0.91

 

$1.13

Amounts attributable to Alliant Energy common shareowners:
 
 
 
 
 
 
 
Income from continuing operations, net of tax

$65.5

 

$50.3

 

$104.8

 

$122.3

Income (loss) from discontinued operations, net of tax
0.4

 
0.8

 
(4.0
)
 
2.3

Net income attributable to Alliant Energy common shareowners

$65.9

 

$51.1

 

$100.8

 

$124.6

Dividends declared per common share

$0.45

 

$0.425

 

$0.90

 

$0.85


The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

3


ALLIANT ENERGY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
 
June 30,
2012
 
December 31,
2011
 
(in millions)
ASSETS
 
 
 
Property, plant and equipment:
 
 
 
Utility:
 
 
 
Electric plant in service

$8,278.1

 

$8,165.4

Gas plant in service
860.1

 
852.9

Other plant in service
514.2

 
510.1

Accumulated depreciation
(3,298.9
)
 
(3,206.0
)
Net plant
6,353.5

 
6,322.4

Construction work in progress:
 
 
 
Edgewater Generating Station Unit 5 emission controls (Wisconsin Power and Light Company)
104.0

 
77.7

Columbia Energy Center Units 1 and 2 emission controls (Wisconsin Power and Light Company)
54.4

 
9.0

Other
219.9

 
170.5

Other, less accumulated depreciation
21.5

 
34.9

Total utility
6,753.3

 
6,614.5

Non-regulated and other:
 
 
 
Non-regulated Generation, less accumulated depreciation
302.4

 
270.6

Alliant Energy Corporate Services, Inc. and other, less accumulated depreciation
192.3

 
148.2

Total non-regulated and other
494.7

 
418.8

Total property, plant and equipment
7,248.0

 
7,033.3

Current assets:
 
 
 
Cash and cash equivalents
30.8

 
11.4

Accounts receivable:
 
 
 
Customer, less allowance for doubtful accounts
81.7

 
88.1

Unbilled utility revenues
76.8

 
75.1

Other, less allowance for doubtful accounts
147.3

 
114.9

Income tax refunds receivable
29.7

 
39.1

Production fuel, at weighted average cost
116.7

 
101.9

Materials and supplies, at weighted average cost
61.1

 
58.5

Gas stored underground, at weighted average cost
28.0

 
57.7

Regulatory assets
98.9

 
103.6

Derivative assets
40.7

 
12.7

Prepaid gross receipts tax
37.3

 
40.2

Deferred income tax assets
82.9

 
22.8

Assets held for sale
53.6

 
119.6

Prepayments and other
34.9

 
25.0

Total current assets
920.4

 
870.6

Investments:
 
 
 
Investment in American Transmission Company LLC
247.0

 
238.8

Other
61.4

 
61.9

Total investments
308.4

 
300.7

Other assets:
 
 
 
Regulatory assets
1,380.6

 
1,391.4

Deferred charges and other
76.8

 
91.9

Total other assets
1,457.4

 
1,483.3

Total assets

$9,934.2

 

$9,687.9

 
The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

4


ALLIANT ENERGY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Continued)
 
June 30,
2012
 
December 31,
2011
 
(in millions, except per
share and share amounts)
CAPITALIZATION AND LIABILITIES
 
 
 
Capitalization:
 
 
 
Alliant Energy Corporation common equity:
 
 
 
Common stock - $0.01 par value - 240,000,000 shares authorized; 110,976,142 and 111,018,821 shares outstanding

$1.1

 

$1.1

Additional paid-in capital
1,511.1

 
1,510.8

Retained earnings
1,511.3

 
1,510.2

Accumulated other comprehensive loss
(0.8
)
 
(0.8
)
Shares in deferred compensation trust - 255,319 and 262,735 shares at a weighted average cost of $32.37 and $31.68 per share
(8.3
)
 
(8.3
)
Total Alliant Energy Corporation common equity
3,014.4

 
3,013.0

Cumulative preferred stock of Interstate Power and Light Company
145.1

 
145.1

Noncontrolling interest
1.8

 
1.8

Total equity
3,161.3

 
3,159.9

Cumulative preferred stock of Wisconsin Power and Light Company
60.0

 
60.0

Long-term debt, net (excluding current portion)
2,752.8

 
2,703.1

Total capitalization
5,974.1

 
5,923.0

Current liabilities:
 
 
 
Current maturities of long-term debt
1.4

 
1.4

Commercial paper
162.8

 
102.8

Accounts payable
337.6

 
267.8

Regulatory liabilities
149.9

 
164.7

Accrued taxes
46.3

 
46.9

Accrued interest
46.6

 
46.6

Derivative liabilities
48.4

 
55.9

Liabilities held for sale
70.9

 
62.1

Other
93.4

 
107.0

Total current liabilities
957.3

 
855.2

Other long-term liabilities and deferred credits:
 
 
 
Deferred income tax liabilities
1,736.1

 
1,592.2

Regulatory liabilities
711.7

 
745.4

Pension and other benefit obligations
309.9

 
312.7

Other
245.1

 
259.4

Total long-term liabilities and deferred credits
3,002.8

 
2,909.7

Total capitalization and liabilities

$9,934.2

 

$9,687.9


The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.


