-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SkHiI+OM0XGzZh7KJgYjJcFjpZqNZSvIgrUXxlkAz3xJHIF1oNKA202xTZjk354b OcLXKhgsYPo8sx1HDclslw== 0000950124-00-002692.txt : 20000503 0000950124-00-002692.hdr.sgml : 20000503 ACCESSION NUMBER: 0000950124-00-002692 CONFORMED SUBMISSION TYPE: 424B3 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20000502 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALLIANT ENERGY CORP CENTRAL INDEX KEY: 0000352541 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 391380265 STATE OF INCORPORATION: WI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B3 SEC ACT: SEC FILE NUMBER: 333-92859-01 FILM NUMBER: 616429 BUSINESS ADDRESS: STREET 1: 222 WEST WASHNGTON AVENUE CITY: MADISON STATE: WI ZIP: 53703 BUSINESS PHONE: 6082523110 MAIL ADDRESS: STREET 1: P O BOX 2568 CITY: MADISON STATE: WI ZIP: 53701-2568 FORMER COMPANY: FORMER CONFORMED NAME: INTERSTATE ENERGY CORP DATE OF NAME CHANGE: 19980427 FORMER COMPANY: FORMER CONFORMED NAME: WPL HOLDINGS INC DATE OF NAME CHANGE: 19920703 424B3 1 FORM 424B3 1 Filed Pursuant to Rule 424(b)(3) Registration No. 333-92859 [ALLIANT ENERGY RESOURCES, INC. LOGO] ALLIANT ENERGY RESOURCES, INC. OFFER TO EXCHANGE ALL OUTSTANDING 7 3/8% SENIOR NOTES DUE 2009 $250,000,000 PRINCIPAL AMOUNT OUTSTANDING FOR NEW 7 3/8% SENIOR NOTES DUE 2009 $250,000,000 PRINCIPAL AMOUNT ---------------------- - - We are offering to exchange new registered 7 3/8% Senior Notes due 2009 for all of our outstanding unregistered 7 3/8% Senior Notes due 2009. - - The exchange offer expires at 5:00 p.m., New York City time, on May 31, 2000, unless we extend it. - - The terms of the new senior notes are substantially identical to those of the existing senior notes, except that the new senior notes will not have securities law transfer restrictions and registration rights relating to the existing 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. - - The exchange offer is not subject to any condition other than that the exchange offer not violate applicable law or applicable interpretation of the staff of the SEC and certain other conditions. - - All outstanding senior notes that are validly tendered and not validly withdrawn will be exchanged. - - You may withdraw your tender of existing senior notes any time before the exchange offer expires. - - We will not receive any proceeds from the exchange offer. - - The exchange of senior notes will not be a taxable event for U.S. federal income tax purposes. 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 May 1, 2000. 2 3 TABLE OF CONTENTS
PAGE ---- Prospectus Summary.......................................... 4 Where You Can Find More Information......................... 13 Forward-Looking Statements.................................. 14 Use of Proceeds............................................. 15 Capitalization.............................................. 15 The Exchange Offer.......................................... 16 Business.................................................... 25 Description of Outstanding Indebtedness..................... 28 Description of the New Senior Notes......................... 29 United States Federal Income Tax Considerations............. 43 Plan of Distribution........................................ 46 Legal Matters............................................... 47 Experts..................................................... 47
---------------------- 3 4 PROSPECTUS SUMMARY The following 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 registered public utility holding company. We manage a portfolio of companies involved in non-regulated businesses. Through these businesses, we: - offer large energy users an array of services to maximize their productivity and energy efficiency, - provide solutions for waste remediation and other environmental engineering and consulting services, - make investments in utilities in international and domestic markets and seek opportunities to develop or improve electricity generation facilities in these markets, - market new products and services to enhance the security and comfort of residential and small customers and to maximize their energy efficiency, - buy, sell and trade electricity for large customers and assist those customers to minimize risks related to changes in costs of energy through Cargill-Alliant LLC, a joint venture with Cargill Incorporated in which we have a 50% ownership interest, - offer short-line railway freight service in Iowa, storage services and barge terminal and hauling service on the Mississippi River, and - own, manage and develop affordable housing developments and provide equity and debt financing for these developments. Set forth below is a condensed organization chart that reflects how our and Alliant Energy Corporation's businesses and investments are managed: [GRAPH] Our principal executive offices are located at Alliant Tower, 200 First Street SE, Cedar Rapids, Iowa 52401, telephone number (319) 398-4411. 4 5 ALLIANT ENERGY CORPORATION Alliant Energy Corporation was formed as a result of a three-way merger involving WPL Holdings, Inc., IES Industries Inc. and Interstate Power Company. The merger was completed in April 1998. The first tier subsidiaries of Alliant Energy Corporation include Wisconsin Power and Light Company, IES Utilities Inc., Interstate Power Company, Alliant Energy Resources, Inc. and Alliant Energy Corporate Services, Inc. Alliant Energy Corporation, through its public utility operating companies, Wisconsin Power and Light Company, IES Utilities Inc. and Interstate Power Company, is engaged principally in: - the generation, transmission, distribution and sale of electric energy; - the purchase, distribution, transportation and sale of natural gas; and - the provision of water and steam services in selected markets. The principal markets of Alliant Energy Corporation's utility operating subsidiaries are located in Iowa, Wisconsin, Minnesota and Illinois. Alliant Energy Corporation is also involved in several non-regulated and non-utility activities through our company. Alliant Energy Corporation, a public utility holding company incorporated in Wisconsin in 1981, has its principal executive offices located at 222 West Washington Avenue, Madison, Wisconsin 53703, telephone number (608) 252-3311. THE EXCHANGE OFFER Existing Senior Notes...... We sold $250,000,000 of our 7 3/8% Senior Notes due 2009, which are fully and unconditionally guaranteed by Alliant Energy Corporation, to the initial purchasers on November 9, 1999. We issued the existing senior notes at a discount of 1.2% per existing senior note, which means the initial purchasers paid less than the principal amount for the existing senior notes. The initial purchasers resold those existing senior notes to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933. Registration Rights Agreement.................. When we sold the existing 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 these existing senior notes the opportunity to exchange your unregistered existing 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 registered 7 3/8% Senior Notes due 2009, which are fully and unconditionally guaranteed by Alliant Energy Corporation, in exchange for your existing senior notes. The terms of the new senior notes and the existing 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. 5 6 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 existing senior notes. As of the date of this prospectus, $250,000,000 aggregate principal amount of the existing senior notes are outstanding. For procedures for tendering, see "The Exchange Offer -- Procedures for Tendering Existing Senior Notes" Expiration Date............ This exchange offer will expire at 5:00 p.m., New York City time, on May 31, 2000, unless we extend it. Resales of New Senior Notes...................... We believe that you may resell or otherwise transfer the new senior notes received in the exchange offer without complying with the registration and prospectus delivery provisions of the Securities Act so long as you are not a broker-dealer and you meet the following conditions: - you are not our "affiliate" within the meaning of Rule 405 under the Securities Act; - you acquire the new senior notes issued in the exchange offer in the ordinary course of your business; - you have no arrangement or understanding with any person to participate in the distribution of the new senior notes; and - you did not purchase the existing senior notes directly from us to resell pursuant to Rule 144A or any other available exemption from the Securities Act. By signing the letter of transmittal and tendering your existing senior notes, you will be making representations to this effect. You may incur liability under the Securities Act if: - any of the representations listed above are not true; and - you transfer any new senior note issued to you in the exchange offer without either delivering a prospectus meeting the requirements of the Securities Act or qualifying for an exemption from the registration requirements under the Securities Act. We do not assume or indemnify you against liability under these circumstances, which means that we will not protect you against any loss incurred as a result of this liability under the Securities Act. If you do not meet the conditions listed above, then: - you will not be permitted to tender existing senior notes in the exchange offer; and - you must comply with the registration and prospectus delivery requirements of the Securities Act, including being named as a selling security holder, in connection with any sale of existing senior notes unless an exemption from these requirements is available. Each broker-dealer that has received new senior notes for its own account in exchange for existing senior notes that were acquired as a result of market-making or other trading activities must acknowledge that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of the new senior notes. 6 7 A broker-dealer generally may use this prospectus in connection with any such resale. See "The Exchange Offer -- Resales of New Senior Notes." Acceptance of Existing Senior Notes and Delivery of New Senior Notes........ We will accept for exchange any and all existing 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 exchange offer. Withdrawal Rights.......... You may withdraw your tender of existing 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 existing 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 existing senior notes, then you will not have further exchange or registration rights and you will continue to hold existing senior notes subject to restrictions on transfer. Federal Income Tax Consequences............... The exchange of an existing 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. Accounting Treatment....... We will not recognize any gain or loss on the exchange of senior notes. See "The Exchange Offer -- Accounting Treatment." Exchange Agent............. Firstar Bank, N.A. is the exchange agent. See "The Exchange Offer -- Exchange Agent." 7 8 THE NEW SENIOR NOTES The new senior notes will evidence the same debt as the existing senior notes and will be governed by the same indenture, as supplemented, under which the existing senior notes were issued. TERMS OF THE NEW SENIOR NOTES Aggregate Principal Amount..................... Up to $250,000,000. Interest Rate.............. 7 3/8% per year. Maturity Date.............. November 9, 2009. Interest Payment Dates..... May 9 and November 9 of each year, beginning November 9, 2000. Interest Calculations...... Based on a 360-day year of twelve 30-day months. Parent Company Guarantee... Our parent, Alliant Energy Corporation, will fully and unconditionally guarantee the new senior notes. The guarantee will be equal in right of payment with all other unsecured indebtedness and guarantees issued by Alliant Energy Corporation. The guarantee will be effectively subordinated to all secured indebtedness of Alliant Energy Corporation and will be effectively subordinated to the claims of creditors of any of Alliant Energy Corporation's subsidiaries. As of December 31, 1999, the amount of indebtedness of Alliant Energy Corporation that ranked equally with, or senior to, the guarantee was $309.8 million, none of which was secured. Ranking.................... The new senior notes will rank equally with all of our other unsecured and unsubordinated indebtedness. The new senior notes will be effectively subordinated to all of our secured indebtedness and will be effectively subordinated to the claims of creditors of any of our subsidiaries. As of December 31, 1999, as adjusted to give effect to the issuance of our exchangeable senior notes due 2030 in the initial aggregate principal amount of $402.5 million on February 1, 2000, the amount of indebtedness of Alliant Energy Resources that ranked equally with, or senior to, the senior notes was $789.8 million, none of which was secured. As of December 31, 1999, the amount of indebtedness incurred by our subsidiaries was $80.1 million. Ratings.................... The senior notes have been assigned ratings of A by Standard & Poor's Ratings Services and A3 by Moody's Investor's Service, Inc. These ratings have been obtained with the understanding that S&P and Moody's will continue to monitor our credit rating and that of Alliant Energy Corporation, and will make future adjustments to the extent warranted. A rating reflects only the views of S&P or Moody's and is 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 entirely by S&P or Moody's. 8 9 Optional Redemption........ The new senior notes will be redeemable in whole or in part at our option at any time, on at least 30 days' but not more than 60 days' prior written notice at a price equal to the greater of: - 100% of the principal amount of the new senior notes being redeemed and - the sum of the present values of the principal amount of the new senior notes to be redeemed and the remaining scheduled payments of interest on the new senior notes from the redemption date to November 9, 2009, discounted from their respective scheduled payment dates to the redemption date semi-annually at a discount rate equal to the Treasury Yield, as defined under "Description of the New Senior Notes -- Optional Redemption", plus 20 basis points, plus accrued interest on the senior notes to the redemption date. See "Description of the New Senior Notes -- Optional Redemption." Sinking Fund............... None. Form and Denominations..... The new senior notes initially will be issued in fully registered book-entry form and will be represented by one or more registered global securities deposited with or on behalf of, and registered in the name of, a nominee of The Depository Trust Company. The new senior notes will be issued in denominations of $1,000 and integral multiples thereof. Absence of Market for the Notes...................... The new senior notes are a new issue of securities with no established trading market. We currently have no intention to apply to list the new 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 new senior notes. GENERAL INDENTURE PROVISIONS APPLICABLE TO THE NEW SENIOR NOTES No Limit on Debt........... The indenture governing the new 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 contains covenants that, among other things, will limit our ability and that 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. 9 10 Events of Default.......... Each of the following is an event of default under the indenture: - the failure by us or Alliant Energy Corporation to pay principal of or premium, if any, on the senior notes when due; - the failure by us or Alliant Energy Corporation for 30 days to pay interest when due on the senior notes; - the failure by us or Alliant Energy Corporation to perform other covenants with respect to the senior notes following 90 days after receipt of notice of failure; and - events of bankruptcy, insolvency or reorganization of us or Alliant Energy Corporation. These covenants are subject to important exceptions and qualifications, which are described under the heading "Description of the New Senior Notes -- Events of Default" in this prospectus. Remedies................... If any event of default occurs and is continuing, the trustee under the indenture or holders of at least 25% in aggregate principal amount of outstanding senior notes may declare the principal thereof immediately due and payable. Other...................... The new senior notes and the existing senior notes will vote together as a single class for purposes of determining whether the holders of the requisite percentage in outstanding principal amount have taken certain actions or exercised certain rights under the indenture. 10 11 SUMMARY FINANCIAL INFORMATION ALLIANT ENERGY RESOURCES, INC. The following table sets forth our unaudited summary consolidated financial information. The information set forth below was derived from Alliant Energy Corporation's financial statements and notes.
