Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

404K characters. Original on sec.gov · Markdown

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

MANAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The management of Alliant Energy Corporation and subsidiaries (Alliant Energy) is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. Alliant Energy’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

Because of the inherent limitations of internal control over financial reporting, misstatements may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Alliant Energy’s management assessed the effectiveness of Alliant Energy’s internal control over financial reporting as of December 31, 2013 using the criteria set forth in Internal Control - Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, Alliant Energy’s management concluded that, as of December 31, 2013, Alliant Energy’s internal control over financial reporting was effective.

Deloitte & Touche LLP, Alliant Energy’s independent registered public accounting firm, has audited Alliant Energy’s internal control over financial reporting. That report is set forth immediately prior to the report of Deloitte & Touche LLP on the financial statements included herein.

/s/ Patricia L. Kampling

Patricia L. Kampling

Chairman, President and Chief Executive Officer

/s/ Thomas L. Hanson

Thomas L. Hanson

Senior Vice President and Chief Financial Officer

/s/ Robert J. Durian

Robert J. Durian

Controller and Chief Accounting Officer

February 25, 2014

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareowners of

Alliant Energy Corporation

Madison, Wisconsin

We have audited the internal control over financial reporting of Alliant Energy Corporation and subsidiaries (the “Company”) as of December 31, 2013, based on the criteria established in Internal Control - Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2013, based on the criteria established in Internal Control - Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements and financial statement schedules as of and for the year ended December 31, 2013 of the Company and our report dated February 25, 2014 expressed an unqualified opinion on those financial statements and financial statement schedules.

/s/ DELOITTE & TOUCHE LLP

DELOITTE & TOUCHE LLP

Milwaukee, Wisconsin

February 25, 2014

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareowners of

Alliant Energy Corporation

Madison, Wisconsin

We have audited the accompanying consolidated balance sheets of Alliant Energy Corporation and subsidiaries (the “Company”) as of December 31, 2013 and 2012, and the related consolidated statements of income, common equity, and cash flows for each of the three years in the period ended December 31, 2013. Our audits also included the financial statement schedules listed in the Index at Item 15. These financial statements and financial statement schedules are the responsibility of the Company’s management. Our responsibility is to express an opinion on the financial statements and financial statement schedules based on our audits.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2013 and 2012, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2013, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’s internal control over financial reporting as of December 31, 2013, based on the criteria established in Internal Control-Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 25, 2014 expressed an unqualified opinion on the Company’s internal control over financial reporting.

/s/ DELOITTE & TOUCHE LLP

DELOITTE & TOUCHE LLP

Milwaukee, Wisconsin

February 25, 2014

ALLIANT ENERGY CORPORATION

CONSOLIDATED STATEMENTS OF INCOME



	Year Ended December 31,
	2013			2012			2011
	(in millions, except per share amounts)
Operating revenues:
Utility:
Electric		$2,689.0			$2,589.3			$2,635.8
Gas	464.8			396.3			476.7
Other	71.3			56.7			62.0
Non-regulated	51.7			52.2			46.9
Total operating revenues	3,276.8			3,094.5			3,221.4
Operating expenses:
Utility:
Electric production fuel and energy purchases	725.0			712.3			764.5
Purchased electric capacity	216.8			271.5			257.2
Electric transmission service	418.3			341.3			323.8
Cost of gas sold	276.7			217.2			295.2
Other operation and maintenance	620.7			590.0			630.2
Non-regulated operation and maintenance	14.9			11.9			18.0
Depreciation and amortization	370.9			332.4			321.0
Taxes other than income taxes	99.6			98.2			98.2
Total operating expenses	2,742.9			2,574.8			2,708.1
Operating income	533.9			519.7			513.3
Interest expense and other:
Interest expense	172.8			156.7			158.3
Equity income from unconsolidated investments, net	(43.7		)	(41.3		)	(39.3		)
Allowance for funds used during construction	(30.8		)	(21.9		)	(12.0		)
Interest income and other	(0.4		)	(4.0		)	(4.3		)
Total interest expense and other	97.9			89.5			102.7
Income from continuing operations before income taxes	436.0			430.2			410.6
Income taxes	53.9			89.4			69.2
Income from continuing operations, net of tax	382.1			340.8			341.4
Loss from discontinued operations, net of tax	(5.9		)	(5.1		)	(19.5		)
Net income	376.2			335.7			321.9
Preferred dividend requirements of subsidiaries	17.9			15.9			18.3
Net income attributable to Alliant Energy common shareowners		$358.3			$319.8			$303.6
Weighted average number of common shares outstanding (basic and diluted)	110.8			110.8			110.7
Earnings per weighted average common share attributable to Alliant Energy common shareowners (basic and diluted):
Income from continuing operations, net of tax		$3.29			$2.93			$2.92
Loss from discontinued operations, net of tax	(0.06		)	(0.04		)	(0.18		)
Net income		$3.23			$2.89			$2.74
Amounts attributable to Alliant Energy common shareowners:
Income from continuing operations, net of tax		$364.2			$324.9			$323.1
Loss from discontinued operations, net of tax	(5.9		)	(5.1		)	(19.5		)
Net income attributable to Alliant Energy common shareowners		$358.3			$319.8			$303.6

The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.

ALLIANT ENERGY CORPORATION

CONSOLIDATED BALANCE SHEETS



	December 31,
	2013			2012
	(in millions)
ASSETS
Property, plant and equipment:
Utility:
Electric plant		$9,415.7			$9,070.7
Gas plant	909.9			878.4
Other plant	547.9			506.2
Accumulated depreciation (accum. depr.)	(3,726.2		)	(3,513.0		)
Net plant	7,147.3			6,942.3
Construction work in progress:
Columbia Energy Center Units 1 and 2 emission controls (WPL)	265.0			130.4
Ottumwa Generating Station Unit 1 emission controls (IPL)	135.1			73.7
George Neal Generating Station Unit 3 emission controls (IPL)	54.6			26.5
Other	223.2			188.2
Other, less accum. depr. of $5.6 for both periods	22.3			21.2
Total utility	7,847.5			7,382.3
Non-regulated and other:
Non-regulated Generation, less accum. depr. of $40.0 and $31.0	249.4			258.6
Alliant Energy Corporate Services, Inc. and other, less accum. depr. of $214.2 and $200.2	229.6			197.1
Total non-regulated and other	479.0			455.7
Total property, plant and equipment	8,326.5			7,838.0
Current assets:
Cash and cash equivalents	9.8			21.2
Accounts receivable, less allowance for doubtful accounts:
Customer	81.8			94.9
Unbilled utility revenues	92.3			81.4
Other	299.2			209.4
Production fuel, at weighted average cost	103.6			103.1
Materials and supplies, at weighted average cost	69.6			63.1
Gas stored underground, at weighted average cost	38.6			37.7
Regulatory assets	53.9			83.5
Prepaid gross receipts tax	40.8			40.4
Deferred income tax assets	136.7			170.2
Other	84.9			89.4
Total current assets	1,011.2			994.3
Investments:
Investment in American Transmission Company LLC	272.1			257.0
Other	57.5			62.0
Total investments	329.6			319.0
Other assets:
Regulatory assets	1,359.3			1,528.9
Deferred charges and other	85.8			105.3
Total other assets	1,445.1			1,634.2
Total assets		$11,112.4			$10,785.5

The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.

