# Alliant Energy (LNT) Financial Model Free Excel 3-statement financial model and company analysis for Alliant Energy. - Canonical: https://finamodel.com/companies/alliant-energy - Industry: Utilities - Downloadable model: Yes - Excel download: https://finamodel.com/company-models/LNT.xlsx ## Model Purpose This model provides a comprehensive equity valuation and scenario planning tool for Alliant Energy (LNT), enabling analysts to forecast earnings growth and cash flow generation driven by its $13.4 billion 2026-2029 capital expenditure plan, renewable energy transition, and massive 3 GW data centre load expansion. ## Company Overview Alliant Energy Corporation is a regulated investor-owned public utility holding company providing electricity and natural gas services primarily in the US Midwest. The company operates through two primary utility subsidiaries: Interstate Power and Light Company (IPL) serving Iowa, and Wisconsin Power and Light Company (WPL) serving Wisconsin. Business segments include Utilities and Corporate Services (generating over 95% of earnings), American Transmission Company (ATC) Holdings (an equity method investment), and Non-utility and Parent operations. The business model is highly asset-heavy, relying on capital investments in generation, distribution, and transmission to grow its regulated rate base, upon which it earns an authorised return on equity. Alliant Energy holds a monopoly position in its designated service territories but is subject to strict oversight by the Iowa Utilities Commission and the Public Service Commission of Wisconsin. Recently, the company secured 3 GW of contracted data centre demand (including a 900 MW agreement with QTS in Madison) and increased its four-year capital expenditure forecast by 17% to $13.4 billion to support this unprecedented load growth. ## Revenue Deep Dive ### Electric Utility (IPL and WPL) * **Segment name:** Electric Utility * **Revenue driver formula:** (Residential MWh + Commercial MWh + Industrial MWh) x Average Rate per MWh + Wholesale Revenue * **Historical growth rate:** 2% to 4% CAGR (historically flat volume offset by rate increases, but volume is now accelerating due to data centres) * **Key growth levers and headwinds:** The primary lever is the 3 GW of contracted data centre demand, expected to drive a 50% increase in peak load by 2030. Headwinds include energy efficiency trends in the residential sector and negative temperature impacts during mild seasons. * **Pricing dynamics:** Fully regulated. Pricing is determined through periodic rate cases based on revenue requirements to cover operating costs and provide a return on invested capital. * **Revenue recognition notes:** Recognised over time as electricity is delivered. Unbilled revenue is accrued at month-end based on estimated usage. * **Seasonality:** Highly seasonal. The third quarter is the strongest due to summer cooling demand (measured in Cooling Degree Days or CDDs), followed by the first quarter for winter heating. ### Gas Utility (IPL and WPL) * **Segment name:** Gas Utility * **Revenue driver formula:** Retail Sales (Dths) x Average Rate per Dth * **Historical growth rate:** 1% to 2% CAGR * **Key growth levers and headwinds:** Driven by residential and commercial heating demand. Headwinds include electrification trends and mild winter weather. * **Pricing dynamics:** Regulated base rates plus a purchased gas adjustment (PGA) clause that passes the commodity cost of gas directly through to customers without markup. * **Revenue recognition notes:** Recognised as gas is delivered to customers. * **Seasonality:** Heavily weighted to the first and fourth quarters due to winter heating demand (measured in Heating Degree Days or HDDs). ## Cost Structure ### Variable Costs / COGS * **Line-by-line breakdown:** Electric production fuel and purchased power, Cost of gas sold. * **Gross margin range:** Not typically evaluated on a gross margin basis in utilities, but revenue less fuel/gas costs (net margin) typically runs at 60% to 65% of total revenues. * **Key input costs and commodity exposures:** Coal, natural gas, and wholesale electricity prices. These are generally pass-through costs via regulatory recovery mechanisms, neutralising direct commodity risk. * **How COGS scales with revenue:** Scales linearly with volume, but price fluctuations are passed through to customers, meaning revenue and COGS often move in tandem without impacting operating income. ### Operating Expenses * **Other operation and maintenance (O&M):** Typically 20% to 25% of revenue. Covers labour, plant maintenance, and administrative costs. * **Depreciation and amortisation:** Typically 15% to 18% of revenue. Highly predictable and growing steadily as the $14.2 billion rate base expands. * **Taxes other than income taxes:** Primarily property and gross receipts taxes, running at 4% to 5% of revenue. * **Restructuring / one-time charges:** Occasional asset valuation