YEAR ENDED DECEMBER 31, -------------------------------- 1999 1998 1997 -------- -------- -------- (IN THOUSANDS) INCOME STATEMENT DATA: Operating revenues.......................................... $305,029 $238,676 $361,961 Operating income (loss)..................................... (1,256) (8,608) (6,818) Net income (loss)........................................... 37,812(1) (8,898) (3,966)
DECEMBER 31, ---------------------- 1999 1998 ---------- -------- (IN THOUSANDS) BALANCE SHEET DATA: Current assets.............................................. $ 132,401 $ 92,148 Non-current assets(2)....................................... 1,716,148 777,113 Current liabilities......................................... 197,669 63,648 Non-current liabilities (excludes minority interest)........ 502,760 160,278 Minority interest(3)........................................ 7,208 6,193
- --------------- (1) Includes after-tax gains of $25 million from the sales of a portion of our investment in McLeodUSA Incorporated. (2) Includes the market value of McLeodUSA Incorporated of $1,124 million at December 31, 1999 and $320 million at December 31, 1998. (3) Minority interest represents primarily real estate joint ventures. 11 12 ALLIANT ENERGY CORPORATION The following table sets forth selected consolidated financial information of Alliant Energy Corporation. The information set forth below was selected or derived from the financial statements and notes of Alliant Energy Corporation. The information set forth below is qualified in its entirety by and should be read in conjunction with the Alliant Energy Corporation Management's Discussion and Analysis of Financial Condition and Results of Operations and the detailed information and consolidated financial statements, including the notes thereto, incorporated by reference in this prospectus. See "Where You Can Find More Information."
YEAR ENDED DECEMBER 31, ------------------------------------------------------------------ 1999 1998(1) 1997 1996 1995 ---------- ---------- ---------- ---------- ---------- (DOLLARS IN THOUSANDS EXCEPT FOR PER SHARE DATA) INCOME STATEMENT DATA: Operating revenues.................. $2,197,963 $2,130,874 $2,300,627 $2,232,840 $1,976,807 Operating income.................... 376,535 283,302 336,383 365,439 364,932 Income from continuing operations... 196,581 96,675 144,578 157,088 159,157 Net income.......................... 196,581 96,675 144,578 155,791 145,971 PER SHARE DATA: Income from continuing operations... $2.51 $1.26 $1.90 $2.08 $2.13 Earnings per average common share (basic and diluted)............... $2.51 $1.26 $1.90 $2.06 $1.95 Dividends declared per common share(2).......................... $2.00 $2.00 $2.00 $1.97 $1.94 BALANCE SHEET DATA: Total assets........................ $6,075,683 $4,959,337 $4,923,550 $4,639,826 $4,476,406 Long-term obligations, net(3)....... $1,660,558 $1,713,649 $1,604,305 $1,444,355 $1,357,755 RATIO OF EARNINGS TO FIXED CHARGES........................... 3.19 2.17 2.77 3.21 3.17
- --------------- (1) The 1998 financial results reflect the recording of $54 million of pre-tax merger charges. (2) Represents data for WPL Holdings, Inc. prior to the three-way merger involving WPL Holdings, Inc., IES Industries Inc. and Interstate Power Company in April 1998. (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. 12 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 which 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 Chicago, Illinois and New York, New York. 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 website 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 contain important business and financial information not included in or delivered with this prospectus. "Incorporating by reference" 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 offering memorandum. 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 end of the exchange offer: - Alliant Energy Corporation's Annual Report on Form 10-K for the year ended December 31, 1999; and - Alliant Energy Corporation's Current Report on Form 8-K dated January 25, 2000, as amended by Alliant Energy Corporation's Current Report on Form 8-K/A dated January 25, 2000, Alliant Energy Corporation's Current Report on Form 8-K dated January 26, 2000, Alliant Energy Corporation's Current Reports on Form 8-K dated February 1, 2000, and Alliant Energy Corporation's Current Report on Form 8-K dated April 7, 2000. YOU MAY REQUEST A COPY OF ANY OF THESE FILINGS (INCLUDING EXHIBITS), 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. TO OBTAIN TIMELY DELIVERY OF ANY OF THIS INFORMATION, YOU MUST MAKE YOUR REQUEST AT LEAST FIVE BUSINESS DAYS PRIOR TO THE EXPIRATION OF THE EXCHANGE OFFER. THE DATE BY WHICH YOU MUST MAKE YOUR REQUEST IS MAY 23, 2000. You should rely only on the information contained or incorporated by reference in this document or to which we have referred you. We have not authorized any other person to provide you with different information. This prospectus may only be used where it is legal to sell these securities. You should assume that the information contained or incorporated by reference in this document is accurate as of the date on the front cover of the prospectus only. Our and Alliant Energy Corporation's business, financial condition, results of operations and prospects may have changed since that date. 13 14 FORWARD-LOOKING STATEMENTS This prospectus (including the information we incorporate by reference) contains forward-looking statements that are not of historical fact and are statements intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995. From time to time, we or Alliant Energy Corporation may make other forward-looking statements within the meaning of the federal securities laws that involve judgments, assumptions and other uncertainties beyond our control. These forward-looking statements may include, among others, statements concerning revenue and cost trends, cost recovery, cost reduction strategies and anticipated outcomes, pricing strategies, changes in the utility industry, planned capital expenditures, financing needs and availability, statements of expectations, beliefs, future plans and strategies, anticipated events or trends and similar comments concerning matters that are not historical facts. You are cautioned that these statements are not a guarantee of future performance and that 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: - weather effects on sales and revenues, - competitive factors, - general economic conditions in the relevant service territory, - federal and state regulatory or government actions, including issues associated with the deregulation of the utility industry, - unanticipated construction and acquisition expenditures, - issues related to stranded costs and their recovery, - the operations of Alliant Energy Corporation's nuclear facilities, - unanticipated costs associated with environmental remediation efforts being undertaken by Alliant Energy Corporation, - unanticipated issues relating to establishing a transmission company, - material changes in the value of our investment in McLeodUSA Incorporated, - technological developments, - employee workforce factors, including changes in key executives, collective bargaining agreements or work stoppages, - political, legal and economic conditions in foreign countries Alliant Energy Corporation has investments in, and - changes in the rate of inflation. 14 15 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 existing senior notes. We will not receive any cash proceeds from the issuance of the new senior notes. We added the net proceeds of approximately $247 million from the sale of the existing senior notes to our general funds. We then used these general funds to repay commercial paper we issued in connection with the development and acquisition of our non-regulated businesses as it became due. CAPITALIZATION The following table sets forth the consolidated capitalization of Alliant Energy Corporation, including us, as of December 31, 1999, and as adjusted to give effect to the issuance of $402.5 million of exchangeable senior notes due 2030. See "Description of Outstanding Indebtedness."