ALLIANT ENERGY CORPORATION CONSOLIDATED BALANCE SHEETS (Continued)

	December 31,
	2013			2012
	(in millions, except per share and share amounts)
CAPITALIZATION AND LIABILITIES
Capitalization:
Alliant Energy Corporation common equity:
Common stock - $0.01 par value - 240,000,000 shares authorized; 110,943,669 and 110,987,400 shares outstanding		$1.1			$1.1
Additional paid-in capital	1,507.8			1,511.2
Retained earnings	1,780.7			1,630.7
Accumulated other comprehensive loss	(0.2		)	(0.8		)
Shares in deferred compensation trust - 227,469 and 216,030 shares at a weighted average cost of $35.25 and $33.61 per share	(8.0		)	(7.3		)
Total Alliant Energy Corporation common equity	3,281.4			3,134.9
Cumulative preferred stock of Interstate Power and Light Company	200.0			145.1
Noncontrolling interest	1.8			1.8
Total equity	3,483.2			3,281.8
Cumulative preferred stock of Wisconsin Power and Light Company	—			60.0
Long-term debt, net (excluding current portion)	2,977.8			3,136.6
Total capitalization	6,461.0			6,478.4
Current liabilities:
Current maturities of long-term debt	358.5			1.5
Commercial paper	279.4			217.5
Accounts payable	365.0			339.3
Regulatory liabilities	196.6			189.7
Accrued taxes	50.0			48.0
Accrued interest	50.7			48.0
Other	133.1			176.0
Total current liabilities	1,433.3			1,020.0
Other long-term liabilities and deferred credits:
Deferred income tax liabilities	2,112.7			1,934.2
Regulatory liabilities	624.9			726.4
Pension and other benefit obligations	206.6			364.0
Other	273.9			262.5
Total long-term liabilities and deferred credits	3,218.1			3,287.1
Commitments and contingencies (Note 16)
Total capitalization and liabilities		$11,112.4			$10,785.5

The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.

ALLIANT ENERGY CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS



	Year Ended December 31,
	2013			2012			2011
	(in millions)
Cash flows from operating activities:
Net income		$376.2			$335.7			$321.9
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization	370.9			332.9			323.8
Other amortizations	40.2			55.0			56.3
Deferred taxes and investment tax credits	108.3			143.3			10.2
Equity income from unconsolidated investments, net	(43.7		)	(41.3		)	(39.3		)
Distributions from equity method investments	35.4			34.2			32.3
Equity component of allowance for funds used during construction	(20.3		)	(14.1		)	(7.6		)
Non-cash valuation charges and other	(3.7		)	0.7			20.3
Other changes in assets and liabilities:
Accounts receivable	(49.2		)	61.3			(54.3		)
Sales of accounts receivable	(101.0		)	(10.0		)	75.0
Regulatory assets	140.5			(178.1		)	(413.1		)
Regulatory liabilities	(90.8		)	16.4			168.3
Deferred income taxes	101.9			69.7			147.3
Pension and other benefit obligations	(157.4		)	51.3			8.9
Other	23.7			(15.9		)	52.7
Net cash flows from operating activities	731.0			841.1			702.7
Cash flows used for investing activities:
Construction and acquisition expenditures:
Utility business - purchase of Riverside Energy Center	—			(403.5		)	—
Utility business - other	(731.6		)	(622.0		)	(608.1		)
Alliant Energy Corporate Services, Inc. and non-regulated businesses	(66.7		)	(132.6		)	(65.3		)
Proceeds from Franklin County wind project cash grant	62.4			—			—
Collections of advances for customer energy efficiency projects	16.6			22.9			31.0
Other	(35.4		)	(20.3		)	(9.7		)
Net cash flows used for investing activities	(754.7		)	(1,155.5		)	(652.1		)
Cash flows from (used for) financing activities:
Common stock dividends	(208.3		)	(199.3		)	(188.1		)
Preferred dividends paid by subsidiaries	(11.4		)	(15.9		)	(16.8		)
Payments to redeem cumulative preferred stock of IPL and WPL	(211.0		)	—			(40.0		)
Proceeds from issuance of cumulative preferred stock of IPL	200.0			—			—
Proceeds from issuance of long-term debt	250.0			385.0			0.4
Net change in commercial paper	11.9			164.7			55.4
Other	(18.9		)	(10.3		)	(9.4		)
Net cash flows from (used for) financing activities	12.3			324.2			(198.5		)
Net increase (decrease) in cash and cash equivalents	(11.4		)	9.8			(147.9		)
Cash and cash equivalents at beginning of period	21.2			11.4			159.3
Cash and cash equivalents at end of period		$9.8			$21.2			$11.4
Supplemental cash flows information:
Cash paid (refunded) during the period for:
Interest, net of capitalized interest		$171.7			$155.2			$157.6
Income taxes, net of refunds		($9.6	)		($20.3	)		($10.8	)
Significant non-cash investing and financing activities:
Accrued capital expenditures		$103.8			$105.3			$49.7

The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.

ALLIANT ENERGY CORPORATION

CONSOLIDATED STATEMENTS OF COMMON EQUITY



															Total
									Accumulated			Shares in			Alliant
			Additional						Other			Deferred			Energy
	Common		Paid-In			Retained			Comprehensive			Compensation			Common
	Stock		Capital			Earnings			Income (Loss)			Trust			Equity
	(in millions)
2011:
Beginning balance	$1.1			$1,506.8			$1,394.7			($1.4	)		($7.6	)		$2,893.6
Net income attributable to Alliant Energy common shareowners						303.6									303.6
Common stock dividends ($1.70 per share)						(188.1		)							(188.1		)
Other			4.0									(0.7		)	3.3
Other comprehensive income, net of tax									0.6						0.6
Ending balance	1.1		1,510.8			1,510.2			(0.8		)	(8.3		)	3,013.0
2012:
Net income attributable to Alliant Energy common shareowners						319.8									319.8
Common stock dividends ($1.80 per share)						(199.3		)							(199.3		)
Other			0.4									1.0			1.4
Ending balance	1.1		1,511.2			1,630.7			(0.8		)	(7.3		)	3,134.9
2013:
Net income attributable to Alliant Energy common shareowners						358.3									358.3
Common stock dividends ($1.88 per share)						(208.3		)							(208.3		)
Preferred stock issuance costs			(5.4		)										(5.4		)
Other			2.0									(0.7		)	1.3
Other comprehensive income, net of tax									0.6						0.6
Ending balance		$1.1		$1,507.8			$1,780.7			($0.2	)		($8.0	)		$3,281.4

The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.

MANAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The management of Interstate Power and Light Company and subsidiary (IPL) is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. IPL’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

IPL’s management assessed the effectiveness of IPL’s internal control over financial reporting as of December 31, 2013 using the criteria set forth in Internal Control - Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, IPL’s management concluded that, as of December 31, 2013, IPL’s internal control over financial reporting was effective.

