10-Q 1 lnt331201610-q.htm 10-Q 10-Q

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 March 31, 2016
 
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
 
 
 
 
 
1-4117
 
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 each 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 March 31, 2016:
Alliant Energy Corporation
Common stock, $0.01 par value, 113,562,651 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:
 




DEFINITIONS
The following abbreviations or acronyms used in this Form 10-Q are defined below:
Abbreviation or Acronym
 
Definition
2015 Form 10-K
 
Combined Annual Report on Form 10-K filed by Alliant Energy, IPL and WPL for the year ended Dec. 31, 2015
AFUDC
 
Allowance for funds used during construction
Alliant Energy
 
Alliant Energy Corporation
AROs
 
Asset retirement obligations
ATC
 
American Transmission Company LLC
CAA
 
Clean Air Act
CCR
 
Coal Combustion Residuals
CEO
 
Chief Executive Officer
CFO
 
Chief Financial Officer
Columbia
 
Columbia Energy Center
Corporate Services
 
Alliant Energy Corporate Services, Inc.
CRANDIC
 
Cedar Rapids and Iowa City Railway Company
DAEC
 
Duane Arnold Energy Center
Dth
 
Dekatherm
Edgewater
 
Edgewater Generating Station
EGU
 
Electric generating unit
EPA
 
U.S. Environmental Protection Agency
EPS
 
Earnings per weighted average common share
FERC
 
Federal Energy Regulatory Commission
Financial Statements
 
Condensed Consolidated Financial Statements
FTR
 
Financial transmission right
Fuel-related
 
Electric production fuel and energy purchases
GAAP
 
U.S. generally accepted accounting principles
HDD
 
Heating degree days
IPL
 
Interstate Power and Light Company
ITC
 
ITC Midwest LLC
IUB
 
Iowa Utilities Board
Marshalltown
 
Marshalltown Generating Station
MDA
 
Management’s Discussion and Analysis of Financial Condition and Results of Operations
MGP
 
Manufactured gas plant
MISO
 
Midcontinent Independent System Operator, Inc.
MW
 
Megawatt
MWh
 
Megawatt-hour
N/A
 
Not applicable
NAAQS
 
National Ambient Air Quality Standards
Nelson Dewey
 
Nelson Dewey Generating Station
Note(s)
 
Combined Notes to Condensed Consolidated Financial Statements
NOx
 
Nitrogen oxide
OPEB
 
Other postretirement benefits
PSCW
 
Public Service Commission of Wisconsin
Receivables Agreement
 
Receivables Purchase and Sale Agreement
Resources
 
Alliant Energy Resources, LLC
Riverside
 
Riverside Energy Center
RMT
 
RMT, Inc.
SCR
 
Selective catalytic reduction
SO2
 
Sulfur dioxide
U.S.
 
United States of America
Whiting Petroleum
 
Whiting Petroleum Corporation
WPL
 
Wisconsin Power and Light Company


 
1
 


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 “may,” “believe,” “expect,” “anticipate,” “plan,” “project,” “will,” “projections,” “estimate,” 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, IPL and 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 fuel costs, operating costs, transmission costs, deferred expenditures, capital expenditures, and remaining costs related to EGUs that may be permanently closed, earning their authorized rates of return, and the payments to their parent of expected levels of dividends;
the ability to continue cost controls and operational efficiencies;
the impact of IPL’s retail electric base rate freeze in Iowa during 2016;
the impact of WPL’s retail electric and gas base rate freeze in Wisconsin during 2016;
weather effects on results of utility operations, including impacts of temperature changes in IPL’s and WPL’s service territories on customers’ demand for electricity and gas;
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;
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, customer- and third party-owned generation 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;
developments that adversely impact the ability to implement the strategic plan, including unanticipated issues with new environmental control equipment for various fossil-fueled EGUs of IPL and WPL, IPL’s construction of Marshalltown, WPL’s Riverside expansion, various replacements, modernization and expansion of IPL’s and WPL’s electric and gas distribution systems, Resources’ electricity output and selling price of such output from its Franklin County wind farm, and the potential decommissioning of certain EGUs of IPL and WPL;
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;
disruptions in the supply and delivery of natural gas, purchased electricity and coal, including due to the bankruptcy of coal mining companies;
changes in the price of delivered coal, natural gas and purchased electricity due to shifts in supply and demand caused by market conditions and regulations, and the ability to recover and to retain the recovery of related changes in purchased power, fuel and fuel-related costs through rates in a timely manner;
impacts on equity income from unconsolidated investments due to potential changes to ATC’s authorized return on equity;
issues associated with environmental remediation and environmental compliance, including compliance with the Consent Decree between WPL, the 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 CCR Rule, 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;

 
2
 


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 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;
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;
the direct or indirect effects resulting from breakdown or failure of equipment in the operation of gas distribution systems, such as leaks, explosions and mechanical problems, and compliance with gas transmission and distribution safety regulations, such as proposed rules recently issued by the Pipeline and Hazardous Materials Safety Administration;
risks associated with integration of a new customer billing and information system, which was completed in the first quarter of 2016;
impacts of IPL’s future tax benefits from Iowa rate-making practices, including deductions for repairs expenditures and allocation of mixed service costs, and recoverability of the associated regulatory assets from customers, when the differences reverse in future periods;
any material post-closing adjustments related to any past asset divestitures, including the sales of IPL’s Minnesota electric and natural gas assets, RMT and Whiting Petroleum, which could result from, among other things, warranties, parental guarantees or litigation;
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 energy and ancillary services markets, the impacts of potential future billing adjustments and cost allocation changes from Regional Transmission Organizations and recovery of costs incurred;
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 restructurings;
inability to access technological developments, including those related to wind turbines, solar generation, smart technology and other future technologies;
changes in technology that alter the channels through which electric customers buy or utilize power;
impacts of ATC’s potential restructuring;
material changes in retirement and benefit plan costs;
the impact of performance-based compensation plans accruals;
the effect of accounting standards issued periodically by standard-setting bodies, including revenue recognition and lease standards;
the impact of changes to production tax credits for wind farms;
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;
impacts of the extension of bonus depreciation deductions;
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 MDA and Risk Factors in Item 1A in the 2015 Form 10-K.