DECEMBER 31, 1999 --------------------------------------- ACTUAL ADJUSTMENTS ADJUSTED ---------- ----------- ---------- (IN THOUSANDS) Common stock......................................... $ 790 -- $ 790 Additional paid-in capital........................... 942,408 -- 942,408 Retained earnings.................................... 577,464 -- 577,464 Accumulated other comprehensive income............... 634,903 -- 634,903 ---------- -------- ---------- Total common equity................................ 2,155,565 -- 2,155,565 ---------- -------- ---------- Cumulative preferred stock of subsidiaries........... 113,638 -- 113,638 Long-term debt (excluding current portion): ---------- -------- ---------- Exchangeable senior notes............................ -- $402,500 402,500 Other long-term debt................................. 1,486,765 -- 1,486,765 ---------- -------- ---------- Total long-term debt............................... 1,486,765 402,500 1,889,265 ---------- -------- ---------- Total capitalization.......................... $3,755,968 $402,500 $4,158,468 ========== ======== ==========
15 16 THE EXCHANGE OFFER PURPOSE AND EFFECT; REGISTRATION RIGHTS We sold the existing senior notes on November 9, 1999 in transactions exempt from the registration requirements of the Securities Act. Therefore, the existing senior notes are subject to significant restrictions on resale. In connection with the issuance of the existing 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 existing 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 existing senior notes, you will continue to hold the untendered existing 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 $250,000,000 in aggregate principal amount of our 7 3/8% Senior Notes due 2009 that have been registered under the Securities Act for a like principal amount of our outstanding unregistered 7 3/8% Senior Notes due 2009. Upon the terms and subject to the conditions set forth in this prospectus and in the accompanying letter of transmittal, we will accept all existing senior notes validly tendered and not withdrawn before 5:00 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 existing senior notes we accept in the exchange offer. You may tender some or all of your existing senior notes under the exchange offer. However, the existing senior notes are issuable in authorized denominations of $1,000 and integral multiples thereof. Accordingly, existing 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 original notes being tendered. The form and terms of the new senior notes will be the same as the form and terms of the existing 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 - the new senior notes will not provide for the payment of additional interest under circumstances relating to the timing of the exchange offer. 16 17 The new senior notes will evidence the same debt as the existing senior notes and will be issued under, and be entitled to the benefits of, the indenture, as supplemented, governing the existing senior notes. The new senior notes will accrue interest from the most recent date to which interest has been paid on the existing senior notes or, if no interest has been paid, from the date of issuance of the existing 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 existing senior notes or, if no interest has been paid, from the date of issuance of the existing 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 existing 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 existing 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 existing senior notes because of an invalid tender or for any other reason, then we will return certificates for any unaccepted existing 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 5:00 p.m., New York City time, on May 31, 2000, 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 existing 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 EXISTING SENIOR NOTES Any tender of existing 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 existing 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 18 - if the existing 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 existing senior notes, along with the letter of transmittal, on or before the expiration date; or - the exchange agent must receive a timely confirmation of book-entry transfer of the existing 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 existing 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 existing senior notes to us. Generally, an eligible institution must guarantee signatures on a letter of transmittal or a notice of withdrawal unless the existing senior notes are tendered: - by a registered holder of the existing 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 existing 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 existing senior notes and an eligible institution must guarantee the signature on the power of attorney. If the letter of transmittal, or any existing 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 existing 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 18 19 for tendering existing senior notes, either register ownership of the existing 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 existing 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 existing senior notes not properly tendered or existing 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 existing 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 existing 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 existing senior notes. By tendering, you will represent to us that: - the new senior notes acquired in the exchange offer are being acquired in the ordinary course of business of the person receiving the new senior notes; - neither you nor any other person receiving your new senior notes has any arrangement or understanding with any person to participate in the distribution of the new senior notes; and - neither you nor any other person receiving your new senior notes is our "affiliate," as defined under Rule 405 of the Securities Act. If you or the person receiving your new senior notes is our "affiliate," as defined under Rule 405 of the Securities Act, or is participating in the exchange offer for the purpose of distributing the new senior notes, you or that other person cannot rely on the applicable interpretations of the staff of the SEC, cannot tender your existing senior notes in the exchange offer and must comply with the registration and prospectus delivery requirements of the Securities Act in any resale transaction. If you are a broker-dealer and you will receive new senior notes for your own account in exchange for the existing senior notes, where these existing senior notes were acquired as a result of market-making activities or other trading activities, then you must acknowledge that you will deliver a prospectus in connection with any resale of the new senior notes. ACCEPTANCE OF EXISTING 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 existing senior notes properly tendered and will issue the new senior notes promptly after acceptance of the existing senior notes. For purposes of the exchange offer, we will be deemed to have accepted properly tendered existing senior notes for exchange when we have given oral or written notice of that acceptance to the exchange agent. For each existing senior note accepted for exchange, you will receive a new senior note having a principal amount equal to that of the surrendered existing senior note. In all cases, we will issue new senior notes for existing senior notes that we have accepted for exchange under the exchange offer only after the exchange agent timely receives: - certificates for your existing senior notes or a timely confirmation of book-entry transfer of your existing 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. 19 20 If we do not accept any tendered existing senior notes for any reason set forth in the terms of the exchange offer or if you submit existing senior notes for a greater principal amount than you desire to exchange, we will return the unaccepted or non-exchanged existing senior notes without expense to you. In the case of existing 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 existing 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 existing 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 existing senior notes by causing DTC to transfer the existing senior notes into the exchange agent's account at DTC in accordance with DTC's procedures for transfer. Although delivery of existing 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 existing senior notes and your existing senior notes are not immediately available, or you cannot deliver your existing 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 existing 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 existing 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 existing senior notes in proper form for transfer, or a book-entry 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 existing 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 existing senior notes to be withdrawn; - identify the existing senior notes to be withdrawn, including the principal amount, or, in the case of existing 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 20 21 - if certificates for existing senior notes have been transmitted, specify the name in which those existing 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 existing 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 existing senior notes so withdrawn will be deemed not to have been validly tendered for purposes of the exchange offer. We will return any existing 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 existing senior notes tendered by book-entry transfer into the exchange agent's account at DTC, the existing senior notes will be credited to an account maintained with DTC for the existing senior notes. You may retender properly withdrawn existing senior notes by following one of the procedures described under "-- Procedures for Tendering Existing 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 existing senior notes if: - the exchange offer, or the making of any exchange by a holder of existing 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. EXCHANGE AGENT Firstar Bank, N.A. 