Better Plan, Wisconsin

ALLIANT ENERGY TO SELL ITS WIND FARM DIVISION

By Tom Daykin

Milwaukee Journal Sentinel

February 11, 2012

Madison-based Alliant Energy Corp. said Friday it will sell its division that designs and builds wind farms and other renewable energy projects, a business that has dragged down the company's earnings.

Madison-based Alliant Energy Corp. said Friday it will sell its division that designs and builds wind farms and other renewable energy projects, a business that has dragged down the company's earnings.

Alliant, the parent of Wisconsin Power & Light Co. and Interstate Power & Light Co., expects to sell RMT Inc. by the end of the year, Chairman and Chief Executive Bill Harvey said during a conference call with analysts to discuss fourth-quarter earnings.

Selling RMT will reduce Alliant's expected 2012 earnings by 5 cents a share, Alliant said. The company's expected earnings were revised to $2.75 to $3.05 for the year, according to a company statement.

Alliant also expects to take a charge of 12 cents a share tied to increased state taxes that will result from RMT's sale, Harvey said.

While RMT doesn't fit Alliant's core strategy of generating energy through conventional power plants, company executives long considered it an attractive operation because of its important role in the renewable energy sector, Harvey said.

But a lack of consistent federal renewable energy policy, and downward pressure on project profit margins, caused Alliant executives to reconsider the investment in RMT, Harvey said.

The company's utility, transportation and non-regulated generation businesses produced solid financial results during the quarter, Harvey said.

Alliant posted net income of $57 million, or 51 cents a share, a 21% increase from $47.3 million, or 43 cents, from the year-earlier quarter. Revenue increased 5.6%, to $879.2 million from $832.6 million.

However, RMT lost 19 cents a share in 2011, compared with a loss of 2 cents a share from 2010, Alliant said.

Alliant attributed the losses to a solar project in New Jersey that has experienced delays and added costs after an original subcontractor abandoned the job. The company also said profit for its wind projects "experienced modest erosion" last year.

In response to questions from analysts, Harvey said Alliant expects to soon begin serious discussions with prospective buyers of RMT.

He said RMT will likely sell for two to six times its annual earnings before interest, taxes, depreciation and amortization. That EBITDA figure has been around $6 million to $8 million annually over the past three years, but was at the low end of that range in 2011, Harvey said.

Alliant bought RMT in 1983, and last year sold the environmental portion of the business to focus exclusively on wind, solar and geothermal projects.

After earnings were released Friday, Alliant shares closed down 28 cents at $43.08.

Alliant Energy Corp. (LNT)

Figures in millions except for earnings per share. Percentages are based on unrounded sales and income figures.