Alliant Energy, IPL and WPL each assume no obligation, and disclaim any duty, to update the forward-looking statements in this report, except as required by law.


 
3
 


PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
ALLIANT ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
 
For the Three Months
 
Ended March 31,
 
2016
 
2015
 
(in millions, except per share amounts)
Operating revenues:
 
 
 
Electric utility

$668.9

 

$671.3

Gas utility
152.2

 
198.4

Other utility
13.2

 
16.4

Non-regulated
9.5

 
11.3

Total operating revenues
843.8

 
897.4

Operating expenses:
 
 
 
Electric production fuel and purchased power
200.9

 
215.9

Electric transmission service
127.9

 
123.2

Cost of gas sold
95.2

 
130.8

Other operation and maintenance
145.1

 
147.9

Depreciation and amortization
102.5

 
100.2

Taxes other than income taxes
26.3

 
26.5

Total operating expenses
697.9

 
744.5

Operating income
145.9

 
152.9

Interest expense and other:
 
 
 
Interest expense
48.0

 
46.6

Equity income from unconsolidated investments, net
(10.5
)
 
(6.5
)
Allowance for funds used during construction
(13.2
)
 
(6.8
)
Interest income and other
(0.2
)
 
(0.1
)
Total interest expense and other
24.1

 
33.2

Income from continuing operations before income taxes
121.8

 
119.7

Income taxes
21.6

 
20.5

Income from continuing operations, net of tax
100.2

 
99.2

Loss from discontinued operations, net of tax
(1.1
)
 

Net income
99.1

 
99.2

Preferred dividend requirements of Interstate Power and Light Company
2.6

 
2.6

Net income attributable to Alliant Energy common shareowners

$96.5

 

$96.6

Weighted average number of common shares outstanding (basic and diluted) (a)
113.4

 
111.1

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

$0.86

 

$0.87

Loss from discontinued operations, net of tax
(0.01
)
 

Net income

$0.85

 

$0.87

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

$97.6

 

$96.6

Loss from discontinued operations, net of tax
(1.1
)
 

Net income

$96.5

 

$96.6

Dividends declared per common share (a)

$0.5875

 

$0.55


(a)
Amounts do not reflect the effects of a two-for-one common stock split approved by Alliant Energy’s Board of Directors on April 20, 2016. Refer to Note 6 for additional details.

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)
 
March 31,
2016
 
December 31,
2015
 
(in millions, except per
share and share amounts)
ASSETS
 
 
 
Current assets:
 
 
 
Cash and cash equivalents

$4.8

 

$5.8

Accounts receivable, less allowance for doubtful accounts
390.6

 
397.6

Production fuel, at weighted average cost
98.0

 
98.8

Gas stored underground, at weighted average cost
15.9

 
43.3

Materials and supplies, at weighted average cost
83.3

 
81.4

Regulatory assets
111.5

 
120.2

Other
64.4

 
79.7

Total current assets
768.5

 
826.8

Property, plant and equipment, net
9,626.6

 
9,519.1

Investments:
 
 
 
Investment in American Transmission Company LLC
302.5

 
293.3

Other
21.0

 
53.0

Total investments
323.5

 
346.3

Other assets:
 
 
 
Regulatory assets
1,805.7

 
1,788.4

Deferred charges and other
10.7

 
14.6

Total other assets
1,816.4

 
1,803.0

Total assets

$12,535.0

 

$12,495.2

LIABILITIES AND EQUITY
 
 
 
Current liabilities:
 
 
 
Current maturities of long-term debt

$313.4

 

$313.4

Commercial paper
213.4

 
159.8

Accounts payable
323.8

 
402.4

Regulatory liabilities
193.1

 
187.1

Other
304.8

 
296.6

Total current liabilities
1,348.5

 
1,359.3

Long-term debt, net (excluding current portion)
3,522.7

 
3,522.2

Other liabilities:
 
 
 
Deferred tax liabilities
2,424.6

 
2,381.2

Regulatory liabilities
517.9

 
550.6

Pension and other benefit obligations
446.5

 
451.8

Other
310.2

 
306.0

Total other liabilities
3,699.2

 
3,689.6

Commitments and contingencies (Note 13)


 


Equity:
 
 
 
Alliant Energy Corporation common equity:
 
 
 
Common stock - $0.01 par value - 240,000,000 shares authorized; 113,562,651 and 113,459,216 shares outstanding (a)
1.1

 
1.1

Additional paid-in capital
1,673.7

 
1,663.0

Retained earnings
2,098.9

 
2,068.9

Accumulated other comprehensive loss
(0.4
)
 
(0.4
)
Shares in deferred compensation trust - 214,881 and 215,093 shares at a weighted average cost of $40.36 and $39.69 per share (a)
(8.7
)
 
(8.5
)
Total Alliant Energy Corporation common equity
3,764.6

 
3,724.1

Cumulative preferred stock of Interstate Power and Light Company
200.0

 
200.0

Total equity
3,964.6

 
3,924.1

Total liabilities and equity

$12,535.0

 

$12,495.2

(a)
Share and per share amounts do not reflect the effects of a two-for-one common stock split approved by Alliant Energy’s Board of Directors on April 20, 2016. Refer to Note 6 for additional details.

