Pursuant to Rule No. 424B3
File No. 333-75020
PROSPECTUS
[ALLIANT ENERGY LOGO]
ALLIANT ENERGY RESOURCES, INC.
OFFER TO EXCHANGE
ALL OUTSTANDING
7% SENIOR NOTES DUE 2011
$300,000,000 PRINCIPAL AMOUNT OUTSTANDING
FOR
NEW 7% SENIOR NOTES DUE 2011
$300,000,000 PRINCIPAL AMOUNT
----------------------
- We are offering to exchange new registered 7% Senior Notes due 2011 for all of
our outstanding unregistered 7% Senior Notes due 2011.
- The exchange offer expires at 11:59 p.m., New York City time, on January 31,
2002, unless we extend it.
- The terms of the new senior notes are substantially identical to those of the
old senior notes, except that the new senior notes will not have securities
law transfer restrictions and registration rights relating to the old senior
notes and the new senior notes will not provide for the payment of additional
interest under circumstances relating to the timing of the exchange offer.
- Our parent, Alliant Energy Corporation, will fully and unconditionally
guarantee the new senior notes.
- All outstanding senior notes that are validly tendered and not validly
withdrawn will be exchanged.
- You may withdraw your tender of old senior notes any time before the exchange
offer expires.
- We will not receive any proceeds from the exchange offer.
- No established trading market for the new senior notes currently exists. The
new senior notes will not be listed on any securities exchange or included in
any automated quotation system.
- The exchange of senior notes will not be a taxable event for U.S. federal
income tax purposes.
SEE "RISK FACTORS" BEGINNING ON PAGE 11 FOR A DISCUSSION OF RISK FACTORS
THAT YOU SHOULD CONSIDER BEFORE DECIDING TO EXCHANGE YOUR OLD SENIOR NOTES FOR
NEW SENIOR NOTES.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
----------------------
The date of this prospectus is December 28, 2001.
TABLE OF CONTENTS
Prospectus Summary.......................................... 3
Risk Factors................................................ 11
Forward-Looking Statements.................................. 13
Where You Can Find More Information......................... 14
Use of Proceeds............................................. 15
Capitalization.............................................. 15
The Exchange Offer.......................................... 16
Business.................................................... 24
Description of Other Outstanding Indebtedness............... 37
Description of the New Senior Notes......................... 38
United States Federal Income Tax Considerations............. 52
Plan of Distribution........................................ 53
Legal Matters............................................... 53
Experts..................................................... 53
----------------------
In this prospectus, "we," "us" and "our" refer to Alliant Energy Resources,
Inc.
THIS PROSPECTUS INCORPORATES IMPORTANT BUSINESS AND FINANCIAL INFORMATION
ABOUT US AND ALLIANT ENERGY CORPORATION THAT IS NOT INCLUDED IN OR DELIVERED
WITH THIS PROSPECTUS. WE WILL PROVIDE YOU WITHOUT CHARGE UPON YOUR REQUEST, A
COPY OF ANY DOCUMENTS THAT WE INCORPORATE BY REFERENCE, OTHER THAN EXHIBITS TO
THOSE DOCUMENTS THAT ARE NOT SPECIFICALLY INCORPORATED BY REFERENCE INTO THOSE
DOCUMENTS. YOU MAY REQUEST A COPY OF A DOCUMENT BY WRITING TO EDWARD M. GLEASON,
VICE PRESIDENT-TREASURER AND CORPORATE SECRETARY, ALLIANT ENERGY CORPORATION,
222 WEST WASHINGTON AVENUE, MADISON, WISCONSIN 53703, OR BY CALLING MR. GLEASON
AT (608) 252-3311. TO ENSURE TIMELY DELIVERY, YOU MUST REQUEST THE INFORMATION
NO LATER THAN FIVE BUSINESS DAYS BEFORE THE COMPLETION OF THE EXCHANGE OFFER.
THEREFORE, YOU MUST MAKE ANY REQUEST ON OR BEFORE JANUARY 24, 2002.
PROSPECTUS SUMMARY
The following prospectus summary highlights selected information from this
prospectus and may not contain all of the information that is important to you.
This prospectus includes the specific terms of the new senior notes we are
offering, as well as information regarding our business. We encourage you to
read this prospectus in its entirety.
ALLIANT ENERGY RESOURCES, INC.
We are a wholly-owned subsidiary of Alliant Energy Corporation, which is a
growing diversified energy-services provider engaged primarily in regulated
utility operations in both the Midwest and, through our company,
internationally. Alliant Energy Corporation also has significant non-regulated
domestic and international operations through our company. We manage a portfolio
of companies involved in international utility operations and non-regulated
domestic and international businesses through our company:
- International: We have established global partnerships to develop energy
generation, delivery and infrastructure in growing international markets,
including Australia, Brazil, China and New Zealand. We have strategic
investments in hydro generation assets in Australia, distribution and
generation in Brazil, combined heat and power plants in China and an
equity investment in hydro and wind generation in New Zealand. Our global
partners include Companhia Forca e Luz Cataguazes-Leopoldina and
TrustPower Limited.
- Non-Regulated Generation: Consistent with our strategy to accumulate and
develop a portfolio of domestic non-regulated generation assets, in
October 2001 Alliant Energy Corporation announced our partnership with
Panda Energy International to jointly develop and operate a
1,100-megawatt natural gas combined-cycle power plant in western
Michigan. We expect that construction of the facility will begin during
the first quarter of 2002 and that the facility will become operational
in 2004, in each case assuming some conditions are satisfied.
- Investments: Our existing investments include our wholly-owned oil and
gas production company, Whiting Petroleum Corporation; a short-line
railroad, Cedar Rapids and Iowa City Railway Company; a barge company,
IEI Barge Services, Inc.; our investments in affordable housing through
Heartland Properties, Inc.; various real estate joint ventures; and an
equity stake in an independent telecommunications provider, McLeodUSA
Incorporated.
- Trading: We have an energy-trading joint venture with Cargill
Incorporated, one of the world's largest and most established commodities
trading firms, that combines Cargill's risk-management and commodity
trading expertise with our low-cost electricity generation and
transmission business experience.
- Integrated Services: Our integrated services division includes Cogenex
Corporation, a provider of energy management consulting, on-site
generation and energy infrastructure; Alliant Energy Integrated
Services -- Energy Management LLC, an energy procurement company; and
RMT, Inc., a provider of environmental engineering and construction
management services. These companies provide services for commercial,
industrial, institutional, educational and governmental customers.
Our principal executive offices are located at Alliant Energy Tower, 200
First Street SE, Cedar Rapids, Iowa 52401, and our telephone number is (319)
398-4411.
3
ALLIANT ENERGY CORPORATION
Alliant Energy Corporation, the guarantor of the senior notes, is a growing
diversified energy-services provider engaged primarily in regulated utility
operations in both the Midwest, through its domestic regulated utility
subsidiaries, and internationally, through our company. Alliant Energy
Corporation also has significant non-regulated domestic and international
operations through our company. Alliant Energy Corporation was formed in April
1998 as a result of the merger of WPL Holdings, Inc., IES Industries Inc. and
Interstate Power Company. Through its subsidiaries and partners, Alliant Energy
Corporation provides electric, natural gas, water and steam services to over 3
million customers worldwide. Alliant Energy Corporation's domestic regulated
public utility subsidiaries, IES Utilities Inc., Wisconsin Power and Light
Company and Interstate Power Company, operate in Iowa, Wisconsin, Illinois and
Minnesota.
Alliant Energy Corporation's principal executive offices are located at 222
West Washington Avenue, Madison, Wisconsin 53703, and its telephone number is
(608) 252-3311.
RECENT DEVELOPMENTS
ALLIANT ENERGY CORPORATION EQUITY OFFERING
On November 15, 2001, Alliant Energy Corporation completed an underwritten
public offering of 9.775 million shares of its common stock at a price to the
public of $28.00 per share. This number of shares included the sale of 1.275
million shares pursuant to the exercise of the underwriters' over-allotment
option. Alliant Energy Corporation used the net proceeds from this offering to
repay Alliant Energy Corporation's short-term debt.
4
THE EXCHANGE OFFER
Old Senior Notes.............. We sold $300,000,000 of our 7% Senior Notes due
2011, which are fully and unconditionally
guaranteed by Alliant Energy Corporation, to
the initial purchasers on November 15, 2001. In
this prospectus, we refer to those senior notes
as the old senior notes. We issued the old
senior notes at a discount of .65% per old
senior note, which means the initial purchasers
paid less than the principal amount for the old
senior notes. The initial purchasers resold
those old senior notes to qualified
institutional buyers pursuant to Rule 144A
under the Securities Act of 1933.
Registration Rights
Agreement..................... When we sold the old senior notes, we entered
into a registration rights agreement with the
initial purchasers in which we agreed, among
other things, to provide to you and all other
holders of the old senior notes the opportunity
to exchange your unregistered old senior notes
for a new series of substantially identical new
senior notes that we have registered under the
Securities Act. This exchange offer is being
made for that purpose.
New Senior Notes.............. We are offering to exchange the old senior
notes for 7% Senior Notes due 2011 that have
been registered under the Securities Act, which
are fully and unconditionally guaranteed by
Alliant Energy Corporation. In this prospectus,
we refer to those registered senior notes as
the new senior notes. The terms of the new
senior notes and the old senior notes are
substantially identical except:
- the new senior notes will be issued in a
transaction that will have been registered
under the Securities Act;
- the new senior notes will not contain
securities law restrictions on transfer; and
- the new senior notes will not provide for the
payment of additional interest under
circumstances relating to the timing of the
exchange offer.
The Exchange Offer............ We are offering to exchange $1,000 principal
amount of the new senior notes for each $1,000
principal amount of your old senior notes. As
of the date of this prospectus, $300,000,000
aggregate principal amount of the old senior
notes are outstanding. For procedures for
tendering, see "The Exchange
Offer -- Procedures for Tendering Old Senior
Notes."
Expiration Date............... This exchange offer will expire at 11:59 p.m.,
New York City time, on January 31, 2002, unless
we extend it.
Resales of New Senior Notes... We believe that the new senior notes issued
pursuant to the exchange offer in exchange for
old senior notes may be offered for resale,
resold and otherwise transferred by you without
compliance with the registration and prospectus
delivery provisions of the Securities Act if:
- you are not our "affiliate" within the
meaning of Rule 405 under the Securities Act;
5
- you are acquiring the new senior notes in the
ordinary course of your business; and
- you have not engaged in, do not intend to
engage in, and have no arrangement or
understanding with any person to participate
in, a distribution of the new senior notes.
If you are an affiliate of ours, or are
engaging in or intend to engage in, or have any
arrangement or understanding with any person to
participate in, a distribution of the new
senior notes, then:
- you will not be permitted to tender old
senior notes in the exchange offer; and
- you must comply with the registration and
prospectus delivery requirements of the
Securities Act in connection with any resale
of the old senior notes.
Each participating broker-dealer that receives
new senior notes for its own account under the
exchange offer in exchange for old senior notes
that were acquired by the broker-dealer as a
result of market-making or other trading
activity must acknowledge that it will deliver
a prospectus in connection with any resale of
the new senior notes. See the caption "Plan of
Distribution."
Acceptance of Old Senior Notes
and Delivery of New Senior
Notes......................... We will accept for exchange any and all old
senior notes that are validly tendered in the
exchange offer and not withdrawn before the
offer expires. The new senior notes will be
delivered promptly following the completion of
the exchange offer.
Withdrawal Rights............. You may withdraw your tender of old senior
notes at any time before the exchange offer
expires.
Conditions of the Exchange
Offer......................... The exchange offer is subject to the following
conditions, which we may waive:
- the exchange offer, or the making of any
exchange by a holder of old senior notes,
will not violate any applicable law or
interpretation by the staff of the SEC; and
- no action may be pending or threatened in any
court or before any governmental agency with
respect to the exchange offer that may impair
our ability to proceed with the exchange
offer.
Consequences of Failure to
Exchange...................... If you are eligible to participate in the
exchange offer and you do not tender your old
senior notes, then you will not have further
exchange or registration rights and you will
continue to hold old senior notes subject to
restrictions on transfer.
Federal Income Tax
Consequences.................. The exchange of an old senior note for a new
senior note will not be taxable to a United
States holder for federal income tax purposes.
Consequently, you will not recognize any gain
or loss upon receipt of the new senior notes.
See "United States Federal Income Tax
Considerations."
Use of Proceeds............... We will not receive any proceeds from the
exchange offer.
6
Accounting Treatment.......... We will not recognize any gain or loss on the
exchange of senior notes. See "The Exchange
Offer -- Accounting Treatment."
Exchange Agent................ U.S. Bank National Association is the exchange
agent. See "The Exchange Offer -- Exchange
Agent."
THE NEW SENIOR NOTES
The new senior notes will evidence the same debt as the old senior notes
and will be governed by the same indenture, as supplemented, under which the old
senior notes were issued. In this prospectus summary, we refer to the old senior
notes and the new senior notes collectively as the senior notes.
Issuer........................ Alliant Energy Resources, Inc.
Notes Offered................. $300,000,000 aggregate principal amount of 7%
senior notes due 2011.
Maturity...................... December 1, 2011.
Interest Payment Dates........ June 1 and December 1 of each year, beginning
June 1, 2002.
Guarantee..................... Our parent, Alliant Energy Corporation, has
fully and unconditionally guaranteed the old
senior notes and will fully and unconditionally
guarantee the new senior notes.
Ranking....................... The old senior notes are, and the new senior
notes will be, unsecured and rank equally with
our unsecured senior indebtedness. The related
guarantees are and will be unsecured and rank
equally with unsecured senior indebtedness of
and guarantees issued by Alliant Energy
Corporation. The senior notes will effectively
rank junior to our subsidiaries' liabilities
and the related guarantees will effectively
rank junior to the liabilities of Alliant
Energy Corporation's subsidiaries. As of
September 30, 2001, after giving pro forma
effect to the sale of the old senior notes and
the application of the net proceeds as
described under "Use of Proceeds" and Alliant
Energy Corporation's sale of 9.775 million
shares of its common stock and the application
of approximately $263.0 million of net proceeds
from that offering (based on an offering price
of $28.00) to repay Alliant Energy
Corporation's short-term debt,
- we would have had outstanding $1,117.8
million of senior indebtedness, none of which
was secured;
- our consolidated subsidiaries would have had
outstanding $104.7 million of indebtedness;
and
- Alliant Energy Corporation would have had
outstanding $1,415.9 million of senior
indebtedness and guarantees, none of which
were secured.
Ratings....................... The senior notes have been assigned a rating of
BBB+ by Standard & Poor's Ratings Service and
Baa1 by Moody's Investor's Service, Inc.
Ratings are not a recommendation to buy, sell
or hold the senior notes. We cannot give any
assurance that the ratings will be retained for
any time period or that they will not be
revised downward or withdrawn by the ratings
agencies.
7
Optional Redemption........... We may redeem some or all of the senior notes
at any time at a redemption price equal to the
greater of:
- 100% of their principal amount or
- the sum of the present values of the
remaining scheduled payments of principal and
interest on the senior notes, discounted to
the redemption date on a semiannual basis at
the treasury rate plus 35 basis points.
Denomination.................. The senior old notes were, and the new senior
notes will be, issued in integral multiples of
$1,000.
Absence of Market for the
Senior Notes.................. The senior notes are a new issue of securities
with no established trading market. We
currently have no intention to apply to list
the senior notes on any securities exchange or
to seek their admission to trading on any
automated quotation system. Accordingly, we
cannot provide any assurance as to the
development or liquidity of any market for the
senior notes. See "Plan of Distribution."
No Limit on Debt.............. The indenture governing the senior notes does
not limit the amount of debt that we may issue
or provide holders any protection should we be
involved in a highly leveraged transaction.
Covenants..................... The indenture governing the senior notes
contains covenants that, among other things,
limit our ability and the ability of our
subsidiaries and, for some limited matters,
Alliant Energy Corporation to:
- issue, assume or guarantee some types of
secured indebtedness;
- engage in sale and lease-back transactions;
and
- consolidate or merge.
These covenants are subject to important
exceptions and qualifications, which are
described under the heading "Description of the
New Senior Notes -- Covenants" in this
prospectus.
Risk Factors.................. See "Risk Factors" and other information
included or incorporated by reference in this
prospectus for a discussion of factors you
should carefully consider before deciding to
exchange your old senior notes for new senior
notes.
8
SUMMARY FINANCIAL INFORMATION
ALLIANT ENERGY RESOURCES, INC.
Our unaudited summary consolidated financial information set forth below
was derived from Alliant Energy Corporation's financial statements and notes.
The information presented below for us includes data for Cargill-Alliant, LLC,
which is included in Alliant Energy Corporation's parent-only books for legal
reporting, but is included with our non-regulated businesses for management
reporting. Accordingly, the amounts set forth below for "operating income
(loss)," "net income (loss)" and "non-current assets" differ from the amounts
reported for those line items in Alliant Energy Corporation's condensed
consolidating financial statement footnote. The unaudited interim period
financial information, in our opinion, includes all adjustments, which are
normal and recurring in nature, necessary for a fair presentation for the
periods shown. Results for the nine months ended September 30, 2001 are not
necessarily indicative of results to be expected for the full fiscal year.