/s/ Patricia L. Kampling

Patricia L. Kampling

Chairman and Chief Executive Officer

/s/ Thomas L. Hanson

Thomas L. Hanson

Senior Vice President and Chief Financial Officer

/s/ Robert J. Durian

Robert J. Durian

Controller and Chief Accounting Officer

February 25, 2014

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareowners of

Interstate Power and Light Company

Cedar Rapids, Iowa

We have audited the accompanying consolidated balance sheets of Interstate Power and Light Company and subsidiary (the “Company”) as of December 31, 2013 and 2012, and the related consolidated statements of income, common equity, and cash flows for each of the three years in the period ended December 31, 2013. Our audits also included the financial statement schedule listed in the Index at Item 15. These financial statements and the financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on the financial statements and the financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2013 and 2012, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2013, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, the financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

/s/ DELOITTE & TOUCHE LLP

DELOITTE & TOUCHE LLP

Milwaukee, Wisconsin

February 25, 2014

INTERSTATE POWER AND LIGHT COMPANY

CONSOLIDATED STATEMENTS OF INCOME



	Year Ended December 31,
	2013			2012			2011
	(in millions)
Operating revenues:
Electric utility		$1,491.8			$1,371.1			$1,408.3
Gas utility	273.9			226.7			276.3
Steam and other	53.1			52.5			55.5
Total operating revenues	1,818.8			1,650.3			1,740.1
Operating expenses:
Electric production fuel and energy purchases	382.1			344.5			383.1
Purchased electric capacity	155.2			153.7			147.7
Electric transmission service	301.4			235.0			219.2
Cost of gas sold	160.3			124.9			175.6
Other operation and maintenance	362.3			350.0			375.0
Depreciation and amortization	191.1			188.9			179.1
Taxes other than income taxes	54.4			53.0			52.0
Total operating expenses	1,606.8			1,450.0			1,531.7
Operating income	212.0			200.3			208.4
Interest expense and other:
Interest expense	81.3			78.5			78.7
Allowance for funds used during construction	(21.0		)	(8.4		)	(5.8		)
Interest income and other	(0.3		)	(0.2		)	(0.2		)
Total interest expense and other	60.0			69.9			72.7
Income before income taxes	152.0			130.4			135.7
Income tax benefit	(37.9		)	(19.8		)	(3.6		)
Net income	189.9			150.2			139.3
Preferred dividend requirements	16.3			12.6			15.0
Earnings available for common stock		$173.6			$137.6			$124.3

Earnings per share data is not disclosed given Alliant Energy Corporation is the sole shareowner of all shares of IPL’s common stock outstanding during the periods presented.

The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.

INTERSTATE POWER AND LIGHT COMPANY

CONSOLIDATED BALANCE SHEETS



	December 31,
	2013			2012
	(in millions)
ASSETS
Property, plant and equipment:
Electric plant		$5,034.9			$4,815.2
Gas plant	456.8			441.4
Steam and other plant	302.8			289.1
Accumulated depreciation	(2,025.3		)	(1,930.7		)
Net plant	3,769.2			3,615.0
Construction work in progress:
Ottumwa Generating Station Unit 1 emission controls	135.1			73.7
George Neal Generating Station Unit 3 emission controls	54.6			26.5
Other	156.7			123.2
Other, less accumulated depreciation of $4.1 for both periods	21.2			19.8
Total property, plant and equipment	4,136.8			3,858.2
Current assets:
Cash and cash equivalents	4.4			4.5
Accounts receivable, less allowance for doubtful accounts	246.9			95.0
Production fuel, at weighted average cost	75.6			75.2
Materials and supplies, at weighted average cost	39.4			33.3
Gas stored underground, at weighted average cost	18.9			17.2
Regulatory assets	28.5			47.6
Deferred income tax assets	87.7			79.3
Other	34.5			39.5
Total current assets	535.9			391.6
Investments	18.6			17.6
Other assets:
Regulatory assets	1,085.0			1,170.3
Deferred charges and other	29.7			19.3
Total other assets	1,114.7			1,189.6
Total assets		$5,806.0			$5,457.0

The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.

INTERSTATE POWER AND LIGHT COMPANY CONSOLIDATED BALANCE SHEETS (Continued)

	December 31,
	2013		2012
	(in millions, except per share and share amounts)
CAPITALIZATION AND LIABILITIES
Capitalization:
Interstate Power and Light Company common equity:
Common stock - $2.50 par value - 24,000,000 shares authorized; 13,370,788 shares outstanding		$33.4		$33.4
Additional paid-in capital	1,152.8		1,037.8
Retained earnings	493.5		448.0
Total Interstate Power and Light Company common equity	1,679.7		1,519.2
Cumulative preferred stock	200.0		145.1
Total equity	1,879.7		1,664.3
Long-term debt, net (excluding current portion)	1,520.0		1,359.5
Total capitalization	3,399.7		3,023.8
Current liabilities:
Current maturities of long-term debt	38.4		—
Commercial paper	—		26.3
Accounts payable	187.1		163.2
Accounts payable to associated companies	29.1		29.3
Regulatory liabilities	143.8		130.1
Accrued taxes	51.1		46.8
Other	74.8		73.1
Total current liabilities	524.3		468.8
Other long-term liabilities and deferred credits:
Deferred income tax liabilities	1,193.0		1,087.3
Regulatory liabilities	471.1		571.3
Pension and other benefit obligations	48.6		122.9
Other	169.3		182.9
Total other long-term liabilities and deferred credits	1,882.0		1,964.4
Commitments and contingencies (Note 16)
Total capitalization and liabilities		$5,806.0		$5,457.0

The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.

INTERSTATE POWER AND LIGHT COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS



	Year Ended December 31,
	2013			2012			2011
	(in millions)
Cash flows from operating activities:
Net income		$189.9			$150.2			$139.3
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization	191.1			188.9			179.1
Deferred tax expense (benefit) and investment tax credits	4.2			19.3			(58.6		)
Equity component of allowance for funds used during construction	(13.8		)	(5.2		)	(3.5		)
Non-cash valuation charges and other	(0.7		)	10.6			23.5
Other changes in assets and liabilities:
Accounts receivable	(55.9		)	(0.7		)	22.4
Sales of accounts receivable	(101.0		)	(10.0		)	75.0
Regulatory assets	71.4			(129.0		)	(328.8		)
Regulatory liabilities	(82.3		)	(12.1		)	156.3
Deferred income taxes	92.4			64.6			145.5
Pension and other benefit obligations	(74.3		)	21.0			(8.3		)
Other	11.6			(6.6		)	25.0
Net cash flows from operating activities	232.6			291.0			366.9
Cash flows used for investing activities:
Utility construction and acquisition expenditures	(400.2		)	(307.5		)	(293.7		)
Proceeds from sale of wind project assets to affiliate	—			—			115.3
Other	(23.1		)	(23.7		)	(22.2		)
Net cash flows used for investing activities	(423.3		)	(331.2		)	(200.6		)
Cash flows from (used for) financing activities:
Common stock dividends	(128.1		)	(122.9		)	(73.4		)
Preferred stock dividends	(10.8		)	(12.6		)	(13.5		)
Capital contributions from parent	120.0			110.0			54.0
Repayment of capital to parent	—			—			(100.7		)
Payments to redeem cumulative preferred stock	(150.0		)	—			(40.0		)
Proceeds from issuance of cumulative preferred stock	200.0			—			—
Proceeds from issuance of long-term debt	250.0			—			—
Net change in commercial paper	(76.3		)	69.2			7.1
Other	(14.2		)	(1.1		)	(3.4		)
Net cash flows from (used for) financing activities	190.6			42.6			(169.9		)
Net increase (decrease) in cash and cash equivalents	(0.1		)	2.4			(3.6		)
Cash and cash equivalents at beginning of period	4.5			2.1			5.7
Cash and cash equivalents at end of period		$4.4			$4.5			$2.1
Supplemental cash flows information:
Cash paid (refunded) during the period for:
Interest		$80.7			$78.3			$78.0
Income taxes, net of refunds		($0.1	)		$3.3			$25.3
Significant non-cash investing and financing activities:
Accrued capital expenditures		$58.1			$53.4			$23.9

The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.