charges (e.g., the 2024 charge for IPL's Lansing Generating Station) or voluntary separation programmes. ### Margin Profile * **Operating margin:** 15% to 20% historically. * **Net margin:** 18% to 22%. * **Margin trend:** Expanding slightly as the company replaces high-O&M coal plants with zero-fuel-cost, low-O&M solar and wind assets, though depreciation expense is rising concurrently. ## Balance Sheet Structure * **Total assets:** Approximately $20 billion to $22 billion. * **Key asset categories:** Property, plant and equipment (PP&E) makes up the vast majority of assets, representing the physical grid and generation fleet. Regulatory assets are also material, representing deferred costs approved for future recovery. * **Goodwill & intangibles:** Minimal, as growth is primarily organic rather than through M&A. * **Working capital profile:** * **Days Sales Outstanding (DSO):** 35 to 45 days. * **Days Inventory Outstanding (DIO):** 40 to 50 days (primarily coal and natural gas in storage). * **Days Payable Outstanding (DPO):** 40 to 50 days. * **Net working capital:** Typically negative or near zero. Utilities frequently operate with negative working capital, using short-term commercial paper to bridge timing differences between fuel purchases and customer billing. * **PP&E:** Consists of generation (wind, solar, coal, gas), distribution, and transmission assets. Useful lives range from 10 to 50 years. * **Right-of-use assets:** Immaterial relative to the massive owned PP&E base. ## Capital Expenditure & Investment * **Capex as % of revenue:** Extremely high, often exceeding 100% of revenue during peak investment cycles. * **Maintenance capex vs. growth capex:** Approximately 30% maintenance and 70% growth/transition. * **Major capex programmes:** The 2026 to 2029 capital plan is $13.4 billion (averaging $3.35 billion annually). This is driven by 3 GW of new data centre load and the continued buildout of renewable generation and battery storage. * **Capitalised software:** Minimal compared to hard infrastructure. * **M&A pattern:** Purely organic growth focused on rate base expansion. ## Debt & Capital Structure * **Total debt:** Approximately $9 billion to $10 billion. * **Debt/EBITDA ratio:** Typically managed between 4.5x and 5.5x to maintain credit ratings. * **Credit rating:** BBB+ (S&P) / Baa2 (Moody's) for the parent company, with operating subsidiaries often rated slightly higher. * **Key debt instruments:** Long-term senior unsecured debentures at the IPL and WPL levels, parent company convertible notes, and a syndicated revolving credit facility backing a commercial paper programme. * **Maturity profile:** Well-laddered over 10 to 30 years to match the long-dated nature of utility assets. * **Interest rate profile:** Predominantly fixed-rate long-term debt, with floating exposure limited to commercial paper. * **Covenants:** Standard debt-to-capitalisation limits (typically maximum 65% debt). * **Share repurchase programme:** Not active. The company issues equity (e.g., $25 million planned in 2025) to fund its massive capex programme and maintain its regulatory capital structure. * **Dividend policy:** Target payout ratio of 60% to 70% of ongoing EPS. The 2026 target is $2.14 per share, representing a 5.4% increase over 2025. ## Cash Flow Characteristics * **Operating cash flow conversion:** OCF to Net Income is typically 1.5x to 2.0x, driven by massive non-cash depreciation and deferred tax add-backs. * **Free cash flow margin:** Deeply negative. The company spends significantly more on capex ($3.35 billion annually) than it generates in OCF. * **Major non-cash items:** Depreciation, amortisation of regulatory assets, and Allowance for Funds Used During Construction (AFUDC). * **Working capital cash flow impact:** Fluctuates based on seasonal gas storage injections and withdrawals, but generally a minor driver over a full year. * **Capex intensity:** Extremely high, requiring constant access to debt and equity capital markets to fund the shortfall between OCF and capex. * **Cash tax rate:** Near zero or negative. The company generates massive Production Tax Credits (PTCs) and Investment Tax Credits (ITCs) from its wind and solar investments, resulting in a consolidated effective tax rate of approximately negative 30%. ## Sheet Structure 1. **Assumptions:** Hardcoded drivers for macro variables, regulatory allowed ROEs, rate base growth, and segment-level sales volumes. 2. **Income Statement:** Consolidated view mirroring the 10-K, splitting revenues into Electric, Gas, and Other, and expenses into Fuel, O&M, and D&A. 3. **Balance Sheet:** Highlighting PP&E, Regulatory Assets, and Regulatory Liabilities. 4. **Cash Flow Statement:** Indirect method, explicitly breaking out AFUDC and deferred taxes. 