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
------------------------------- --------------------
1998 1999 2000 2000 2001
-------- -------- --------- -------- --------
(IN THOUSANDS)
INCOME STATEMENT DATA:
Operating revenues.................... $238,676 $235,039 $ 311,262 $204,559 $342,831
Operating income (loss)............... (8,608) (1,256) 19,147 4,490 28,191
Net income (loss)(1).................. (8,898) 37,813 236,734 213,898 329
Adjustments to net income(2).......... 2,580 (25,286) (219,607) (209,460) 19,602
Adjusted net income (loss)(1)(2)...... (6,318) 12,527 17,127 4,438 19,931
AS OF DECEMBER 31, AS OF SEPTEMBER 30,
----------------------- -----------------------
1999 2000 2000 2001
---------- ---------- ---------- ----------
(IN THOUSANDS)
BALANCE SHEET DATA:
Current assets............................... $ 132,401 $ 283,841 $ 139,862 $ 278,101
Non-current assets(1)........................ 1,723,145 2,049,437 1,965,335 1,514,536
Current liabilities.......................... 197,669 246,405 297,402 432,413
Non-current liabilities (excludes minority
interest).................................. 502,760 627,988 648,853 212,189
Minority interest............................ 7,208 23,341 7,452 50,850
---------------
(1) The Cargill-Alliant, LLC investment was transferred to Alliant Energy
Corporation's parent-only books in the fourth quarter of 1999. Net income
and adjusted net income for periods subsequent to that transfer include a
net loss of $0.1 million in 1999, net income of $9.5 million in 2000, net
income of $6.5 million for the nine months ended September 30, 2000 and net
income of $5.2 million for the nine months ended September 30, 2001 from the
Cargill-Alliant, LLC investment. Non-current assets related to the
Cargill-Alliant, LLC investment were $7.0 million at December 31, 1999,
$20.5 million at December 31, 2000, $15.8 million at September 30, 2000 and
$22.8 million at September 30, 2001.
(2) Adjusted net loss for 1998 excludes $2.6 million of merger-related charges.
Adjusted net income for 1999 excludes $25.3 million of income from gains on
sales of McLeodUSA stock. Adjusted net income for 2000 excludes $204.0
million of non-cash income related to Alliant Energy Corporation's adoption
of Statement of Financial Accounting Standards No. 133 on July 1, 2000, and
$15.7 million of income from gains on sales of McLeodUSA stock. Adjusted net
income for the nine months ended September 30, 2000 excludes $204.0 million
of non-cash income related to Alliant Energy Corporation's adoption of
Statement of Financial Accounting Standards No. 133, $6.7 million of income
from gains on sales of McLeodUSA stock and $1.2 million of non-cash
valuation charges related to our exchangeable senior notes. Adjusted net
income for the nine months ended September 30, 2001 excludes $19.6 million
of non-cash valuation charges related to our exchangeable senior notes.
9
ALLIANT ENERGY CORPORATION
The summary consolidated financial information of Alliant Energy
Corporation set forth below was selected or derived from the financial
statements of Alliant Energy Corporation. The unaudited interim period financial
information, in the opinion of Alliant Energy Corporation, includes all
adjustments, which are normal and recurring in nature, necessary for a fair
presentation for the periods shown. Results for the nine months ended September
30, 2001 are not necessarily indicative of results to be expected for the full
fiscal year. The information set forth below is qualified in its entirety by and
should be read in conjunction with Alliant Energy Corporation's Management's
Discussion and Analysis of Financial Condition and Results of Operations and
consolidated financial statements and related notes incorporated by reference
into this prospectus. See "Where You Can Find More Information."
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
-------------------------------------------------------------- -----------------------
1996 1997 1998 1999 2000 2000 2001
---- ---- ---- ---- ---- ---- ----
(DOLLARS IN THOUSANDS)
INCOME STATEMENT DATA:
Operating revenues........ $2,232,840 $2,300,627 $2,130,874 $2,127,973 $2,404,984 $1,701,139 $2,130,819
Operating income.......... 365,439 336,383 283,302 376,535 381,056 288,578 291,020
Income from continuing
operations.............. 157,088 144,578 96,675 196,581 398,662 337,846 118,970
Net income................ 155,791 144,578 96,675 196,581 398,662 337,846 118,970
Adjustments to net
income(1)............... 3,447 1,589 34,589 (25,286) (219,642) (209,495) 19,602
Adjusted net income(1).... 159,238 146,167 131,264 171,295 179,020 128,351 138,572
RATIO OF EARNINGS TO FIXED
CHARGES(2).............. 3.21 2.77 2.17 3.19 4.37 4.95 2.21
PER SHARE DATA:
Income from continuing
operations (diluted).... $ 2.08 $ 1.90 $ 1.26 $ 2.51 $ 5.03 $ 4.27 $ 1.50
Earnings per average
common share
(diluted)............... 2.06 1.90 1.26 2.51 5.03 4.27 1.50
Adjusted earnings per
average common share
(diluted)(1)............ 2.11 1.92 1.71 2.19 2.26 1.62 1.75
Dividends declared per
common share............ 1.97 2.00 2.00 2.00 2.00 1.50 1.50
AS OF DECEMBER 31, AS OF SEPTEMBER 30,
-------------------------------------------------------------- -----------------------
1996 1997 1998 1999 2000 2000 2001
---- ---- ---- ---- ---- ---- ----
(DOLLARS IN THOUSANDS)
BALANCE SHEET DATA:
Total assets.............. $4,639,826 $4,923,550 $4,959,337 $6,075,683 $6,733,766 $6,347,441 $6,049,011
Long-term obligations,
net(3).................. 1,444,355 1,604,305 1,713,649 1,660,558 2,128,496 1,793,753 2,338,318
---------------
(1) Adjusted net income for 1996 excludes $3.4 million of merger-related
charges. Adjusted net income for 1997 excludes $1.6 million of
merger-related charges. Adjusted net income for 1998 excludes $34.6 million
of merger-related charges. Adjusted net income for 1999 excludes $25.3
million of income from gains on sales of McLeodUSA stock. Adjusted net
income for 2000 excludes $204.0 million of non-cash income related to
Alliant Energy Corporation's adoption of Statement of Financial Accounting
Standards No. 133 on July 1, 2000, and $15.7 million of income from gains on
sales of McLeodUSA stock. Adjusted net income for the nine months ended
September 30, 2000 excludes $204.0 million of non-cash income related to
Alliant Energy Corporation's adoption of Statement of Financial Accounting
Standards No. 133, $6.7 million of income from gains on sales of McLeodUSA
stock and $1.2 million of non-cash valuation charges related to our
exchangeable senior notes. Adjusted net income for the nine months ended
September 30, 2001 excludes $19.6 million of non-cash valuation charges
related to our exchangeable senior notes.
(2) Ratio of earnings to fixed charges based on adjusted net income as described
in footnote (1) above was 3.23 for 1996, 2.78 for 1997, 2.42 for 1998, 3.02
for 1999, 3.19 for 2000, 3.42 for the nine months ended September 30, 2000
and 2.34 for the nine months ended September 30, 2001.
(3) Long-term obligations, net include long-term debt, current maturities,
variable rate demand bonds, current and long-term capital lease obligations
and mandatory redeemable preferred stock.
10
RISK FACTORS
You should carefully consider the risk factors described below, as well as
the other information included or incorporated by reference in this prospectus,
before deciding to exchange your old senior notes for new senior notes. The
risks and uncertainties described below are not the only ones facing our company
or Alliant Energy Corporation.
THE ENERGY INDUSTRY IS RAPIDLY CHANGING AND BECOMING INCREASINGLY COMPETITIVE,
WHICH MAY ADVERSELY AFFECT ALLIANT ENERGY CORPORATION'S ABILITY TO OPERATE
PROFITABLY.
The energy industry is in a period of fundamental change resulting from
legislative and regulatory changes. Although Alliant Energy Corporation expects
that deregulation in its domestic retail service territories will likely be
delayed due to events related to California's restructured electric utility
industry, regulatory changes and other developments will continue to increase
competitive pressures on electric and gas utility companies. Generally,
increased competition could threaten Alliant Energy Corporation's market share
in some segments of its business and could reduce its profit margins. Such
competitive pressures could cause Alliant Energy Corporation to lose customers
and incur additional costs that might not be recovered from customers.
IF ALLIANT ENERGY CORPORATION IS UNABLE TO RECOVER THE COST OF FUEL, PURCHASED
POWER AND NATURAL GAS COSTS FROM ITS CUSTOMERS, THEN ALLIANT ENERGY CORPORATION
MAY EXPERIENCE AN ADVERSE IMPACT ON ITS BUSINESS.
Approximately 54% of Alliant Energy Corporation's domestic utility
operating revenues are from its Iowa operations and approximately 40% of its
domestic utility operating revenues are from its Wisconsin operations. Alliant
Energy Corporation's Iowa utilities are entitled to recover increases in the
cost of fuel, purchased energy and natural gas purchased for resale
automatically through electric and natural gas rates. Purchased power capacity
costs in Iowa are not recovered from electric customers through these energy
adjustment clauses. Recovery of these costs must be addressed in a formal rate
proceeding. Retail electric rates of Alliant Energy Corporation's Wisconsin
utility are based in part on forecasted fuel and purchased power costs. Alliant
Energy Corporation can seek emergency rate increases in Wisconsin if these costs
on an annual basis are more than 3% higher than the estimated costs used to
establish rates. If Alliant Energy Corporation is unable to recover its costs
through adjusted rates, then it may experience an adverse impact on its results
of operations and cash flows.
AS HOLDING COMPANIES, WE AND ALLIANT ENERGY CORPORATION ARE EACH SUBJECT TO
RESTRICTIONS ON OUR ABILITY TO SERVICE DEBT.
We and Alliant Energy Corporation are both holding companies with no
significant operations of our own. Accordingly, the primary source of funds for
us and Alliant Energy Corporation to service debt, including interest on and
principal of the senior notes, is dividends our subsidiaries pay to us and
dividends Alliant Energy Corporation's subsidiaries pay to it. Our and Alliant
Energy Corporation's subsidiaries are separate and distinct legal entities and
have no obligation to pay any amounts to us or Alliant Energy Corporation,
whether by dividends, loans or other payments. The ability of our subsidiaries
and Alliant Energy's subsidiaries to pay dividends or make distributions to us
and Alliant Energy Corporation, and accordingly, our and Alliant Energy
Corporation's ability to service debt, will depend on the earnings, capital
requirements and general financial condition of our and Alliant Energy
Corporation's subsidiaries. Alliant Energy Corporation's domestic utility
subsidiaries each have dividend payment restrictions based on their respective
bond indentures, the terms of their outstanding preferred stock and state
regulatory limitations applicable to them.
11
COSTS OF COMPLIANCE WITH ENVIRONMENTAL LAWS ARE SIGNIFICANT AND THE COSTS OF
COMPLIANCE WITH NEW ENVIRONMENTAL LAWS AND THE INCURRENCE OF ENVIRONMENTAL
LIABILITIES COULD ADVERSELY AFFECT OUR AND ALLIANT ENERGY CORPORATION'S
PROFITABILITY.
Our and Alliant Energy Corporation's operations are subject to extensive
regulation relating to environmental protection. To comply with these legal
requirements, we and Alliant Energy Corporation must spend significant sums on
environmental monitoring, pollution control equipment and emission fees. New
environmental laws and regulations affecting our or Alliant Energy Corporation's
operations may be adopted, and new interpretations of existing laws and
regulations could be adopted or become applicable to us or Alliant Energy
Corporation or our and Alliant Energy Corporation's facilities, which may
substantially increase environmental expenditures made by us and Alliant Energy
Corporation in the future. In addition, we and Alliant Energy Corporation may
not be able to recover all of our respective costs for environmental
expenditures through electric and natural gas rates at current levels in the
future. Under current law, we and Alliant Energy Corporation are also generally
responsible for any on-site liabilities associated with the environmental
condition of the facilities that we or Alliant Energy Corporation have
previously owned or operated, regardless of whether the liabilities arose
before, during or after the time we owned or operated the facilities. The
incurrence of a material environmental liability could have a material adverse
effect on our and Alliant Energy Corporation's results of operations and
financial condition.
OUR ABILITY TO ACHIEVE GROWTH IN OUR NON-REGULATED BUSINESSES DEPENDS UPON THE
AVAILABILITY OF SUITABLE ACQUISITIONS AND PROJECTS FOR DEVELOPMENT AND OUR
ABILITY TO ACCESS CAPITAL AT COMPETITIVE RATES.
Our growth strategy depends upon our ability to identify and complete
acquisitions and development projects at prices that will allow us to earn a
competitive rate of return. Our non-regulated businesses have achieved growth
through acquisitions. However, we may not be able to identify appropriate future
acquisitions and projects. Our future acquisitions and projects also may not
perform as expected and the returns from those transactions may not support the
indebtedness we incur to acquire them or the capital expenditures we need to
maintain or develop them. In addition, if we are not able to access capital at
competitive rates, then our growth will be adversely affected.
WE HAVE MADE SUBSTANTIAL INTERNATIONAL INVESTMENTS, WHICH MAY PRESENT ADDITIONAL
RISKS TO OUR BUSINESS.
As of September 30, 2001, we had $606 million in net investments in foreign
countries, primarily in electric utility companies and generation facilities,
and we anticipate making additional new international investments in the future.
International operations are subject to various risks, including political and
economic instability, local labor market conditions, the impact of foreign
government regulations and taxation, and differences in business practices.
Unfavorable changes in the international political, regulatory or business
climate could have a material adverse effect on our growth plans for our
international investments and, in turn, our results of operations and financial
condition. In addition, the results of operations and financial condition of our
subsidiaries that conduct operations in foreign countries will be reported in
the relevant foreign currencies and then translated into U.S. dollars at the
applicable exchange rates for inclusion in our consolidated financial
statements. Fluctuations between these currencies and the U.S. dollar may have a
material adverse effect on our results of operations and financial condition and
may also significantly affect the comparability of our results between financial
periods.
12
FORWARD-LOOKING STATEMENTS
This prospectus, including the information we incorporate by reference,
contains forward-looking statements that are intended to qualify for the safe
harbors from liability established by the Private Securities Litigation Reform
Act of 1995. All statements other than statements of historical fact, including
statements regarding anticipated financial performance, business strategy and
management's plans and objectives for future operations, are forward-looking
statements. These forward-looking statements can be identified as such because
the statements generally include words such as "expect," "intend," "believe,"
"anticipate," "estimate," "plan" or "objective" or other similar expressions.
These forward-looking statements are subject to risks and uncertainties that
could cause actual results to differ materially from those expressed in, or
implied by, these statements. Some, but not all, of the risks and uncertainties
include those described in the "Risk Factors" section of this prospectus and the
following:
- effects of weather on sales and revenues;
- general economic conditions in Alliant Energy Corporation's utility
subsidiaries' service territories;
- unanticipated construction and acquisition expenditures;
- issues related to costs that Alliant Energy Corporation's regulated
utility subsidiaries have incurred but cannot recover through increased
rates;
- unanticipated issues related to the supply and price of purchased
electricity;
- adverse fluctuations in the price of oil and natural gas;
- unexpected issues related to the operations of Alliant Energy
Corporation's nuclear facilities;
- technological developments;
- employee workforce factors, including changes in key executives,
collective bargaining agreements or work stoppages; and
- changes in the rate of inflation.
13
WHERE YOU CAN FIND MORE INFORMATION
Alliant Energy Corporation, our parent corporation and the guarantor of the
senior notes, files annual, quarterly and current reports, proxy statements and
other information with the SEC. You may read and copy any document that Alliant
Energy Corporation files at the SEC's public reference rooms at 450 Fifth
Street, N.W., Washington D.C., and at regional SEC offices in New York, New York
and Chicago, Illinois. You can call the SEC at 1-800-SEC-0330 for further
information on the operation of the public reference rooms. You can also find
Alliant Energy Corporation's public filings with the SEC on the internet at a
web site maintained by the SEC located at http://www.sec.gov.
We are "incorporating by reference" specified documents that Alliant Energy
Corporation files with the SEC, which means:
- incorporated documents are considered part of this prospectus;
- we are disclosing important information to you by referring you to those
documents; and
- information Alliant Energy Corporation files with the SEC will
automatically update and supersede information contained in this
prospectus.
We incorporate by reference the documents we list below and any future
filings Alliant Energy Corporation makes with the SEC under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934 after the date of this
prospectus and before the completion of the exchange offer:
- Alliant Energy Corporation's Annual Report on Form 10-K for the year
ended December 31, 2000;
- Alliant Energy Corporation's Reports on Form 10-Q for the quarters ended
March 31, 2001, June 30, 2001 and September 30, 2001;
- Alliant Energy Corporation's Current Report on Form 8-K, dated February
20, 2001 and filed February 20, 2001, as amended by its Current Report on
Form 8-K/A, dated February 20, 2001 and filed March 1, 2001;
- Alliant Energy Corporation's Current Report on Form 8-K, dated October
19, 2001 and filed October 19, 2001;
- Alliant Energy Corporation's Current Report on Form 8-K, dated November
8, 2001 and filed November 9, 2001; and
- Alliant Energy Corporation's Current Report on Form 8-K, dated November
15, 2001 and filed November 15, 2001.
YOU MAY REQUEST A COPY OF ANY OF THESE FILINGS, AT NO COST, BY WRITING TO
EDWARD M. GLEASON, VICE PRESIDENT-TREASURER AND CORPORATE SECRETARY, ALLIANT
ENERGY CORPORATION, 222 WEST WASHINGTON AVENUE, MADISON, WISCONSIN 53703, OR BY
CALLING MR. GLEASON AT (608) 252-3311.
14
USE OF PROCEEDS
This exchange offer is intended to satisfy our obligations under the
registration rights agreement entered into in connection with the issuance of
the old senior notes. We will not receive any cash proceeds from the issuance of
the new senior notes. We used the net proceeds of approximately $297.2 million
from the sale of the old senior notes to repay our short-term debt, including
some commercial paper classified as long-term debt.