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 Three Months
 
Ended March 31,
 
2016
 
2015
 
(in millions)
Cash flows from operating activities:
 
 
 
Net income

$99.1

 

$99.2

Adjustments to reconcile net income to net cash flows from operating activities:
 
 
 
Depreciation and amortization
102.5

 
100.2

Deferred tax expense and investment tax credits
22.8

 
29.7

Other
(17.6
)
 
(0.1
)
Other changes in assets and liabilities:
 
 
 
Accounts receivable
(47.8
)
 
6.6

Sales of accounts receivable
57.0

 
52.0

Gas stored underground
27.4

 
49.5

Accounts payable
(31.2
)
 
(32.8
)
Regulatory liabilities
(28.7
)
 
(6.6
)
Other
44.8

 
17.0

Net cash flows from operating activities
228.3

 
314.7

Cash flows used for investing activities:
 
 
 
Construction and acquisition expenditures:
 
 
 
Utility business
(220.4
)
 
(226.0
)
Alliant Energy Corporate Services, Inc. and non-regulated businesses
(18.8
)
 
(19.8
)
Other
19.2

 
(5.1
)
Net cash flows used for investing activities
(220.0
)
 
(250.9
)
Cash flows used for financing activities:
 
 
 
Common stock dividends
(66.5
)
 
(60.7
)
Proceeds from issuance of common stock, net
6.2

 
122.1

Net change in commercial paper
53.6

 
(99.8
)
Other
(2.6
)
 
15.3

Net cash flows used for financing activities
(9.3
)
 
(23.1
)
Net increase (decrease) in cash and cash equivalents
(1.0
)
 
40.7

Cash and cash equivalents at beginning of period
5.8

 
56.9

Cash and cash equivalents at end of period

$4.8

 

$97.6

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

($44.5
)
 

($40.2
)
Income taxes, net

$—

 

$0.1

Significant non-cash investing and financing activities:
 
 
 
Accrued capital expenditures

$105.0

 

$119.0


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
 
Ended March 31,
 
2016
 
2015
 
(in millions)
Operating revenues:
 
 
 
Electric utility

$361.6

 

$362.6

Gas utility
84.2

 
111.2

Steam and other
12.9

 
15.2

Total operating revenues
458.7

 
489.0

Operating expenses:
 
 
 
Electric production fuel and purchased power
99.4

 
110.1

Electric transmission service
86.5

 
83.9

Cost of gas sold
52.4

 
71.0

Other operation and maintenance
92.0

 
92.6

Depreciation and amortization
52.7

 
51.8

Taxes other than income taxes
13.7

 
14.1

Total operating expenses
396.7

 
423.5

Operating income
62.0

 
65.5

Interest expense and other:
 
 
 
Interest expense
24.9

 
24.1

Allowance for funds used during construction
(10.3
)
 
(5.3
)
Interest income and other

 
(0.1
)
Total interest expense and other
14.6

 
18.7

Income before income taxes
47.4

 
46.8

Income tax benefit
(0.8
)
 
(3.3
)
Net income
48.2

 
50.1

Preferred dividend requirements
2.6

 
2.6

Earnings available for common stock

$45.6

 

$47.5

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)
 
March 31,
2016
 
December 31,
2015
 
(in millions, except per
share and share amounts)
ASSETS
 
Current assets:
 
 
 
Cash and cash equivalents

$3.0

 

$4.5

Accounts receivable, less allowance for doubtful accounts
180.9

 
200.0

Production fuel, at weighted average cost
60.8

 
60.2

Gas stored underground, at weighted average cost
3.1

 
18.2

Materials and supplies, at weighted average cost
47.0

 
45.7

Regulatory assets
29.7

 
39.6

Other
13.8

 
28.2

Total current assets
338.3

 
396.4

Property, plant and equipment, net
4,993.8

 
4,925.1

Investments
0.7

 
19.6

Other assets:
 
 
 
Regulatory assets
1,376.2

 
1,363.0

Deferred charges and other
4.4

 
5.0

Total other assets
1,380.6

 
1,368.0

Total assets

$6,713.4

 

$6,709.1

LIABILITIES AND EQUITY
 
Current liabilities:
 
 
 
Accounts payable

$153.5

 

$197.2

Regulatory liabilities
133.1

 
130.9

Other
198.3

 
203.0

Total current liabilities
484.9

 
531.1

Long-term debt, net (excluding current portion)
1,857.4

 
1,856.9

Other liabilities:
 
 
 
Deferred tax liabilities
1,408.9

 
1,378.0

Regulatory liabilities
335.1

 
358.3

Pension and other benefit obligations
160.5

 
160.2

Other
223.7

 
229.3

Total other liabilities
2,128.2

 
2,125.8

Commitments and contingencies (Note 13)


 


Equity:
 
 
 
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
1,447.9

 
1,407.8

Retained earnings
561.6

 
554.1

Total Interstate Power and Light Company common equity
2,042.9

 
1,995.3

Cumulative preferred stock
200.0

 
200.0

Total equity
2,242.9

 
2,195.3

Total liabilities and equity

$6,713.4

 

$6,709.1


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

 
8
 


INTERSTATE POWER AND LIGHT COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
 
For the Three Months
 
Ended March 31,
 
2016
 
2015
 
(in millions)
Cash flows from operating activities:
 
 
 
Net income

$48.2

 

$50.1

Adjustments to reconcile net income to net cash flows from operating activities:
 
 
 
Depreciation and amortization
52.7

 
51.8

Other
3.2

 
12.8

Other changes in assets and liabilities:
 
 
 
Accounts receivable
(37.5
)
 
(2.2
)
Sales of accounts receivable
57.0

 
52.0

Gas stored underground
15.1

 
26.4

Accounts payable
(19.5
)
 
(36.1
)
Regulatory liabilities
(23.6
)
 
(11.8
)
Other
20.8

 
27.1

Net cash flows from operating activities
116.4

 
170.1

Cash flows used for investing activities:
 
 
 
Utility construction and acquisition expenditures
(135.3
)
 