INTERSTATE POWER AND LIGHT COMPANY

CONSOLIDATED STATEMENTS OF COMMON EQUITY



									Total
			Additional						IPL
	Common		Paid-In			Retained			Common
	Stock		Capital			Earnings			Equity
	(in millions)
2011:
Beginning balance		$33.4		$974.0			$382.4			$1,389.8
Earnings available for common stock						124.3			124.3
Common stock dividends						(73.4		)	(73.4		)
Capital contribution from parent			54.0						54.0
Repayment of capital to parent			(100.7		)				(100.7		)
Other			0.4						0.4
Ending balance	33.4		927.7			433.3			1,394.4
2012:
Earnings available for common stock						137.6			137.6
Common stock dividends						(122.9		)	(122.9		)
Capital contribution from parent			110.0						110.0
Other			0.1						0.1
Ending balance	33.4		1,037.8			448.0			1,519.2
2013:
Earnings available for common stock						173.6			173.6
Common stock dividends						(128.1		)	(128.1		)
Capital contribution from parent			120.0						120.0
Preferred stock issuance costs			(5.4		)				(5.4		)
Other			0.4						0.4
Ending balance		$33.4		$1,152.8			$493.5			$1,679.7

The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.

MANAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The management of Wisconsin Power and Light Company and subsidiary (WPL) is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. WPL’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

WPL’s management assessed the effectiveness of WPL’s internal control over financial reporting as of December 31, 2013 using the criteria set forth in Internal Control - Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, WPL’s management concluded that, as of December 31, 2013, WPL’s internal control over financial reporting was effective.

/s/ Patricia L. Kampling

Patricia L. Kampling

Chairman and Chief Executive Officer

/s/ Thomas L. Hanson

Thomas L. Hanson

Senior Vice President and Chief Financial Officer

/s/ Robert J. Durian

Robert J. Durian

Controller and Chief Accounting Officer

February 25, 2014

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareowner of

Wisconsin Power and Light Company

Madison, Wisconsin

We have audited the accompanying consolidated balance sheets of Wisconsin Power and Light Company and subsidiary (the “Company”) as of December 31, 2013 and 2012, and the related consolidated statements of income, common equity, and cash flows for each of the three years in the period ended December 31, 2013. Our audits also included the financial statement schedule listed in the Index at Item 15. These financial statements and the financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on the financial statements and the financial statement schedule based on our audits.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2013 and 2012, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2013, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, the financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

/s/ DELOITTE & TOUCHE LLP

DELOITTE & TOUCHE LLP

Milwaukee, Wisconsin

February 25, 2014

WISCONSIN POWER AND LIGHT COMPANY

CONSOLIDATED STATEMENTS OF INCOME



	Year Ended December 31,
	2013			2012			2011
	(in millions)
Operating revenues:
Electric utility		$1,197.2			$1,218.2			$1,227.5
Gas utility	190.9			169.6			200.4
Other	18.2			4.2			6.5
Total operating revenues	1,406.3			1,392.0			1,434.4
Operating expenses:
Electric production fuel and energy purchases	342.9			367.8			381.4
Purchased electric capacity	61.6			117.8			109.5
Electric transmission service	116.9			106.3			104.6
Cost of gas sold	116.4			92.3			119.6
Other operation and maintenance	258.4			240.0			255.2
Depreciation and amortization	172.2			140.9			140.1
Taxes other than income taxes	41.8			42.1			43.6
Total operating expenses	1,110.2			1,107.2			1,154.0
Operating income	296.1			284.8			280.4
Interest expense and other:
Interest expense	85.0			80.2			79.9
Equity income from unconsolidated investments	(43.7		)	(42.1		)	(38.7		)
Allowance for funds used during construction	(9.8		)	(13.5		)	(6.2		)
Interest income and other	(0.1		)	(0.1		)	—
Total interest expense and other	31.4			24.5			35.0
Income before income taxes	264.7			260.3			245.4
Income taxes	87.2			94.6			81.9
Net income	177.5			165.7			163.5
Preferred dividend requirements	1.6			3.3			3.3
Earnings available for common stock		$175.9			$162.4			$160.2

Earnings per share data is not disclosed given Alliant Energy Corporation is the sole shareowner of all shares of WPL’s common stock outstanding during the periods presented.

The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.

WISCONSIN POWER AND LIGHT COMPANY

CONSOLIDATED BALANCE SHEETS



	December 31,
	2013			2012
	(in millions)
ASSETS
Property, plant and equipment:
Electric plant		$4,380.8			$4,255.5
Gas plant	453.1			437.0
Other plant	245.1			217.1
Accumulated depreciation	(1,700.9		)	(1,582.3		)
Net plant	3,378.1			3,327.3
Leased Sheboygan Falls Energy Facility, less accumulated amortization of $52.9 and $46.7	70.9			77.0
Construction work in progress:
Columbia Energy Center Units 1 and 2 emission controls	265.0			130.4
Other	66.5			65.0
Other, less accumulated depreciation of $1.5 for both periods	1.1			1.4
Total property, plant and equipment	3,781.6			3,601.1
Current assets:
Cash and cash equivalents	0.5			0.7
Accounts receivable, less allowance for doubtful accounts:
Customer	73.0			83.3
Unbilled utility revenues	92.3			81.4
Other	33.1			48.5
Production fuel, at weighted average cost	28.0			27.9
Materials and supplies, at weighted average cost	28.9			28.5
Gas stored underground, at weighted average cost	19.7			20.5
Regulatory assets	25.4			35.9
Prepaid gross receipts tax	40.8			40.4
Deferred income tax assets	43.3			85.6
Other	17.6			16.0
Total current assets	402.6			468.7
Investments:
Investment in American Transmission Company LLC	272.1			257.0
Other	19.5			19.6
Total investments	291.6			276.6
Other assets:
Regulatory assets	274.3			358.6
Deferred charges and other	54.3			57.6
Total other assets	328.6			416.2
Total assets		$4,804.4			$4,762.6

The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.

WISCONSIN POWER AND LIGHT COMPANY CONSOLIDATED BALANCE SHEETS (Continued)

	December 31,
	2013		2012
	(in millions, except per share and share amounts)
CAPITALIZATION AND LIABILITIES
Capitalization:
Wisconsin Power and Light Company common equity:
Common stock - $5 par value - 18,000,000 shares authorized; 13,236,601 shares outstanding		$66.2		$66.2
Additional paid-in capital	959.0		959.2
Retained earnings	617.2		557.6
Total Wisconsin Power and Light Company common equity	1,642.4		1,583.0
Cumulative preferred stock	—		60.0
Long-term debt, net (excluding current portion)	1,323.6		1,331.5
Total capitalization	2,966.0		2,974.5
Current liabilities:
Current maturities of long-term debt	8.5		—
Commercial paper	183.7		86.6
Accounts payable	120.0		126.4
Accounts payable to associated companies	26.0		13.2
Regulatory liabilities	52.8		59.6
Accrued taxes	1.4		28.3
Accrued interest	22.2		22.2
Other	36.9		49.2
Total current liabilities	451.5		385.5
Other long-term liabilities and deferred credits:
Deferred income tax liabilities	897.1		844.1
Regulatory liabilities	153.8		155.1
Capital lease obligations - Sheboygan Falls Energy Facility	94.5		99.1
Pension and other benefit obligations	88.4		159.7
Other	153.1		144.6
Total long-term liabilities and deferred credits	1,386.9		1,402.6
Commitments and contingencies (Note 16)
Total capitalization and liabilities		$4,804.4		$4,762.6

The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.