5


ALLIANT ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
 
For the Six Months
 
Ended June 30,
 
2012
 
2011
 
(in millions)
Cash flows from operating activities:
 
 
 
Net income

$108.7

 

$135.0

Adjustments to reconcile net income to net cash flows from operating activities:
 
 
 
Depreciation and amortization
164.3

 
161.0

Other amortizations
27.6

 
28.3

Deferred tax expense (benefit) and investment tax credits
56.3

 
(25.5
)
Equity income from unconsolidated investments, net
(20.0
)
 
(19.5
)
Distributions from equity method investments
16.8

 
15.9

Other
(7.6
)
 
16.7

Other changes in assets and liabilities:
 
 
 
Accounts receivable
54.0

 
27.8

Sales of accounts receivable
(27.0
)
 
55.0

Regulatory assets
(19.6
)
 
(110.3
)
Deferred income tax assets
(60.1
)
 
(1.1
)
Regulatory liabilities
(43.5
)
 
165.9

Deferred income tax liabilities
86.8

 
70.8

Pension and other benefit obligations
(2.8
)
 
(62.0
)
Other
5.3

 
8.8

Net cash flows from operating activities
339.2

 
466.8

Cash flows used for investing activities:
 
 
 
Construction and acquisition expenditures:
 
 
 
Utility business
(247.3
)
 
(338.1
)
Alliant Energy Corporate Services, Inc. and non-regulated businesses
(75.1
)
 
(20.6
)
Other
0.6

 
17.6

Net cash flows used for investing activities
(321.8
)
 
(341.1
)
Cash flows from (used for) financing activities:
 
 
 
Common stock dividends
(99.7
)
 
(94.2
)
Preferred dividends paid by subsidiaries
(7.9
)
 
(8.9
)
Payments to redeem cumulative preferred stock of IPL

 
(40.0
)
Net change in commercial paper
110.0

 
(47.4
)
Other
(0.4
)
 
(17.4
)
Net cash flows from (used for) financing activities
2.0

 
(207.9
)
Net increase (decrease) in cash and cash equivalents
19.4

 
(82.2
)
Cash and cash equivalents at beginning of period
11.4

 
159.3

Cash and cash equivalents at end of period

$30.8

 

$77.1

Supplemental cash flows information:
 
 
 
Cash paid (refunded) during the period for:
 
 
 
Interest, net of capitalized interest

$77.4

 

$80.2

Income taxes, net of refunds

($0.9
)
 

($3.0
)
Significant noncash investing and financing activities:
 
 
 
Accrued capital expenditures

$100.3

 

$43.3


The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.


6


INTERSTATE POWER AND LIGHT COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
 
 
For the Three Months
 
For the Six Months
 
Ended June 30,
 
Ended June 30,
 
2012
 
2011
 
2012
 
2011
 
(in millions)
Operating revenues:
 
 
 
 
 
 
 
Electric utility

$321.0

 

$323.9

 

$614.1

 

$654.1

Gas utility
26.8

 
38.7

 
119.6

 
170.6

Steam and other
12.9

 
11.5

 
25.7

 
26.9

Total operating revenues
360.7

 
374.1

 
759.4

 
851.6

Operating expenses:
 
 
 
 
 
 
 
Electric production fuel and energy purchases
82.0

 
87.4

 
156.1

 
184.2

Purchased electric capacity
36.0

 
34.6

 
77.0

 
73.9

Electric transmission service
52.9

 
54.0

 
108.4

 
101.9

Cost of gas sold
10.3

 
20.9

 
67.6

 
113.5

Other operation and maintenance
83.8

 
100.5

 
170.7

 
197.2

Depreciation and amortization
47.1

 
45.0

 
93.8

 
88.9

Taxes other than income taxes
13.2

 
13.2

 
26.5

 
26.4

Total operating expenses
325.3

 
355.6

 
700.1

 
786.0

Operating income
35.4

 
18.5

 
59.3

 
65.6

Interest expense and other:
 
 
 
 
 
 
 
Interest expense
19.6

 
19.8

 
39.3

 
39.7

Allowance for funds used during construction
(1.7
)
 
(1.6
)
 
(3.2
)
 
(3.0
)
Interest income and other

 

 
(0.2
)
 
(0.2
)
Total interest expense and other
17.9

 
18.2

 
35.9

 
36.5

Income before income taxes
17.5

 
0.3

 
23.4

 
29.1

Income tax expense (benefit)
(2.1
)
 
(0.7
)
 
5.3

 
1.0

Net income
19.6

 
1.0

 
18.1

 
28.1

Preferred dividend requirements
3.0

 
3.3

 
6.2

 
8.7

Earnings available (loss) for common stock

$16.6

 

($2.3
)
 

$11.9

 

$19.4

Earnings per share data is not disclosed given Alliant Energy Corporation is the sole shareowner of all shares of IPL’s common stock outstanding during the periods presented.
The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

7


INTERSTATE POWER AND LIGHT COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
 
 
June 30,
2012
 
December 31,
2011
  
(in millions)
ASSETS
 
Property, plant and equipment:
 
 
 
Electric plant in service

$4,736.5

 

$4,684.0

Gas plant in service
431.1

 
428.2

Steam plant in service
34.9

 
34.9

Other plant in service
251.8

 
246.4

Accumulated depreciation
(1,876.2
)
 
(1,833.8
)
Net plant
3,578.1

 
3,559.7

Construction work in progress
144.5

 
96.6

Other, less accumulated depreciation
19.7

 
19.8

Total property, plant and equipment
3,742.3

 
3,676.1

Current assets:
 
 
 
Cash and cash equivalents
2.8

 
2.1

Accounts receivable, less allowance for doubtful accounts
102.4

 
75.2

Income tax refunds receivable
16.3

 
28.4

Production fuel, at weighted average cost
75.9

 
67.7

Materials and supplies, at weighted average cost
32.8

 
31.5

Gas stored underground, at weighted average cost
7.9

 
25.5

Regulatory assets
60.1

 
59.0

Derivative assets
29.8

 
9.2

Deferred income tax assets
34.9

 
13.5

Prepayments and other
11.3

 
11.0

Total current assets
374.2

 
323.1

Investments
17.0

 
16.8

Other assets:
 