(150.6
)
Other
12.1

 
(5.7
)
Net cash flows used for investing activities
(123.2
)
 
(156.3
)
Cash flows from (used for) financing activities:
 
 
 
Common stock dividends
(38.1
)
 
(35.0
)
Capital contributions from parent
40.0

 

Other
3.4

 
18.5

Net cash flows from (used for) financing activities
5.3

 
(16.5
)
Net decrease in cash and cash equivalents
(1.5
)
 
(2.7
)
Cash and cash equivalents at beginning of period
4.5

 
5.3

Cash and cash equivalents at end of period

$3.0

 

$2.6

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

($22.6
)
 

($18.4
)
Income taxes, net

$1.1

 

$6.2

Significant non-cash investing and financing activities:
 
 
 
Accrued capital expenditures

$47.6

 

$82.8


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



 
9
 


WISCONSIN POWER AND LIGHT COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
 
For the Three Months
 
Ended March 31,
 
2016
 
2015
 
(in millions)
Operating revenues:
 
 
 
Electric utility

$307.3

 

$308.7

Gas utility
68.0

 
87.2

Other
0.3

 
1.2

Total operating revenues
375.6

 
397.1

Operating expenses:
 
 
 
Electric production fuel and purchased power
101.5

 
105.8

Electric transmission service
41.4

 
39.3

Cost of gas sold
42.8

 
59.8

Other operation and maintenance
52.1

 
54.0

Depreciation and amortization
47.4

 
46.0

Taxes other than income taxes
11.6

 
11.4

Total operating expenses
296.8

 
316.3

Operating income
78.8

 
80.8

Interest expense and other:
 
 
 
Interest expense
22.9

 
23.1

Equity income from unconsolidated investments
(10.7
)
 
(7.8
)
Allowance for funds used during construction
(2.9
)
 
(1.5
)
Interest income and other
(0.1
)
 
0.1

Total interest expense and other
9.2

 
13.9

Income before income taxes
69.6

 
66.9

Income taxes
22.6

 
21.8

Net income
47.0

 
45.1

Net income attributable to noncontrolling interest
0.5

 
0.2

Earnings available for common stock

$46.5

 

$44.9

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.

 
10
 


WISCONSIN POWER AND LIGHT COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
 
March 31,
2016
 
December 31,
2015
 
(in millions, except per
share and share amounts)
ASSETS
 
Current assets:
 
 
 
Cash and cash equivalents

$1.3

 

$0.4

Accounts receivable, less allowance for doubtful accounts
192.6

 
185.4

Production fuel, at weighted average cost
37.2

 
38.6

Gas stored underground, at weighted average cost
12.8

 
25.1

Materials and supplies, at weighted average cost
34.0

 
33.5

Regulatory assets
81.8

 
80.6

Other
51.2

 
59.9

Total current assets
410.9

 
423.5

Property, plant and equipment, net
4,141.6

 
4,103.7

Investments:
 
 
 
Investment in American Transmission Company LLC
302.5

 
293.3

Other
14.7

 
15.4

Total investments
317.2

 
308.7

Other assets:
 
 
 
Regulatory assets
429.5

 
425.4

Deferred charges and other
6.7

 
9.1

Total other assets
436.2

 
434.5

Total assets

$5,305.9

 

$5,270.4

LIABILITIES AND EQUITY
 
Current liabilities:
 
 
 
Commercial paper

$25.5

 

$19.9

Accounts payable
111.0

 
136.0

Regulatory liabilities
60.0

 
56.2

Other
146.7

 
124.8

Total current liabilities
343.2

 
336.9

Long-term debt, net (excluding current portion)
1,534.2

 
1,533.9

Other liabilities:
 
 
 
Deferred tax liabilities
1,025.1

 
1,005.4

Regulatory liabilities
182.8

 
192.3

Capital lease obligations - Sheboygan Falls Energy Facility
82.1

 
83.6

Pension and other benefit obligations
186.4

 
188.7

Other
169.0

 
162.0

Total other liabilities
1,645.4

 
1,632.0

Commitments and contingencies (Note 13)

 

Equity:
 
 
 
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
959.1

 
959.0

Retained earnings
743.8

 
731.1

Total Wisconsin Power and Light Company common equity
1,769.1

 
1,756.3

Noncontrolling interest
14.0

 
11.3

Total equity
1,783.1

 
1,767.6

Total liabilities and equity

$5,305.9

 

$5,270.4

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

 
11
 


WISCONSIN POWER AND LIGHT COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
 
For the Three Months
 
Ended March 31,
 
2016
 
2015
 
(in millions)
Cash flows from operating activities:
 
 
 
Net income

$47.0

 

$45.1

Adjustments to reconcile net income to net cash flows from operating activities:
 
 
 
Depreciation and amortization
47.4

 
46.0

Deferred tax expense and investment tax credits
18.8

 
10.1

Other
(10.9
)
 
(0.9
)
Other changes in assets and liabilities:
 
 
 
Gas stored underground
12.3

 
23.1

Accounts payable
(15.3
)
 
4.0

Derivative liabilities
19.5

 
4.6

Other
4.8

 
25.8

Net cash flows from operating activities
123.6

 
157.8

Cash flows used for investing activities:
 
 
 
Utility construction and acquisition expenditures
(85.1
)
 
(75.4
)
Other
(6.3
)
 
(3.0
)
Net cash flows used for investing activities
(91.4
)
 
(78.4
)
Cash flows used for financing activities:
 
 
 
Common stock dividends
(33.8
)
 
(31.8
)
Other
2.5

 
(3.4
)
Net cash flows used for financing activities
(31.3
)
 
(35.2
)
Net increase in cash and cash equivalents
0.9

 
44.2

Cash and cash equivalents at beginning of period
0.4

 
46.7

Cash and cash equivalents at end of period

$1.3

 

$90.9

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

($21.9
)
 