WISCONSIN POWER AND LIGHT COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS



	Year Ended December 31,
	2013			2012			2011
	(in millions)
Cash flows from operating activities:
Net income		$177.5			$165.7			$163.5
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization	172.2			140.9			140.1
Other amortizations	29.5			43.7			42.4
Deferred taxes and investment tax credits	86.5			88.6			93.7
Equity income from unconsolidated investments	(43.7		)	(42.1		)	(38.7		)
Distributions from equity method investments	35.4			34.2			32.3
Equity component of allowance for funds used during construction	(6.5		)	(8.9		)	(4.1		)
Non-cash valuation charges and other	(0.2		)	(2.9		)	10.8
Other changes in assets and liabilities:
Income tax refunds receivable	(0.3		)	(2.9		)	39.9
Regulatory assets	69.1			(49.1		)	(84.3		)
Regulatory liabilities	(8.5		)	28.5			12.0
Accrued taxes	(26.9		)	19.2			(2.1		)
Pension and other benefit obligations	(71.3		)	31.7			8.8
Other	10.5			(19.2		)	14.5
Net cash flows from operating activities	423.3			427.4			428.8
Cash flows used for investing activities:
Utility construction and acquisition expenditures:
Purchase of Riverside Energy Center	—			(403.5		)	—
Other	(331.4		)	(314.5		)	(314.4		)
Collections of advances for customer energy efficiency projects	15.8			20.9			26.8
Other	(20.3		)	(13.1		)	(17.8		)
Net cash flows used for investing activities	(335.9		)	(710.2		)	(305.4		)
Cash flows from (used for) financing activities:
Common stock dividends	(116.3		)	(112.0		)	(112.1		)
Preferred stock dividends	(0.6		)	(3.3		)	(3.3		)
Capital contributions from parent	—			90.0			25.0
Payments to redeem cumulative preferred stock	(61.0		)	—			—
Proceeds from issuance of long-term debt	—			250.0			—
Net change in commercial paper	97.1			60.9			(21.7		)
Other	(6.8		)	(4.8		)	(8.7		)
Net cash flows from (used for) financing activities	(87.6		)	280.8			(120.8		)
Net increase (decrease) in cash and cash equivalents	(0.2		)	(2.0		)	2.6
Cash and cash equivalents at beginning of period	0.7			2.7			0.1
Cash and cash equivalents at end of period		$0.5			$0.7			$2.7
Supplemental cash flows information:
Cash paid (refunded) during the period for:
Interest		$85.0			$79.5			$79.9
Income taxes, net of refunds		$22.9			($3.3	)		($51.3	)
Significant non-cash investing and financing activities:
Accrued capital expenditures		$37.7			$39.5			$19.7

The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.

WISCONSIN POWER AND LIGHT COMPANY

CONSOLIDATED STATEMENTS OF COMMON EQUITY



									Total
			Additional						WPL
	Common		Paid-In			Retained			Common
	Stock		Capital			Earnings			Equity
	(in millions)
2011:
Beginning balance		$66.2		$844.0			$459.1			$1,369.3
Earnings available for common stock						160.2			160.2
Common stock dividends						(112.1		)	(112.1		)
Capital contribution from parent			25.0						25.0
Ending balance	66.2		869.0			507.2			1,442.4
2012:
Earnings available for common stock						162.4			162.4
Common stock dividends						(112.0		)	(112.0		)
Capital contribution from parent			90.0						90.0
Other			0.2						0.2
Ending balance	66.2		959.2			557.6			1,583.0
2013:
Earnings available for common stock						175.9			175.9
Common stock dividends						(116.3		)	(116.3		)
Other			(0.2		)				(0.2		)
Ending balance		$66.2		$959.0			$617.2			$1,642.4

The accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.

ALLIANT ENERGY CORPORATION

INTERSTATE POWER AND LIGHT COMPANY

WISCONSIN POWER AND LIGHT COMPANY

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) General -

Description of Business - Alliant Energy’s consolidated financial statements include the accounts of Alliant Energy and its consolidated subsidiaries. Alliant Energy is an investor-owned public utility holding company, whose primary wholly-owned subsidiaries are IPL, WPL, Resources and Corporate Services.

IPL’s consolidated financial statements include the accounts of IPL and its consolidated subsidiary, IPL SPE LLC, which is used for IPL’s sales of accounts receivable program. IPL is a direct subsidiary of Alliant Energy and is engaged principally in the generation and distribution of electricity and the distribution and transportation of natural gas. IPL is also engaged in the generation and distribution of steam for two customers in Cedar Rapids, Iowa. IPL’s service territories are located in Iowa and southern Minnesota. Refer to Note 3(a) for discussion of IPL’s proposed sales of its Minnesota electric and natural gas distribution assets.

WPL’s consolidated financial statements include the accounts of WPL and its consolidated subsidiary, WPL Transco, which holds WPL’s investment in ATC. WPL is a direct subsidiary of Alliant Energy and is engaged principally in the generation and distribution of electricity and the distribution and transportation of natural gas. WPL’s service territories are located in southern and central Wisconsin.

Resources is comprised of Transportation, Non-regulated Generation and other non-regulated investments. Transportation includes a short-line railway that provides freight service between Cedar Rapids, Iowa and Iowa City, Iowa; barge terminal and hauling services on the Mississippi River; and other transfer and storage services. Non-regulated Generation owns Sheboygan Falls, a 347 MW, simple-cycle, natural gas-fired EGU near Sheboygan Falls, Wisconsin, which is leased to WPL for an initial period of 20 years ending in 2025. In addition, Non-regulated Generation owns the non-regulated 99 MW Franklin County wind project located in Franklin County, Iowa. Refer to Note 19 for discussion of the IEA business and RMT’s environmental consulting and engineering services business unit, which were both sold in 2011, and the remaining portion of Alliant Energy’s RMT business, which was sold in 2013.

Corporate Services is the subsidiary formed to provide administrative services to Alliant Energy and its subsidiaries.

Basis of Presentation - The consolidated financial statements reflect investments in controlled subsidiaries on a consolidated basis and Alliant Energy’s, IPL’s and WPL’s proportionate shares of jointly-owned utility EGUs. Unconsolidated investments, which Alliant Energy and WPL do not control, but do have the ability to exercise significant influence over operating and financial policies, are accounted for under the equity method of accounting. Investments that do not meet the criteria for consolidation or the equity method of accounting are accounted for under the cost method. Alliant Energy, IPL and WPL did not reflect any VIEs on a consolidated basis in the consolidated financial statements. Refer to Notes 1(n) and 6(a) for further discussion of VIEs and equity method investments, respectively.

All intercompany balances and transactions, other than certain transactions affecting the rate-making process at IPL and WPL, have been eliminated from the consolidated financial statements. Such transactions not eliminated include costs that are recoverable from customers through rate-making processes. The consolidated financial statements are prepared in conformity with GAAP, which give recognition to the rate-making and accounting practices of FERC and state commissions having regulatory jurisdiction. Certain prior period amounts in the Consolidated Financial Statements and Combined Notes to Consolidated Financial Statements have been reclassified to conform to the current period presentation for comparative purposes. Unless otherwise noted, the notes herein exclude discontinued operations and assets and liabilities held for sale for all periods presented.

Use of Estimates - The preparation of the consolidated financial statements requires management to make estimates and assumptions that affect: (a) the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements; and (b) the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

(b) Regulatory Assets and Regulatory Liabilities - Alliant Energy, IPL and WPL are subject to regulation by FERC and various state regulatory commissions. As a result, Alliant Energy, IPL and WPL are subject to GAAP provisions for regulated operations, which provide that rate-regulated public utilities record certain costs and credits allowed in the rate-making process in different periods than for non-regulated entities. Regulatory assets generally represent incurred costs that have been deferred as they are probable of recovery in future customer rates. Regulatory liabilities generally represent obligations to make refunds to customers and amounts collected in rates for which the related costs have not yet been incurred. Amounts deferred as regulatory assets or accrued as regulatory liabilities are generally recognized in the Consolidated Statements of Income at the time they are reflected in rates. Refer to Note 2 for additional discussion of regulatory assets and regulatory liabilities.

