SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
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Date of Report
(Date of earliest
event reported): January 25, 2000
Alliant Energy Corporation
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(Exact name of registrant as specified in its charter)
Wisconsin 1-9894 39-1380265
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(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
222 West Washington Avenue, Madison, Wisconsin 53703
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(Address of principal executive offices, including zip code)
(608) 252-3311
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(Registrant's telephone number)
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Item 5. Other Events.
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On January 25, 2000, Alliant Energy Corporation issued a press release
announcing that Alliant Energy Resources, Inc., the parent company of Alliant
Energy Corporation's diversified operations, agreed to acquire a significant
stake in four Brazilian electric utilities. A copy of such press release is
filed as Exhibit 99.1 and is incorporated by reference herein.
Item 7. Financial Statements and Exhibits.
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(a) Not applicable.
(b) Not applicable.
(c) Exhibits. The following exhibit is being filed herewith:
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(99.1) Alliant Energy Corporation Press Release dated January 25,
2000.
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SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ALLIANT ENERGY CORPORATION
Date: January 25, 2000 By: /s/ Edward M. Gleason
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Edward M. Gleason
Vice President-Treasurer and
Corporate Secretary
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ALLIANT ENERGY CORPORATION
Exhibit Index to Current Report on Form 8-K
Dated January 25, 2000
Exhibit
Number
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(99.1) Alliant Energy Corporation Press Release dated January 25, 2000.
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ALLIANT ENERGY
Alliant Energy
Worldwide Headquarters
222 W. Washington Ave.
P.O. Box 192
Madison, WI 53701-0192
www.alliant-energy.com
News Release
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FOR IMMEDIATE RELEASE Contact: David Giroux at (608) 252-3924
Melanie Schmidt at (608) 252-3187
ALLIANT ENERGY RESOURCES TO BUY STAKE IN BRAZIL UTILITIES
$347 million investment will be the company's first major step in Latin America
CEDAR RAPIDS, Iowa--Jan. 25, 2000--Alliant Energy Resources, Inc., a
subsidiary of Alliant Energy Corp. (NYSE: LNT), today announced a major step in
its plans to pursue energy-related investments in selected international
markets.
As the parent company of Alliant Energy's non-utility holdings, Alliant
Energy Resources has agreed to acquire a significant stake in four Brazilian
electric utilities serving more than 820,000 customers for a total investment of
approximately $347 million. The transaction is also expected to position the
company's Brazil partners for future acquisitions in that country's Northeast
region.
With this investment, Alliant Energy will be involved in serving more than
2 million utility customers around the world.
Alliant Energy Resources has agreed to acquire a 49.2 percent ownership in
Companhia Forca E Luz Cataguazes-Leopoldina (Cataguazes), an electric utility.
Cataguazes owns a majority stake in CENF, another electric utility company, as
well as a majority interest in Energisa S.A., an energy development company. As
part of the same investment, Alliant Energy Resources will directly acquire 45.6
percent of Energisa itself, which holds majority stakes in two regulated
utilities--Energipe and Celb. As part owner of Cataguazes, Alliant Energy
Resources will hold both indirect and direct interests in Energisa.
The acquisitions of these equity stakes, through negotiated transactions
with CMS Energy Corp. and the Botelho family, are expected to be complete by
mid-February.
"I believe that our shareowners will be very pleased with this investment
and the future earnings it is expected to bring to our company," said Erroll B.
Davis Jr., president and CEO of Alliant Energy. "We are especially pleased that
we could participate in a negotiated purchase involving such fine companies."
-more-
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Alliant Energy--Brazil
Jan. 25, 2000
Page 2 of 4
Davis indicated that the investment is anticipated to dilute Alliant Energy
Corp.'s earnings per share by approximately three percent in 2000, with positive
contributions to the bottom line expected in subsequent years. The investment is
not expected to affect Alliant Energy Corp.'s dividend policy.
"This is an example of how we can carefully grow our long-term corporate
earnings through selective investments, while at the same time defending and
reshaping our core utility businesses," said Davis. "With more than a century of
experience operating three highly-successful U.S. utilities, Alliant Energy is
now poised to play an active role in the future success of Energisa and
Cataguazes."
"This is a significant step in our international growth strategy and
reflects our desire to pursue opportunities in high-growth markets where we can
apply our decades of experience as an electric utility," said Jim Hoffman,
president of Alliant Energy Resources. "Adding to our international portfolio,
this initial investment establishes Alliant Energy as a major investor in
Brazil, and also creates a platform for Energisa's further expansion in that
country. We believe that growth will further enhance the value of this
investment. With the expected reinvestment of earnings from the Brazil holdings
over the next several years, we anticipate that the value of our holdings could
exceed $400 million."
Alliant Energy Resources' strategic plan for Brazil, developed with its
partners there, earmarks about $40 million of the investment to be set aside,
within the existing companies, for future growth opportunities in both electric
distribution and generation in Brazil. Hoffman added that Alliant Energy
Resources currently expects returns from this investment in excess of 15
percent, which satisfies the company's internal threshold for new investments.
"Cataguazes and Energisa have solid track records in acquiring state-run
distribution companies and improving their operational performance. One uniquely
attractive element of this investment is our ability to partner with the
respected Botelho family. With 95 years of utility operating experience, their
expertise will be invaluable," added Hoffman.