 
 
Regulatory assets
1,050.3

 
1,058.3

Deferred charges and other
17.7

 
19.2

Total other assets
1,068.0

 
1,077.5

Total assets

$5,201.5

 

$5,093.5


The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

8


INTERSTATE POWER AND LIGHT COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Continued)

 
June 30,
2012
 
December 31,
2011
 
(in millions, except per
share and share amounts)
CAPITALIZATION AND LIABILITIES
 
Capitalization:
 
 
 
Interstate Power and Light Company common equity:
 
 
 
Common stock - $2.50 par value - 24,000,000 shares authorized; 13,370,788 shares outstanding

$33.4

 

$33.4

Additional paid-in capital
977.8

 
927.7

Retained earnings
384.4

 
433.3

Total Interstate Power and Light Company common equity
1,395.6

 
1,394.4

Cumulative preferred stock
145.1

 
145.1

Total equity
1,540.7

 
1,539.5

Long-term debt, net
1,359.3

 
1,309.0

Total capitalization
2,900.0

 
2,848.5

Current liabilities:
 
 
 
Commercial paper
15.4

 
7.1

Accounts payable
171.8

 
118.2

Accounts payable to associated companies
33.7

 
36.7

Regulatory liabilities
100.9

 
137.1

Accrued taxes
67.2

 
43.8

Accrued interest
22.8

 
22.8

Derivative liabilities
23.2

 
24.5

Other
31.8

 
32.3

Total current liabilities
466.8

 
422.5

Other long-term liabilities and deferred credits:
 
 
 
Deferred income tax liabilities
992.6

 
936.9

Regulatory liabilities
555.0

 
584.2

Pension and other benefit obligations
100.4

 
101.9

Other
186.7

 
199.5

Total other long-term liabilities and deferred credits
1,834.7

 
1,822.5

Total capitalization and liabilities

$5,201.5

 

$5,093.5


The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

9


INTERSTATE POWER AND LIGHT COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

 
For the Six Months
 
Ended June 30,
 
2012
 
2011
 
(in millions)
Cash flows from operating activities:
 
 
 
Net income

$18.1

 

$28.1

Adjustments to reconcile net income to net cash flows from operating activities:
 
 
 
Depreciation and amortization
93.8

 
88.9

Deferred tax expense (benefit) and investment tax credits
8.2

 
(41.4
)
Other
1.8

 
15.4

Other changes in assets and liabilities:
 
 
 
Accounts receivable
(0.5
)
 
35.1

Sales of accounts receivable
(27.0
)
 
55.0

Regulatory assets
(12.1
)
 
(133.3
)
Deferred income tax assets
(21.4
)
 
1.1

Derivative assets
(20.9
)
 
(8.3
)
Regulatory liabilities
(61.5
)
 
158.0

Accrued taxes
23.4

 
(5.0
)
Deferred income tax liabilities
47.1

 
65.8

Pension and other benefit obligations
(1.5
)
 
(35.3
)
Other
28.9

 
20.8

Net cash flows from operating activities
76.4

 
244.9

Cash flows used for investing activities:
 
 
 
Utility construction and acquisition expenditures
(109.9
)
 
(163.5
)
Proceeds from sale of wind project assets to affiliate

 
115.3

Other
(10.4
)
 
(11.7
)
Net cash flows used for investing activities
(120.3
)
 
(59.9
)
Cash flows from (used for) financing activities:
 
 
 
Common stock dividends
(60.8
)
 
(43.7
)
Preferred stock dividends
(6.2
)
 
(7.2
)
Capital contributions from parent
50.0

 

Repayment of capital to parent

 
(71.0
)
Payments to redeem cumulative preferred stock

 
(40.0
)
Net change in commercial paper
58.3

 

Other
3.3

 
(7.8
)
Net cash flows from (used for) financing activities
44.6

 
(169.7
)
Net increase in cash and cash equivalents
0.7

 
15.3

Cash and cash equivalents at beginning of period
2.1

 
5.7

Cash and cash equivalents at end of period

$2.8

 

$21.0

Supplemental cash flows information:
 
 
 
Cash paid (refunded) during the period for:
 
 
 
Interest

$39.2

 

$39.0

Income taxes, net of refunds

($15.4
)
 

$15.5

Significant noncash investing and financing activities:
 
 
 
Accrued capital expenditures

$61.1

 

$19.1


The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

10


WISCONSIN POWER AND LIGHT COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
 
For the Three Months
 
For the Six Months
 
Ended June 30,
 
Ended June 30,
  
2012
 
2011
 
2012
 
2011
 
(in millions)
Operating revenues:
 
 
 
 
 
 
 
Electric utility

$291.6

 

$296.6

 

$570.9

 

$586.7

Gas utility
23.2

 
28.4

 
97.5

 
125.5

Other
0.9

 
1.8

 
1.8

 
3.1

Total operating revenues
315.7

 
326.8

 
670.2

 
715.3

Operating expenses:
 
 
 
 
 
 
 