(c) Income Taxes - Alliant Energy, IPL and WPL follow the liability method of accounting for deferred income taxes, which requires the establishment of deferred income tax assets and liabilities, as appropriate, for temporary differences between the tax basis of assets and liabilities and the amounts reported in the consolidated financial statements. Deferred income taxes are recorded using currently enacted tax rates and estimates of state apportionment rates. Changes in deferred income tax assets and liabilities associated with certain property-related differences at IPL are accounted for differently than other subsidiaries of Alliant Energy due to rate-making practices in Iowa. Rate-making practices in Iowa do not include the impact of certain deferred tax expenses (benefits) in the determination of retail rates. Based on these rate-making practices, deferred tax expense (benefit) related to these property-related differences at IPL is not recorded in the income statement but instead charged to regulatory assets or regulatory liabilities until these temporary differences reverse. Refer to Note 2 for further discussion of regulatory assets and regulatory liabilities associated with property-related differences at IPL. In Wisconsin, the PSCW has allowed rate recovery of deferred taxes on all temporary differences since 1991.

Alliant Energy, IPL and WPL recognize positions taken, or expected to be taken, in income tax returns that are more-likely-than-not to be realized, assuming that the position will be examined by tax authorities with full knowledge of all relevant information. If it is more-likely-than-not that a tax position, or some portion thereof, will not be sustained, the related tax benefits are not recognized in the consolidated financial statements. Uncertain tax positions may result in an increase in income taxes payable, a reduction of income tax refunds receivable or changes in deferred income taxes. Also, when uncertainty about the deductibility of an amount is limited to the timing of such deductibility, the increase in taxes payable (or reduction in tax refunds receivable) is accompanied by offsetting changes in deferred income taxes. Generally Alliant Energy, IPL and WPL recognize current taxes payable related to uncertain tax positions in “Accrued taxes” and non-current taxes payable related to uncertain tax positions in “Other long-term liabilities and deferred credits” on the Consolidated Balance Sheets. However, if the uncertain tax position would be settled through the reduction of a net operating loss rather than through the payment of cash, the uncertain tax position is reflected in deferred income taxes on the Consolidated Balance Sheets. Refer to Note 11 for further discussion of uncertain tax positions.

Alliant Energy, IPL and WPL defer investment tax credits and amortize the credits to income over the average lives of the related property. Other tax credits for Alliant Energy, IPL and WPL reduce income tax expense in the year claimed.

Alliant Energy, IPL and WPL have elected the alternative transition method to calculate their beginning pool of excess tax benefits available to absorb any tax deficiencies associated with recognition of share-based payment awards.

Alliant Energy files a consolidated federal income tax return, which includes the aggregate taxable income or loss of Alliant Energy and its subsidiaries. In addition, a combined return including Alliant Energy and all of its subsidiaries is filed in Wisconsin. Alliant Energy subsidiaries with a presence in Iowa file as part of a consolidated return in Iowa. Under the terms of a tax sharing agreement between Alliant Energy and its subsidiaries, the subsidiaries calculate state income tax using consolidated apportionment rates applied to separate company taxable income.

(d) Cash and Cash Equivalents - Cash and cash equivalents include short-term liquid investments that have original maturities of less than 90 days.

(e) Property, Plant and Equipment -

Utility -

General - Utility plant is recorded at the original cost of acquisition or construction, which includes material, labor, contractor services, AFUDC and allocable overheads, such as supervision, engineering, benefits, certain taxes and transportation. Repairs, replacements and renewals of items of property determined to be less than a unit of property or that do not increase the property’s life or functionality are charged to maintenance expense. Ordinary retirements of utility plant and salvage value are netted and charged to accumulated depreciation upon removal from utility plant accounts and no gain

or loss is recognized consistent with rate-making policies. Removal costs incurred reduce the regulatory liability. Property, plant and equipment that is probable of being retired early is classified as plant anticipated to be retired early.

Depreciation - IPL and WPL use a combination of remaining life and straight-line depreciation methods as approved by their respective regulatory commissions. The composite or group method of depreciation is used, in which a single depreciation rate is applied to the gross investment in a particular class of property. This method pools similar assets and then depreciates each group as a whole. Periodic depreciation studies are performed to determine the appropriate group lives, net salvage, estimated cost of removal and group depreciation rates. These depreciation studies are subject to review and approval by IPL’s and WPL’s respective regulatory commissions. Depreciation expense is included within the recoverable cost of service component of rates charged to customers. The average rates of depreciation for electric, gas and other properties, consistent with current rate-making practices, were as follows:



	IPL			WPL
	2013	2012	2011	2013 (a)	2012	2011
Electric - generation	3.6%	3.7%	3.5%	3.3%	3.2%	3.3%
Electric - distribution	2.5%	2.5%	2.4%	2.7%	2.9%	2.9%
Gas	3.4%	3.4%	3.5%	2.5%	2.6%	2.6%
Other	4.4%	4.5%	4.8%	5.1%	5.3%	5.2%


(a)	In 2012, the PSCW issued an order approving the implementation of updated depreciation rates for WPL effective January 1, 2013 as a result of a recently completed depreciation study. In 2013, the PSCW and FERC issued orders approving WPL’s requests to revise depreciation rates associated with the acquisition of Riverside effective January 1, 2013.

AFUDC - AFUDC represents costs to finance construction additions including a return on equity component and cost of debt component as required by regulatory accounting. AFUDC for IPL’s construction projects is calculated in accordance with FERC guidelines. AFUDC for WPL’s retail and wholesale jurisdiction construction projects is calculated in accordance with PSCW and FERC guidelines, respectively. The AFUDC recovery rates, computed in accordance with the prescribed regulatory formula, were as follows:



	2013	2012	2011
IPL (FERC formula)	8.2%	8.2%	8.5%
WPL (PSCW formula - retail jurisdiction) (a)	8.2%	8.8%	8.8%
WPL (FERC formula - wholesale jurisdiction)	4.5%	7.9%	6.2%


(a)	Consistent with the PSCW’s retail rate case order issued in 2009, WPL accrued AFUDC on 100% of CWIP related to the Edgewater Unit 5 SCR emission controls project and the Columbia Units 1 and 2 scrubber and baghouse emission controls project in 2012 and 2011. Consistent with the PSCW’s retail rate case order issued in 2012, WPL earned a return on 50% of the estimated CWIP related to its Columbia Units 1 and 2 scrubber and baghouse emission controls project for 2013 and accrued AFUDC on the remaining 50% in 2013.

(a)

Consistent with the PSCW’s retail rate case order issued in 2009, WPL accrued AFUDC on 100% of CWIP related to the Edgewater Unit 5 SCR emission controls project and the Columbia Units 1 and 2 scrubber and baghouse emission controls project in 2012 and 2011. Consistent with the PSCW’s retail rate case order issued in 2012, WPL earned a return on 50% of the estimated CWIP related to its Columbia Units 1 and 2 scrubber and baghouse emission controls project for 2013 and accrued AFUDC on the remaining 50% in 2013.

Non-regulated and Other -

General - Non-regulated and other property, plant and equipment is recorded at the original cost of acquisition or construction, which includes material, labor and contractor services. Repairs, replacements and renewals of items of property determined to be less than a unit of property or that do not increase the property’s life or functionality are charged to maintenance expense. Upon retirement or sale of non-regulated and other property, plant and equipment, the original cost and related accumulated depreciation are removed from the accounts and any gain or loss is included in the Consolidated Statements of Income.