The Botelho family founded Cataguazes, one of the first companies listed on
the Rio de Janeiro Stock Exchange in 1905. As a regulated utility, Cataguazes
serves more than 250,000 customers in the state of Minas Gerais, providing
940,000 megawatt hours of energy annually. In 1997, Cataguazes purchased
majority control of CENF, an electric utility located in the state of Rio de
Janeiro, providing 303,000 megawatt hours of energy each year to about 67,000
customers. Both Cataguazes and CENF were
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Alliant Energy--Brazil
Jan. 25, 2000
Page 3 of 4
recently granted renewable 30-year concession contracts to provide regulated
electric utility service in a defined service territory. Cataguazes is also
developing several small hydroelectric generating stations to serve its
customers.
Through Cataguazes, the Botelho family was also instrumental in the
formation of Energisa in 1997 as a holding company to participate in the
privatization of Brazil's government-run utilities. Its larger utility
subsidiary, Energipe, provides 1.89 million megawatt hours of electricity
annually to over 380,000 customers in the state of Sergipe. Its other holding,
Celb, serves nearly 120,000 customers in the state of Paraiba, providing 483,000
megawatt hours of electricity annually. Both have recently been granted 30-year
concession contracts. In addition, Energisa has an exclusive contract to develop
a 100-megawatt co-generation facility (producing electricity and steam) to
supply Energipe customers.
Concession contracts for the Brazilian utilities set the terms of their
electric rates. As outlined in those contracts, the utilities will receive
inflation increases each year, and a pass-through for certain costs for the
first of five or six years of those contracts. All are still receiving normal
inflation increases and will continue to receive those increases until 2002.
Brazil investment at a glance:
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Annual sales 1999 Revenue
Utility Customers (megawatt hours) ($US/year*) Employees
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Energipe 382,738 1,890,000 $110 million 599
Celb 119,059 483,000 $28.9 million 270
Cataguazes 251,404 940,000 $77.8 million 720
CENF 67,600 303,000 $22.2 million 93
TOTAL: 820,801 3,620,000 $238.9 million 1,682
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* Revenues listed in U.S. dollars (US$), converted from Brazilian Reais (R$)
using: R$1.80 = US$1.00
In comparison, Alliant Energy's domestic utility subsidiaries serve a
combined total of 919,000 electric customers with annual sales of approximately
24.5 million megawatt hours.
"We believe that the Brazil energy market offers great opportunity for
sales growth in an increasingly healthy economic environment," said Hoffman.
"Our review indicates that energy consumption there is growing faster than
electric use in U.S. homes and businesses. While demand for electricity in the
U.S. grows by two to three percent annually, it is expected to increase by six
to eight percent annually over the next four years in Brazil. Our research
indicates that the gross domestic product in Brazil is projected to grow at four
to five percent annually in the same time period."
Alliant Energy Resources, through its wholly owned subsidiary, Alliant
Energy International, Inc., will finance the Brazil investments through debt and
with cash made available through the internal transfer of existing diversified
corporate assets.
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Alliant Energy--Brazil
Jan. 25, 2000
Page 4 of 4
Alliant Energy officials currently do not anticipate pursuing another
investment of this magnitude, and short-term plans call for earnings from the
Brazil companies to be reinvested in the businesses there. Alliant Energy
Resources, however, will continue to analyze other international investment
opportunities as they arise.
"By pursuing a negotiated transaction in Brazil, our acquisition costs are
believed to compare favorably to prices paid by companies which purchased
utility assets through a competitive bidding process," said Davis. "The 1999
devaluation of Brazil's currency also improves the value of Alliant Energy's
investment when compared, on a cost-per-customer or cost-per-megawatt basis, to
acquisitions by other companies."
Alliant Energy Resources has entered into a new shareholders agreement with
the Brazilian companies, which would allow it to name two directors to the
boards of each company and its subsidiaries. The agreement will also provide
Alliant Energy Resources with a role in selecting each company's management
team, along with voting rights relating to critical issues at the Brazilian
companies and their subsidiaries.
Alliant Energy Corp. is the parent company of three domestic utilities
providing electric, gas, water and steam to 1.3 million customers in Iowa,
Wisconsin, Minnesota and Illinois. The company's diversified investments
holdings include transportation, oil and gas development, real estate, and
telecommunications. The company's other international investments are located in
New Zealand, Australia, Mexico and China.
For more information on Alliant Energy, see the company's Internet site at
www.alliant-energy.com.
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This press release includes forward-looking statements. These forward-looking
statements can be identified as such because the statement includes words such
as "expects" or "anticipates" or other words of similar import. Similarly,
statements that describe future plans or strategies are also forward-looking
statements. Such statements are subject to certain risks and uncertainties which
could cause actual results to differ materially from those currently
anticipated. Factors which could affect actual results include, among others,
the accuracy of Alliant Energy's forecasts for future growth in its Brazil
investments; future economic conditions in Brazil, including inflation rates;
the level of energy demand in the markets in Brazil that Energisa and Cataguazes
serve; future political conditions in Brazil, including regulatory treatment of
utility assets; changes in currency exchange ratios; unanticipated changes in
projected economic growth in Brazil; Alliant Energy's ability to use its
expertise in the manner expected to enhance its Brazilian investment; and the
risks inherent in holding a minority equity investment. These factors should be
considered in evaluating the forward-looking statements and undue reliance
should not be placed on such statements. The forward-looking statements included
herein are made as of the date hereof and Alliant Energy undertakes no
obligation to update publicly such statements to reflect subsequent events or
circumstances.
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