CAPITALIZATION
The following table sets forth the consolidated capitalization of Alliant
Energy Corporation, including short-term debt, as of September 30, 2001 on an
actual basis and as adjusted to give effect to our sale of the old senior notes
and the application of the net proceeds as described under "Use of Proceeds" and
Alliant Energy Corporation's sale of 9.775 million shares of its common stock
and the application of approximately $263.0 million of net proceeds from that
offering (based on an offering price of $28.00) to repay Alliant Energy
Corporation's short-term debt.
AS OF SEPTEMBER 30, 2001
---------------------------------------
ACTUAL AS ADJUSTED % OF TOTAL
---------- ----------- ----------
(IN THOUSANDS)
Common stock............................................ $ 794 $ 892
Additional paid-in capital.............................. 961,659 1,224,572
Retained earnings....................................... 818,629 818,629
Accumulated other comprehensive loss.................... (177,187) (177,187)
Shares in deferred compensation trust................... (2,136) (2,136)
---------- ----------
Total common equity.............................. 1,601,759 1,864,770 41.9%
Cumulative preferred stock of subsidiaries, net......... 113,912 113,912 2.6
Long-term debt
Long-term debt (excluding current maturities)...... 1,756,782 2,056,782 46.2
Commercial paper classified as long-term debt...... 450,000 165,761 3.7
Short-term debt
Current maturities of long-term debt............... 10,696 10,696 0.2
Other short-term borrowings........................ 514,752 238,741 5.4
---------- ---------- -----
Total capitalization............................. $4,447,901 $4,450,662 100.0%
========== ========== =====
15
THE EXCHANGE OFFER
PURPOSE AND EFFECT; REGISTRATION RIGHTS
We sold the old senior notes on November 15, 2001 in transactions exempt
from the registration requirements of the Securities Act. Therefore, the old
senior notes are subject to significant restrictions on resale. In connection
with the issuance of the old senior notes, we entered into a registration rights
agreement, which required that we and Alliant Energy Corporation:
- file with the SEC a registration statement under the Securities Act
relating to the exchange offer and the issuance and delivery of new
senior notes in exchange for the old senior notes;
- use our reasonable best efforts to cause the SEC to declare the exchange
offer registration statement effective under the Securities Act; and
- use our reasonable best efforts to consummate the exchange offer not
later than 45 days following the effective date of the exchange offer
registration statement.
If you participate in the exchange offer, you will, with limited
exceptions, receive new senior notes that are freely tradeable and not subject
to restrictions on transfer. You should read this prospectus under the heading
"-- Resales of New Senior Notes" for more information relating to your ability
to transfer new senior notes.
If you are eligible to participate in the exchange offer and do not tender
your old senior notes, you will continue to hold the untendered old senior
notes, which will continue to be subject to restrictions on transfer under the
Securities Act.
The exchange offer is intended to satisfy our exchange offer obligations
under the registration rights agreement. The above summary of the registration
rights agreement is not complete and is subject to, and qualified by reference
to, all the provisions of the registration rights agreement. A copy of the
registration rights agreement has been filed as an exhibit to the registration
statement that includes this prospectus.
TERMS OF THE EXCHANGE OFFER
We are offering to exchange $300,000,000 in aggregate principal amount of
our 7% Senior Notes due 2011 that have been registered under the Securities Act
for a like principal amount of our outstanding unregistered 7% Senior Notes due
2011.
Upon the terms and subject to the conditions set forth in this prospectus
and in the accompanying letter of transmittal, we will accept all old senior
notes validly tendered and not withdrawn before 11:59 p.m., New York City time,
on the expiration date of the exchange offer. We will issue $1,000 principal
amount of new senior notes in exchange for each $1,000 principal amount of
outstanding old senior notes we accept in the exchange offer. You may tender
some or all of your old senior notes under the exchange offer. However, the old
senior notes are issuable in authorized denominations of $1,000 and integral
multiples thereof. Accordingly, old senior notes may be tendered only in
denominations of $1,000 and integral multiples thereof. The exchange offer is
not conditioned upon any minimum amount of old senior notes being tendered.
The form and terms of the new senior notes will be the same as the form and
terms of the old senior notes, except that:
- the new senior notes will be registered with the SEC and thus will not be
subject to the restrictions on transfer or bear legends restricting their
transfer;
- all of the new senior notes will be represented by global notes in
book-entry form unless exchanged for notes in definitive certificated
form under the limited circumstances described under "Description of the
New Senior Notes -- Book-Entry Procedures and Form;" and
16
- the new senior notes will not provide for the payment of additional
interest under circumstances relating to the timing of the exchange
offer.
The new senior notes will evidence the same debt as the old senior notes
and will be issued under, and be entitled to the benefits of, the indenture, as
supplemented, governing the old senior notes.
The new senior notes will accrue interest from the most recent date to
which interest has been paid on the old senior notes or, if no interest has been
paid, from the date of issuance of the old senior notes. Accordingly, registered
holders of new senior notes on the record date for the first interest payment
date following the completion of the exchange offer will receive interest
accrued from the most recent date to which interest has been paid on the old
senior notes or, if no interest has been paid, from the date of issuance of the
old senior notes. However, if that record date occurs prior to completion of the
exchange offer, then the interest payable on the first interest payment date
following the completion of the exchange offer will be paid to the registered
holders of the old senior notes on that record date.
In connection with the exchange offer, you do not have any appraisal or
dissenters' rights under the Wisconsin Business Corporation Law or the
indenture, as supplemented. We intend to conduct the exchange offer in
accordance with the registration rights agreement and the applicable
requirements of the Securities Exchange Act of 1934 and the rules and
regulations of the SEC.
We will be deemed to have accepted validly tendered old senior notes when
we have given oral or written notice of our acceptance to the exchange agent.
The exchange agent will act as agent for the tendering holders for the purpose
of receiving the new senior notes from us.
If we do not accept any tendered old senior notes because of an invalid
tender or for any other reason, then we will return certificates for any
unaccepted old senior notes without expense to the tendering holder as promptly
as practicable after the expiration date.
EXPIRATION DATE; AMENDMENTS
The exchange offer will expire at 11:59 p.m., New York City time, on
January 31, 2002, unless we, in our sole discretion, extend the exchange offer.
If we determine to extend the exchange offer, then we will notify the
exchange agent of any extension by oral or written notice and give each
registered holder notice of the extension by means of a press release or other
public announcement before 9:00 a.m., New York City time, on the next business
day after the previously scheduled expiration date.
We reserve the right, in our sole discretion, to delay accepting any old
senior notes, to extend the exchange offer or to amend or terminate the exchange
offer if any of the conditions described below under "-- Conditions" have not
been satisfied or waived by giving oral or written notice to the exchange agent
of the delay, extension, amendment or termination. Further, we reserve the
right, in our sole discretion, to amend the terms of the exchange offer in any
manner. We will notify you as promptly as practicable of any extension,
amendment or termination. We will also file a post-effective amendment to the
registration statement of which this prospectus is a part with respect to any
fundamental change in the exchange offer.
PROCEDURES FOR TENDERING OLD SENIOR NOTES
Any tender of old senior notes that is not withdrawn prior to the
expiration date will constitute a binding agreement between the tendering holder
and us upon the terms and subject to the conditions set forth in this prospectus
and in the accompanying letter of transmittal. A holder who wishes to tender old
senior notes in the exchange offer must do either of the following:
- properly complete, sign and date the letter of transmittal, including all
other documents required by the letter of transmittal; have the signature
on the letter of transmittal guaranteed if the letter of transmittal so
requires; and deliver that letter of transmittal and other required
documents to the exchange agent at the address listed below under "--
Exchange Agent" on or before the expiration date; or
17
- if the old senior notes are tendered under the book-entry transfer
procedures described below, transmit to the exchange agent on or before
the expiration date an agent's message.
In addition, one of the following must occur:
- the exchange agent must receive certificates representing your old senior
notes along with the letter of transmittal on or before the expiration
date;
- the exchange agent must receive a timely confirmation of book-entry
transfer of the old senior notes into the exchange agent's account at DTC
under the procedure for book-entry transfers described below along with
the letter of transmittal or a properly transmitted agent's message, on
or before the expiration date; or
- the holder must comply with the guaranteed delivery procedures described
below.
The term "agent's message" means a message, transmitted by a book-entry
transfer facility to and received by the exchange agent and forming a part of
the book-entry confirmation, which states that the book-entry transfer facility
has received an express acknowledgement from the tendering participant stating
that the participant has received and agrees to be bound by the letter of
transmittal and that we may enforce the letter of transmittal against the
participant.
The method of delivery of old senior notes, the letter of transmittal and
all other required documents to the exchange agent is at your election and risk.
Rather than mail these items, we recommend that you use an overnight or hand
delivery service. In all cases, you should allow sufficient time to assure
timely delivery to the exchange agent before the expiration date. Do not send
letters of transmittal or old senior notes to us.
Generally, an eligible institution must guarantee signatures on a letter of
transmittal or a notice of withdrawal unless the old senior notes are tendered:
- by a registered holder of the old senior notes who has not completed the
box entitled "Special Issuance Instructions" or "Special Delivery
Instructions" on the letter of transmittal; or
- for the account of an eligible institution.
If signatures on a letter of transmittal or a notice of withdrawal are
required to be guaranteed, the guarantee must be by a firm which is:
- a member of a registered national securities exchange;
- a member of the National Association of Securities Dealers, Inc.;
- a commercial bank or trust company having an office or correspondent in
the United States; or
- another "eligible institution" within the meaning of Rule 17Ad-15 under
the Securities Exchange Act.
If the letter of transmittal is signed by a person other than the
registered holder of any outstanding old senior notes, the original notes must
be endorsed or accompanied by appropriate powers of attorney. The power of
attorney must be signed by the registered holder exactly as the registered
holder(s) name(s) appear(s) on the old senior notes and an eligible institution
must guarantee the signature on the power of attorney.
If the letter of transmittal, or any old senior notes or powers of attorney
are signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, these persons should so indicate when signing. Unless waived by us,
they should also submit evidence satisfactory to us of their authority to so
act.
If you wish to tender old senior notes that are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee, you should
promptly instruct the registered holder to tender on your behalf. If you wish to
tender on your behalf, you must, before completing the procedures for
18
tendering old senior notes, either register ownership of the old senior notes in
your name or obtain a properly completed bond power from the registered holder.
The transfer of registered ownership may take considerable time.
We will determine in our sole discretion all questions as to the validity,
form, eligibility, including time of receipt, and acceptance of old senior notes
tendered for exchange. Our determination will be final and binding on all
parties. We reserve the absolute right to reject any and all tenders of old
senior notes not properly tendered or old senior notes our acceptance of which
might, in the judgment of our counsel, be unlawful. We also reserve the absolute
right to waive any defects, irregularities or conditions of tender as to any
particular old senior notes. Our interpretation of the terms and conditions of
the exchange offer, including the instructions in the letter of transmittal,
will be final and binding on all parties. Unless waived, any defects or
irregularities in connection with tenders of old senior notes must be cured
within the time period we determine. Neither we, the exchange agent nor any
other person will incur any liability for failure to give you notification of
defects or irregularities with respect to tenders of your old senior notes.
By tendering, a holder of old senior notes will represent to us that:
- any new senior notes that the holder receives will be acquired in the
ordinary course of its business;
- the holder has no arrangement or understanding with any person or entity
to participate in the distribution of the new senior notes;
- if the holder is not a broker-dealer, that it is not engaged in and does
not intend to engage in the distribution of the new senior notes;
- if the holder is a broker-dealer that will receive new senior notes for
its own account in exchange for old senior notes that were acquired as a
result of market-making activities or other trading activities, that it
will deliver a prospectus, as required by law, in connection with any
resale of those new senior notes (see "Plan of Distribution"); and
- the holder is not our "affiliate," as defined in Rule 405 of the
Securities Act, or, if the holder is our affiliate, it will comply with
any applicable registration and prospectus delivery requirements of the
Securities Act
If any holder or any such other person is our "affiliate," or is engaged in
or intends to engage in or has an arrangement or understanding with any person
to participate in a distribution of the new senior notes to be acquired in the
exchange offer, then that holder or any such other person:
- may not rely on the applicable interpretations of the staff of the SEC;
- is not entitled and will not be permitted to tender old senior notes in
the exchange offer; and
- must comply with the registration and prospectus delivery requirements of
the Securities Act in connection with any resale transaction.
Each broker-dealer who acquired its old senior notes as a result of
market-making activities or other trading activities and thereafter receives new
senior notes issued for its own account in the exchange offer, must acknowledge
that it will deliver a prospectus in connection with any resale of such new
senior notes issued in the exchange offer. The letter of transmittal states that
by so acknowledging and by delivering a prospectus, a broker-dealer will not be
deemed to admit that it is an "underwriter" within the meaning of the Securities
Act. See "Plan of Distribution" for a discussion of the exchange and resale
obligations of broker-dealers in connection with the exchange offer.
ACCEPTANCE OF OLD SENIOR NOTES FOR EXCHANGE; DELIVERY OF NEW SENIOR NOTES
Upon satisfaction of all conditions to the exchange offer, we will accept,
promptly after the expiration date, all old senior notes properly tendered and
will issue the new senior notes promptly after acceptance of the old senior
notes.
19
For purposes of the exchange offer, we will be deemed to have accepted
properly tendered old senior notes for exchange when we have given oral or
written notice of that acceptance to the exchange agent. For each old senior
note accepted for exchange, you will receive a new senior note having a
principal amount equal to that of the surrendered old senior note.
In all cases, we will issue new senior notes for old senior notes that we
have accepted for exchange under the exchange offer only after the exchange
agent timely receives:
- certificates for your old senior notes or a timely confirmation of
book-entry transfer of your old senior notes into the exchange agent's
account at DTC; and
- a properly completed and duly executed letter of transmittal and all
other required documents or a properly transmitted agent's message.
If we do not accept any tendered old senior notes for any reason set forth
in the terms of the exchange offer or if you submit old senior notes for a
greater principal amount than you desire to exchange, we will return the
unaccepted or non-exchanged old senior notes without expense to you. In the case
of old senior notes tendered by book-entry transfer into the exchange agent's
account at DTC under the book-entry procedures described below, we will credit
the non-exchanged old senior notes to your account maintained with DTC.
BOOK-ENTRY TRANSFER
We understand that the exchange agent will make a request within two
business days after the date of this prospectus to establish accounts for the
old senior notes at DTC for the purpose of facilitating the exchange offer, and
any financial institution that is a participant in DTC's system may make
book-entry delivery of old senior notes by causing DTC to transfer the old
senior notes into the exchange agent's account at DTC in accordance with DTC's
procedures for transfer. Although delivery of old senior notes may be effected
through book-entry transfer at DTC, the exchange agent must receive a properly
completed and duly executed letter of transmittal with any required signature
guarantees, or an agent's message instead of a letter of transmittal, and all
other required documents at its address listed below under "-- Exchange Agent"
on or before the expiration date, or if you comply with the guaranteed delivery
procedures described below, within the time period provided under those
procedures.
GUARANTEED DELIVERY PROCEDURES
If you wish to tender your old senior notes and your old senior notes are
not immediately available, or you cannot deliver your old senior notes, the
letter of transmittal or any other required documents or comply with DTC's
procedures for transfer before the expiration date, then you may participate in
the exchange offer if:
- the tender is made through an eligible institution;
- before the expiration date, the exchange agent receives from the eligible
institution a properly completed and duly executed notice of guaranteed
delivery, substantially in the form provided by us, by facsimile
transmission, mail or hand delivery, containing:
- the name and address of the holder and the principal amount of old
senior notes tendered,
- a statement that the tender is being made thereby, and
- a guarantee that within three New York Stock Exchange trading days
after the expiration date, the certificates representing the old
senior notes in proper form for transfer or a book-entry confirmation
and any other documents required by the letter of transmittal will be
deposited by the eligible institution with the exchange agent; and
- the exchange agent receives the properly completed and executed letter of
transmittal as well as certificates representing all tendered old senior
notes in proper form for transfer, or a book-entry
20
confirmation, and all other documents required by the letter of
transmittal within three New York Stock Exchange trading days after the
expiration date.
WITHDRAWAL RIGHTS
You may withdraw your tender of old senior notes at any time before the
exchange offer expires.
For a withdrawal to be effective, the exchange agent must receive a written
notice of withdrawal at its address listed below under "-- Exchange Agent." The
notice of withdrawal must:
- specify the name of the person who tendered the old senior notes to be
withdrawn;
- identify the old senior notes to be withdrawn, including the principal
amount, or, in the case of old senior notes tendered by book-entry
transfer, the name and number of the DTC account to be credited, and
otherwise comply with the procedures of DTC; and
- if certificates for old senior notes have been transmitted, specify the
name in which those old senior notes are registered if different from
that of the withdrawing holder.
If you have delivered or otherwise identified to the exchange agent the
certificates for old senior notes, then, before the release of these
certificates, you must also submit the serial numbers of the particular
certificates to be withdrawn and a signed notice of withdrawal with the
signatures guaranteed by an eligible institution, unless the holder is an
eligible institution.
We will determine in our sole discretion all questions as to the validity,
form and eligibility, including time of receipt, of notices of withdrawal. Our
determination will be final and binding on all parties. Any old senior notes so
withdrawn will be deemed not to have been validly tendered for purposes of the
exchange offer. We will return any old senior notes that have been tendered but
that are not exchanged for any reason to the holder, without cost, as soon as
practicable after withdrawal, rejection of tender or termination of the exchange
offer. In the case of old senior notes tendered by book-entry transfer into the
exchange agent's account at DTC, the old senior notes will be credited to an
account maintained with DTC for the old senior notes. You may retender properly
withdrawn old senior notes by following one of the procedures described under
"-- Procedures for Tendering Old Senior Notes" at any time on or before the
expiration date.