(f) Operating Revenues -

Utility - Revenues from Alliant Energy’s utility business are primarily from electricity and natural gas sales and are recognized on an accrual basis as services are rendered or commodities are delivered to customers. Energy sales to individual customers are based on the reading of customers’ meters, which occurs on a systematic basis throughout each reporting period. Amounts of energy delivered to customers since the date of the last meter reading are estimated at the end of each reporting period and the corresponding estimated unbilled revenue is recorded in such reporting period. The unbilled revenue estimate is based on daily system demand volumes, estimated customer usage by class, weather impacts, line losses and the most recent customer rates.

IPL and WPL accrue revenues from their wholesale customers to the extent that the actual net revenue requirements calculated in accordance with FERC-approved formula rates for the reporting period are higher or lower than the amounts billed to wholesale customers during such period. In accordance with authoritative guidance, regulatory assets or regulatory liabilities are recorded as the offset for these accrued revenues under formulaic rate-making programs. IPL’s estimated recovery amount is recorded in the current period of service and is reflected in customer bills within two years under the provisions of approved formula rates. WPL’s estimated recovery amount is recorded in the current period of service and subject to final adjustments after a customer audit period in the subsequent year. Final settled recovery amounts are reflected in WPL’s customer bills within two years under the provisions of approved formula rates.

IPL and WPL participate in bid/offer-based wholesale energy and ancillary services markets operated by MISO. IPL’s and WPL’s customers and generating resources are located in the MISO region. MISO requires that all load serving entities and generation owners, including IPL and WPL, submit hourly day-ahead and/or real-time bids and offers for energy and ancillary services. The MISO day-ahead and real-time transactions are grouped together, resulting in a net supply to or net purchase from MISO for each hour of each day. The net supply to MISO is recorded in “Electric utility operating revenues” and the net purchase from MISO is recorded in “Electric production fuel and energy purchases” in the Consolidated Statements of Income. IPL and WPL also engage in transactions in PJM’s bid/offer-based wholesale energy market, which are accounted for similar to the MISO transactions.

Non-regulated - Revenues from Alliant Energy’s non-regulated businesses are primarily from its Transportation business and are recognized on an accrual basis as services are rendered or goods are delivered to customers.

Taxes Collected from Customers - Certain of Alliant Energy’s subsidiaries serve as collection agents for sales or various other taxes and record revenues on a net basis. Operating revenues do not include the collection of the aforementioned taxes.

(g) Utility Cost Recovery Mechanisms -

Electric Production Fuel and Energy Purchases (Fuel-related Costs) - Alliant Energy, IPL and WPL incur fuel-related costs each period to generate and purchase electricity to meet the demand of their electric customers. These fuel-related costs include the cost of fossil fuels (primarily coal and natural gas) used during each period to produce electricity at their EGUs, electricity purchased each period from wholesale energy markets (primarily MISO) and under PPAs, costs for allowances acquired to allow certain emissions (primarily SO2 and NOx) from their EGUs and costs for chemicals utilized to control emissions from their EGUs. Alliant Energy, IPL and WPL record these fuel-related costs in “Electric production fuel and energy purchases” in the Consolidated Statements of Income.

IPL Retail - The cost recovery mechanisms applicable for IPL’s retail electric customers provide for subsequent adjustments to their electric rates for changes in fuel-related costs. Fuel adjustment clause rules applicable to IPL’s Iowa retail jurisdiction also currently allow IPL to recover prudently incurred costs for emission allowances required to comply with EPA regulations including the Acid Rain program and CAIR through the fuel adjustment clause. Changes in the under-/over-collection of these costs each period are recognized in “Electric production fuel and energy purchases” in Alliant Energy’s and IPL’s Consolidated Statements of Income. The cumulative effects of the under-/over-collection of these costs are recorded in current “Regulatory assets” or current “Regulatory liabilities” on Alliant Energy’s and IPL’s Consolidated Balance Sheets until they are reflected in future billings to customers. The fuel adjustment clause rules applicable to IPL’s Iowa retail jurisdiction currently do not contain a provision for recovery of emission controls chemical costs to flow through the fuel adjustment clause. The fuel adjustment clause rules applicable to IPL’s Minnesota retail jurisdiction currently do not contain a provision for recovery of emission allowance costs or emission controls chemical costs through the fuel adjustment clause.

Effective February 22, 2014, IPL will recover the Iowa retail portion of the DAEC PPA costs from its Iowa retail electric customers through the fuel adjustment clause pursuant to a January 2013 IUB order. This PPA does not contain minimum payments for electric generating capacity.

WPL Retail - The cost recovery mechanisms applicable for WPL’s retail electric customers are based on forecasts of certain fuel-related costs expected to be incurred during forward-looking test year periods and fuel monitoring ranges determined by the PSCW during each electric retail rate proceeding or in a separate fuel cost plan approval proceeding. However, if WPL’s actual fuel-related costs fall outside these fuel monitoring ranges during the test period, WPL is authorized to defer the incremental under-/over-collection of fuel-related costs that are outside the approved ranges. Deferral of under-collections are reduced to the extent actual return on common equity earned by WPL during the fuel cost plan year exceeds the most recently authorized return on common equity. Deferred amounts for fuel-related costs outside the approved fuel monitoring ranges are recognized in “Electric production fuel and energy purchases” in Alliant Energy’s and WPL’s Consolidated Statements of Income each period. The cumulative effects of these deferred amounts are recorded in current “Regulatory assets” or current “Regulatory liabilities” on Alliant Energy’s and WPL’s Consolidated Balance Sheets until they are reflected

in future billings to customers. Effective January 2012, WPL’s retail fuel-related costs include costs for emission allowances and emission controls chemicals. Prior to 2012, WPL’s retail fuel-related costs excluded costs for emission allowances and emission controls chemicals.

IPL and WPL Wholesale - The cost recovery mechanisms applicable for IPL’s and WPL’s wholesale electric customers provide for subsequent adjustments to their electric rates for changes in fuel-related costs. Changes in the under-/over-collection of these costs are recognized in “Electric production fuel and energy purchases” in the Consolidated Statements of Income each period. The cumulative effects of the under-/over-collection of these costs are recorded in current “Regulatory assets” or current “Regulatory liabilities” on the Consolidated Balance Sheets until they are reflected in future billings to customers. IPL’s and WPL’s costs for emission allowances and emission controls chemicals are recovered through the capacity charge component of their respective wholesale formula rates.

Purchased Electric Capacity - Alliant Energy, IPL and WPL enter into PPAs to help meet the electricity demand of their customers. Certain of these PPAs include minimum payments for IPL’s and WPL’s rights to electric generating capacity, which are charged each period to “Purchased electric capacity” in the Consolidated Statements of Income. Purchased electric capacity expenses are recovered from IPL’s and WPL’s retail electric customers through changes in base rates determined during periodic rate proceedings. Purchased electric capacity expenses are recovered from IPL’s and WPL’s wholesale electric customers through annual changes in base rates determined by a formula rate structure.

Electric Transmission Service - Alliant Energy, IPL and WPL incur costs for the transmission of electricity to their customers and charge these costs each period to “Electric transmission service” in the Consolidated Statements of Income.

IPL Retail - Electric transmission service expenses are recovered from IPL’s Iowa retail electric customers through a transmission cost rider. This cost recovery mechanism provides for subsequent adjustments to electric rates charged to Iowa electric retail customers for changes in electric transmission service expenses. Changes in the under-/over-collection of these costs are recognized in “Electric transmission service” in Alliant Energy’s and IPL’s Consolidated Statements of Income each period. The cumulative effects of the under-/over-collection of these costs are recorded in current “Regulatory assets” or current “Regulatory liabilities” on Alliant Energy’s and IPL’s Consolidated Balance Sheets until they are reflected in future billings to customers. The transmission cost rider will remain in effect until the IUB’s final decision in IPL’s next retail electric base rate case, at which time the rider will continue in its current form, continue in a modified form or be terminated.