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: Firstar Bank, N.A. 1555 North RiverCenter Drive Suite 301 Milwaukee, Wisconsin 53212 Attention: Robert L. Shellman 21 22 By Facsimile: (414) 905-5049 Attention: Robert L. Shellman 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 existing 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 existing senior notes, which is the aggregate principal amount of the existing 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 EXISTING SENIOR NOTES If you are eligible to participate in the exchange offer but do not tender your existing senior notes, you will not have any further registration rights. Your existing senior notes will continue to be subject to restrictions on transfer. Accordingly, you may resell the existing senior notes that are not exchanged only: - to us; - so long as the existing 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 Rule 144 under the Securities Act or another exemption from the registration requirements of the Securities Act; - to an institutional accredited investor as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act that is acquiring the existing senior notes for its own account or for the account of an institutional accredited investor for investment purposes and not with a view to, or for offer or sale in connection with, any distribution in violation 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 existing senior notes under the Securities Act. RESALES OF NEW SENIOR NOTES We are making the exchange offer in reliance on the position of the staff of the SEC as set forth in interpretive letters addressed to third parties in other transactions. However, we have not sought our own 22 23 interpretive letter, and we cannot provide any assurance that the staff of the SEC would make a similar determination with respect to the exchange offer as it has in the interpretive letters addressed to third parties. Based on these interpretations by the staff of the SEC, and except as provided below, we believe that new senior notes may be offered for resale, resold and otherwise transferred by a holder that participates in the exchange offer and is not a broker-dealer without further compliance with the registration and prospectus delivery provisions of the Securities Act. To receive new senior notes that are freely tradeable, a holder must acquire the new senior notes in the ordinary course of its business and may not participate, or have any arrangement or understanding with any person to participate, in the "distribution" within the meaning of the Securities Act of the existing senior notes or the new senior notes. Holders wishing to participate in the exchange offer must make the representations described in " -- Procedures for Tendering Existing Senior Notes" above. Any holder of existing senior notes: - who is our "affiliate," as defined in Rule 405 under the Securities Act; - who did not acquire the new senior notes in the ordinary course of its business; - who intends to participate, or has an arrangement or understanding with any person to participate, in a "distribution" within the meaning of the Securities Act of the existing senior notes or the new senior notes; or - who purchased the existing senior notes directly from us to resell pursuant to Rule 144A or any other available exemption under the Securities Act, will be subject to separate restrictions. Each holder in any of the above categories: - will not be ably to rely on the interpretations of the staff of the SEC in the above-mentioned interpretative letters; - will not be permitted or entitled to tender existing senior notes in the exchange offer; and - must comply with the registration and prospectus delivery requirements of the Securities Act, including being named as a selling security holder, in connection with any sale or other transfer of existing senior notes unless such sale is made pursuant to an exemption from these requirements. In addition, if you are a broker-dealer holding existing senior notes acquired for your own account, then you may be deemed a statutory "underwriter" within the meaning of the Securities Act in connection with any resales of your new senior notes. Each broker-dealer that receives new senior notes for its own account pursuant to the exchange offer must acknowledge that it acquired the existing senior notes for its own account as a result of market-making activities or other trading activities and must agree that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of those new senior notes. The letter of transmittal states that by making the above acknowledgement 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. Based on the position taken by the staff of the SEC in the interpretative letters referred to above, we believe that broker-dealers who acquired existing senior notes for their own accounts, as a result of market-making or other trading activities may fulfill their prospectus delivery requirements with respect to the new senior notes received upon the exchange of existing senior notes, other than existing senior notes that represent an unsold allotment from the original sale of the existing senior notes, with a prospectus meeting the requirements of the Securities Act, which may be the prospectus prepared for an exchange offer so long as it contains a description of the plan of distribution with respect to the sale of such new senior notes. Accordingly, this prospectus, as it may be amended or supplemented, may be used by a participating broker-dealer in connection with resales of new senior notes received in exchange for existing senior notes where such existing senior notes were acquired by that participating broker-dealer for its own account as a result of market-making or other trading activities. See "Plan of Distribution." However, a participating broker-dealer who intends to use this prospectus in connection with the resale of new senior 23 24 notes received in exchange for existing senior notes pursuant to the exchange offer must notify us, or cause us to be notified, on or before the expiration date of the exchange offer, that it is a participating broker-dealer. Such notice may be given in the space provided for that purpose in the letter of transmittal or may be delivered to the exchange agent at the address set forth above under " -- Exchange Agent." Any participating broker-dealer who is an "affiliate" of ours may not rely on such interpretive letters and must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction. 24 25 BUSINESS OVERVIEW We are a wholly-owned subsidiary of Alliant Energy Corporation, which is a registered public utility holding company. We manage a portfolio of companies involved in non-regulated businesses. Our primary subsidiaries include Alliant Energy Investments, Inc.; Alliant Energy International, Inc.; and Alliant Energy Industrial Services, Inc. Alliant Energy Corporation also has a 50% ownership interest in a joint venture with Cargill Incorporated, named Cargill-Alliant LLC. We were incorporated in Wisconsin in 1988 as Heartland Development Corporation, a subsidiary of WPL Holdings, Inc. As part of a three-way merger involving our parent in April 1998, we merged with IES Diversified Inc., the holding company for the non-regulated businesses of the former IES Industries Inc., to form Alliant Energy Resources, Inc. STRATEGY As competitive forces shape the energy-services industry, energy providers are being challenged to increase growth and profits. Because we expect consumption of electricity and natural gas to grow only modestly within Alliant Energy Corporation's domestic utility service territory, we have entered several energy-services markets that we expect will provide opportunities for new sources of growth. We have established new distinct platforms to complement our existing non-regulated investments, which are designed to meet customer needs. These platforms and existing investments include: - Investments: Our existing investments include an oil and gas production company, a short-line railroad, a barge company, an affordable housing company, various real estate joint ventures and an equity stake in an independent telecommunications provider. - International: We are a partner in developing, or are seeking to develop, energy generation and infrastructure in New Zealand, Australia, China, Mexico and Brazil, markets which we have selected because of their growth potential. - Industrial Services: We are a provider of energy and environmental services designed to maximize productivity for industrial and large commercial customers. This platform consists of four units: Energy Planning; Energy Management; Energy Applications, which provides facilities-based and commodities-based energy solutions; and RMT, Inc., an environmental-management and engineering firm with offices throughout the United States and the United Kingdom. We believe these four components comprise an industrial services company with expertise that customers find valuable. - Cargill-Alliant: Alliant Energy Corporation has an energy-trading joint venture with Cargill Incorporated that combines the risk-management and commodity trading expertise of Cargill with Alliant Energy Corporation's low-cost electricity generation and transmission business experience. Cargill-Alliant LLC officially began operations in 1997 and has an initial term through October 2002. The term automatically renews for successive five-year periods unless either party notifies the other at least one year prior to the then expiring term, in which case the other party must decide whether to sell its interest in the joint venture to the nonrenewing party or acquire the nonrenewing party's interest. - Mass Markets: We are a provider of products and services designed to meet the comfort, security and productivity needs of residential and small commercial customers. We offer home appliance and furnace warranties and a variety of home energy, safety and security products through our "Power House" catalog. We market these products directly to customers, through the mail with our catalog and over the Internet. We expect to continue to pursue opportunities in these markets, which we believe have growth potential as industry deregulation allows more customers to choose their energy suppliers in an open market. 25 26 PRINCIPAL OPERATIONS We conduct our operations through our principal subsidiaries and investments, which are engaged in the businesses described below: Investments: Our subsidiaries and investments include Whiting Petroleum Corporation, Alliant Energy Transportation, Inc. and Alliant Energy Investments, Inc., which is a holding company whose primary subsidiaries include Heartland Properties, Inc. and Capital Square Financial Corporation and which holds an equity stake in McLeodUSA Incorporated. 