CONDITIONS
Notwithstanding any other term of the exchange offer, we will not be
required to accept for exchange, or to exchange new senior notes for, any old
senior notes if:
- the exchange offer, or the making of any exchange by a holder of old
senior notes, would violate any applicable law or applicable
interpretation by the staff of the SEC; or
- any action or proceeding is instituted or threatened in any court or by
or before any governmental agency with respect to the exchange offer
which, in our judgment, would reasonably be expected to impair our
ability to proceed with the exchange offer.
The conditions listed above are for our sole benefit and we may assert them
regardless of the circumstances giving rise to any condition. Subject to
applicable law, we may waive these conditions in our discretion in whole or in
part at any time and from time to time. If we waive these conditions, then we
intend to continue the exchange offer for at least five business days after the
waiver. If we fail at any time to exercise any of the above rights, the failure
will not be deemed a waiver of those rights, and those rights will be deemed
ongoing rights which may be asserted at any time and from time to time.
21
EXCHANGE AGENT
U.S. Bank National Association is the exchange agent for the exchange
offer. You should direct any questions and requests for assistance and requests
for additional copies of this prospectus, the letter of transmittal or the
notice of guaranteed delivery to the exchange agent addressed as follows:
By Hand, Overnight Mail, Courier, or Registered or Certified Mail:
U.S. Bank National Association
180 East Fifth Street
St. Paul, MN 55101
Attention: Corporate Trust Department
By Facsimile:
(651) 244-0711
Attention: Corporate Trust Department
Delivery of the letter of transmittal to an address other than as listed
above or transmission via facsimile other than as listed above will not
constitute a valid delivery of the letter of transmittal.
FEES AND EXPENSES
We will pay the expenses of the exchange offer. We will not make any
payments to brokers, dealers or others soliciting acceptances of the exchange
offer. We are making the principal solicitation by mail; however, our officers
and employees may make additional solicitations by facsimile transmission,
e-mail, telephone or in person. You will not be charged a service fee for the
exchange of your senior notes, but we may require you to pay any transfer or
similar government taxes in certain circumstances.
TRANSFER TAXES
You will not be obligated to pay any transfer taxes, unless you instruct us
to register new senior notes in the name of, or request that old senior notes
not tendered or not accepted in the exchange offer be returned to, a person
other than the registered tendering holder.
ACCOUNTING TREATMENT
We will record the new senior notes at the same carrying values as the old
senior notes, which is the aggregate principal amount of the old senior notes,
as reflected in our accounting records on the date of exchange. Accordingly, we
will not recognize any gain or loss on the exchange of senior notes. We will
amortize the expenses of the offer over the term of the new senior notes.
CONSEQUENCES OF FAILURE TO EXCHANGE OLD SENIOR NOTES
If you are eligible to participate in the exchange offer but do not tender
your old senior notes, you will not have any further registration rights. Your
old senior notes will continue to be subject to restrictions on transfer.
Accordingly, you may resell the old senior notes that are not exchanged only:
- to us;
- so long as the old senior notes are eligible for resale under Rule 144A
under the Securities Act, to a person whom you reasonably believe is a
"qualified institutional buyer" within the meaning of Rule 144A
purchasing for its own account or for the account of a qualified
institutional buyer in a transaction meeting the requirements of Rule
144A;
- in accordance with another exemption from the registration requirements
of the Securities Act; or
- under any effective registration statement under the Securities Act;
in each case in accordance with all other applicable securities laws. We do not
intend to register the old senior notes under the Securities Act.
22
RESALES OF NEW SENIOR NOTES
Based on interpretations of the staff of the SEC, as set forth in no-action
letters to third parties, we believe that new senior notes issued under the
exchange offer in exchange for old senior notes may be offered for resale,
resold and otherwise transferred by any old senior note holder without further
registration under the Securities Act and without delivery of a prospectus that
satisfies the requirements of the Securities Act if:
- the holder is not our "affiliate" within the meaning of Rule 405 under
the Securities Act;
- the new senior notes are acquired in the ordinary course of the holder's
business; and
- the holder does not intend to participate in a distribution of the new
senior notes.
Any holder who exchanges old senior notes in the exchange offer with the
intention of participating in any manner in a distribution of the new senior
notes must comply with the registration and prospectus delivery requirements of
the Securities Act in connection with a secondary resale transaction.
This prospectus may be used for an offer to resell, resale or other
transfer of new senior notes. With regard to broker-dealers, only broker-dealers
that acquire the old senior notes as a result of market-making activities or
other trading activities may participate in the exchange offer. Each
broker-dealer that receives new senior notes for its own account in exchange for
old senior notes, where the old senior notes were acquired by the broker-dealer
as a result of market-making activities or other trading activities, must
acknowledge that it will deliver a prospectus in connection with any resale of
the new senior notes. Please see "Plan of Distribution" for more details
regarding the transfer of new senior notes.
CONSEQUENCES OF FAILING TO EXCHANGE OLD SENIOR NOTES
Holders who desire to tender their old senior notes in exchange for new
senior notes registered under the Securities Act should allow sufficient time to
ensure timely delivery. Neither we nor the exchange agent is under any duty to
give notification of defects or irregularities with respect to the tenders of
old senior notes for exchange.
Old senior notes that are not tendered or are tendered but not accepted
will, following the consummation of the exchange offer, continue to be subject
to the provisions in the indenture regarding the transfer and exchange of the
old senior notes and the existing restrictions on transfer set forth in the
legend on the old senior notes and in the offering memorandum, dated November 9,
2001, relating to the old senior notes. Except in limited circumstances with
respect to the specific types of holders of old senior notes, we will have no
further obligation to provide for the registration under the Securities Act of
such old senior notes. In general, old senior notes, unless registered under the
Securities Act, may not be offered or sold except pursuant to an exemption from,
or in a transaction not subject to, the Securities Act and applicable state
securities laws. We do not anticipate that we will take any further action to
register the untendered old senior notes under the Securities Act or under any
state securities laws.
Upon completion of the exchange offer, holders of the old senior notes will
not be entitled to any further registration rights under the registration rights
agreement, except under limited circumstances.
Old senior notes that are not exchanged in the exchange offer will remain
outstanding and continue to accrue interest and will be entitled to the rights
and benefits their holders have under the indenture relating to the old senior
notes and the new senior notes. Holders of the new senior notes and any old
senior notes that remain outstanding after consummation of the exchange offer
will vote together as a single class for purposes of determining whether holders
of the requisite percentage of the class have taken certain actions or exercised
certain rights under the indenture.
23
BUSINESS
ALLIANT ENERGY RESOURCES
We are a wholly-owned subsidiary of Alliant Energy Corporation, which is a
growing diversified energy-services provider engaged primarily in regulated
utility operations in both the Midwest and, through our company,
internationally. Alliant Energy Corporation also has significant non-regulated
domestic and international operations through our company.
[Graph-Breakdown of Adjusted Net Income for 2000 $179.0 million]
---------------
(1) Includes $5.9 million of holding company and other expenses.
(2) Adjusted net income for 2000 excludes $204.0 million of non-cash income
related to Alliant Energy Corporation's adoption of Statement of Financial
Accounting Standards No. 133 on July 1, 2000, and $15.7 million of income
from gains on sales of McLeodUSA stock. Substantially all of these
adjustments were at the Alliant Energy Resources level. Alliant Energy
Corporation's reported net income for 2000 was $398.7 million.
We manage a portfolio of companies involved in international utility
operations and non-regulated domestic and international businesses:
- International: We have established global partnerships to develop energy
generation, delivery and infrastructure in growing international markets,
including Australia, Brazil, China and New Zealand. We have strategic
investments in hydro generation assets in Australia, distribution and
generation assets in Brazil, combined heat and power plants in China and
hydro and wind generation assets in New Zealand. Our global partners
include Compania Forca e Luz Cataguazes-Leopoldina and TrustPower
Limited.
- Non-Regulated Generation: Consistent with our strategy to accumulate and
develop a portfolio of domestic non-regulated generation assets, in
October 2001 Alliant Energy Corporation announced our partnership with
Panda Energy International to jointly develop and operate a
1,100-megawatt natural gas combined-cycle power plant in western
Michigan. We expect that construction of the
24
facility will begin during the first quarter of 2002 and that the
facility will become operational in 2004, in each case assuming some
conditions are satisfied.
- Investments: Our existing investments include our wholly-owned oil and
gas production company, Whiting Petroleum Corporation; a short-line
railroad, Cedar Rapids and Iowa City Railway Company; a barge company,
IEI Barge Services, Inc; our investments in affordable housing through
Heartland Properties, Inc.; various real estate joint ventures; and an
equity stake in an independent telecommunications provider, McLeodUSA.
- Trading: We have an energy-trading joint venture with Cargill
Incorporated, one of the world's largest and most established commodities
trading firms, that combines Cargill's risk-management and commodity
trading expertise with our low-cost electricity generation and
transmission business experience.
- Integrated Services: Our integrated services division includes Cogenex
Corporation, a provider of energy management consulting, on-site
generation and energy infrastructure; Alliant Energy Integrated
Services -- Energy Management LLC, an energy procurement company; and
RMT, Inc., a provider of environmental engineering and construction
management services. These companies provide services for commercial,
industrial, institutional, educational and government customers.
Our overall strategic objective is to grow our operations to contribute
more than 25% to Alliant Energy Corporation's adjusted earnings within the next
three years. We expect funding for these growth plans to come from a combination
of external financings, sales of investments and internally generated funds.
The following charts show the composition of our assets at December 31,
2000 and adjusted net income for the three years ended December 31, 2000.
(Graph-Assets $2.3 billion)
INVESTMENTS OTHER TRADING INTERNATIONAL INTEGRATED SERVICES
----------- ----- ------- ------------- -------------------
56 6.00 1.00 27.00 10.00
(Bar Chart-Adjusted Net Income (Loss)(1) in millions)
ADJUSTED NET INCOME
-------------------
1998 -6.30
1999 12.50
2000 17.10
---------------
(1) Adjusted net loss for 1998 excludes $2.6 million of merger-related charges.
Reported non-regulated net loss for 1998 was $8.9 million. Adjusted net
income for 1999 excludes $25.3 million of income from gains on sales of
McLeodUSA stock. Reported non-regulated net income for 1999 was $37.8
million. Adjusted net income for 2000 excludes $204.0 million of non-cash
income related to Alliant Energy Corporation's adoption of Statement of
Financial Accounting Standards No. 133 on July 1, 2000, and $15.7 million of
income from gains on sales of McLeodUSA stock. Reported non-regulated net
income for 2000 was $236.8 million.
ALLIANT ENERGY RESOURCES COMPETITIVE STRENGTHS
We believe we have substantial competitive strengths that will enable us to
execute our strategy successfully. We believe our competitive strengths are
reflected in our earnings and growth track record and include:
- Proven track record of quickly and successfully integrating both domestic
and international businesses obtained through mergers and acquisitions.
- Valuable knowledge and experience gained in privatized and deregulating
utility markets through our investments in Australia, Brazil, China and
New Zealand.
25
- Joint venture with Cargill Incorporated gives us the commodity trading
expertise of one of the largest commodities traders in the world.
- Established ability to seek out and develop alliances with strong
partners when entering new markets.
ALLIANT ENERGY RESOURCES STRATEGY
We believe competitive forces are reshaping the energy-services industry,
and new opportunities are available for customers to manage their energy
consumption patterns and costs. As an energy provider, we are presented with the
opportunity to intensify and adapt our relationships with our customers, and in
so doing, to increase our earnings growth and profit margins. We have relied on
our established competencies and strengths to establish new businesses that will
add growth. Our strategic objectives are to:
- Focus on opportunities that leverage management core competencies and
experience;
- Employ disciplined approach to developing partnerships and acquiring
assets; and
- Target areas with high growth potential where meaningful competitive
positions can be established.
ALLIANT ENERGY RESOURCES OPERATIONS
We manage a portfolio of companies involved in international utility
operations and domestic and international non-regulated businesses. Our
divisions include International, Non-Regulated Generation, Investments, Trading
and Integrated Services.
International
We invest in energy generation and distribution companies and projects in
developing markets throughout the world. Currently, we have operations in
Australia, Brazil, China and New Zealand. We have focused on these locations
because they offer a growing demand for energy and are receptive to foreign
investment. The investments of our international division by country as of
September 30, 2001 were as follows:
[Graph--Investments by Country $606 million]
NEW ZEALAND AUSTRALIA CHINA OTHER BRAZIL
----------- --------- ----- ----- ------
11 9.00 20.00 6.00 54.00
Our international operations include the following:
- Alliant Energy Holdings do Brasil Ltda., holds a non-controlling interest
in five Brazilian utility companies, Companhia Forca e Luz
Cataguazes-Leopoldina or Cataguazes, Celb, CENF, Energipe and Saelpa,
which together serve more than 1.6 million customers in Brazil. Working
with our local partners, we are developing two thermal generation plants
to complement the hydro generation facilities of Cataguazes. As of
September 30, 2001, our total investment in Brazil was $326 million.
- Alliant Energy International has invested in three individual
cogeneration facilities in China and has a controlling interest in Peak
Pacific Investment Company Ltd. Peak Pacific was formed to develop
investment opportunities in generation infrastructure projects in China.
As of September 30, 2001, our total investment in China was $124 million.
Our objective is to increase our total investment in
26
China up to approximately $250 million within the next three to five
years. We expect that any additional investments in China above $250
million would be supported by cash flows from our original investments.
On August 31, 2001, we announced that Alliant Energy International
acquired three combined heat and power facilities in the People's
Republic of China representing an investment of $66 million through the
establishment of joint ventures by Peak Pacific. The three acquired
facilities in China have a total generation capacity of 225 megawatts.
- Alliant International New Zealand has made equity investments in
infrastructure and utility businesses, including TrustPower Limited,
which totaled $67 million as of September 30, 2001.
- Alliant Energy Australia holds a 69% equity interest in Southern Hydro, a
seven-plant, 479-megawatt hydro-electricity generation business that
supplies energy to the Melbourne area. As of September 30, 2001, our
total investment in Australia was $54 million.
Non-Regulated Generation
On October 4, 2001, Alliant Energy Corporation announced that we entered
into an agreement with Panda Energy International, to jointly develop and
operate a 1,100-megawatt natural gas combined-cycle power plant in western
Michigan. We expect the facility to become operational in 2004.
We estimate that the total cost of the project will be approximately $600
million. We anticipate that at least 55% of the project costs will be financed
through non-recourse debt at the joint venture level, with the remaining portion
to be provided by us. The project, currently in its early development phase, is
due to begin its two-year construction period during the first quarter of 2002,
assuming some conditions are satisfied.
We anticipate that the project will be earnings neutral during construction
but contribute positively to our earnings per share in 2004, the plant's
projected first year of operation. We expect returns on investment over the life
of the project to be between 15% and 20%.
We and Panda intend to sell a significant portion of the plant's output
under long-term contracts. We will manage power sales from the facility not
subject to such contracts. Panda will provide development services for the new
project, while Alliant Energy Resources will maintain and operate the plant. The
long lead time equipment for the project, including the turbines, is on order or
under purchase option agreements, with delivery schedules consistent with the
commercial operation start date.
Investments
Our subsidiaries and investments include Whiting Petroleum Corporation,
Alliant Energy Transportation, Inc. and Alliant Energy Investments, Inc. Alliant
Energy Investments is a holding company whose subsidiaries include Heartland
Properties, Inc. and which holds an equity stake in McLeodUSA. Alliant Energy
Investments also has direct and indirect equity interests in various real estate
and economic development ventures, primarily concentrated in Iowa.
- Whiting Petroleum is based in Denver, Colorado and was organized to
purchase, develop and produce crude oil and natural gas, with an emphasis
on the acquisition of proven reserves and the production of natural gas.
Whiting Petroleum's construction and acquisition expenditures were
approximately $137 million in 2000 and are anticipated to be
approximately $130 million annually for 2001 through 2004. We and Whiting
Petroleum use sales contracts and hedges to limit our exposure to
fluctuations in prices for crude oil and natural gas.
- Alliant Energy Transportation is a holding company whose equity
investments were $30 million as of December 31, 2000. These equity
investments include the Cedar Rapids and Iowa City Railway Company, which
is a short-line railway that provides freight service between Cedar
Rapids and Iowa City; Transfer Services, Inc., which provides transfer
and storage services; and a 75% equity investment in IEI Barge Services
Inc., which provides barge terminal and hauling services on the
Mississippi River.
27
- Heartland Properties performs asset management and facilitates the
development and financing of high-quality, affordable housing in
Wisconsin and the Midwest. Heartland Properties has ownership interests
in approximately 80 properties.
- We also hold an equity interest of approximately 9%, or approximately 56
million shares, in McLeodUSA. McLeodUSA is an independent
telecommunications provider based in Cedar Rapids, Iowa. We and our
affiliates are parties to a stockholders' agreement that provides,
subject to some exceptions, that we may not sell any equity securities of
McLeodUSA until December 31, 2001 without the consent of the Board of
Directors of McLeodUSA.
Trading
We and international commodity trader Cargill Incorporated are partners in
a joint venture, Cargill-Alliant, LLC, which is an energy-trading company that:
- Buys, sells and trades electricity for large customers and assists those
customers in minimizing risks related to changes in costs of energy; and
- Provides coal, oil and natural gas supply management, plant operations
assistance and risk-management consultation.
Cargill-Alliant LLC officially began operation in 1997 and the joint
venture agreement has an initial term expiring in October 2002.
