Alliant Energy(LNT) - 2018 Q4 - Annual Report

Customer Base and Service - Alliant Energy serves approximately 965,000 electric and 415,000 natural gas customers in the Midwest through its subsidiaries IPL and WPL[20]. - The number of retail customers at the end of 2018 was 965,514, a slight increase from 962,121 in 2017[79]. - Alliant Energy's strategic focus includes providing affordable energy solutions to retain and grow its customer base[150]. Employee and Labor Relations - As of December 31, 2018, IPL had 1,628 employees, with 63% covered by collective bargaining agreements, while WPL had 1,234 employees, with 82% covered[26]. - The majority of IPL's bargaining unit employees are covered by a collective bargaining agreement expiring on August 31, 2020[26]. Financial Performance - Total revenues for Alliant Energy in 2018 reached $3,000.3 million, an increase of 3.6% from $2,894.7 million in 2017[79]. - Alliant Energy reported revenues of $3,534.5 million for 2018, an increase of 4.5% from $3,382.2 million in 2017[141]. - Net income attributable to Alliant Energy common shareowners was $512.1 million in 2018, up from $457.3 million in 2017, representing an increase of 11.8%[141]. - Earnings per share from continuing operations for 2018 was $2.19, compared to $1.99 in 2017, reflecting a growth of 10.1%[141]. - The utility electric margin for 2018 was $1,649.6 million, up from $1,595.7 million in 2017, indicating a growth of 3.4%[160]. - The utility gas margin increased to $214.3 million in 2018 from $189.5 million in 2017, representing a rise of 13.5%[160]. - Operating income for Alliant Energy reached $694.4 million in 2018, compared to $671.2 million in 2017, marking a 3.4% increase[160]. Capital Expenditures and Investments - The company has forecasted capital expenditures of approximately $5 billion over the next four years, which is critical for implementing its strategy[108]. - Construction and acquisition expenditures increased to $1,633.9 million in 2018 from $1,466.9 million in 2017, a rise of 11.4%[141]. - Alliant Energy plans to develop and acquire up to 1,200 MW of wind generation from 2018 to 2020, with estimated capital expenditures included in the renewable projects line[174]. - IPL has ongoing wind generation development of up to 1,000 MW, with several projects expected to be operational by 2020[177]. Regulatory Environment - IPL and WPL are subject to regulation by various federal and state agencies, including FERC and IUB, impacting their operations and rate structures[27]. - WPL must obtain a Certificate of Public Convenience and Necessity (CPCN) for any new electric generating unit (EGU) with a capacity of 100 MW or more[45]. - A rate settlement approved in December 2018 allows electric and gas base rates for WPL retail customers to remain flat until 2020[152]. - WPL's retail electric and gas base rates will remain unchanged through the end of 2020, maintaining a return on common equity of 10.0%[186]. Environmental Initiatives - Alliant Energy aims to reduce CO2 emissions from fossil-fueled generation by 40% by 2030 and 80% by 2050 from 2005 levels[64]. - Compliance with the Clean Air Act's effluent limitation guidelines requires changes to discharge limits for wastewater, with compliance deadlines set for December 31, 2023[53]. - IPL and WPL currently exceed their respective Renewable Energy Standards (RES) requirements, primarily relying on wind and hydro energy[56]. - Alliant Energy aims to reduce SO2 and NOx emissions by approximately 90% and 80%, respectively, from 2005 levels by 2020[179]. Risks and Challenges - The utility business is significantly influenced by regulatory authorities, which can affect rates, authorized returns, and cost recovery, potentially leading to adverse financial impacts[94]. - The company faces risks related to large construction projects, including potential delays and cost overruns, which could adversely affect financial performance[97]. - Compliance with stringent environmental laws and regulations may impose additional costs, and failure to comply could result in fines or sanctions[106]. - Economic conditions in service territories can adversely affect customer demand for electricity and natural gas, impacting overall financial performance[110]. - Natural disasters may unpredictably impact operations, leading to increased repair costs and reduced energy demand, which could lower sales and revenues[115]. Debt and Financial Management - Alliant Energy plans to maintain consolidated debt at approximately 55% of total capital[200]. - The company reported a higher interest expense of $31 million in 2018, attributed to increased long-term debt balances[170]. - The dividend payout ratios for Alliant Energy, IPL, and WPL were 61%, 64%, and 67% of their consolidated earnings from continuing operations in 2018, respectively[217]. Customer Demand and Sales - Retail sales increased to 25,684,000 MWh in 2018, up from 25,095,000 MWh in 2017, reflecting a growth of 2.3%[79]. - Gas utility operations generated total revenues of $446.6 million in 2018, up from $400.9 million in 2017, marking an increase of 11.4%[91]. - Retail gas sales volume increased to 53,389,000 Dths in 2018, compared to 49,250,000 Dths in 2017, representing an increase of 4.3%[91]. - The estimated impact of temperatures on electric margins for Alliant Energy was an increase of $32 million in 2018, compared to a decrease of $16 million in 2017[163].