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. Whiting Petroleum's construction and acquisition expenditures were approximately $60 million in 1998 and $35 million in 1999. - Alliant Energy Transportation is a holding company whose equity investments total $31 million as of December 31, 1999 and include the Cedar Rapids and Iowa City Railway Company, a short-line railway, which renders freight service between Cedar Rapids and Iowa City, Transfer Services, Inc. and Williams Bulk Transfer, Inc., which provide transloading and storage services, and a 75% equity investment in IEI Barge Services Inc., which provides barge terminal and hauling services on the Mississippi River. - Heartland Properties, formed in 1988, is responsible for performing asset management and facilitating the development and financing of high quality, affordable housing in Wisconsin and the Midwest. Heartland Properties has a majority ownership interest in approximately 60 properties. - Capital Square was incorporated in 1992 to provide mortgage banking services to facilitate Heartland Properties' development and financing efforts in the affordable housing market. - We also hold an equity interest of approximately 10.5% in McLeodUSA Incorporated. McLeodUSA is an independent telecommunications provider based in Cedar Rapids, Iowa. Our investment in McLeodUSA had a market value of approximately $1.1 billion as of December 31, 1999 (based on a closing price of $58.875 per share and compared to a cost basis of approximately $28 million). Alliant Energy Investments is a party to a stockholders' agreement that provides, subject to some exceptions, that it may not sell any equity securities of McLeodUSA until December 31, 2001 without the consent of the Board of Directors of McLeodUSA. International: Our international operations include Alliant Energy International, Inc., a holding company whose primary investments include Alliant International New Zealand Limited, Alliant Energy Australia Pty Ltd., Interstate Energy Corporation Pte. Ltd., Grandelight Holdings Ltd., Alliant Energy de Mexico L.L.C. and Alliant Energy Brazil, Inc. - Alliant International New Zealand has made equity investments in several New Zealand utility entities since 1995, which totaled $108 million as of December 31, 1999. As a result of electricity reforms since 1995, several utility companies exited generation and retail businesses. As part of its strategy to enter the generation and retail markets, Alliant International New Zealand sold all of its interest in Central Power Limited and a portion of its interest in Powerco Limited, each of which were electricity distribution companies. Alliant International New Zealand has a 10% interest in Infrastructure and Utilities NZ Ltd., a holding company for infrastructure and utility businesses in New Zealand and a 17% interest in TrustPower Ltd., an electricity generation and retail company. Alliant International New Zealand and Infrastructure and Utilities NZ Ltd. hold a collective interest in TrustPower of approximately 42%. - In October 1999, Alliant Energy Australia acquired a 10% equity interest in Infratil Australia Limited, a holding company for infrastructure and utility businesses in Australia. Alliant Energy Australia also closed on the acquisition of a 22% equity interest in Southern Hydro Partnership, a hydro-electricity generation business, in February 2000. 26 27 - As of December 31, 1999, Alliant Energy International has invested $62 million in investments in China, which consist of an equity investment of $27 million in two individual cogeneration facilities in China and an equity investment of $35 million in Peak Pacific Investment Company PTE Ltd. Peak Pacific was formed to develop investment opportunities in generation infrastructure projects in China. In addition, we have commitments of an additional $11 million to invest in China as of December 31, 1999. - Alliant Energy de Mexico owns two subsidiaries incorporated in Mexico that have entered into agreements to operate the electrical distributions facilities serving a resort community known as Laguna del Mar, located in Puerto Penasco, Sonora, Mexico. As of December 31, 1999, Alliant Energy International's investment consisted of $10 million in secured debentures of Laguna del Mar. - Alliant Energy Brazil was formed for the purpose of making investments in Brazil. On January 25, 2000, our subsidiary, Alliant Energy Holdings do Brazil Ltda., acquired, for approximately $347 million, an equity stake in Brazilian utility operations serving an aggregate of approximately 820,000 customers. Alliant Energy Brazil will continue to examine similar opportunities to invest in electricity generation and distribution entities that have arisen as a result of the Brazilian government's privatization of the electricity sector. Industrial Services: Our industrial services include Alliant Energy Industrial Services, Inc., a holding company whose primary wholly-owned subsidiaries include Industrial Energy Applications, Inc., Heartland Energy Group, Inc. and RMT, Inc. - Industrial Energy Applications and Heartland Energy Group offer to their customers commodities-based energy services, such as supplying natural gas and electricity, and facilities-based energy services, including standby generation, cogeneration, steam production and propane air systems. They also provide energy consulting services for customers and own two oil and natural gas gathering systems in Texas. - RMT is a Madison, Wisconsin-based environmental and engineering consulting company that serves clients nationwide in a variety of industrial market segments. The most significant of these markets are chemical companies, pulp and paper processors, oil and gas providers, foundries and other manufacturers. RMT specializes in consulting on solid and hazardous waste management, ground water quality protection, industrial design and hygiene engineering, and air and water pollution control. 27 28 DESCRIPTION OF OUTSTANDING INDEBTEDNESS The following is information concerning our indebtedness other than the existing senior notes. We are a party to a revolving 3-Year Credit Agreement with various banking institutions. This agreement extends through October 2000, 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 December 31, 1999, we had no direct borrowings under this facility and $139 million of commercial paper outstanding and backed by this facility, with interest rates ranging from 5.90% to 6.32% and maturities ranging from 11 to 53 days. We intend to continue issuing commercial paper backed by this facility. At December 31, 1999, we had $311 million of credit capacity available under this facility. No conditions existed at December 31, 1999 that would prevent the issuance of commercial paper or direct borrowings under the 3-Year Credit Agreement. The new senior notes will rank equally with indebtedness under the 3-Year Credit Agreement. We are also a party to a revolving 364-Day Credit Agreement with various banking institutions. This agreement extends through October 16, 2000, with 364-day extensions available upon agreement by the parties. 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. 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 December 31, 1999, we had no borrowings under this facility and no commercial paper backed by this facility outstanding and we had $150 million of credit capacity available under this facility. No conditions existed at December 31, 1999 that would prevent the issuance of commercial paper or direct borrowings under the 364-Day Credit Agreement. The new senior notes will rank equally with indebtedness under the 364-Day Credit Agreement. On February 1, 2000, we completed a private placement of 5,940,960 exchangeable senior notes in accordance with Rule 144A under the Securities Act. The exchangeable senior notes were issued in the initial aggregate principal amount of $402.5 million and will be due in 2030. The exchangeable senior notes have an interest rate of 7.25% through February 15, 2003 and 2.5% after that date. The exchangeable senior notes are exchangeable for cash based upon the value of McLeodUSA Incorporated Class A Common Stock. Alliant Energy Corporation has agreed to fully and unconditionally guarantee the payment of principal and interest on the exchangeable senior notes. The exchangeable senior notes were issued as a series of debt under the same indenture that the existing senior notes were, and the new senior notes will be, issued. The new senior notes will rank equally with the exchangeable senior notes. 28 29 DESCRIPTION OF THE NEW SENIOR NOTES The existing senior notes were, and the new senior notes will be, issued under and governed by an Indenture, as supplemented and amended by the First Supplemental Indenture, each dated as of November 4, 1999, between us and Firstar Bank, N.A., as trustee and paying agent. The following summary of some provisions of the indenture, the new senior notes and the guarantees is not complete, and is qualified in its entirety by reference to the provisions of the indenture. A copy of the indenture and the supplemental indenture have been filed as exhibits to the registration statement that includes this prospectus. The holders of new 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 may be issued 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 new senior notes will be fully and unconditionally guaranteed by Alliant Energy Corporation, will be issued in the aggregate principal amount of $250,000,000 and will mature on November 9, 2009, at their principal amount unless redeemed before that date. We will pay interest on the new senior notes at a rate of 7 3/8% per annum from the most recent date to which interest has been paid on the existing senior notes or, if no interest has been paid, from the date of issuance of the existing senior notes. We will pay interest on the new senior notes semiannually in arrears on May 9 and November 9 of each year, commencing on November 9, 2000, until the principal amount has been paid or made available for payment, to the persons in whose names the new senior notes are registered at the close of business on May 1 or November 1, as the case may be, before each interest payment date. Interest on the new 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 new senior notes will be payable in U.S. dollars or in such other coin or 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 new 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 new seniors 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 new senior notes or the indenture, any waiver or consent by a holder of new 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 new senior notes against us with respect to any amounts paid by Alliant Energy Corporation pursuant to the guarantee. RANKING The new 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 29 30 those under the new 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 which 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 new 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 new 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 new 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 and registered in the name of a nominee of DTC. We expect that pursuant to procedures