Electric production fuel and energy purchases
86.9

 
93.3

 
172.7

 
190.5

Purchased electric capacity
34.7

 
32.6

 
55.2

 
51.1

Electric transmission service
26.5

 
26.1

 
52.4

 
51.8

Cost of gas sold
8.3

 
13.9

 
55.8

 
77.7

Other operation and maintenance
54.1

 
68.4

 
117.2

 
132.3

Depreciation and amortization
33.2

 
36.1

 
69.0

 
69.5

Taxes other than income taxes
10.5

 
10.9

 
21.8

 
22.1

Total operating expenses
254.2

 
281.3

 
544.1

 
595.0

Operating income
61.5

 
45.5

 
126.1

 
120.3

Interest expense and other:
 
 
 
 
 
 
 
Interest expense
19.9

 
20.0

 
39.9

 
40.1

Equity income from unconsolidated investments
(10.6
)
 
(9.7
)
 
(20.7
)
 
(19.1
)
Allowance for funds used during construction
(3.1
)
 
(1.1
)
 
(5.4
)
 
(2.8
)
Interest income and other
0.1

 

 

 

Total interest expense and other
6.3

 
9.2

 
13.8

 
18.2

Income before income taxes
55.2

 
36.3

 
112.3

 
102.1

Income taxes
19.1

 
11.3

 
44.3

 
32.7

Net income
36.1

 
25.0

 
68.0

 
69.4

Preferred dividend requirements
0.9

 
0.9

 
1.7

 
1.7

Earnings available for common stock

$35.2

 

$24.1

 

$66.3

 

$67.7

Earnings per share data is not disclosed given Alliant Energy Corporation is the sole shareowner of all shares of WPL’s common stock outstanding during the periods presented.
The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

11


WISCONSIN POWER AND LIGHT COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
 
 
June 30,
2012
 
December 31,
2011
 
(in millions)
ASSETS
 
Property, plant and equipment:
 
 
 
Electric plant in service

$3,541.6

 

$3,481.4

Gas plant in service
429.0

 
424.7

Other plant in service
227.5

 
228.8

Accumulated depreciation
(1,422.7
)
 
(1,372.2
)
Net plant
2,775.4

 
2,762.7

Leased Sheboygan Falls Energy Facility, less accumulated amortization
80.1

 
83.2

Construction work in progress:
 
 
 
Edgewater Generating Station Unit 5 emission controls
104.0

 
77.7

Columbia Energy Center Units 1 and 2 emission controls
54.4

 
9.0

Other
75.4

 
73.9

Other, less accumulated depreciation
1.8

 
15.1

Total property, plant and equipment
3,091.1

 
3,021.6

Current assets:
 
 
 
Cash and cash equivalents
2.5

 
2.7

Accounts receivable:
 
 
 
Customer, less allowance for doubtful accounts
72.3

 
76.2

Unbilled utility revenues
76.8

 
75.1

Other, less allowance for doubtful accounts
37.8

 
38.2

Production fuel, at weighted average cost
40.8

 
34.2

Materials and supplies, at weighted average cost
26.6

 
25.7

Gas stored underground, at weighted average cost
20.1

 
32.2

Regulatory assets
38.8

 
44.6

Prepaid gross receipts tax
37.3

 
40.2

Derivative assets
10.9

 
3.5

Deferred income tax assets
43.9

 
6.0

Prepayments and other
25.9

 
7.4

Total current assets
433.7

 
386.0

Investments:
 
 
 
Investment in American Transmission Company LLC
247.0

 
238.8

Other
19.8

 
19.8

Total investments
266.8

 
258.6

Other assets:
 
 
 
Regulatory assets
330.3

 
333.1

Deferred charges and other
34.2

 
44.7

Total other assets
364.5

 
377.8

Total assets

$4,156.1

 

$4,044.0


The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

12


WISCONSIN POWER AND LIGHT COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Continued)

 
June 30,
2012
 
December 31,
2011
  
(in millions, except per
share and share amounts)
CAPITALIZATION AND LIABILITIES
 
Capitalization:
 
 
 
Wisconsin Power and Light Company common equity:
 
 
 
Common stock - $5 par value - 18,000,000 shares authorized; 13,236,601 shares outstanding

$66.2

 

$66.2

Additional paid-in capital
869.2

 
869.0

Retained earnings
517.5

 
507.2

Total Wisconsin Power and Light Company common equity
1,452.9

 
1,442.4

Cumulative preferred stock
60.0

 
60.0

Long-term debt, net
1,082.3

 
1,082.2

Total capitalization
2,595.2

 
2,584.6

Current liabilities:
 
 
 
Commercial paper
35.6

 
25.7

Accounts payable
106.4

 
98.5

Accounts payable to associated companies
15.0

 
20.5

Regulatory liabilities
49.0

 
27.6

Accrued interest
21.6

 
21.6

Derivative liabilities
25.2

 
31.4

Other
33.5

 
32.3

Total current liabilities
286.3

 
257.6

Other long-term liabilities and deferred credits:
 
 
 
Deferred income tax liabilities
754.5

 
672.5

Regulatory liabilities
156.7

 
161.2

Capital lease obligations - Sheboygan Falls Energy Facility
101.3

 
103.3

Pension and other benefit obligations
127.1

 
128.0

Other
135.0

 
136.8

Total long-term liabilities and deferred credits
1,274.6

 
1,201.8

Total capitalization and liabilities

$4,156.1

 

$4,044.0


The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

13


WISCONSIN POWER AND LIGHT COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
 
For the Six Months
 
Ended June 30,
 
2012
 
2011
 
(in millions)
Cash flows from operating activities:
 
 
 
Net income

$68.0

 

$69.4

Adjustments to reconcile net income to net cash flows from operating activities:
 
 
 
Depreciation and amortization
69.0

 
69.5

Other amortizations
21.8

 
21.2

Deferred tax expense and investment tax credits
43.3

 
34.3

Equity income from unconsolidated investments
(20.7
)
 