Integrated Services
Alliant Energy Integrated Services Company is a national energy-services
company that offers a wide range of energy and environmental services for
businesses. It offers large energy users an array of services to maximize their
productivity, profitability and energy efficiency, and provides solutions for
waste remediation and other environmental engineering and consulting services.
Integrated Services includes Cogenex Corporation, a provider of energy
management consulting, on-site generation and energy infrastructure; Alliant
Energy Integrated Services -- Energy Management LLC, an energy procurement
company; and RMT, Inc., a provider of environmental engineering and construction
management services. These companies provide services to commercial, industrial,
institutional, educational and governmental customers.
28
ALLIANT ENERGY CORPORATION
Alliant Energy Corporation is a growing diversified energy-services
provider engaged primarily in regulated utility operations in both the Midwest
and through our company, internationally. Alliant Energy Corporation also has
significant non-regulated domestic and international operations through our
company. Alliant Energy Corporation was formed in April 1998 as a result of the
merger of WPL Holdings, Inc., IES Industries Inc. and Interstate Power Company.
Through its subsidiaries and partners, Alliant Energy Corporation provides
electric, natural gas, water and steam services to over 3 million customers
worldwide. Its domestic utilities operate in Iowa, Wisconsin, Illinois and
Minnesota. Through our company, Alliant Energy Corporation has energy-related
operations and investments throughout the United States as well as in Australia,
Brazil, China and New Zealand.
Alliant Energy Corporation's mission is to create energy partnerships and
solutions that exceed its customers' expectations for comfort, security and
productivity in its service territories and around the world. Alliant Energy
Corporation plans to achieve this goal by executing its "invest, connect and
grow" strategy. Alliant Energy Corporation plans to invest in its core domestic
regulated utility operations and infrastructure, as well as in domestic and
international regulated and non-regulated generation and other energy-related
opportunities. Alliant Energy Corporation will continue to use technology and
other resources to better connect with its customers through enhanced service
reliability and operational efficiencies, value-added products and services, and
e-business initiatives. Alliant Energy Corporation will continue to grow its
non-regulated operations through partnerships and acquisitions with a focus on
generation projects, select international markets and other strategic
initiatives. Alliant Energy Corporation's goal is to have its non-regulated
operations contribute more than 25% to Alliant Energy Corporation's adjusted
earnings within the next three years. Alliant Energy Corporation believes that
successful implementation of these strategies will contribute significantly to
the achievement of its targeted annual growth rate of 7% to 10% in adjusted
earnings.
ALLIANT ENERGY CORPORATION DOMESTIC UTILITY OPERATIONS
Alliant Energy Corporation's domestic utility operations consist of its
regulated public utility subsidiaries, IES Utilities Inc., Wisconsin Power and
Light Company and Interstate Power Company.
- IES Utilities Inc., incorporated in 1925, is an Iowa utility engaged
principally in the generation, transmission, distribution and sale of
electric energy to approximately 347,000 customers; the purchase,
distribution, transportation and sale of natural gas to approximately
182,000 customers; and the delivery of steam services in selected
markets.
- Wisconsin Power and Light Company, incorporated in 1917, is a Wisconsin
utility engaged principally in the generation, transmission, distribution
and sale of electric energy to approximately 414,000 customers; the
purchase, distribution, transportation and sale of natural gas to
approximately 165,000 customers; and the delivery of water services in
selected markets to approximately 19,000 customers.
- Interstate Power Company, incorporated in 1925, is a public utility
operating in Iowa, Illinois and Minnesota engaged principally in the
generation, transmission, distribution and sale of electric energy to
approximately 168,000 customers and the purchase, distribution,
transportation and sale of natural gas to approximately 50,000 customers.
On April 23, 2001, shareowners of IES Utilities Inc. and Interstate Power
Company approved the merger of Interstate Power Company with and into IES
Utilities Inc., and the merger has received all required regulatory approvals.
Alliant Energy Corporation expects the merger to be effective on January 1,
2002.
29
DOMESTIC UTILITY COMPETITIVE STRENGTHS
Alliant Energy Corporation believes its domestic utilities have substantial
competitive strengths that will enable Alliant Energy Corporation to execute its
strategy successfully. Alliant Energy Corporation believes its domestic
utilities' competitive strengths are reflected in its earnings and growth track
record and include:
- Stable upper-Midwest utility service territory creating strong cash flows
from operations.
- Competitive electric rates in both Alliant Energy Corporation's region
and nationally.
- Significant management experience in regulated domestic utility
operations.
- Service territories located in favorable regulatory environments.
DOMESTIC UTILITY STRATEGY
Alliant Energy Corporation's strategic objectives within its regulated
domestic segment are:
- To increase its megawatts of capacity through investment in new electric
power generation, subject to appropriate regulatory incentives;
- To increase plant availability and reduce the cost of energy production;
- To enhance service reliability and operational excellence;
- To provide excellent customer service;
- To maintain favorable regulatory relationships;
- To remain current with cutting-edge technologies that impact its
business; and
- To practice proactive environmental compliance.
30
DOMESTIC UTILITY OPERATIONS
Alliant Energy Corporation's domestic utility operations consist of
regulated electric, natural gas and steam and water service businesses. Alliant
Energy Corporation serves more than 1.3 million customers in more than 1,000
communities in Iowa, southern and central Wisconsin, northwestern Illinois and
southern Minnesota. Approximately 54% of its domestic utility operating revenues
are from its Iowa operations and approximately 40% of its domestic utility
operating revenues are from its Wisconsin operations. Alliant Energy Corporation
believes sales of electric and gas commodities to end user customers will
continue to grow across its domestic service territories as the consumption of
electricity and gas by residential and business customers expands. For the year
ended December 31, 2000, Alliant Energy Corporation's domestic utility
operations represented $167.8 million of its adjusted net income. The
composition of Alliant Energy Corporation's domestic utility revenues for the
year ended December 31, 2000 was as follows:
(Graph-Total Revenues $2.1 billion(1))
Gas 20
Steam and Water 1
Electric 79
(Graph-Electric Revenues $1.6 billion)
Commercial 21
Other 15
Industrial 30
Residential 34
(Graph-Gas Revenues $0.4 billion)
Commercial 31
Other 3
Industrial 7
Residential 59
---------------
(1) Includes $33.4 million of steam and water revenues.
Historically, Alliant Energy Corporation has managed its power supply
requirements through a combination of owned capacity and purchased power
contracts. In 2000, approximately 75% of Alliant Energy Corporation's domestic
megawatt-hour sales were provided by generation facilities it owns. Alliant
Energy Corporation's current regulated domestic generation capacity is
approximately 5,900 megawatts, consisting of 5,200 megawatts from company-owned
generation facilities and 700 megawatts from purchased power contracts. In
addition, Alliant Energy Corporation has entered into an agreement with Calpine
Corporation to purchase capacity and energy from a 453-megawatt gas-fired power
plant to be constructed near Beloit, Wisconsin. Alliant Energy Corporation
expects the plant to be in service by early 2004.
Alliant Energy Corporation believes that its capacity, including the
Calpine plant, will allow it to meet its expected load requirements.
Furthermore, Alliant Energy Corporation has transmission interconnections at
various locations with 12 other transmission-owning utilities in the Midwest.
Alliant Energy Corporation believes these interconnections enhance the overall
reliability of its transmission systems and provides access to multiple sources
of economic and emergency power and energy. Alliant Energy Corporation manages
its supply portfolio to maintain an 18% reserve margin and it believes that its
proximity to transmission and generating capacity in the upper Midwest region
provides it additional access to a low-cost supply of power. Alliant Energy
Corporation's sources of power supply for the year ended December 31, 2000 were
as follows:
(Graph-Sources of Power Supply in 2000 (32,299 Thousand Megawatt-Hours))
Nuclear 15
Other 1
Purchased Power 25
Coal and Gas 59
31
IES UTILITIES INC.
IES Utilities Inc., or IESU, is a regulated utility serving customers in
Iowa. IESU is engaged principally in the generation, transmission, distribution
and sale of electric energy to approximately 347,000 customers in 525
communities; the purchase, distribution, transportation and sale of natural gas
to approximately 182,000 customers in 212 communities; and the delivery of steam
services in selected markets.
During 2000, IESU had total revenues of $876.0 million, which included
$28.4 million of steam and other revenues. IESU's electric and gas revenues
consisted of the following:
ELECTRIC GAS
----------------------------------------- ---------------------------------------
REVENUES SALES CUSTOMERS REVENUES SALES CUSTOMERS
----------- --------------- --------- ----------- ------------- ---------
(THOUSANDS OF (THOUSANDS OF
(THOUSANDS) MEGAWATT-HOURS) (THOUSANDS) DEKATHERMS)
Residential.......... $236,084 2,742 295,747 $117,132 14,829 160,357
Commercial........... 182,068 2,701 50,498 57,671 8,753 21,751
Industrial........... 188,734 5,053 706 15,377 3,063 365
Other................ 44,573 1,084 448 6,001 10,061 --
-------- ------ ------- -------- ------ -------
Total................ $651,459 11,580 347,399 $196,181 36,706 182,473
======== ====== ======= ======== ====== =======
During the last three years, IESU's electric sales to end user customers
grew at an annualized rate of 2% and the number of electric customers increased
by 1%. During the same period, gas sales to end user customers grew at an
annualized rate of 2% and the number of gas customers increased by 1%. During
the last three years, no single customer accounted for more than 10% of IESU's
consolidated revenues.
Electric Operations. At the time of peak load in 2000, IESU had available
capacity to provide 2,143 megawatts of electricity, of which 1,916 megawatts
were installed and 227 megawatts were purchased capacity under contract. In
2000, IESU had a maximum peak hour demand of 2,067 megawatts in the month of
August. During 2000, sources of generation at IESU included 55% coal/gas, 26%
nuclear, 18% purchased and 1% other.
IESU owns and operates 4,448 miles of electric transmission lines and 577
substation facilities connecting with its high voltage transmission systems. A
non-cancelable operating agreement, which will terminate on December 31, 2035,
provides for the joint use of certain transmission facilities of IESU and
Central Iowa Power Cooperative.
Gas Operations. At December 2000, IESU served approximately 182,000
customers in approximately 212 communities. The gas utility operations accounted
for 22% of IESU operating revenues for the year ended December 31, 2000.
Steam Operations. Steam operations, based entirely in Cedar Rapids, Iowa,
represented about 3% of IESU's revenues for the year ended December 31, 2000.
Construction Program. Construction expenditures for 2000 were $121
million. Estimated construction expenditures are approximately $147 million for
2001, and $786 million for 2002 through 2005.
WISCONSIN POWER AND LIGHT COMPANY
Wisconsin Power and Light Company, or WP&L, is a regulated utility with a
service territory of 16,000 square miles in southern and central Wisconsin and
northern Illinois. WP&L is engaged principally in the generation, transmission,
distribution and sale of electric energy to approximately 414,000 customers in
600 communities; the purchase, distribution, transportation and sale of natural
gas to approximately 165,000 customers in 233 communities; and the delivery of
water services to approximately 19,000 customers in selected markets.
32
During 2000, WP&L had total revenues of $862.4 million, which included $5.0
million of water and other revenues. WP&L's electric and gas revenues consisted
of the following:
ELECTRIC GAS
----------------------------------------- ---------------------------------------
REVENUES SALES CUSTOMERS REVENUES SALES CUSTOMERS
----------- --------------- --------- ----------- ------------- ---------
(THOUSANDS OF (THOUSANDS OF
(THOUSANDS) MEGAWATT-HOURS) (THOUSANDS) DEKATHERMS)
Residential.......... $229,668 3,151 362,178 $ 96,204 12,769 146,690
Commercial........... 127,199 2,031 49,350 54,512 8,595 17,583
Industrial........... 190,085 4,688 974 8,581 1,476 513
Other................ 145,239(1) 3,291 1,923 5,855 13,680 --
-------- ------ ------- -------- ------ -------
Total................ $692,191 13,161 414,425 $165,152 36,520 164,786
======== ====== ======= ======== ====== =======
---------------
(1) Includes revenues of $115,715 for wholesale electric customers.
During the last three years, WP&L's electric sales to end user customers
grew at an annualized rate of 2% and the number of electric customers increased
by 2%. During the same period, gas sales to end user customers grew at an
annualized rate of 5% and the number of gas customers increased by 2%. During
the last three years, no single customer accounted for more than 10% of WP&L's
consolidated revenues.
Electric Operations. At the time of peak load in 2000, WP&L had available
capacity to provide 2,680 megawatts of electricity, of which 2,345 megawatts
were installed and 335 megawatts were purchased capacity under contract. In
2000, WP&L had a maximum peak hour demand of 2,508 megawatts in the month of
August. During 2000, sources of generation at WP&L included 58% coal/gas, 29%
purchased, 11% nuclear (including a planned refueling outage during 2000) and 2%
other.
Gas Operations. At December 2000, WP&L served approximately 165,000
customers in approximately 233 communities. The gas utility operations accounted
for 19% of WP&L operating revenues for the year ended December 31, 2000.
Water Operations. Water operations represented about 1% of WP&L's revenues
for the year ended December 31, 2000.
Construction Program. Construction expenditures for 2000 were $132
million. Estimated construction expenditures are approximately $138 million for
2001, and $625 million for 2002 through 2005.
INTERSTATE POWER COMPANY
Interstate Power Company, or IPC, is a regulated utility serving customers
in Iowa, Minnesota and Illinois. IPC is engaged principally in the generation,
transmission, distribution and sale of electric energy to approximately 168,000
customers in 234 communities and the purchase, distribution, transportation and
sale of natural gas to approximately 50,000 customers in 41 communities.
During 2000, IPC had total revenues of $358.0 million consisting of the
following:
ELECTRIC GAS
----------------------------------------- ---------------------------------------
REVENUES SALES CUSTOMERS REVENUES SALES CUSTOMERS
----------- --------------- --------- ----------- ------------- ---------
(THOUSANDS) (THOUSANDS OF (THOUSANDS) (THOUSANDS OF
MEGAWATT-HOURS) DEKATHERMS)
Residential.......... $101,531 1,267 141,678 $32,361 4,428 44,943
Commercial........... 39,752 633 23,985 14,921 2,348 5,320
Industrial........... 122,336 3,351 1,093 3,794 811 75
Other................ 40,767 705 945 2,539 20,190 --
-------- ----- ------- ------- ------ ------
Total................ $304,386 5,956 167,701 $53,615 27,777 50,338
======== ===== ======= ======= ====== ======
33
During the last three years, IPC's electric sales to end user customers
grew at an annualized rate of 1% and the number of electric customers increased
by more than 1%. During the same period, gas sales to end user customers grew at
an annualized rate of 4% and the number of gas customers increased by 1%. During
the last three years, no single customer accounted for more than 10% of IPC's
consolidated revenues.
Electric Operations. At the time of peak load in 2000, IPC had available
capacity to provide 1,117 megawatts of electricity, of which 1,029 megawatts
were installed and 88 megawatts were purchased capacity under contract. In 2000,
IPC had a maximum peak hour demand of 996 megawatts in the month of August.
During 2000, sources of generation at IPC included 71% coal/gas and 29%
purchased.
IPC owns and operates 2,600 miles of electric transmission lines and 222
substation facilities.
Gas Operations. At December 2000, IPC served approximately 50,000
customers in approximately 41 communities. The gas utility operations accounted
for 15% of IPC operating revenues during the year ended December 31, 2000.
Construction Program. Construction expenditures for 2000 were $51 million.
Estimated construction expenditures are approximately $61 million for 2001, and
$307 million for 2002 through 2005.
AMERICAN TRANSMISSION COMPANY
In 1999, Wisconsin enacted legislation for the formation of a Wisconsin
transmission-only company, American Transmission Company, LLC, for those
Wisconsin utility companies that elected to join. On January 1, 2001, WP&L
contributed its transmission assets, with approximate net book value of $186
million, in exchange for a 26% ownership in American Transmission Company.
Alliant Energy Corporation's partners in American Transmission Company include
Madison Gas and Electric Company, Wisconsin Energy Corporation and WPS Resources
Corporation. Alliant Energy Corporation believes the contribution of its WP&L
transmission assets to a transmission-only company is consistent with its
strategy to connect to customers and grow its transmission business
opportunities. Alliant Energy Corporation expects to earn a competitive return
on its ownership interest in American Transmission Company.
TRANSLINK
In March 2001, Alliant Energy Corporation announced discussions with Corn
Belt Power Cooperative, MidAmerican Energy Company, Nebraska Public Power
District, Omaha Public Power District and Xcel Energy Inc. to assess the
viability of developing an independent transmission company for Midwest
utilities that are not a part of American Transmission Company. On September 28,
2001, these utility companies and Alliant Energy Corporation's subsidiaries,
IESU and IPC, announced the filing of an application with the Federal Energy
Regulatory Commission to create TRANSLink Transmission Co. LLC, a for-profit,
transmission-only company. The participants have requested the Federal Energy
Regulatory Commission to expedite consideration of the application so that
TRANSLink could commence operations by 2002. Current plans call for IESU and IPC
to contribute their transmission assets, which have an estimated net book value
of $300 million, to TRANSLink in exchange for a corresponding ownership interest
in TRANSLink. Alliant Energy Corporation expects to earn a competitive return on
any ownership interest in TRANSLink that it may obtain. The TRANSLink proposal
is subject to receipt of all required federal and state regulatory approvals.