($22.6
)
Income taxes, net

($7.4
)
 

$9.1

Significant non-cash investing and financing activities:
 
 
 
Accrued capital expenditures

$49.7

 

$32.9


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

 
12
 


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

COMBINED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NOTE 1(a) General - The interim unaudited Financial Statements included herein have been prepared 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 GAAP have been condensed or omitted, although management believes that the disclosures are adequate to make the information presented not misleading. These Financial Statements should be read in conjunction with the financial statements and the notes thereto included in the 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 results of operations, financial position and cash flows have been made. Results for the three months ended March 31, 2016 are not necessarily indicative of results that may be expected for the year ending December 31, 2016. A change in management’s estimates or assumptions could have a material impact on financial condition and results of operations during the period in which such change occurred. Certain prior period amounts in the Financial Statements and Notes have been reclassified to conform to the current period presentation for comparative purposes. Unless otherwise noted, the Notes herein exclude discontinued operations for all periods presented. In the fourth quarter of 2015, IPL and WPL implemented a change in method of recording income taxes that impacts the separate financial statements of IPL and WPL. As required by GAAP, all prior period financial statements and disclosures presented herein have been restated to reflect these changes.

NOTE 1(b) New Accounting Standards -
Revenue Recognition - In May 2014, the Financial Accounting Standards Board issued an accounting standard providing principles for recognizing revenue for the transfer of promised goods or services to customers with the consideration to which the entity expects to be entitled in exchange for those goods or services. This standard also requires disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Alliant Energy, IPL and WPL currently expect to adopt this standard on January 1, 2018 and are currently evaluating the impact of this standard on their financial condition and results of operations.

Leases - In February 2016, the Financial Accounting Standards Board issued an accounting standard requiring lease assets and lease liabilities, including operating leases, to be recognized on the balance sheet for all leases with terms longer than 12 months. The standard also requires disclosure of key information about leasing arrangements. Alliant Energy, IPL and WPL are required to adopt this standard on January 1, 2019 and are currently evaluating the impact of this standard on their financial condition and results of operations. Early adoption of this standard is permitted.

NOTE 2. REGULATORY MATTERS
Regulatory Assets and Regulatory Liabilities -
Regulatory assets were comprised of the following items (in millions):
 
Alliant Energy
 
IPL
 
WPL
 
March 31,
2016
 
December 31,
2015
 
March 31,
2016
 
December 31,
2015
 
March 31,
2016
 
December 31,
2015
Tax-related

$1,002.7

 

$987.7

 

$972.0

 

$958.2

 

$30.7

 

$29.5

Pension and OPEB costs
570.0

 
579.5

 
293.6

 
298.1

 
276.4

 
281.4

AROs
96.1

 
92.4

 
54.1

 
50.8

 
42.0

 
41.6

Derivatives
86.6

 
70.6

 
25.5

 
28.2

 
61.1

 
42.4

WPL’s EGUs retired early
43.2

 
45.0

 

 

 
43.2

 
45.0

Emission allowances
26.7

 
26.9

 
26.7

 
26.9

 

 

Commodity cost recovery
26.3

 
35.9

 
0.3

 
2.8

 
26.0

 
33.1

Other
65.6

 
70.6

 
33.7

 
37.6

 
31.9

 
33.0

 

$1,917.2

 

$1,908.6

 

$1,405.9

 

$1,402.6

 

$511.3

 

$506.0



 
13
 


Regulatory liabilities were comprised of the following items (in millions):
 
Alliant Energy
 
IPL
 
WPL
 
March 31,
2016
 
December 31,
2015
 
March 31,
2016
 
December 31,
2015
 
March 31,
2016
 
December 31,
2015
Cost of removal obligations

$408.1

 

$406.0

 

$263.1

 

$260.4

 

$145.0

 

$145.6

IPL’s tax benefit riders
141.1

 
159.2

 
141.1

 
159.2

 

 

Electric transmission cost recovery
51.4

 
43.5

 
25.5

 
21.9

 
25.9

 
21.6

Energy efficiency cost recovery
41.6

 
48.3

 

 

 
41.6

 
48.3

Commodity cost recovery
35.2

 
37.6

 
20.4

 
23.5

 
14.8

 
14.1

Other
33.6

 
43.1

 
18.1

 
24.2

 
15.5

 
18.9

 

$711.0

 

$737.7

 

$468.2

 

$489.2

 

$242.8

 

$248.5


Tax-related - Alliant Energy’s and IPL’s tax-related regulatory assets are generally impacted by certain property-related differences at IPL for which deferred tax is not recorded in the income statement pursuant to Iowa rate-making principles. Deferred tax amounts for such property-related differences at IPL are recorded to regulatory assets, along with the necessary revenue requirement tax gross-ups. During the three months ended March 31, 2016, Alliant Energy’s and IPL’s tax-related regulatory assets increased primarily due to property-related differences for qualifying repair expenditures.

Derivatives - Refer to Note 12 for discussion of derivative assets and derivative liabilities.

IPL’s tax benefit riders - IPL’s tax benefit riders utilize regulatory liabilities to credit bills of IPL’s Iowa retail electric and gas customers to help offset the impact of rate increases on such customers. These regulatory liabilities are related to tax benefits from tax accounting method changes for repairs expenditures, allocation of mixed service costs, allocation of insurance proceeds from floods in 2008, and cost of removal expenditures. For the three months ended March 31, 2016, Alliant Energy’s and IPL’s “IPL’s tax benefit riders” regulatory liabilities decreased by $18 million as follows (in millions):
Electric tax benefit rider credits

$15

Gas tax benefit rider credits
3

 

$18


Refer to Note 8 for additional details regarding IPL’s tax benefit riders.