(19.1
)
Distributions from equity method investments
16.8

 
15.9

Other
(6.5
)
 
8.1

Other changes in assets and liabilities:
 
 
 
Accounts receivable
8.4

 
19.9

Income tax refunds receivable
(10.9
)
 
33.7

Regulatory assets
(7.5
)
 
23.0

Deferred income tax assets
(37.9
)
 
2.2

Deferred income tax liabilities
38.1

 
1.0

Other

 
(8.6
)
Net cash flows from operating activities
181.9

 
270.5

Cash flows used for investing activities:
 
 
 
Utility construction and acquisition expenditures
(137.4
)
 
(174.6
)
Other
4.0

 
3.3

Net cash flows used for investing activities
(133.4
)
 
(171.3
)
Cash flows used for financing activities:
 
 
 
Common stock dividends
(56.0
)
 
(55.5
)
Preferred stock dividends
(1.7
)
 
(1.7
)
Capital contributions from parent

 
25.0

Net change in commercial paper
9.9

 
(47.4
)
Other
(0.9
)
 
(6.5
)
Net cash flows used for financing activities
(48.7
)
 
(86.1
)
Net increase (decrease) in cash and cash equivalents
(0.2
)
 
13.1

Cash and cash equivalents at beginning of period
2.7

 
0.1

Cash and cash equivalents at end of period

$2.5

 

$13.2

Supplemental cash flows information:
 
 
 
Cash paid (refunded) during the period for:
 
 
 
Interest

$40.0

 

$40.0

Income taxes, net of refunds

$15.8

 

($35.8
)
Significant noncash investing and financing activities:
 
 
 
Accrued capital expenditures

$20.8

 

$16.9


The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

14


ALLIANT ENERGY CORPORATION
INTERSTATE POWER AND LIGHT COMPANY
WISCONSIN POWER AND LIGHT COMPANY

COMBINED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) General - The interim condensed consolidated financial statements included herein have been prepared by Alliant Energy, IPL and WPL, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the U.S. (GAAP) have been condensed or omitted, although management believes that the disclosures are adequate to make the information presented not misleading. Alliant Energy’s condensed consolidated financial statements include the accounts of Alliant Energy and its consolidated subsidiaries (including IPL, WPL, Resources and Alliant Energy Corporate Services, Inc. (Corporate Services)). IPL’s condensed consolidated financial statements include the accounts of IPL and its consolidated subsidiary. WPL’s condensed consolidated financial statements include the accounts of WPL and its consolidated subsidiaries. These financial statements should be read in conjunction with the financial statements and the notes thereto included in Alliant Energy’s, IPL’s and WPL’s latest combined Annual Report on Form 10-K.

In the opinion of management, all adjustments, which unless otherwise noted are normal and recurring in nature, necessary for a fair presentation of the condensed consolidated results of operations for the three and six months ended June 30, 2012 and 2011, the condensed consolidated financial position at June 30, 2012 and December 31, 2011, and the condensed consolidated statements of cash flows for the six months ended June 30, 2012 and 2011 have been made. Results for the six months ended June 30, 2012 are not necessarily indicative of results that may be expected for the year ending December 31, 2012. A change in management’s estimates or assumptions could have a material impact on Alliant Energy’s, IPL’s and WPL’s respective financial condition and results of operations during the period in which such change occurred. Certain prior period amounts in the Condensed Consolidated Financial Statements and Notes to Condensed Consolidated Financial Statements have been reclassified to conform to the current period presentation for comparative purposes. Unless otherwise noted, the notes herein have been revised to exclude discontinued operations and assets and liabilities held for sale for all periods presented.

(b) Regulatory Assets and Regulatory Liabilities -
Regulatory assets were comprised of the following items (in millions):
 
Alliant Energy
 
IPL
 
WPL
 
June 30,
2012
 
December 31,
2011
 
June 30,
2012
 
December 31,
2011
 
June 30,
2012
 
December 31,
2011
Tax-related

$652.8

 

$634.7

 

$630.8

 

$614.6

 

$22.0

 

$20.1

Pension and other postretirement benefits costs
502.8

 
514.1

 
260.0

 
264.9

 
242.8

 
249.2

Derivatives
64.2

 
77.7

 
28.8

 
33.5

 
35.4

 
44.2

Asset retirement obligations
58.0

 
65.9

 
39.6

 
48.7

 
18.4

 
17.2

Environmental-related costs
37.1

 
38.9

 
32.2

 
32.2

 
4.9

 
6.7

Emission allowances
30.0

 
30.0

 
30.0

 
30.0

 

 

IPL’s electric transmission service costs
20.8

 
24.9

 
20.8

 
24.9

 

 

Debt redemption costs
20.8

 
21.8

 
14.3

 
15.1

 
6.5

 
6.7

Proposed base-load projects costs
17.8

 
21.5

 
12.7

 
15.3

 
5.1

 
6.2

Other
75.2

 
65.5

 
41.2

 
38.1

 
34.0

 
27.4

 

$1,479.5

 

$1,495.0

 

$1,110.4

 

$1,117.3

 

$369.1

 

$377.7


15


Regulatory liabilities were comprised of the following items (in millions):
 
Alliant Energy
 
IPL
 
WPL
 
June 30,
2012
 
December 31,
2011
 
June 30,
2012
 
December 31,
2011
 
June 30,
2012
 
December 31,
2011
Cost of removal obligations

$406.8

 

$404.9

 

$265.0

 

$261.9

 

$141.8

 

$143.0

IPL’s tax benefit rider
309.1

 
349.6

 
309.1

 
349.6

 