NUCLEAR MANAGEMENT COMPANY
Alliant Energy Corporation's subsidiaries, IESU and WP&L, and Wisconsin
Energy Corporation, WPS Resources Corporation and Xcel Energy Inc. formed
Nuclear Management Company in 1999 to consolidate the operation of their nuclear
plants and to provide similar capabilities for other nuclear operators and
owners. After the formation of Nuclear Management Company, an additional
partner, CMS Energy Corporation, joined the venture. Alliant Energy Corporation
owns 20% of Nuclear Management Company. Combined, the Nuclear Management Company
member utilities operate seven nuclear
34
generating units at five sites representing 4,500 megawatts of capacity. Alliant
Energy Corporation and its partners continue to own their respective plants and
are entitled to the energy generated at the plants. Each partner retains the
financial obligations for the safe operation, maintenance and the
decommissioning of its plants.
Alliant Energy Corporation owns interests in two nuclear facilities,
Kewaunee Nuclear Power Plant and Duane Arnold Energy Center. Kewaunee, a
532-megawatt plant, is operated by Nuclear Management Company under contract to
Wisconsin Public Service Corporation and is jointly owned by Wisconsin Public
Service Corporation (59.0%) and WP&L (41.0%). The Kewaunee operating license
expires in 2013. Duane Arnold, a 535-megawatt plant, is also operated by Nuclear
Management Company under contract to IESU, which has a 70.0% ownership interest
in the plant. The Duane Arnold operating license expires in 2014. In 2000, the
capacity factor for Kewaunee was 80.9%, including the impact of a planned
refueling outage, and the capacity factor for Duane Arnold was 94.9%. For the
last three years, the capacity factor for both plants has averaged 85.0%.
IESU's and WP&L's anticipated nuclear-related construction expenditures for
2001 are approximately $41 million and for 2002 through 2005 are approximately
$42 million.
RATES AND REGULATORY ENVIRONMENT
Alliant Energy Corporation operates as a registered public utility holding
company subject to regulation by the Securities and Exchange Commission under
the Public Utility Holding Company Act of 1935. Alliant Energy Corporation and
its subsidiaries are subject to the regulatory provisions of the Public Utility
Holding Company Act, including provisions relating to the issuance and sales of
securities, acquisitions and sales of utility properties and acquisitions and
retention of interests in non-utility businesses.
As a utility holding company incorporated in Wisconsin, Alliant Energy
Corporation is subject to regulation by the Public Service Commission of
Wisconsin, or the PSCW. The PSCW regulates the type and amount of Alliant Energy
Corporation's investments in non-utility businesses. WP&L, also subject to
regulation by the PSCW, is generally required to file a rate case with the PSCW
every two years based on a forward-looking test year period. However, as one of
the conditions for approval of the 1998 merger which formed Alliant Energy
Corporation, the PSCW required, with some exceptions, that WP&L freeze retail
electric, natural gas and water rates through April 2002. In August 2001, WP&L
filed an application with the PSCW for new rates to apply beginning April 2002.
The application requested an increase in WP&L's authorized return on investment
from the current level of 11.7% to 13.5%. Alliant Energy Corporation cannot
provide any assurance that the PSCW will grant the requested rate increase or,
if granted, that the rate increase will be at the requested level.
In August 2001, WP&L filed a rate case with the PSCW and the new rates are
expected to go into effect in the spring of 2002. WP&L's retail electric rates
will be based in part on forecasted fuel and purchased power costs. Under the
PSCW rules, WP&L can seek emergency rate increases if the annual fuel and
purchased power costs are more than 3% higher than the estimated costs used to
establish rates. Similarly, rates are also subject to a decrease if actual costs
are more than 3% lower than estimated costs. WP&L has a gas performance
incentive that includes a sharing mechanism under which 40% of all gains and
losses relative to current commodity prices, as well as other benchmarks, are
retained or incurred by WP&L, with the remainder refunded to or recovered from
customers.
IESU and IPC both operate under the jurisdiction of the Iowa Utilities
Board. Requests for rate relief are based on historical test periods, adjusted
for some known and measurable changes. IESU and IPC also agreed to a four-year
price cap in Iowa as part of Alliant Energy Corporation's 1998 merger approval
process. IESU and IPC are currently reviewing the potential need to file for new
rates in early 2002. IESU's and IPC's tariffs provide for subsequent adjustments
to their electric and natural gas rates for changes in the cost of fuel,
purchased energy and natural gas purchased for resale. Purchased power capacity
costs are not recovered from electric customers through this energy adjustment
clause mechanism. Recovery of these capacity costs must be addressed in formal
rate proceedings.
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South Beloit Water, Gas and Electric Company, a wholly-owned subsidiary of
WP&L, is subject to regulation by the Illinois Commerce Commission. IPC is also
subject to regulation by the Minnesota Public Utilities Commission and the
Illinois Commerce Commission.
The Federal Energy Regulatory Commission has jurisdiction under the Federal
Power Act over some of the electric utility facilities and operations, wholesale
rates and accounting practices of IESU, WP&L and IPC, and in some other
respects.
WP&L and IESU are indirectly and directly subject to the jurisdiction of
the Nuclear Regulatory Commission with respect to Kewaunee Nuclear Power Plant
and Duane Arnold Energy Center, and to the jurisdiction of the U.S. Department
of Energy with respect to the disposal of nuclear fuel and other radioactive
wastes from Kewaunee Nuclear Power Plant and Duane Arnold Energy Center.
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DESCRIPTION OF OTHER OUTSTANDING INDEBTEDNESS
The following is information about our indebtedness other than indebtedness
outstanding under our indenture. See "Description of the Senior Notes."
We are a party to a 3-Year Credit Agreement with various banking
institutions. This agreement extends through October 2003, with one-year
extensions available upon agreement by the parties. We also use unused borrowing
availability under this agreement to support our commercial paper program. A
combined maximum of $450 million of borrowings under this agreement and the
commercial paper program may be outstanding at any time. Interest rates and
maturities are set at the time of borrowing. The rates are based upon quoted
market prices and the maturities are less than one year. At September 30, 2001,
we had no direct borrowings under this facility. In addition, we had $450
million of commercial paper outstanding that was backed by this facility, with
interest rates ranging from 2.66% to 3.78% and maturities ranging from 4 to 59
days. We intend to continue issuing commercial paper backed by this facility. At
September 30, 2001, we had no credit capacity remaining under this facility. No
conditions existed at September 30, 2001 that would prevent the issuance of
commercial paper or direct borrowings under the 3-Year Credit Agreement. The
senior notes will rank equally with indebtedness under the 3-Year Credit
Agreement.
We are also a party to a 364-Day Credit Agreement with various banking
institutions. This agreement extends through October 14, 2002, with 364-day
extensions available upon agreement by the parties. If the parties do not agree
to a one-year extension to the agreement, we may elect, nevertheless, to extend
the term of repayment of our borrowings for an additional year. We also use the
unborrowed portion of this agreement to support our commercial paper program. A
combined maximum of $150 million of borrowings under this agreement and
commercial paper backed by this facility may be outstanding at any one time. We
may increase that combined maximum to $450 million at our option if we comply
with some conditions in this agreement. Under this agreement, we may borrow in
one of two ways, at our option. Under the first, interest rates float or are
established periodically with reference to the London Interbank Offered Rate and
effective maturity is the termination date of the facility. Under the second,
interest rates, which are based upon quoted market prices, and maturities, which
may not extend beyond the agreement termination date, are set at the time of
borrowing. At September 30, 2001, we had no direct borrowings under this
facility. In addition, we had $119 million of commercial paper outstanding that
was backed by this facility, with an interest rate ranging from 2.66% to 3.78%
and maturities ranging from 4 to 59 days. We intend to continue issuing
commercial paper backed by this facility. At September 30, 2001, we had $31
million credit capacity remaining under this facility. No conditions existed at
September 30, 2001 that would prevent the issuance of commercial paper or direct
borrowings under the 364-Day Credit Agreement. The senior notes will rank
equally with indebtedness under the 364-Day Credit Agreement.
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DESCRIPTION OF THE NEW SENIOR NOTES
The old senior notes were, and the new senior notes will be, issued as a
series of debt securities under and governed by an indenture, dated as of
November 4, 1999, between us and U.S. Bank National Association, as successor to
Firstar Bank, N.A., as trustee and paying agent, as supplemented and amended by
the first supplemental indenture, dated as of November 4, 1999, the second
supplemental indenture, dated as of February 1, 2000, and the third supplemental
indenture, dated as of November 15, 2001, which created the senior notes. We
refer to the indenture, as so supplemented and amended, as the indenture. We
refer to the old senior notes and the new senior notes collectively as the
senior notes. The following summary of some provisions of the indenture, the
senior notes and the guarantees is not complete and is qualified in its entirety
by reference to provisions of the indenture. Copies of the indenture are
available for inspection on any business day during normal business hours at the
office of the trustee in Milwaukee, Wisconsin or New York, New York. The holders
of senior notes are entitled to the benefits of and are bound by all the
provisions of the indenture.
GENERAL
The indenture does not limit the aggregate principal amount of debt
securities that we may issue under it and provides that debt securities may be
issued from time to time in one or more series as provided in a supplemental
indenture or a resolution of our Board of Directors. The senior notes will be
fully and unconditionally guaranteed by Alliant Energy Corporation, will be
issued in the aggregate principal amount of $300,000,000 and will mature on
December 1, 2011, at their principal amount unless we redeem them before that
date.
As of the date of this prospectus, the debt securities outstanding under
the indenture other than the senior notes are $250 million aggregate principal
amount of our 7 3/8% senior notes due 2009 and $402.5 million aggregate
principal amount of our exchangeable senior notes due 2030. Our exchangeable
notes due 2030 have a stated interest rate of 7.25% through February 2003 and
2.5% after that time. Our exchangeable notes due 2030 are exchangeable for cash
based upon a percentage on the value of McLeodUSA Class A Common Stock. The
provisions of the indenture described below are also applicable to our senior
notes due 2009 and our exchangeable notes due 2030. The senior notes will rank
equally with these notes.
We will pay interest on the senior notes at a rate of 7% per annum from the
most recent date to which interest has been paid on the old senior notes or, if
no interest has been paid, from the date of issuance of the old senior notes. We
will pay interest on the senior notes semiannually in arrears on June 1 and
December 1 of each year, commencing on June 1, 2002, until the principal amount
has been paid or made available for payment, to the persons in whose names the
senior notes are registered at the close of business on May 15 or November 15,
as the case may be, before each interest payment date. Interest on the senior
notes will be computed on the basis of a 360-day year of twelve 30-day months.
The principal of and interest on the senior notes will be payable in U.S.
dollars or in such other currency of the United States that at the time of
payment is legal tender for the payment of public and private debts.
FULL AND UNCONDITIONAL GUARANTEE
Alliant Energy Corporation has agreed to fully and unconditionally
guarantee the payment of the principal of, and premium, if any, or interest on,
the senior notes as these items become due and payable, whether at maturity,
upon redemption or otherwise, according to the terms of the new senior notes and
the indenture. Alliant Energy Corporation will determine, at least one business
day prior to the date upon which a payment of principal of, and premium, if any,
or interest on, the senior notes is due and payable, whether we have available
the funds to make these payments as they become due and payable. If we fail to
pay principal, premium, if any, or interest, then Alliant Energy Corporation
will cause these payments to be made as they become due and payable, whether at
maturity, upon redemption, or otherwise, as if these payments were made by us.
Alliant Energy Corporation's obligations will be unconditional regardless of the
validity or enforceability of, or the absence of any action to enforce, the
senior notes or the
38
indenture, any waiver or consent by a holder of senior notes, the recovery of
any judgment against us or any action to enforce a judgment against us. Alliant
Energy Corporation will be subrogated to all rights of a holder of senior notes
against us with respect to any amounts paid by Alliant Energy Corporation
pursuant to the guarantee.
RANKING
The senior notes will be senior, unsecured and unsubordinated obligations
of ours, ranking equally and ratably with all our other senior, unsecured and
unsubordinated obligations. The guarantees will be unsecured obligations of
Alliant Energy Corporation and will rank equally with all other unsecured and
unsubordinated indebtedness of Alliant Energy Corporation. Because we are a
holding company and conduct substantially all of our operations through our
subsidiaries, the rights of our creditors, including those under the senior
notes, to participate in any distributions of the assets of any of our
subsidiaries or joint ventures, upon liquidation or reorganization or otherwise,
are necessarily subject, and therefore will be effectively subordinated, to the
prior claims of creditors of any of our subsidiaries or joint ventures, except
to the extent our claims as a creditor may be recognized.
In addition, because Alliant Energy Corporation is a holding company that
conducts substantially all of its operations through subsidiaries, including us,
the right of Alliant Energy Corporation, and hence the right of creditors of
Alliant Energy Corporation, including holders of the senior notes through the
guarantees, to participate in any distribution of assets of any subsidiary upon
its liquidation or reorganization or otherwise is necessarily subject to the
prior claims of creditors of such subsidiaries, except to the extent that claims
of Alliant Energy Corporation itself as a creditor of the subsidiary may be
recognized.
The senior notes will also be effectively subordinated to all of our future
secured indebtedness, and the related guarantees will be effectively
subordinated to all future secured indebtedness of Alliant Energy Corporation.
BOOK-ENTRY PROCEDURES AND FORM
Global Notes: Book-Entry Form
Except as provided below, the senior notes will be issued in fully
registered book-entry form and will be represented by one or more global notes.
The global notes will be deposited with, or on behalf of, The Depositary Trust
Company of New York City, or DTC, and registered in the name of a nominee of
DTC.
We expect that pursuant to procedures established by DTC:
- upon the issuance of the senior notes in the form of one or more global
notes, DTC or its custodian will credit, on its internal system, the
principal amount of senior notes of the individual beneficial interests
represented by these global notes to the respective accounts of persons
who have accounts with DTC; and
- ownership of beneficial interests in the global notes will be shown on,
and the transfer of this ownership will be effected only through, records
maintained by DTC or its nominee with respect to interests of
participants and the records of participants with respect to interests of
persons other than participants. These accounts initially will be
designated by or on behalf of the initial purchasers and ownership of
beneficial interests in the global notes will be limited to participants
or persons who hold interests through participants. QIBs, may hold their
interests in the global notes directly through DTC if they are
participants in this system, or indirectly through organizations which
are participants in this system. The laws of some states of the United
States may require that some purchasers of securities take physical
delivery of the senior notes in definitive registered form. Such limits
and such laws may impair the ability of such purchasers to own, transfer
or pledge interests in the global notes.
39
So long as DTC, or its nominee, is the registered owner or holder of senior
notes, DTC or its nominee, as the case may be, will be considered the sole owner
or holder of senior notes represented by the global notes for all purposes under
the indenture. No beneficial owner of an interest in the global notes will be
able to transfer that interest except in accordance with DTC's procedures, in
addition to those provided for under the indenture with respect to the senior
notes.
Payments of the principal of, and premium, if any, and interest on, the
global notes will be made to DTC or its nominee, as the case may be, as the
registered owner thereof. None of us, the trustee or any paying agent will have
any responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in the global notes
or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interest.
We expect that DTC or its nominee, upon receipt of any payment of principal
of and premium, if any, and interest on the global notes, will credit
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of the global notes as
shown on the records of DTC or its nominee. We also expect that payments by
participants to owners of beneficial interests in the global notes held through
such participants will be governed by standing instructions and customary
practice, as is now the case with securities held for the accounts of customers
registered in the names of nominees for such customers. These payments will be
the responsibility of such participants. Transfers between participants in DTC
will be effected in the ordinary way through DTC's settlement system in
accordance with DTC rules and will be settled in same day funds.
DTC has advised us that it will take any action permitted to be taken by a
holder of senior notes only at the direction of one or more participants to
whose account the DTC interests in the global notes are credited and only in
respect of such portion of the aggregate principal amount of senior notes as to
which such participant or participants has or have given such direction.
DTC has advised us that:
- DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code
and a "clearing agency" registered under Section 17A of the Securities
Exchange Act of 1934;
- DTC holds securities that its direct participants deposit with DTC and
facilitates the settlement among direct participants of securities
transactions, such as transfers and pledges, in deposited securities
through electronic computerized book-entry changes in direct
participants' accounts, thereby eliminating the need for physical
movement of securities certificates;
- direct participants include securities brokers and dealers, trust
companies, clearing corporations and other organizations;
- DTC is owned by a number of its direct participants and by the New York
Stock Exchange, Inc., the American Stock Exchange LLC and the National
Association of Securities Dealers, Inc.;
- access to the DTC system is also available to indirect participants such
as securities brokers and dealers, banks and trust companies that clear
through or maintain a custodial relationship with a direct participant,
either directly or indirectly; and
- the rules applicable to DTC and its direct and indirect participants are
on file with the SEC.
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interests in the global notes among participants of DTC, it is
under no obligation to perform such procedures, and such procedures may be
discontinued at any time. None of us, the trustee or any of our respective
agents will have any responsibility for the performance by DTC or its
participants or indirect participants of their respective obligations under the
rules and procedures governing their operations, including maintaining,
supervising or reviewing the records relating to, payments made on account of,
or beneficial ownership interests in, global notes.
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According to DTC, the foregoing information with respect to DTC has been
provided to its participants and other members of the financial community for
informational purposes only and is not intended to serve as a representation,
warranty or contract modification of any kind. We have provided the foregoing
descriptions of the operations and procedures of DTC solely as a matter of
convenience. DTC's operations and procedures are solely within DTC's control and
are subject to change by DTC from time to time. Neither we, the initial
purchasers nor the trustee take any responsibility for these operations or
procedures, and you are urged to contact DTC or its participants directly to
discuss these matters.
Certificated Notes
We will issue senior notes in certificated form in exchange for global
notes if:
- DTC or any successor depositary notifies us that it is unwilling or
unable to continue as a depositary for the global notes or ceases to be a
"clearing agency" registered under the Securities Exchange Act of 1934
and a successor depositary is not appointed by us within 90 days of such
notice;
- an event of default (as defined below) under the senior notes has
occurred and is continuing; or
- we determine that the senior notes will no longer be represented by
global notes.