established by DTC: - upon the issuance of the new 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 new senior notes of the individual beneficial interests represented by these global notes to the respective accounts of participants 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. Holders of senior notes 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 certain purchasers of securities take physical delivery of the new senior notes in definitive certificated form. Such limits and such laws may impair the ability of such purchasers to own, transfer or pledge interests in the global notes. So long as DTC, or its nominee, is the registered owner or holder of new senior notes, DTC or its nominee, as the case may be, will be considered the sole owner or holder of new 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 new 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 30 31 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 new 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 new senior notes as to which such participant or participants has or have given such direction. DTC has advised us as follows: DTC is a limited purpose trust company organized under the laws of the State of New York, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the Uniform Commercial Code and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC was created to hold securities for its participants and facilitate the clearance and settlement of securities transactions between participants through electronic book-entry changes in accounts of its participants, thereby eliminating the need for physical movement of certificates. Participants include securities brokers and dealers, banks, trust companies and clearing corporations and some other organizations. Indirect access to the DTC system is available to others such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a participant, either directly or indirectly. 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, beneficial ownership interests in global notes. 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. Certificated Notes We will issue new 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 under the new senior notes has occurred and is continuing, or - we determine that the new senior notes will no longer be represented by global notes. The holder of a new 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. A holder of a new senior note may request that its new senior note be issued in certificated form and may request at any time that its interest in a global note be exchanged for a new senior note in certificated form. New senior notes in certificated form may also be issued in exchange for new senior notes represented by the global notes if no successor depositary is appointed by us as described above or in some other circumstances set forth in the indenture. 31 32 PURCHASE AND CANCELLATION We may at any time purchase new 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 new senior notes. Any new senior notes so purchased must be promptly surrendered to the trustee for cancellation. All new senior notes that are redeemed or purchased by us will promptly be canceled. Any new senior notes in certificated form so canceled will be forwarded to or to the order of the trustee and these new 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 new senior notes remain outstanding or any amount remains unpaid on any of the new 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 new senior notes in accordance with the terms of the new 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 new senior notes, together with any other indebtedness then existing or thereafter created ranking equally with the new 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 consisting of zoning restrictions, leases, subleases, licenses, sublicenses, restrictions on the use of property or defects in the title to property. The limitation on Liens does not apply to: - Liens in existence on the date of original issuance of the new 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, together with any costs, expenses, interest and fees, incurred in connection with the acquisition, construction or creation of the property or assets or a guarantee given in connection with the acquisition, construction or creation of the property or assets, - 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 that project and property; - any Lien securing amounts not more than 90 days overdue or otherwise being contested in good faith; 32 33 - rights of financial institutions to offset credit balances in connection with the operation of cash management programs established or 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 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; - 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 that legal process is effectively stayed and the claims secured by the Lien are being contested in good faith and 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; 33 34 - any Lien arising by operation of law or by order of a court 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 those properties 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; - 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 the 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 34 35 present value of this obligation is discounted at the rate of interest implicit in the transaction determined in accordance with generally accepted accounting principles. Consolidation, Merger, Conveyance, Sale or Lease The indenture provides that we may, without the consent of any holders of the new 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 new senior notes and the indenture; - immediately after giving effect to the transaction, no event of default under the new senior notes and no event which, after notice or lapse of time, would become an event of default under the new 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 the 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 new senior notes, the supplemental indenture 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 new senior notes, and no event which, after notice or lapse of time, would become an event of default under the new senior notes, has occurred and is continuing. The indenture also provides that Alliant Energy Corporation may, without the consent of any holders of the new 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 new senior notes, and no event which, after notice or lapse of time, would become an event of default under the new senior notes, has occurred and is continuing; and - either Alliant Energy Corporation or the successor person delivers to the trustee an officers' certificate and an opinion of counsel stating that the 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 these 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 new senior notes, we will, on or before each due date of the principal of, or any premium or interest on, any of the new senior notes, segregate and hold in trust for the benefit of the persons entitled a sum in the currency in which the new senior notes are payable sufficient to pay the principal or any premium or interest due until such sums are paid or otherwise disposed of. We will promptly notify the trustee of our action or failure to act. 35 36 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 such 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 that principal, premium or interest has become due and payable will be discharged from such trust. The holder of the new 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 expense cause to be published once, in an authorized newspaper or mailed to holders of the new 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 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 would become, an event of default under the new 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. 36 37 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 new senior notes or any event which after notice or lapse of time would become an event of default. 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 more than 50% 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, rights of holders of debt securities to receive payments 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. 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, or 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 37 38 - 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 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 not 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 38 39 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 new 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 new senior notes may not enforce the indenture, the new senior notes or any guarantees, if applicable, unless: - the holder has previously given written notice to the trustee of a continuing event of default under the senior notes 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 new senior notes for the enforcement of the payment of the principal of or premium, if any, or interest on the new senior notes on or after the applicable due date specified in the new senior notes. 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 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 this 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 this money, 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 new 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 new senior notes, at a price equal to the greater of: - 100% of the principal amount of the new senior notes being redeemed; and - the sum of the present values of the principal amount of the new senior notes to be redeemed and the remaining scheduled payments of interest on the new senior notes from the redemption date to November 9, 2009, 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 39 40 equal to the Treasury Yield plus 20 basis points, plus accrued interest on the new 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 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 new senior notes to be redeemed at its registered address. If fewer than all the new senior notes are to be redeemed, selection of new 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 new senior notes or portions thereof called for redemption will cease to bear interest, and the holders of the new senior notes will have no right in respect of the new 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 new senior notes ("defeasance"), except for the obligations to register the transfer or exchange of the new senior notes, replace stolen, lost or mutilated new senior notes, maintain paying agencies and hold moneys for payments in trust or - not to comply with some covenants ("covenant defeasance") of the indenture with respect to the new senior notes described above under "-- Covenants" 40 41 If we and Alliant Energy Corporation irrevocably deposit with the trustee money or U.S. Government Obligations or a combination of money 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 and premium, if any, and interest on the outstanding new senior notes to maturity or redemption or an installment of interest. 