 

Energy conservation cost recovery
43.5

 
29.6

 
7.8

 
4.7

 
35.7

 
24.9

IPL’s electric transmission assets sale
38.0

 
45.1

 
38.0

 
45.1

 

 

Commodity cost recovery
5.4

 
23.8

 
0.5

 
23.2

 
4.9

 
0.6

Other
58.8

 
57.1

 
35.5

 
36.8

 
23.3

 
20.3

 

$861.6

 

$910.1

 

$655.9

 

$721.3

 

$205.7

 

$188.8


Proposed base-load projects costs - The Minnesota Public Utilities Commission’s (MPUC’s) June 2011 oral decision related to IPL’s 2009 test year Minnesota retail electric rate case authorized IPL to recover $2 million of previously incurred plant cancellation costs for its proposed base-load project referred to as Sutherland #4. As a result, Alliant Energy and IPL recorded a $2 million increase to regulatory assets, and a $2 million credit to “Utility - Other operation and maintenance” in their Condensed Consolidated Statements of Income in the second quarter of 2011.

IPL’s tax benefit rider - Alliant Energy’s and IPL’s “IPL’s tax benefit rider” regulatory liabilities in the above table decreased primarily due to $40 million of regulatory liabilities used to credit IPL’s Iowa retail electric customers’ bills during the six months ended June 30, 2012. Refer to Note 2 for discussion of a proposed tax benefit rider for IPL’s Iowa retail gas customers and Note 4 for additional details regarding the tax benefit rider for IPL’s Iowa retail electric customers.

IPL’s electric transmission assets sale - Based on the MPUC’s June 2011 oral decision related to IPL’s 2009 test year Minnesota retail electric rate case, IPL was ordered to refund a higher amount of the gain realized from the sale of its electric transmission assets in 2007 to its Minnesota retail electric customers than originally estimated. As a result, Alliant Energy and IPL recorded a $5 million increase to regulatory liabilities, and a $5 million charge to “Utility - Other operation and maintenance” in their Condensed Consolidated Statements of Income in the second quarter of 2011 based on an estimate of the additional amount that is probable of being refunded.

Other - Based on an assessment completed in the second quarter of 2011, Alliant Energy, IPL and WPL recognized impairment charges of $6 million, $1 million and $5 million, respectively, for regulatory assets that were no longer probable of future recovery. The regulatory asset impairment charges were recorded by Alliant Energy, IPL and WPL as reductions in regulatory assets, and charges to “Utility - Other operation and maintenance” in their Condensed Consolidated Statements of Income in the second quarter of 2011.

Based on the Public Service Commission of Wisconsin’s (PSCW’s) July 2012 order related to WPL’s 2013/2014 test period Wisconsin retail electric and gas rate case, WPL was authorized to recover previously incurred costs associated with the acquisition of a 25% ownership interest in Edgewater Unit 5 and proposed clean air compliance plan projects. As a result, Alliant Energy and WPL recorded a $5 million increase to “Regulatory assets” on their Condensed Consolidated Balance Sheets and a $5 million credit to “Utility - Other operation and maintenance” in their Condensed Consolidated Statements of Income in the second quarter of 2012.

(c) Utility Property, Plant and Equipment -
WPL’s Edgewater Unit 5 Emission Controls Project - WPL is currently installing a selective catalytic reduction (SCR) system at Edgewater Unit 5 to reduce nitrogen oxide (NOx) emissions at the generating facility. Construction began in the third quarter of 2010 and is expected to be completed by the end of 2012. The SCR is expected to help meet requirements under the Wisconsin Reasonably Available Control Technology (RACT) Rule, which require additional NOx emission reductions at Edgewater by May 2013. As of June 30, 2012, WPL recorded capitalized expenditures of $98 million and allowance for funds used during construction (AFUDC) of $6 million for the SCR system in “Construction work in progress - Edgewater Generating Station Unit 5 emission controls” on Alliant Energy’s and WPL’s Condensed Consolidated Balance Sheets.


16


WPL’s Columbia Units 1 and 2 Emission Controls Project - WPL is currently installing scrubbers and baghouses at Columbia Units 1 and 2 to reduce sulfur dioxide (SO2) and mercury emissions at the generating facility. Construction began in the first quarter of 2012 and is expected to be completed in 2014. The scrubbers and baghouses are expected to help meet requirements under the Clean Air Interstate Rule (CAIR), the Cross-State Air Pollution Rule (CSAPR) or some alternative to these rules that may be implemented, the Utility Maximum Achievable Control Technology (MACT) Rule and the Wisconsin State Mercury Rule. As of June 30, 2012, WPL recorded capitalized expenditures of $53 million and AFUDC of $1 million for the scrubbers and baghouses in “Construction work in progress - Columbia Energy Center Units 1 and 2 emission controls” on Alliant Energy’s and WPL’s Condensed Consolidated Balance Sheets.

Franklin County Wind Project - In 2008, Alliant Energy entered into a master supply agreement with Vestas-American Wind Technology, Inc. (Vestas) to purchase 500 MW of wind turbine generator sets and related equipment. Alliant Energy utilized 400 MW of these wind turbine generator sets and related equipment to construct IPL’s Whispering Willow - East and WPL’s Bent Tree - Phase I wind projects. In the second quarter of 2011, Alliant Energy decided to utilize the remaining 100 MW of wind turbine generator sets and related equipment at Resources to build the Franklin County wind project. In the second quarter of 2011, IPL sold the assets for this wind project to Resources for $115.3 million, which represented IPL’s book value for progress payments to date for the 100 MW of wind turbine generator sets and related equipment and land rights in Franklin County, Iowa. In addition, Resources assumed the remaining progress payments to Vestas for the 100 MW of wind turbine generator sets and related equipment. The proceeds received by IPL were recorded in investing activities in IPL’s Condensed Consolidated Statement of Cash Flows in the second quarter of 2011. Refer to Note 1(d) for further discussion of the Franklin County wind project.