Utility Rate Cases -
IPL’s Iowa Retail Electric Rate Settlement Agreement - The IUB approved a settlement agreement in 2014 related to rates charged to IPL’s Iowa retail electric customers. The settlement agreement extends IPL’s Iowa retail electric base rates authorized in its 2009 Test Year rate case through 2016 and provides targeted retail electric customer billing credits. For the three months ended March 31, IPL recorded billing credits to reduce retail electric customers’ bills as follows (in millions):
 
2016
 
2015
Billing credits to reduce retail electric customers’ bills
$2
 

$6


NOTE 3. PROPERTY, PLANT AND EQUIPMENT
Utility -
Emission Controls Project -
WPL’s Edgewater Unit 5 - WPL is currently constructing a scrubber and baghouse at Edgewater Unit 5 to reduce SO2 and mercury emissions at the EGU. Construction began in 2014 and is expected to be completed in 2016. As of March 31, 2016, Alliant Energy and WPL recorded capitalized expenditures for construction work in progress of $207 million and AFUDC of $10 million for the scrubber and baghouse in “Property, plant and equipment, net” on their balance sheets.

Natural Gas-Fired Generation Project -
IPL’s Marshalltown Generating Station - IPL is currently constructing Marshalltown, an approximate 650 MW natural gas-fired combined-cycle EGU. Construction began in 2014 and is expected to be completed in 2017. As of March 31, 2016, Alliant Energy and IPL recorded capitalized expenditures for construction work in progress of $492 million and AFUDC of $33 million for Marshalltown in “Property, plant and equipment, net” on their balance sheets.


 
14
 


NOTE 4. RECEIVABLES
Sales of Accounts Receivable - IPL maintains a Receivables Agreement whereby it may sell its customer accounts receivables, unbilled revenues and certain other accounts receivables to a third party through wholly-owned and consolidated special purpose entities. In March 2016, IPL extended through March 2018 the purchase commitment from the third party to which it sells its receivables. The transfers of receivables meet the criteria for sale accounting established by the transfer of financial assets accounting rules. As of March 31, 2016, IPL sold $220.5 million of receivables to the third party, received $62.0 million in cash proceeds and recorded deferred proceeds of $154.2 million.

IPL’s maximum and average outstanding cash proceeds related to the sales of accounts receivable program for the three months ended March 31 were as follows (in millions):
 
2016
 
2015
Maximum outstanding aggregate cash proceeds (based on daily outstanding balances)

$75.0

 

$118.0

Average outstanding aggregate cash proceeds (based on daily outstanding balances)
39.1

 
68.0


For the three months ended March 31, 2016 and 2015, IPL’s costs incurred related to the sales of accounts receivable program were not material.

The attributes of IPL’s receivables sold under the Receivables Agreement were as follows (in millions):
 
March 31, 2016
 
December 31, 2015
Customer accounts receivable

$142.7

 

$109.7

Unbilled utility revenues
77.5

 
71.3

Other receivables
0.3

 
0.1

Receivables sold to third party
220.5

 
181.1

Less: cash proceeds (a)
62.0

 
5.0

Deferred proceeds
158.5

 
176.1

Less: allowance for doubtful accounts
4.3

 
4.1

Fair value of deferred proceeds

$154.2

 

$172.0


(a)
Changes in cash proceeds are presented in “Sales of accounts receivable” in operating activities in Alliant Energy’s and IPL’s cash flows statements.

As of March 31, 2016, outstanding receivables past due under the Receivables Agreement were $47.5 million. Additional attributes of IPL’s receivables sold under the Receivables Agreement for the three months ended March 31 were as follows (in millions):
 
2016
 
2015
Collections reinvested in receivables

$440.2

 

$505.9

Credit losses, net of recoveries
0.4

 
1.0


NOTE 5. INVESTMENTS
NOTE 5(a) Unconsolidated Equity Investments - Equity (income) loss from unconsolidated investments accounted for under the equity method of accounting for the three months ended March 31 was as follows (in millions):
 
Alliant Energy
 
WPL
 
2016
 
2015
 
2016
 
2015
ATC

($10.7
)
 

($7.8
)
 

($10.7
)
 

($7.8
)
Other
0.2

 
1.3

 

 

 

($10.5
)
 

($6.5
)
 

($10.7
)
 

($7.8
)

NOTE 5(b) Cash Surrender Value of Life Insurance Policies - During the three months ended March 31, 2016, certain of Alliant Energy’s and IPL’s company-owned life insurance policies were liquidated. The related proceeds of $26 million and $18 million were recorded in investing activities in Alliant Energy’s and IPL’s cash flows statements, respectively.


 
15
 


NOTE 6. COMMON EQUITY
Common Share Activity - A summary of Alliant Energy’s common stock activity was as follows:
Shares outstanding, January 1, 2016
113,459,216

Shareowner Direct Plan issuances
92,231

Equity-based compensation plans (Note 9(b))
11,204

Shares outstanding, March 31, 2016
113,562,651


Common Stock Split - On April 20, 2016, Alliant Energy’s Board of Directors approved a two-for-one common stock split and a proportionate increase in the number of shares of common stock of Alliant Energy from 240 million shares to 480 million shares to implement the stock split. Alliant Energy shareowners of record at the close of business on May 4, 2016 will receive one additional share of Alliant Energy common stock for each share held on that date. The proportionate interest that a shareowner owns in Alliant Energy will not change as a result of the stock split. The additional shares are expected to be distributed on May 19, 2016 and post-split trading is expected to begin on May 20, 2016. Based on common shares outstanding as of March 31, 2016, upon the completion of the stock split, Alliant Energy will have approximately 227 million shares of common stock outstanding. Except as disclosed in the pro forma EPS information below, all share and per share amounts for the three months ended March 31, 2016 and 2015 in this report have been reflected on a pre-split basis. The stock split will require all historical common stock shares and EPS data to be recast in the second quarter of 2016. For the three months ended March 31, pro forma basic and diluted EPS attributable to Alliant Energy common shareowners to reflect the two-for-one common stock split is as follows:
 
2016
 
2015
Basic and diluted EPS:
 
 
 
As reported

$0.85

 

$0.87

Pro forma
0.43

 
0.43


Dividend Restrictions - As of March 31, 2016, IPL’s amount of retained earnings that were free of dividend restrictions was $562 million. As of March 31, 2016, WPL’s amount of retained earnings that were free of dividend restrictions was $101 million for the remainder of 2016.