5. **Rate Base & Capex:** The engine of the model. Tracks beginning rate base, plus capex, minus depreciation, minus deferred taxes to calculate the ending rate base for IPL and WPL. 6. **Revenue Build:** Calculates Electric and Gas revenues based on projected rate base, equity thickness, authorised ROE, and cost of debt. 7. **Debt & Interest:** Tranches of long-term debt, commercial paper balances, and interest expense calculations. 8. **Tax & Credits:** Schedule tracking the generation and utilisation of PTCs and ITCs, driving the negative effective tax rate. 9. **Valuation:** Dividend Discount Model (DDM) and Sum-of-the-Parts (SOTP) based on P/E multiples, which are standard for regulated utilities. ## Key Financial Relationships 1. **Ending Rate Base** = Beginning Rate Base + Capital Expenditures - Depreciation - Increase in Accumulated Deferred Income Taxes (ADIT) 2. **Authorised Net Income** = Average Rate Base x Equity Ratio (typically 50% to 54%) x Authorised ROE (typically 9.5% to 10.0%) 3. **Electric Revenue** = Fuel Costs + O&M + D&A + Interest Expense + Taxes + Authorised Net Income 4. **Electric Sales Volume (MWh)** = Base Residential MWh + Base Commercial MWh + (Data Centre Peak Load MW x 8760 hours x Capacity Factor) 5. **Gas Revenue** = Cost of Gas Sold + Gas Segment O&M + Gas Segment D&A + Gas Segment Return on Capital 6. **AFUDC Equity** = Average Construction Work in Progress (CWIP) x Equity Cost of Capital 7. **AFUDC Debt** = Average Construction Work in Progress (CWIP) x Debt Cost of Capital 8. **Interest Expense** = (Average Short-Term Debt x Short-Term Rate) + (Average Long-Term Debt x Weighted Average Cost of Debt) 9. **Effective Tax Rate** = (Statutory Tax Rate x Pre-Tax Income - Tax Credits) / Pre-Tax Income 10. **Dividends Paid** = Prior Year Dividend per Share x (1 + Target Dividend Growth Rate) x Shares Outstanding ## Cross-Sheet Dependencies The **Rate Base & Capex** sheet is the critical chain. Capex assumptions feed the Rate Base calculation. The Rate Base feeds the **Revenue Build** (as the company is allowed to earn a return on its assets). The Revenue Build feeds the **Income Statement**. The Income Statement generates Net Income, which feeds the **Cash Flow Statement**. The massive capex outflows on the Cash Flow Statement create a funding deficit, which feeds the **Debt & Interest** sheet. The resulting interest expense flows back to the Income Statement, creating a circularity that must be managed with an interest toggle or iterative calculation. ## Sign Convention * **Revenues and Assets:** Entered and displayed as positive numbers. * **Expenses:** Entered as positive numbers in their specific build schedules, but subtracted in the Income Statement totals. * **Liabilities and Equity:** Entered as positive numbers. * **Cash Flow Statement:** Cash inflows (e.g., Net Income, depreciation, debt issuance) are positive. Cash outflows (e.g., capex, dividends, debt repayment) are negative. ## Things Most Likely to Go Wrong * **Ignoring AFUDC:** The company capitalises financing costs during construction. Failing to model AFUDC will understate Net Income and overstate cash interest expense. * **Misunderstanding the Tax Rate:** Alliant Energy guides to a negative 28% to 30% effective tax rate due to renewable tax credits. Using a standard 21% corporate rate will completely break the earnings forecast. * **Weather Normalisation:** Historical sales volumes fluctuate based on HDDs and CDDs. Projecting future growth off a weather-skewed base year will result in inaccurate volume forecasts. * **Regulatory Lag:** Capex does not instantly generate revenue. It must be placed in service and approved in a rate case. The model must account for the timing delay between spending capital and earning a return. * **Data Centre Ramp Timing:** The 3 GW of contracted data centre load will not appear overnight. It must be phased in over the 2026 to 2030 period. * **Conflating GAAP and Ongoing EPS:** Management strips out asset valuation charges and state tax apportionment adjustments. Valuation should be based on Ongoing EPS. * **Working Capital Spikes:** Gas prices can cause massive seasonal swings in working capital. These should be modelled as neutral over a full 12-month cycle. * **Equity Issuance:** To maintain a ~50% equity ratio while funding $13.4 billion in capex, the company must issue equity. Failing to model share count dilution will artificially inflate EPS. ## Validation Checks * **EPS Growth:** Ongoing EPS growth should calculate to 5% to 7% annually, aligning with management's long-term guidance. * **Dividend Payout Ratio:** Dividends per share divided by Ongoing EPS must remain between 60% and 70%. * **Effective Tax Rate:** The calculated effective tax rate must be negative (between -25% and -35%). * **Capital Structure:** The ratio of Total Debt to Total Capitalisation should remain stable at approximately 50% to 55%. * **Balance Sheet Check:** Total Assets must exactly equal Total Liabilities plus Shareholders' Equity in every period. * **Capex vs OCF:** Free Cash Flow (OCF minus Capex) should be consistently negative, reflecting the $13.4 billion 2026-2029 investment cycle. * **Rate Base Growth:** Rate base should grow at approximately 8% to 10% annually, driven by the capex plan. ## Key Assumptions (Default Values) | Assumption | Default Value | Unit | Rationale | |---|---|---|---| | 2026 Ongoing EPS Guidance | 3.41 | $ | Midpoint of management's $3.36 to $3.46 guidance range | | 2026 Dividend per Share | 2.14 | $ | Management's stated 2026 target (5.4% increase over 2025) | | Long-Term EPS Growth Target | 6.0 | % | Midpoint of management's 5% to 7% long-term target | | 2026-2029 Annual Capex | 3,350 | $ Millions | Based on the $13.4 billion 4-year capital expenditure forecast | | Electric Sales Volume Growth | 3.5 | % | Elevated above historical averages due to 3 GW data centre ramp | | Gas Sales Volume Growth | 1.0 | % | Historical average, assuming normal weather | | Effective Tax Rate | -30.0 | % | Management guidance based on renewable PTCs and ITCs | | Authorised ROE (IPL) | 9.5 | % | Recent Iowa Utilities Commission rate case outcomes | | Authorised ROE (WPL) | 9.8 | % | Recent Public Service Commission of Wisconsin outcomes | | Equity Layer Thickness | 52.0 | % | Standard regulatory capital structure requirement | | Average Cost of Debt | 4.5 | % | Blended rate of historical issuances and current yields | | O&M as % of Revenue | 22.0 | % | Historical average, adjusting for lower-O&M renewable mix | | D&A as % of Rate Base | 3.5 | % | Blended depreciation rate on utility PP&E | | Target P/E Multiple | 16.5 | x | Standard valuation multiple for regulated midwest utilities | ## Data Sources & Benchmarks * **Filings:** SEC EDGAR for Alliant Energy (LNT) 10-K and 10-Q filings. Investor Relations page for the March 2026 Investor Presentation and Q4 2025 Earnings Release. * **Peers for Benchmarking:** WEC Energy Group (WEC), Xcel Energy (XEL), CMS Energy (CMS), and Ameren Corporation (AEE). * **Industry Data:** Edison Electric Institute (EEI) for utility capex and rate case trends; S&P Global Market Intelligence for regulatory allowed ROE averages. * **Consensus Estimates:** FactSet or Bloomberg for forward EPS and capex consensus. ## Sources * Alliant Energy Q4 2025 Earnings Release (February 19, 2026) detailing $3.14 GAAP EPS, $3.22 Ongoing EPS, and 2026 guidance. * Alliant Energy Q3 2025 Earnings Release (November 6, 2025) detailing the 3 GW data centre load expansion and $13.4 billion capex plan. * Alliant Energy 2024 Form 10-K (February 21, 2025) for historical segment breakdowns, sales volumes, and baseline financial data. * Alliant Energy March 2026 Investor Presentation for rate base growth projections and regulatory strategy. --- ## Frequently asked questions ### What services does Alliant Energy provide? Alliant Energy Corporation is a regulated investor-owned public utility holding company that primarily provides electricity and natural gas services. It operates mainly in the US Midwest through its subsidiaries, Interstate Power and Light Company (Iowa) and Wisconsin Power and Light Company (Wisconsin). ### How does Alliant Energy generate revenue, and what drives its growth? Alliant Energy generates revenue by providing regulated electricity and natural gas services to its customers. Its growth is primarily driven by capital investments in generation, distribution, and transmission assets to expand its regulated rate base, notably supported by a $13.4 billion capital expenditure plan for 2026-2029 and new data center load expansion. ### What are the key capital expenditure assumptions in the Alliant Energy financial model? The Alliant Energy financial model incorporates a significant capital expenditure assumption, with Capex_Pct_Revenue set at approximately 21.38%. This reflects the company's asset-heavy business model and its substantial $13.4 billion capital plan from 2026 to 2029, aimed at supporting renewable energy transition and new data center demand. ### What are the primary revenue growth and cost assumptions used in the Alliant Energy financial model? The Alliant Energy financial model assumes a Revenue_Growth rate of approximately 2.5%. Key cost assumptions include COGS_Pct_Revenue at about 13.8% and SGA_Pct_Revenue at 15%. ### What is the main purpose of the Alliant Energy financial model? The Alliant Energy financial model serves as a comprehensive tool for equity valuation and scenario planning. It enables analysts to forecast the company's earnings growth and cash flow generation, driven by its significant capital expenditure plans and strategic initiatives like renewable energy transition and data center load expansion. ### Is an Excel financial model available for Alliant Energy, and what forecast period does it cover? Yes, a downloadable Excel financial model is available for Alliant Energy (LNT). This model provides forecasts for the period from Fiscal Year 2026 through Fiscal Year 2030. [Interactive forecast calculator](https://finamodel.com/companies/alliant-energy/forecast)