IPL’s Whispering Willow - East Wind Project - In 2011, IPL received an order from the MPUC approving a temporary recovery rate for the Minnesota retail portion of its Whispering Willow - East wind project construction costs. In its order, the MPUC did not conclude on the prudence of these project costs. The prudence of these project costs and the final recovery rate for these costs will be addressed in a separate proceeding that is expected to be completed in 2013. The initial recovery rate approved by the MPUC is below the amount required by IPL to recover the Minnesota retail portion of its total project costs. Based on its interpretation of the order, IPL currently believes that it is probable it will not be allowed to recover the entire Minnesota retail portion of its project costs. IPL currently believes the most likely outcome of the final rate proceeding will result in the MPUC effectively disallowing recovery of approximately $8 million of project costs out of a total of approximately $30 million of project costs allocated to the Minnesota retail jurisdiction. As a result, IPL recognized an $8 million impairment related to this probable disallowance, which was recorded as a reduction to electric plant in service and a charge to “Utility - Other operation and maintenance” in Alliant Energy’s and IPL’s Condensed Consolidated Statements of Income in the second quarter of 2011. This amount is subject to change until the MPUC determines the final recovery rate for these project costs.

Wind Site in Green Lake and Fond du Lac Counties in Wisconsin - In 2009, WPL purchased development rights to an approximate 100 MW wind site in Green Lake and Fond du Lac Counties in Wisconsin. Due to events in the first quarter of 2011 resulting in uncertainty regarding wind siting requirements in Wisconsin and increased risks with permitting this wind site, WPL determined it would be difficult to sell or effectively use the site for wind development. As a result, WPL recognized a $5 million impairment in the first quarter of 2011 for the amount of capitalized costs incurred for this site. The impairment was recorded as a reduction in other utility property, plant and equipment, and a charge to “Utility - Other operation and maintenance” in Alliant Energy’s and WPL’s Condensed Consolidated Statements of Income in the first half of 2011.

Depreciation - In May 2012, the PSCW issued an order approving the implementation of updated depreciation rates for WPL as a result of a recently completed depreciation study. The updated depreciation rates will be effective January 1, 2013 for all assets other than Riverside. WPL’s depreciation rates for Riverside will be effective on the purchase date of Riverside. WPL estimates the new average rates of depreciation for its electric generation, electric distribution and gas properties will be approximately 3.6%, 2.7% and 2.5%, respectively, during 2013.

(d) Non-regulated and Other Property, Plant and Equipment - As of June 30, 2012, Alliant Energy recorded capitalized expenditures of $183 million and capitalized interest of $6 million in “Non-regulated Generation property, plant and equipment” on Alliant Energy’s Condensed Consolidated Balance Sheet related to Resources’ Franklin County wind project. Refer to Note 1(c) for further discussion of the Franklin County wind project.

In April 2012, Alliant Energy exercised its option under the corporate headquarters lease and purchased the building at the expiration of the lease term for $48 million.


17


(e) Comprehensive Income (Loss) - For the three and six months ended June 30, 2012 and 2011, Alliant Energy’s other comprehensive income was not material; therefore, its comprehensive income was substantially equal to its net income for such periods. For the three and six months ended June 30, 2012 and 2011, IPL and WPL had no other comprehensive income; therefore their comprehensive income (loss) was equal to their earnings available (loss) for common stock for such periods.

(f) Cash Flows Presentation - Alliant Energy reports cash flows from continuing operations together with cash flows from discontinued operations in its Condensed Consolidated Statements of Cash Flows. Refer to Note 13 for details of cash flows from discontinued operations.

(2) UTILITY RATE CASES
WPL’s Wisconsin Retail Electric and Gas Rate Case (2013/2014 Test Period) - In May 2012, WPL filed a retail base rate filing based on a forward-looking test period that includes 2013 and 2014. The filing requested approval for WPL to implement a decrease in annual base rates for WPL’s retail gas customers of $13 million effective January 1, 2013 followed by a freeze of such gas base rates through the end of 2014. The filing also requested authority to maintain customer base rates for WPL’s retail electric customers at their current levels through the end of 2014. Recovery of the costs for the planned acquisition of Riverside, the SCR project at Edgewater Unit 5 and the scrubber and baghouse projects at Columbia Units 1 and 2 are included in the request. The recovery of the costs for these capital projects are offset by decreases in rate base resulting from increased net deferred tax liabilities, the impact of changes in the amortizations of regulatory assets and regulatory liabilities, and the reduction of capacity payments. In July 2012, WPL received an order from the PSCW authorizing WPL to implement its retail base rate filing as requested. Refer to Note 1(b) for details of increases to “Regulatory assets” on Alliant Energy’s and WPL’s Condensed Consolidated Balance Sheets and regulatory-related credits to “Utility - Other operation and maintenance” in Alliant Energy’s and WPL’s Condensed Consolidated Statements of Income in the second quarter of 2012 as a result of the PSCW’s order authorizing WPL to recover previously incurred costs associated with the acquisition of a 25% interest in Edgewater Unit 5 and proposed clean air compliance plan projects.