Restricted Net Assets of Subsidiaries - As of March 31, 2016, the amount of net assets of IPL and WPL that were not available to be transferred to their parent company, Alliant Energy, in the form of loans, advances or cash dividends without the consent of IPL’s and WPL’s regulatory authorities was $1.5 billion and $1.7 billion, respectively.

Capital Transactions with Subsidiaries - For the three months ended March 31, 2016, IPL received capital contributions of $40.0 million from its parent company. For the three months ended March 31, 2016, IPL and WPL paid common stock dividends of $38.1 million and $33.8 million, respectively, to their parent company.

Comprehensive Income - For the three months ended March 31, 2016 and 2015, Alliant Energy had no other comprehensive income; therefore, its comprehensive income was equal to its net income and its comprehensive income attributable to Alliant Energy common shareowners was equal to its net income attributable to Alliant Energy common shareowners for such periods. For the three months ended March 31, 2016 and 2015, IPL and WPL had no other comprehensive income; therefore, their comprehensive income was equal to their net income and their comprehensive income available for common stock was equal to their earnings available for common stock for such periods.

NOTE 7. DEBT
Short-term Debt - Information regarding commercial paper classified as short-term debt and back-stopped by the credit facilities was as follows (dollars in millions):
 
Alliant Energy
 
Parent
 
 
 
 
March 31, 2016
(Consolidated)
 
Company
 
IPL
 
WPL
Commercial paper:
 
 
 
 
 
 
 
Amount outstanding
$213.4
 
$187.9
 
$—
 
$25.5
Weighted average remaining maturity
2 days
 
2 days
 
N/A
 
1 day
Weighted average interest rates
0.6%
 
0.6%
 
N/A
 
0.4%
Available credit facility capacity
$786.6
 
$112.1
 
$300.0
 
$374.5

 
16
 


 
Alliant Energy
 
IPL
 
WPL
Three Months Ended March 31
2016
 
2015
 
2016
 
2015
 
2016
 
2015
Maximum amount outstanding
(based on daily outstanding balances)

$242.6

 

$151.3

 

$—

 

$1.4

 
$55.7
 

$—

Average amount outstanding
(based on daily outstanding balances)

$199.0

 

$127.9

 

$—

 

$—

 
$25.8
 

$—

Weighted average interest rates
0.6
%
 
0.4
%
 
N/A

 
0.4
%
 
0.4%
 
N/A


NOTE 8. INCOME TAXES
Income Tax Rates - The provision for income taxes for earnings from continuing operations is based on an estimated annual effective income tax rate that excludes the impact of significant unusual or infrequently occurring items, discontinued operations or extraordinary items. The overall income tax rates shown in the following table were computed by dividing income tax expense (benefit) by income from continuing operations before income taxes.
 
Alliant Energy
 
IPL
 
WPL
Three Months Ended March 31
2016
 
2015
 
2016
 
2015
 
2016
 
2015
Statutory federal income tax rate
35.0
 %
 
35.0
 %
 
35.0
%
 
35.0
%
 
35.0
 %
 
35.0
 %
IPL’s tax benefit riders
(8.7
)
 
(9.9
)
 
(20.7
)
 
(25.2
)
 

 

Effect of rate-making on property-related differences
(6.8
)
 
(6.1
)
 
(15.2
)
 
(14.6
)
 
(0.8
)
 
(0.6
)
Production tax credits
(6.3
)
 
(6.2
)
 
(6.7
)
 
(7.1
)
 
(6.5
)
 
(6.2
)
Other items, net
4.5

 
4.3

 
5.9

 
4.8

 
4.8

 
4.4

Overall income tax rate
17.7
%
 
17.1
%
 
(1.7
%)
 
(7.1
%)
 
32.5
%
 
32.6
%

IPL’s tax benefit riders - Alliant Energy’s and IPL’s effective income tax rates include the impact of reducing income tax expense with offsetting reductions to regulatory liabilities as a result of implementing IPL’s tax benefit riders. Refer to Note 2 for additional details of the tax benefit riders.

Deferred Tax Assets and Liabilities - For the three months ended March 31, 2016, Alliant Energy’s, IPL’s and WPL’s non-current deferred tax liabilities increased $43.4 million, $30.9 million and $19.7 million, respectively. These increases in non-current deferred tax liabilities were primarily due to property-related differences recorded during the three months ended March 31, 2016.

Carryforwards - At March 31, 2016, tax carryforwards and associated deferred tax assets and expiration dates were estimated as follows (dollars in millions):
 
 
 
Alliant Energy
 
IPL
 
WPL
 
Earliest
Expiration Date
 
Tax Carryforwards
 
Deferred
Tax Assets
 
Tax Carryforwards
 
Deferred
Tax Assets
 
Tax Carryforwards
 
Deferred
Tax Assets
Federal net operating losses
2030
 

$733

 

$252

 

$330

 

$111

 

$298

 

$104

State net operating losses
2018
 
748

 
39

 
20

 
1

 
47

 
2

Federal tax credits
2022
 
250

 
246

 
89

 
86

 
101

 
101

 
 
 
 
 

$537

 
 
 

$198

 
 
 

$207


NOTE 9. BENEFIT PLANS
NOTE 9(a) Pension and Other Postretirement Benefits Plans -
Net Periodic Benefit Costs (Credits) - The components of net periodic benefit costs (credits) for sponsored defined benefit pension and OPEB plans for the three months ended March 31 are included in the tables below (in millions). In IPL’s and WPL’s tables below, the defined benefit pension plans costs represent those respective costs for their bargaining unit employees covered under the qualified plans that they sponsor, as well as amounts directly assigned to them related to their current and former non-bargaining employees who are participants in the Alliant Energy and Corporate Services sponsored qualified and non-qualified defined benefit pension plans. In IPL’s and WPL’s tables below, the OPEB plans costs (credits) represent respective costs (credits) for their employees, as well as amounts directly assigned to them related to their current and former non-bargaining employees who are participants in the Corporate Services sponsored OPEB plan.