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 under the senior notes or event, which with notice or lapse of time would become an event of default with respect to the new 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 after the date 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 will be required to deliver to the Trustee: - an opinion of independent counsel of recognized standing to the effect that the holders of the new 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 - an officer's certificate as to compliance with all conditions precedent provided for in the indenture relating to the satisfaction and discharge of the new 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 new senior notes to and including a redemption date on which all of the outstanding new 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. 41 42 PAYMENT AND PAYING AGENT We have appointed the trustee to act as paying agent with respect to the new 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 new 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 new 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 new senior notes will thereafter look only to us for payment of any such amounts. GOVERNING LAW The indenture and the new senior notes will be governed by, and construed in accordance with, the laws of the State of Wisconsin. 42 43 UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS THIS SUMMARY IS OF A GENERAL NATURE AND IS INCLUDED 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 discussion of the material United States federal income tax consequences to a beneficial owner of new senior notes (a "United States Holder") who is: - a citizen or resident of the United States, - a corporation, partnership or other entity treated as a corporation or a partnership for United States federal income tax purposes created or organized in or under the laws of the United States, any state thereof or the District of Columbia, - an estate whose income is subject to United States federal income tax regardless of its source, or - a trust if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons have the authority to control all substantial decisions of the trust. The following summary deals only with new 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 new senior notes as a hedge against or which are hedged against currency risks, and persons whose functional currency is not the U.S. dollar. Persons considering the purchase of new 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 discussion 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. 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 purchase, ownership and disposition of the new senior notes may differ from the treatment described below. CONSEQUENCES OF THE EXCHANGE OFFER TO EXCHANGING AND NONEXCHANGING HOLDERS The exchange of an existing senior note for a new senior note pursuant to the exchange offer will not be taxable to an exchanging United States Holder for federal income tax purposes. As a result, an exchanging United States Holder will not recognize any gain or loss on the exchange; the holding period for the new senior note will include the holding period for the existing senior note; and the basis of the new senior note will be the same as the basis for the new senior note. The exchange offer will result in no federal income tax consequences to a nonexchanging United States Holder of existing senior notes. GENERAL A United States Holder using the accrual method of accounting for federal income tax purposes is required to include interest paid or accrued on the new senior notes in ordinary income as interest accrues, while a United States Holder using the cash receipts and disbursements method of accounting for federal income tax purposes must include interest in ordinary income when payments are received, or made available for receipt, by the United States Holder. 43 44 Although the existing senior notes were issued at a discount of 1.2% per existing senior note to the initial purchasers, such discount is not considered to be original issue discount for tax purposes. However, the existing senior notes provide for the payment of additional amounts of interest under certain circumstances and therefore both the existing and new senior notes are subject to the Treasury Regulations that apply to debt instruments that provide for one or more contingent payments. For purposes of determining whether the existing senior notes were issued with original issue discount, we intend to take the position that the existing senior notes did not, as of the issue date, represent contingent payment debt because the likelihood of paying an increased rate of interest as a result of us or Alliant Energy Corporation defaulting under the registration rights agreement was remote. Accordingly, both the existing and new senior notes will not be considered to be issued with original issue discount. A United States Holder may not take a contrary position unless such contrary position is disclosed in the proper manner to the IRS. United States Holders should consult their tax advisors regarding the tax consequences of the new senior notes being treated as contingent payment debt. If the IRS successfully asserts that these contingent payments were not remote as of the issue date, the amount and timing of the interest income that a United States Holder is required to include in taxable income may have to be redetermined and any gain or loss on a sale, exchange, redemption or retirement of the new senior notes, may be recharacterized as ordinary income. If the amount and timing of interest income required to be included in taxable income is redetermined, then a United States Holder, regardless of the United States Holder's method of accounting, may be required to include in taxable income interest in excess of the coupon amount of interest received periodically over the term of the new senior notes as its accrues, which may result in the recognition of interest income prior to the receipt of the coupon amount of interest. SALE, EXCHANGE, REDEMPTION OR RETIREMENT OF NEW SENIOR NOTES Upon the sale, exchange, redemption or retirement of a new senior note, a United States Holder will generally recognize capital gain or loss equal to the difference between the amount realized and the United States Holder's tax basis in the new senior note. For these purposes, the amount realized will not include any amounts attributable to accrued and unpaid interest. A United States Holder's tax basis in a new senior note will generally be its cost. That capital gain or loss will generally be long-term capital gain or loss if the new senior notes were held for more than one year; otherwise, the capital gain or loss will be short-term. ASSUMPTION OF THE NEW SENIOR NOTES An assumption of our obligations under the new senior notes may be deemed for United States federal income tax purposes to be an exchange of the new senior notes for new debt instruments resulting in the recognition of taxable gain or loss to a United States Holder and possibly other adverse United States tax consequences. Investors should consult their tax advisors regarding the United States federal, state, local and foreign tax consequences of such an assumption. WITHHOLDING TAXES AND REPORTING REQUIREMENTS Interest payments and payments of principal and any premium with respect to a new senior note will be reported to the extent required by the Internal Revenue Code to the United States Holders and the IRS. These amounts will ordinarily not be subject to withholding of United States federal income tax. However, a backup withholding tax at a rate of 31% will apply to these payments if a United States Holder fails to properly certify to us or our agent the United States Holder's taxpayer identification number and other information, or fails to report all interest and dividends required to be reported on its federal income tax returns, or otherwise fails to establish, in the manner prescribed by law, an exemption from backup withholding. Any amount withheld under backup withholding is allowable as a credit against the United States Holder's federal income tax liability, provided that person furnishes the required information to the IRS. 44 45 New IRS regulations will generally be applicable to payments made after December 31, 1999. In general, these regulations do not significantly alter the substantive withholding and information reporting requirements but unify and clarify current procedures. Under the new regulations, special rules apply which permit the shifting of primary responsibility for withholding to some financial intermediaries acting on behalf of beneficial owners. United States Holders of new senior notes should consult with their own tax advisors regarding the application of the backup withholding rules to their particular situation, the availability of exemption therefrom, the procedure for obtaining such an exemption, if available, and the impact of the new regulations with respect to new senior notes. 45 46 PLAN OF DISTRIBUTION Each broker-dealer that receives new senior notes for its own account as a result of market-making activities or other trading activities in connection with the exchange offer must acknowledge that it 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 existing senior notes where such existing senior notes were acquired as a result of market-making activities or other trading activities. 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." 46 47 LEGAL MATTERS Foley & Lardner of Milwaukee, Wisconsin will issue an opinion about some legal matters with respect to the new senior notes. EXPERTS The audited financial statements and schedules incorporated by reference in this prospectus and elsewhere in the registration statement have been audited by Arthur Andersen LLP, independent public accountants, as indicated in their reports with respect thereto, and are included herein in reliance upon the authority of said firm as experts in giving said reports. 47 48 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- $250,000,000 [ALLIANT ENERGY RESOURCES, INC. LOGO] ALLIANT ENERGY RESOURCES, INC. NEW 7 3/8% SENIOR NOTES DUE 2009 UNCONDITIONALLY GUARANTEED BY ALLIANT ENERGY CORPORATION ----------------------- PROSPECTUS ----------------------- MAY 1, 2000 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- -----END PRIVACY-ENHANCED MESSAGE-----