IPL’s Iowa Retail Gas Rate Case (2011 Test Year) - In May 2012, IPL filed a request with the Iowa Utilities Board (IUB) to increase annual rates for its Iowa retail gas customers by $15 million, or approximately 6%. The request was based on a 2011 historical test year as adjusted for certain known and measurable changes occurring up to 12 months after the commencement of the proceeding. The key drivers for the filing included recovery of capital investments since IPL’s last Iowa retail gas rate case filed in 2005. IPL’s request included a proposal to utilize regulatory liabilities to credit bills of Iowa retail gas customers to help mitigate the impact of the proposed final rate increase on such customers. IPL is proposing to reduce customer bills utilizing a tax benefit rider over a three-year period by approximately $36 million in aggregate. In conjunction with the filing, IPL implemented an interim retail gas rate increase of $9 million, or approximately 3%, on an annual basis, effective June 4, 2012, without regulatory review and subject to refund pending determination of final rates from the request.

IPL’s Minnesota Retail Electric Rate Case (2009 Test Year) - In May 2010, IPL filed a request with the MPUC to increase annual rates for its Minnesota retail electric customers by $15 million, or approximately 22%. The request was based on a 2009 historical test year as adjusted for certain known and measurable items at the time of the filing. The key drivers for the filing included recovery of investments in the Whispering Willow - East wind project and emission control projects at Lansing Unit 4, and recovery of increased electric transmission service costs. In conjunction with the filing, IPL implemented an interim retail rate increase of $14 million, on an annual basis, effective July 6, 2010. In November 2011, IPL received an order from the MPUC authorizing a final annual retail electric rate increase equivalent to $11 million. The final annual retail electric rate increase of $11 million includes $8 million of higher base rates, $2 million from the temporary renewable energy rider and $1 million from the utilization of regulatory liabilities to offset higher electric transmission service costs. Refer to Note 1(b) for discussion of changes to regulatory assets and regulatory liabilities in the second quarter of 2011 based on the MPUC’s decisions to provide IPL’s retail electric customers in Minnesota additional refunds from the gain on the sale of electric transmission assets in 2007 and to provide IPL recovery of $2 million of previously incurred costs for Sutherland #4. Refer to Note 1(c) for discussion of an impairment recognized in second quarter of 2011 based on the MPUC’s decision regarding the recovery of IPL’s Whispering Willow - East wind project costs.

WPL’s Retail Fuel-related Rate Case (2013 Test Year) - In June 2012, WPL filed a request with the PSCW to decrease annual rates for WPL’s retail electric customers by $25 million, or approximately 2%, to reflect anticipated decreases in retail electric production fuel and energy purchases costs (fuel-related costs) in 2013. Any rate changes granted from this request are expected to be effective on January 1, 2013.


18


WPL’s Retail Fuel-related Rate Case (2012 Test Year) - In December 2011, WPL received an order from the PSCW authorizing an annual retail electric rate increase of $4 million related to expected changes in retail fuel-related costs for 2012. The December 2011 order also required WPL to defer direct CSAPR compliance costs that are not included in the fuel monitoring level and set a zero percent tolerance band for the CSAPR-related deferral. The 2012 fuel-related costs, excluding deferred CSAPR compliance costs, will be monitored using an annual bandwidth of plus or minus 2%. The retail electric rate increase granted from this request was effective January 1, 2012. Retail fuel-related costs incurred by WPL for the period from January 2012 through June 2012 were lower than retail fuel-related costs used to determine rates. WPL currently projects that its retail fuel-related costs for the 2012 calendar year will remain lower than the approved fuel monitoring level by more than the 2% bandwidth resulting in future refunds anticipated to be paid to WPL’s retail electric customers. As of June 30, 2012, Alliant Energy and WPL recorded $4 million in “Regulatory liabilities” on their Condensed Consolidated Balance Sheets for refunds anticipated to be paid to WPL’s retail electric customers. Subsequent to the PSCW order issued in December 2011, the U.S. Court of Appeals for the D.C. Circuit stayed the implementation of CSAPR and as a result, CAIR remains effective. Alliant Energy and WPL are currently unable to predict the final outcome of the CSAPR stay and its impact on their financial condition or results of operations.

(3) RECEIVABLES
Sales of Accounts Receivable - IPL maintains a Receivables Purchase and Sale Agreement (Agreement) whereby it may sell its customer accounts receivables, unbilled revenues and certain other accounts receivables to a third-party financial institution through wholly-owned and consolidated special purpose entities. In March 2012, IPL extended through March 2014 the purchase commitment from the third-party financial institution to which it sells its receivables. In exchange for the receivables sold, IPL receives cash proceeds from the third-party financial institution (based on seasonal limits up to $180 million including $150 million as of June 30, 2012), and deferred proceeds recorded in “Accounts receivable” on Alliant Energy’s and IPL’s Condensed Consolidated Balance Sheets.

As of June 30, 2012 and December 31, 2011, IPL sold $196.2 million and $195.3 million aggregate amounts of receivables, respectively. IPL’s maximum and average outstanding cash proceeds, and costs incurred related to the sales of accounts receivable program for the three and six months ended June 30 were as follows (in millions):
 
Three Months
 
Six Months
 
2012
 
2011
 
2012
 
2011
Maximum outstanding aggregate cash proceeds (based on daily outstanding balances)
$150.0
 
$140.0
 
$160.0
 
$140.0
Average outstanding aggregate cash proceeds (based on daily outstanding balances)
135.1
 
124.7
 
139.0
 
108.2
Costs incurred
0.3
 
0.4
 
0.7
 
0.8

The attributes of IPL’s receivables sold under the Agreement were as follows (in millions):
 
June 30, 2012
 
December 31, 2011
Customer accounts receivable
$97.1