17


 
Defined Benefit Pension Plans
 
OPEB Plans
Alliant Energy
2016
 
2015
 
2016
 
2015
Service cost

$3.2

 

$4.0

 

$1.3

 

$1.4

Interest cost
13.3

 
13.4

 
2.3

 
2.2

Expected return on plan assets
(16.4
)
 
(18.7
)
 
(1.5
)
 
(2.1
)
Amortization of prior service credit
(0.1
)
 
(0.1
)
 
(1.0
)
 
(2.8
)
Amortization of actuarial loss
9.3

 
8.8

 
1.2

 
1.2

Additional benefit costs

 
0.2

 

 

 

$9.3

 

$7.6

 

$2.3

 

($0.1
)
 
Defined Benefit Pension Plans
 
OPEB Plans
IPL
2016
 
2015
 
2016
 
2015
Service cost

$1.9

 

$2.2

 

$0.6

 

$0.6

Interest cost
6.1

 
6.2

 
1.0

 
0.9

Expected return on plan assets
(7.7
)
 
(8.9
)
 
(1.0
)
 
(1.4
)
Amortization of prior service credit

 

 
(0.7
)
 
(1.5
)
Amortization of actuarial loss
4.1

 
3.8

 
0.6

 
0.6

 

$4.4

 

$3.3

 

$0.5

 

($0.8
)
 
Defined Benefit Pension Plans
 
OPEB Plans
WPL
2016
 
2015
 
2016
 
2015
Service cost

$1.2

 

$1.4

 

$0.5

 

$0.6

Interest cost
5.6

 
5.6

 
0.9

 
0.9

Expected return on plan assets
(7.1
)
 
(8.1
)
 
(0.2
)
 
(0.4
)
Amortization of prior service cost (credit)
0.1

 
0.1

 
(0.2
)
 
(0.9
)
Amortization of actuarial loss
4.4

 
4.2

 
0.5

 
0.6

Additional benefit costs

 
0.2

 

 

 

$4.2

 

$3.4

 

$1.5

 

$0.8


401(k) Savings Plans - A significant number of employees participate in defined contribution retirement plans (401(k) savings plans). For the three months ended March 31, costs related to the 401(k) savings plans, which are partially based on the participants’ contributions and include allocated costs associated with Corporate Services employees for IPL and WPL, were as follows (in millions):
 
Alliant Energy
 
IPL
 
WPL
 
2016
 
2015
 
2016
 
2015
 
2016
 
2015
401(k) costs

$6.2

 

$6.7

 

$3.1

 

$3.4

 

$2.8

 

$2.9


NOTE 9(b) Equity-based Compensation Plans - A summary of compensation expense, including amounts allocated to IPL and WPL, and the related income tax benefits recognized for share-based compensation awards for the three months ended March 31 was as follows (in millions):
 
Alliant Energy
 
IPL
 
WPL
 
2016
 
2015
 
2016
 
2015
 
2016
 
2015
Compensation expense

$5.3

 

$3.2

 

$2.8

 

$1.7

 

$2.3

 

$1.4

Income tax benefits
2.2

 
1.3

 
1.1

 
0.7

 
0.9

 
0.6


As of March 31, 2016, total unrecognized compensation cost related to share-based compensation awards was $12.9 million, which is expected to be recognized over a weighted average period of between one and two years. Share-based compensation expense is recognized on a straight-line basis over the requisite service periods and is primarily recorded in “Other operation and maintenance” in the income statements.


 
18
 


Performance Shares and Performance Units - A summary of the performance shares and performance units activity, with amounts representing the target number of awards, was as follows:
 
Performance Shares
 
Performance Units
 
2016
 
2015
 
2016
 
2015
Nonvested awards, January 1
144,215

 
144,424

 
58,206

 
63,665

Granted
33,776

 
45,403

 
11,959

 
17,837

Vested
(49,093
)
 
(45,612
)
 
(21,380
)
 
(22,845
)
Forfeited
(615
)
 

 
(382
)
 
(93
)
Nonvested awards, March 31
128,283

 
144,215

 
48,403

 
58,564


Granted Awards - For the performance units granted in 2016, each performance unit’s value is based on the closing market price of one share of Alliant Energy’s common stock at the end of the performance period. For the performance units granted prior to 2016, each performance unit’s value is based on the closing market price of one share of Alliant Energy’s common stock on the grant date of the award.

Vested Awards - During the three months ended March 31, certain performance shares and performance units vested, resulting in payouts (a combination of cash and common stock for the performance shares and cash only for the performance units) as follows:
 
Performance Shares
 
Performance Units
 
2016
 
2015
 
2016
 
2015
 
2013 Grant
 
2012 Grant
 
2013 Grant
 
2012 Grant
Performance awards vested
49,093

 
45,612

 
21,380

 
22,845

Percentage of target number of performance awards
165.0
%
 
167.5
%
 
165.0
%
 
167.5
%
Aggregate payout value (in millions)

$5.1

 

$5.1

 

$1.7

 

$1.6

Payout - cash (in millions)

$2.9

 

$3.2

 

$1.7

 

$1.6

Payout - common stock shares issued
11,204

 
10,975

 
N/A