The holder of a senior note in certificated form may transfer such note by
surrendering it at the office or agency maintained by us for such purpose in
Milwaukee, Wisconsin or New York, New York.
PURCHASE AND CANCELLATION
We may at any time purchase senior notes in the open market or otherwise at
any price, subject to applicable U.S. securities laws. Any purchase by tender
will be made available to all holders of senior notes. Any senior notes so
purchased must be promptly surrendered to the trustee for cancellation.
All senior notes that we redeem or purchase will promptly be canceled. Any
senior notes in certificated form so canceled will be forwarded to or to the
order of the trustee and such senior notes in certificated form may not be
reissued or resold.
COVENANTS
Except as otherwise set forth under "-- Defeasance and Covenant Defeasance"
below, for so long as any senior notes remain outstanding or any amount remains
unpaid on any of the senior notes, we will comply with the terms of the
covenants set forth below.
Payment of Principal and Interest
We will duly and punctually pay the principal of and premium, if any, and
interest on the senior notes in accordance with the terms of the senior notes
and the indenture.
Limitation on Liens
The indenture provides that we will not, and we will not permit any of our
subsidiaries to issue, assume or guarantee any Debt if the Debt is secured by
any Lien upon any of our property or assets other than cash, without effectively
securing the outstanding senior notes, together with any other indebtedness or
obligation then existing or thereafter created ranking equally with the senior
notes, equally and ratably with the Debt. "Debt" is defined in the indenture as
all of our obligations evidenced by bonds, debentures, notes or similar
evidences of indebtedness in each case for money borrowed. "Lien" is defined in
the indenture as any mortgage, lien, pledge, security interest or other
encumbrance. The term "Lien" does not include any easements, rights-of-way,
restrictions and other similar encumbrances and encumbrances
41
consisting of zoning restrictions, leases, subleases, licenses, sublicenses,
restrictions on the use of property or defects in the title thereto. This
limitation does not apply to:
- Liens in existence on the date of original issuance of the senior notes;
- any Lien created or arising over any property or assets which we or any
of our subsidiaries acquire, construct or create, but only if
- the Lien secures only principal amounts, which may not exceed the cost
of the acquisition, construction or creation, of Debt incurred for the
purposes of the acquisition, construction or creation, together with
any costs, expenses, interest and fees incurred in connection with the
acquisition, construction or creation or a guarantee given in
connection with the acquisition, construction or creation,
- the Lien is created or arises on or before 90 days after the
completion of the acquisition, construction or creation of the
property or assets and
- the Lien is confined solely to the property or assets so acquired,
constructed or created;
- any Lien to secure the Debt incurred by us or our subsidiaries in
connection with a specifically identifiable project where the Lien
relates and is confined to a property, including shares or other rights
of ownership in the entities which own that property or project involved
in that project and acquired by us or our subsidiaries after the date of
original issuance of the senior notes and the recourse of the creditors
in respect of the Debt is limited to any or all of that project and
property;
- any Lien securing amounts not more than 90 days overdue or otherwise
being contested in good faith;
- rights of financial institutions to offset credit balances in connection
with the operation of cash management programs established for our or any
of our subsidiaries' benefit or in connection with the issuance of
letters of credit for our or any of our subsidiaries' benefit;
- any Lien securing Debt incurred by us or any of our subsidiaries in
connection with the financing of accounts receivable;
- any Lien incurred in the ordinary course of business, including any
mechanics', materialmen's, carriers', workmen's, vendors' or other like
Liens and any Liens securing amounts in connection with workers'
compensation, unemployment insurance and other types of social security;
- any Lien upon specific items of our or any of our subsidiaries' inventory
or other goods and proceeds securing our or any of our subsidiaries'
obligations in respect of bankers' acceptances issued or created to
facilitate the purchase, shipment or storage of inventory or other goods;
- any Lien incurred or deposits made securing the performance of tenders,
bids, leases, trade contracts other than for borrowed money, statutory
obligations, surety bonds, appeal bonds, government contracts,
performance bonds, return-of-money bonds and other obligations of like
nature incurred by us or any of our subsidiaries in the ordinary course
of business;
- any Lien constituted by a right of set off or right over a margin call
account or any form of cash or cash collateral or any similar arrangement
for obligations incurred by us or any of our subsidiaries in respect of
the hedging or management of risks under transactions involving any
derivative instrument of any kind;
- any Lien arising out of title retention or like provisions in connection
with the purchase of goods and equipment by us or any of our subsidiaries
in the ordinary course of business;
- any Lien securing reimbursement obligations under letters of credit,
guarantees and other forms of credit enhancement given in connection with
the purchase of goods and equipment by us or any of our subsidiaries in
the ordinary course of business;
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- Liens on any property or assets acquired from an entity with which we or
any of our subsidiaries merge and that is not created in anticipation of
any such transaction, unless the Lien was created to secure or provide
for the payment of any part of the purchase price of the entity to be
acquired;
- any Lien on any property or assets existing at the time of acquisition by
us or any of our subsidiaries and which is not created in anticipation of
the acquisition, unless the Lien was created to secure or provide for the
payment of any part of the purchase price of the property or assets so
acquired;
- Liens required by any contract or statute in order to permit us or any of
our subsidiaries to perform any contract or subcontract made by us or any
of our subsidiaries with a governmental entity or governmental unit, or
to secure payments by us or any of our subsidiaries to a governmental
unit under the provisions of any contract or statute;
- any Lien securing industrial revenue, development or similar bonds issued
by us or any of our subsidiaries or for our or any of our subsidiaries'
benefit, provided that these bonds are nonrecourse to us or any of our
subsidiaries;
- any Lien securing taxes or assessments or other applicable governmental
charges or levies;
- any Lien which arises under any order of attachment, distraint or similar
legal process arising in connection with court proceedings and any Lien
which secures the reimbursement obligation for any bond obtained in
connection with an appeal taken in any court proceeding, so long as the
execution or other enforcement of the Lien arising in connection with
such legal process is effectively stayed and the claims secured by the
Lien are being contested in good faith and, if appropriate, by
appropriate legal proceedings, or any Lien in favor of a plaintiff or
defendant in any action before a court or tribunal as security for costs
or expenses;
- any Lien arising by operation of law or by order of a court or tribunal
or any Lien arising by an agreement of similar effect, including judgment
liens; or
- any extension, renewal or replacement of any Liens referred to in the
clauses above, for amounts not exceeding the principal amount of the Debt
secured by the Lien so extended, renewed or replaced, so long as the
extension, renewal or replacement Lien is limited to all or a part of the
same property or assets that were covered by the Lien that was extended,
renewed or replaced, plus improvements on such property or assets.
Although the indenture limits our and our subsidiaries' ability to incur
Liens as set forth above, the indenture nevertheless provides that we or our
subsidiaries may create or permit to subsist Liens over any of our and our
subsidiaries' property or assets so long as the aggregate amount of Debt secured
by all Liens that we or our subsidiaries incur, excluding the amount of Debt
secured by Liens set forth in the clauses above, does not exceed 10% of Alliant
Energy Corporation's Consolidated Net Tangible Assets. "Consolidated Net
Tangible Assets" is defined in the indenture as the total of all assets,
including revaluations thereof as a result of commercial appraisals, price level
restatement or otherwise, appearing on the most recent consolidated balance
sheet of Alliant Energy Corporation as of the date of determination, net of
applicable reserves and deductions, but excluding goodwill, trade names,
trademarks, patents, unamortized debt discount and all other like intangible
assets, less the aggregate of the consolidated current liabilities of Alliant
Energy Corporation appearing on such balance sheet.
Limitation on Sale and Lease-Back Transactions
The indenture provides that we will not enter into any arrangement with any
entity providing for the lease by us of any of the assets that we have sold or
transferred or that we have agreed to sell or transfer to that entity unless:
- the transaction involves a lease for a temporary period not to exceed
three years;
- the transaction is between us and one of our affiliates;
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- we would be entitled to incur Debt secured by a Lien on the assets or
property involved in the transaction at least equal to the Attributable
Debt with respect to the transaction, without equally and ratably
securing the senior notes, as described under "-- Limitation on Liens"
above, other than as described in the second paragraph of that
description;
- we enter into the transaction within 270 days after our initial
acquisition of the assets or property subject to the transaction;
- the aggregate amount of all Attributable Debt with respect to all sale
and lease-back transactions then in effect does not exceed 10% of Alliant
Energy Corporation's Consolidated Net Tangible Assets; or
- within 12 months preceding the sale or transfer or 12 months following
the sale or transfer, regardless of whether we make any sale or transfer,
we apply, in the case of a sale or transfer for cash, an amount equal to
the net proceeds of the sale or transfer and, in the case of a sale or
transfer other than for cash, an amount equal to the fair value of the
assets so leased at the time that we enter into such arrangement, as
determined by our Board of Directors,
- to the retirement of Debt, incurred or assumed by us which by its
terms matures at, or is extendible or renewable at the option of the
obligor to, a date more than 12 months after the date of incurring,
assuming or guaranteeing such Debt or
- to an investment in any of our assets.
"Attributable Debt" is defined in the indenture as, with respect to any
particular sale and lease-back transaction, at the time of determination, the
present value of the obligation of the lessee for net rental payments during the
remaining term of the lease included in the sale and lease-back transaction,
including any period for which such lease has been extended or may, at the
option of the lessor, be extended. The present value of this obligation is
discounted at the rate of interest implicit in the transaction determined in
accordance with U.S. generally accepted accounting principles.
Consolidation, Merger, Conveyance, Sale or Lease
The indenture provides that we may, without the consent of any holders of
the senior notes, consolidate or merge with, or convey, transfer or lease
substantially all of our property and assets to, another U.S. entity so long as:
- if we are not the surviving entity, the surviving entity expressly
assumes by supplemental indenture all of our applicable obligations under
the senior notes and the indenture;
- immediately after giving effect to the transaction, no event of default
under the senior notes and no event which, after notice or lapse of time
or both, would become an event of default under the senior notes, has
occurred and is continuing; and
- either we or our successor delivers to the trustee an officers'
certificate and an opinion of counsel stating that such consolidation,
merger, conveyance, transfer or lease, and if a supplemental indenture is
required by the transaction, the supplemental indenture, comply with the
indenture and all conditions precedent in the indenture relating to such
transaction.
In addition, we may assign and delegate all of our rights and obligations
under the indenture, the senior notes, the supplemental indenture relating to
the senior notes and all other related documents, agreements and instruments to
Alliant Energy Corporation or a subsidiary of Alliant Energy Corporation, any
person that owns all of our capital stock or any person that owns all of the
capital stock of a person that owns all of our capital stock. Upon the
assumption of these rights and obligations by that person, we will be
automatically released from the obligations, provided that immediately after
giving effect to the transaction, no event of default under the senior notes,
and no event which, after notice or lapse of time or both, would become an event
of default under the senior notes, has occurred and is continuing.
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The indenture also provides that Alliant Energy Corporation may, without
the consent of any holders of the senior notes, consolidate or merge with, or
convey, transfer or lease substantially all of its property and assets to,
another U.S. entity so long as:
- if Alliant Energy Corporation is not the surviving entity, the surviving
entity assumes by supplemental indenture all of Alliant Energy
Corporation's obligations under the guarantees and the indenture;
- immediately after giving effect to the transaction, no event of default
under the senior notes, and no event which, after notice or lapse of time
or both, would become an event of default under the senior notes, has
occurred and is continuing; and
- each of Alliant Energy Corporation and the successor person delivers to
the trustee an officers' certificate and an opinion of counsel stating
that such consolidation, merger, conveyance, transfer or lease, and if a
supplemental indenture is required by the transaction, the supplemental
indenture, comply with the indenture and all conditions precedent in the
indenture, relating to such transactions.
Money For Securities Payments To Be Held In Trust
The indenture provides that if we at any time act as our own paying agent
with respect to the senior notes, we will, on or before each due date of the
principal of, or any premium or interest on, any of the senior notes, segregate
and hold in trust for the benefit of the persons entitled a sum in the currency
in which the senior notes are payable sufficient to pay the principal or any
premium or interest due until such sums are paid or otherwise disposed of, and
we will promptly notify the trustee of our action or failure to act.
Whenever we have one or more paying agents for any series of debt
securities, we will, on or prior to each due date of the principal of, or any
premium or interest on, any series of debt securities, deposit with any paying
agent a sum sufficient to pay the principal or any premium or interest due, the
sum to be held in trust for the benefit of the persons entitled. Unless the
paying agent is the trustee, we will promptly notify the trustee of our action
or failure to act.
We will cause each paying agent for each series of debt securities, if
other than the trustee, to execute and deliver to the trustee an agreement that
requires the paying agent:
- to hold all sums held by it for the payment of the principal of, or any
premium or interest on, any series of debt securities in trust for the
benefit of the persons entitled until such sums are paid or otherwise
disposed of as provided in the indenture;
- to give the trustee notice of any default by us or Alliant Energy
Corporation in the making of any payment of principal, any premium or
interest on any series of debt securities; and
- at any time during the continuance of the default, upon the written
request of the trustee, pay to the trustee all sums held in trust by it.
We or Alliant Energy Corporation may at any time pay, or direct any paying
agent to pay, to the trustee all sums held in trust by us or the paying agent.
These sums will be held by the trustee upon the same terms as those applicable
to us or the paying agent. Upon payment by the paying agent to the trustee, the
paying agent will be released from all further liability with respect to these
sums.
Except as otherwise provided in the indenture, any money deposited with the
trustee or the paying agent, or held by us, in trust for the payment of the
principal of, or any premium or interest on, any series of debt securities and
remaining unclaimed for two years after such principal or any such premium or
interest has become due and payable will be discharged from such trust. The
holder of the senior note will thereafter, as an unsecured general creditor,
look only to us or Alliant Energy Corporation, as the case may be, for payment,
and all liability of the trustee or the paying agent with respect to the trust
money, and all liability of us as trustee thereof, will cease. However, the
trustee or the paying agent may at our
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expense cause to be published once, in an authorized newspaper or mailed to
holders of the senior notes, or both, notice that such money remains unclaimed
and that, after a date specified, which will not be less than 30 days from the
date of the publication or mailing nor later than two years after the principal
and any premium or interest have become due and payable, any unclaimed balance
of such money then remaining will be repaid to us or Alliant Energy Corporation,
as the case may be.
Company And Guarantor Statements As To Compliance; Notice Of Certain Defaults
We and Alliant Energy Corporation will each deliver to the trustee, within
120 days after the end of each fiscal year, a written statement signed by our
respective principal executive officer, principal financial officer or principal
accounting officer, stating that:
- a review of our respective activities during the year and of our
respective performances under the indenture has been made under such
officer's supervision and
- to the best of such officer's knowledge, based on that review,
- we or Alliant Energy Corporation, as the case may be, have complied with
all the conditions and covenants imposed on each of us by the indenture
throughout the year, or, if there has been a default in the fulfillment
of any condition or covenant, specifying each default known to such
officer and its nature and status and
- no event has occurred and is continuing which is, or after notice or
lapse of time or both would become, an event of default under the senior
notes, or, if such an event has occurred and is continuing, specifying
each such event known to such officer and its nature and status.
We and Alliant Energy Corporation will deliver to the trustee, within five
days after its occurrence, written notice of any event of default under the
senior notes or any event which after notice or lapse of time or both would
become an event of default under the senior notes.
MODIFICATION OF THE INDENTURE
We, Alliant Energy Corporation and the trustee may modify and amend the
indenture or any supplemental indenture or the rights of the holders of the debt
securities of each series to be affected with the consent of the holders of a
majority of the principal amount of the outstanding debt securities of each
affected series, with each series voting as a class. These majority holders may
also waive compliance by us or Alliant Energy Corporation with any provision of
the indenture, any supplemental indenture or the debt securities of any series.
However, without the consent of a holder of each debt security affected, an
amendment or waiver may not:
- reduce the amount of debt securities whose holders must consent to an
amendment or waiver;
- change the rate or the time for payment of interest;
- change the principal or the fixed maturity;
- waive a default in the payment of principal, premium or interest;
- make any debt securities payable in a different currency;
- make any change in the provisions of the indenture concerning waiver of
existing defaults, right of holders of debt securities to receive payment
or amendments and waivers with consent of holders of debt securities;
- impair the right to institute suit for the enforcement of any payment on
or after the stated maturity of such payment or, in the case of
redemption, on or after the redemption date; or
- modify or effect in any manner adverse to the holders the terms and
conditions of Alliant Energy Corporation's obligations regarding due and
punctual payment of principal of, or any premium or interest on, or any
sinking fund requirements of, any debt securities subject to guarantees.
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We, Alliant Energy Corporation and the trustee may amend or supplement the
indenture without the consent of any holder of any of the debt securities:
- to cure any ambiguity, defect or inconsistency in the indenture, any
supplemental indenture, the debt securities or guarantees;
- to provide for the assumption of all of our obligations under the debt
securities, the indenture, any supplemental indenture or of Alliant
Energy Corporation's obligations under the guarantees and the indenture
or any supplemental indenture by any corporation in connection with a
merger or consolidation of us or Alliant Energy Corporation or transfer
or lease of substantially all of our or Alliant Energy Corporation's
property and assets;
- make any change that does not adversely affect the rights of any holder
of debt securities;
- to add to the rights of holders of any of the debt securities;
- to secure any debt securities as provided under the heading "--
Limitation on Liens";
- to evidence the succession of another person to us or Alliant Energy
Corporation, and the assumption by the successor person of the covenants
of us and Alliant Energy Corporation, as the case may be, provided in the
indenture or the senior notes;
- to establish the form or terms of any debt securities;
- to evidence and provide for the acceptance of appointment under the
indenture by a successor trustee with respect to the debt securities and
to add to or change any of the provisions of the indenture necessary to
facilitate the administration of the indenture by more than one trustee;
or
- to supplement any of the provisions of the indenture to the extent
necessary to permit or facilitate defeasance and discharge of any debt
securities, provided that such action will not adversely affect the
interests of any holder of any debt security in any material respect.
EVENTS OF DEFAULT
Any one of the following is an event of default with respect to the senior
notes:
(a) if we or Alliant Energy Corporation default in the payment of any
interest on the senior notes, and such default continues for 30 days;
(b) if we or Alliant Energy Corporation default in payment of principal of
or premium, if any, on the senior notes when the same become due at
maturity, upon redemption, by declaration or otherwise;
(c) if we or Alliant Energy Corporation materially default in the
performance or materially breach any of our respective covenants or
obligations in the indenture, any supplemental indenture or the senior
notes and this material default or breach continues for a period of 90
days after we or Alliant Energy Corporation receive written notice from
the trustee or the holders of at least 25% in aggregate principal
amount of the outstanding senior notes;
(d) if we or Alliant Energy Corporation default in the payment of the
principal of any bond, debenture, note or other indebtedness or in the
payment of principal under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced
any indebtedness for money borrowed, which default for payment of
principal is in an aggregate principal amount exceeding $25,000,000
when such indebtedness becomes due and payable, whether at maturity,
upon redemption or acceleration or otherwise, if such default continues
unremedied or unwaived for more than 30 business days and the time for
payment of such amount has not been expressly extended;
(e) our failure or the failure by Alliant Energy Corporation generally to
pay our respective debts as they become due, or the admission in
writing of our inability or Alliant Energy Corporation's
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inability to pay our respective debts generally, or the making of a
general assignment for the benefit of our respective creditors, or the
institution of any proceeding by or against Alliant Energy Corporation
or us that is dismissed within 180 days from its commencement seeking
to adjudicate us or Alliant Energy Corporation bankrupt or insolvent,
or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief or composition, other than a solvent
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition, of us or Alliant Energy Corporation
or our respective debts under any law relating to bankruptcy,
insolvency, reorganization, moratorium or relief of debtors, or seeking
the entry of an order for relief or appointment of an administrator,
receiver, trustee, intervenor or other similar official for us or
Alliant Energy Corporation or for any substantial part of our property
or the property of Alliant Energy Corporation, or the taking of any
action by Alliant Energy Corporation or us to authorize any of the
actions set forth in this clause; and
(f) a material default in the performance or material breach by Alliant
Energy Corporation of any covenant or obligation of Alliant Energy
Corporation contained in the guarantee, and the continuance of such
material default or breach for a period of 90 days after which we or
Alliant Energy Corporation receive written notice from the trustee or
the holders of at least 25% in aggregate principal amount of the senior
notes.
If an event of default with respect to the senior notes occurs and is
continuing, either the trustee or the holders of at least 25% in aggregate
principal amount of the outstanding senior notes may declare the principal
amount of the outstanding senior notes, and any interest accrued on the senior
notes, to be due and payable immediately by delivering a written notice to us
and Alliant Energy Corporation and to the trustee if given by the holders. At
any time after that declaration of acceleration has been made, but before a
judgment or decree for payment of money has been obtained, the holders of a
majority in principal amount of all of the senior notes, by notice to the
trustee, may rescind this declaration and all its consequences if all events of
default have been cured or waived, other than the non-payment of principal of
the outstanding senior notes which has become due solely by reason of the
declaration of acceleration, and that declaration of acceleration and its
consequences will be automatically annulled and rescinded.
Holders of the senior notes may not enforce the indenture, the senior notes
or any guarantees, if applicable, unless:
- the holder has previously given written notice to the trustee of a
continuing event of default with respect to the senior notes;
- the holders of not less than 25% in aggregate principal amount of the
senior notes have made written request to the trustee to institute
proceedings in respect of such event of default under the senior notes in
its own name as trustee;
- the holder or holders have offered the trustee indemnity satisfactory to
the trustee against the costs, expenses and liabilities to be incurred in
compliance with such request;
- the trustee, for 60 days after its receipt of such notice, request and
offer of indemnity, has failed to institute any such proceedings; and
- no direction inconsistent with such written request has been given to the
trustee during the 60-day period by the holders of a majority of the
outstanding aggregate principal amount of the senior notes.
However, these limitations do not apply to a suit instituted by a holder of
any senior notes for the enforcement of the payment of the principal of or
premium, if any, or interest on the senior notes on or after the applicable due
date specified in the senior notes.
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If the trustee collects any money pursuant to an event of default under the
senior notes, it will pay out the money in the following order:
- first, to the trustee for amounts due to it as compensation for its
services and any indemnities owed to it;
- second, to holders of the senior notes in respect of which or for the
benefit of which such money has been collected for amounts due and unpaid
on the senior notes for principal and interest, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the senior notes for principal and interest; and
- third, to the person or persons lawfully entitled thereto, or as a court
of competent jurisdiction may direct.
The trustee may fix a record date with respect to registered securities and
payment date for any such payment to holders of the senior notes. This record
date will not be less than 10 days nor more than 60 days prior to the applicable
payment date.
OPTIONAL REDEMPTION
We may redeem the senior notes at our option in whole or in part at any
time, on at least 30 days' but not more than 60 days' prior written notice
mailed to the registered holders of the senior notes, at a price equal to the
greater of:
- 100% of the principal amount of the senior notes being redeemed; and
- the sum of the present values of the principal amount of the senior notes
to be redeemed and the remaining scheduled payments of interest on the
senior notes from the redemption date to December 1, 2011, discounted
from their respective scheduled payment dates to the redemption date
semi-annually, assuming a 360-day year consisting of twelve 30-day months
at a discount rate equal to the Treasury Yield plus 35 basis points, plus
accrued interest on the senior notes to the redemption date.
"Treasury Yield" means, with respect to any redemption date, the annual
rate equal to the semi-annual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue expressed as
a percentage of its principal amount equal to the Comparable Treasury Price for
such redemption date.
"Comparable Treasury Issue" means the United States treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the senior notes to be redeemed that would be utilized, at
the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of the senior notes.
"Comparable Treasury Price" means, with respect to any date of redemption:
- the average of the bid and asked prices for the Comparable Treasury
Issue, expressed in each case as a percentage of its principal amount, on
the third business day preceding the redemption date, as set forth in the
daily statistical release published by the Federal Reserve Bank of New
York and designated "Composite 3:30 p.m. Quotations for U.S. Government
Securities" or
- if this release is not published or does not contain such prices on the
business day in question, the Reference Treasury Dealer Quotation for the
redemption date.
"Independent Investment Banker" means an independent investment banking
institution of national standing appointed by us and reasonably acceptable to
the trustee.
"Reference Treasury Dealer Quotation" means, with respect to the Reference
Treasury Dealer and redemption date, the average, as determined by us, of the
bid and asked prices for the Comparable
49
Treasury Issue expressed in each case as a percentage of its principal amount
and quoted in writing to us by the Reference Treasury Dealer at 5:00 p.m. on the
third business day preceding the redemption date.
"Reference Treasury Dealer" means a primary United States government
securities dealer in New York City appointed by us and reasonably acceptable to
the trustee.
Notice of redemption will be mailed by first class mail at least 30 but not
more than 60 days before the redemption date to each holder of the senior notes
to be redeemed at its registered address.
If fewer than all the senior notes are to be redeemed, selection of senior
notes for redemption will be made by the trustee in any manner the trustee deems
fair and appropriate and that complies with applicable legal and securities
exchange requirements.
Unless we default in payment of the redemption price, from and after the
date of redemption, the senior notes or portions thereof called for redemption
will cease to bear interest, and the holders of the senior notes will have no
right in respect of the senior notes except the right to receive the redemption
price.
DEFEASANCE AND COVENANT DEFEASANCE
The indenture provides that we and Alliant Energy Corporation may elect:
- to be discharged from any and all of our respective obligations in
respect of the senior notes ("defeasance"), except in each case for the
obligations to register the transfer or exchange of the senior notes,
replace stolen, lost or mutilated senior notes, maintain paying agencies
and hold moneys for payments in trust or
- not to comply with certain covenants ("covenant defeasance") of the
indenture with respect to the senior notes described above under
"-- Covenants"
if we and Alliant Energy Corporation irrevocably deposit with the trustee cash
or U.S. Government Obligations or a combination of cash or U.S. Government
Obligations, in an amount sufficient, together with interest paid on the U.S.
Government Obligations, to pay, when due, the principal of, premium, if any, and
interest on the outstanding senior notes to maturity or redemption. We and
Alliant Energy Corporation must satisfy certain other conditions before we may
effect defeasance or covenant defeasance. These conditions include:
- that no event of default or event, which with notice or lapse of time
would become an event of default with respect to the senior notes, will
have occurred and be continuing on the date of the deposit or insofar as
an event of default described in clause (e) of the first paragraph under
"-- Events of Default" is concerned, at any time during the period ending
on the 181st day of the deposit and
- that the defeasance or covenant defeasance will not result in the breach
or violation of, or constitute a default under, the indenture or any
other material agreement or instrument under which we are bound or under
which Alliant Energy Corporation is bound.
To exercise any such option, we or Alliant Energy Corporation, as
applicable, will be required to deliver to the trustee:
- an opinion of independent counsel of recognized standing to the effect
that the holders of the senior notes will not recognize income, gain or
loss for United States federal income tax purposes as a result of such
deposit, and will be subject to United States federal income tax on the
same amounts, in the same manner and at the same times as would have been
the case absent the deposit, which in the case of defeasance must be
based on a change in law or a published ruling by the United States
Internal Revenue Service, and the deposit will not result in us or
Alliant Energy Corporation being deemed an "investment company" required
to be registered under the Investment Company Act of 1940 and
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- an officer's certificate as to compliance with all conditions precedent
provided for in the indenture relating to the satisfaction and discharge
of the senior notes.
If we or Alliant Energy Corporation wish to deposit or cause to be
deposited money or U.S. Government Obligations to pay or discharge the principal
of, premium, if any, and interest on the outstanding senior notes to and
including a redemption date on which all of the outstanding senior notes are to
be redeemed, the redemption date will be irrevocably designated by a resolution
of our Board of Directors or a resolution of the Board of Directors of Alliant
Energy Corporation delivered to the trustee on or prior to the date of deposit
of such money or U.S. Government Obligations, and such Board resolution will be
accompanied by an irrevocable notice of the defeasance to the trustee.
If the trustee is unable to apply any money or U.S. Government Obligations
deposited in trust to effect a defeasance or covenant defeasance by reason of
any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, then any obligations from
which we or Alliant Energy Corporation had been discharged or released will be
revived and reinstated as though no such deposit of moneys in trust had
occurred, until the time that the trustee is permitted so to apply all of the
money or U.S. Government Obligations deposited in trust.
"U.S. Government Obligations" means direct obligations of the United States
for the payment of which its full faith and credit is pledged, or obligations of
a person controlled or supervised by and acting as an agency or instrumentality
of the United States and the payment of which is unconditionally guaranteed by
the United States, and will also include a depository receipt issued by a bank
or trust company as custodian with respect to any U.S. Government Obligation or
a specific payment of interest on or principal of any U.S. Government Obligation
held by a custodian for the account of a holder of a depository receipt.
However, except as required by law, a custodian is not authorized to make any
deduction from the amount payable to the holder of any depository receipt from
any amount received by the custodian in respect of the U.S. Government
Obligation or the specific payment of interest on or principal of the U.S.
Government Obligation evidenced by a depository receipt.
PAYMENT AND PAYING AGENT
We have appointed the trustee to act as paying agent with respect to the
senior notes. We may at any time designate additional paying agents or rescind
the designation of any paying agents or approve a change in the office through
which any paying agent acts, except that we will be required to maintain a
paying agent in each place of payment for the senior notes.
All moneys paid by us to the paying agent for the payment of the principal
of, or premium, if any, or interest on, any senior notes that remain unclaimed
at the end of two years after such principal, premium, if any, or interest has
become due and payable will be repaid to us and the holder of the senior notes
will thereafter look only to us for payment of any such amounts.
GOVERNING LAW
The indenture and the senior notes will be governed by, and construed in
accordance with, the laws of the State of Wisconsin.
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UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
THIS SUMMARY IS OF A GENERAL NATURE AND IS INCLUDED HEREIN SOLELY FOR
INFORMATIONAL PURPOSES. IT IS NOT INTENDED TO BE, NOR SHOULD IT BE CONSTRUED AS
BEING, LEGAL OR TAX ADVICE. NO REPRESENTATION WITH RESPECT TO THE CONSEQUENCES
TO ANY PARTICULAR PURCHASER OF THE NEW SENIOR NOTES IS MADE. PROSPECTIVE
PURCHASERS SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THEIR
PARTICULAR CIRCUMSTANCES.
The following is a summary of certain material United States federal income
tax consequences of the exchange offer to holders of the old senior notes. The
discussion does not consider the aspects of the ownership and disposition of the
old senior notes or the new senior notes. A discussion of the U.S. federal
income tax consequences of holding and disposing of the senior notes is
contained in the offering memorandum with respect to the old senior notes.
The following summary deals only with senior notes held as capital assets
by purchasers at the issue price who are United States holders and not with
special classes of holders, such as dealers in securities or currencies,
financial institutions, life insurance companies, tax-exempt entities, persons
holding senior notes as part of a hedge, conversion, constructive sale
transaction, straddle or other risk reduction strategy, and persons whose
functional currency is not the U.S. dollar. Persons considering the purchase of
senior notes should consult their own tax advisors concerning these matters and
as to the tax treatment under foreign, state and local tax laws and regulations.
We cannot provide any assurance that the Internal Revenue Service will not
challenge the conclusions stated below. We have not sought and will not seek a
ruling from the IRS on any of the matters discussed below.
This summary is based upon the Internal Revenue Code of 1986, Treasury
Regulations, IRS rulings and pronouncements and judicial decisions now in
effect, all of which are subject to change at any time. Changes in this area of
law may be applied retroactively in a manner that could cause the tax
consequences to vary substantially from the consequences described below,
possibly adversely affecting a United States holder of senior notes. The
authorities on which this discussion is based are subject to various
interpretations, and it is therefore possible that the federal income tax
treatment of the exchange of old senior notes for the new senior notes may
differ from the treatment described below.
The exchange of old senior notes for the new senior notes under the terms
of the exchange offer should not constitute a taxable exchange. As a result:
- A holder should not recognize taxable gain or loss as a result of
exchanging old senior notes for the new senior notes under the terms of
the exchange offer;
- The holder's holding period of the new senior notes should include the
holding period of the old senior notes exchanged for the new senior
notes; and
- A holder's adjusted tax basis in the new senior notes should be the same
as the adjusted tax basis, immediately before the exchange, of the old
senior notes exchanged for the new senior notes.
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PLAN OF DISTRIBUTION
If you are a broker-dealer and hold old senior notes for your own account
as a result of market-making activities or other trading activities and you
receive new senior notes in exchange for old senior notes in the exchange offer,
then you may be a statutory underwriter and must acknowledge that you will
deliver a prospectus in connection with any resale of these new senior notes.
This prospectus, as it may be amended or supplemented from time to time, may be
used by a broker-dealer in connection with resales of new senior notes received
in exchange for old senior notes where such old senior notes were acquired as a
result of market-making activities or other trading activities. We acknowledge
and, unless you are a broker-dealer, you must acknowledge that you are not
engaged in, do not intend to engage in, and have no arrangement or understanding
with any person to participate in a distribution of new senior notes. We have
agreed that we will make this prospectus, as amended or supplemented, available
to any broker-dealer for use in connection with any such resale.
We will not receive any proceeds in connection with the exchange offer or
any sale of new senior notes by broker-dealers. New senior notes received by
broker-dealers for their own account pursuant to the exchange offer may be sold
from time to time in one or more transactions in the over-the-counter market, in
negotiated transactions, through the writing of options on the new senior notes
or a combination of these methods of resale, at market prices prevailing at the
time of resale, at prices related to such prevailing market prices or negotiated
prices. Any resale may be made directly to purchasers or to or through brokers
or dealers who may receive compensation in the form of commissions or
concessions from any such broker-dealers or the purchasers of any such new
senior notes. Any broker-dealer that resells new senior notes that were received
by it for its own account pursuant to the exchange offer and any broker-dealer
that participates in a distribution of such new senior notes may be deemed to be
an "underwriter" within the meaning of the Securities Act and any profit on any
such resale of new senior notes and any commissions or concessions received by
any such persons may be deemed to be underwriting compensation under the
Securities Act. The letter of transmittal states that by acknowledging that it
will deliver, and by delivering, a prospectus, a broker-dealer will not be
deemed to admit that it is an "underwriter" within the meaning of the Securities
Act. See "The Exchange Offer -- Resales of the New Senior Notes."
LEGAL MATTERS
Foley & Lardner, Milwaukee, Wisconsin will issue an opinion about some
legal matters with respect to the new senior notes and the new guarantees.
EXPERTS
The audited financial statements of Alliant Energy Corporation incorporated
by reference in this prospectus from Alliant Energy Corporation's Annual Report
on Form 10-K for the year ended December 31, 2000 have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their report with
respect thereto, and are included herein in reliance upon the authority of said
firm as experts in giving said reports.
53
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$300,000,000
[ALLIANT LOGO]
ALLIANT ENERGY RESOURCES, INC.
NEW 7% SENIOR NOTES DUE 2011
UNCONDITIONALLY GUARANTEED BY
ALLIANT ENERGY CORPORATION
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PROSPECTUS
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DECEMBER 28, 2001
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