WPL Retail - Electric transmission service expenses are recovered from WPL’s retail electric customers through changes in base rates determined during periodic rate proceedings.

IPL and WPL Wholesale - Electric transmission service expenses are recovered from IPL’s and WPL’s wholesale electric customers through annual changes in base rates determined by a formula rate structure.

Cost of Gas Sold - Alliant Energy, IPL and WPL incur costs for the purchase, transportation and storage of natural gas to serve their gas customers and charge the costs associated with the natural gas delivered to customers during each period to “Cost of gas sold” in the Consolidated Statements of Income. The tariffs for IPL’s and WPL’s retail gas customers provide for subsequent adjustments to their rates for changes in the cost of gas sold. Changes in the under-/over-collection of these costs are also recognized in “Cost of gas sold” in the Consolidated Statements of Income each period. The cumulative effects of the under-/over-collection of these costs are recorded in current “Regulatory assets” or current “Regulatory liabilities” on the Consolidated Balance Sheets until they are reflected in future billings to customers.

Energy Efficiency Costs - Alliant Energy, IPL and WPL incur costs to fund energy efficiency programs and initiatives that help customers reduce their energy usage and charge the costs incurred for these programs and initiatives to “Utility - Other operation and maintenance” in the Consolidated Statements of Income each period. Energy efficiency costs incurred by IPL are recovered from its retail electric and gas customers in Iowa through an additional tariff called an EECR factor. EECR factors are revised annually and include a reconciliation to eliminate any under-/over-collection of energy efficiency costs from prior periods. Energy efficiency costs incurred by WPL are recovered from retail electric and gas customers through changes in base rates determined during periodic rate proceedings. Reconciliations of any under-/over-collection of energy efficiency costs from prior periods are also addressed in WPL’s periodic rate proceedings. Changes in the under-/over-collection of energy efficiency costs each period for IPL and WPL are recognized in “Utility - Other operation and maintenance” in the Consolidated Statements of Income. The cumulative effects of the under-/over-collection of these costs for IPL and WPL are recorded in current “Regulatory assets” or current “Regulatory liabilities” on the Consolidated Balance Sheets until they are reflected in future billings to customers.

Refer to Note 2 for additional information regarding these utility cost recovery mechanisms.

(h) Financial Instruments - Alliant Energy, IPL and WPL periodically use financial instruments for risk management purposes to mitigate exposures to fluctuations in certain commodity prices and transmission congestion costs. The fair value of those financial instruments that are determined to be derivatives are recorded as assets or liabilities on the Consolidated Balance Sheets. At the end of each reporting period, derivative instruments representing unrealized gain positions are reported as derivative assets, and derivative instruments representing unrealized loss positions are reported as derivative liabilities. Alliant Energy, IPL and WPL also have certain commodity purchase and sales contracts that quality for and have been designated under the normal purchase and sale exception, and based on this designation, such contracts are accounted for on the accrual basis of accounting. Alliant Energy, IPL and WPL have elected to not net the fair value amounts of derivatives subject to a master netting arrangement by counterparty. Alliant Energy, IPL and WPL do not offset fair value amounts recognized for the right to reclaim cash collateral (receivable) or the obligation to return cash collateral (payable) against fair value amounts recognized for derivative instruments executed with the same counterparty under the same master netting arrangement. Refer to Note 2 for discussion of the recognition of regulatory assets and regulatory liabilities related to the unrealized losses and gains on IPL’s and WPL’s derivative instruments. Refer to Notes 14, 15 and 16(f) for further discussion of derivatives and related credit risk.

(i) Asset Impairments -

Property, Plant and Equipment of Regulated Operations - Property, plant and equipment of regulated operations are reviewed for possible impairment whenever events or changes in circumstances indicate all or a portion of the carrying value of the assets may be disallowed for rate-making purposes. If IPL or WPL are disallowed recovery of any portion of the carrying value of their regulated property, plant and equipment that is under construction, has been recently completed or is probable of abandonment, an impairment charge is recognized equal to the amount of the carrying value that was disallowed. If IPL or WPL are disallowed a full or partial return on the carrying value of their regulated property, plant and equipment that is under construction, has been recently completed or is probable of abandonment, an impairment charge is recognized equal to the difference between the carrying value and the present value of the future revenues expected from their regulated property, plant and equipment. Refer to Note 3(a) for discussion of adjustments made by Alliant Energy and IPL in 2011 and 2013 to the carrying value of IPL’s Whispering Willow - East wind project, based on amounts IPL determined were probable of being disallowed for recovery from its Minnesota retail electric customers.

Property, Plant and Equipment of Non-regulated Operations - Property, plant and equipment of non-regulated operations are reviewed for possible impairment whenever events or changes in circumstances indicate the carrying value of the assets may not be recoverable. Impairment is indicated if the carrying value of an asset exceeds its undiscounted future cash flows. An impairment charge is recognized equal to the amount the carrying value exceeds the asset’s fair value.

Unconsolidated Equity Investments - If events or circumstances indicate the carrying value of investments accounted for under the equity method of accounting may not be recoverable, potential impairment is assessed by comparing the fair value of these investments to their carrying values as well as assessing if a decline in fair value is temporary. If an impairment is indicated, a charge is recognized equal to the amount the carrying value exceeds the investment’s fair value. Refer to Note 6(a) for additional discussion of investments accounted for under the equity method of accounting.

(j) Emission Allowances - Emission allowances are granted by the EPA at zero cost and permit the holder of the allowances to emit certain gaseous by-products of fossil fuel combustion, including SO2 and NOx. Unused emission allowances may be bought and sold or carried forward to be utilized in future years. Purchased emission allowances are recorded as intangible assets at their original cost and evaluated for impairment as long-lived assets to be held and used. Emission allowances allocated to or acquired by Alliant Energy, IPL or WPL are held primarily for consumption.

Amortization of emission allowances is based upon a weighted average cost for each category of vintage year utilized during the reporting period and is recorded in “Electric production fuel and energy purchases” in the Consolidated Statements of Income as follows (in millions):



	Alliant Energy			IPL			WPL
	2013	2012	2011	2013	2012	2011	2013	2012	2011
Amortization expense	$—	$—	$13.4	$—	$—	$12.9	$—	$—	$0.5

No amortization expense for emission allowances held at December 31, 2013 is currently expected to be recorded during 2014 through 2018.

Cash inflows and outflows related to sales and purchases of emission allowances are presented in investing activities in the Consolidated Statements of Cash Flows. Refer to Note 2 for information regarding regulatory assets related to emission allowances.

(k) Asset Retirement Obligations - The fair value of any retirement costs associated with an asset for which Alliant Energy, IPL and WPL have a legal obligation is recorded as a liability with an equivalent amount added to the asset cost when an asset is placed in service or when sufficient information becomes available to determine a reasonable estimate of the fair value of future retirement costs. The fair value of AROs is determined using discounted cash flows analyses. The liability is accreted to its present value each period and the capitalized cost is depreciated over the useful life of the related asset. Accretion and depreciation expenses related to AROs for IPL’s and WPL’s regulated operations are recorded to regulatory assets on the Consolidated Balance Sheets. Upon regulatory approval to recover IPL’s AROs expenditures, its regulatory assets are amortized to depreciation and amortization expense in Alliant Energy’s and IPL’s Consolidated Statements of Income over the same time period that IPL’s customer rates are increased to recover the ARO expenditures. Effective January 1, 2013, WPL’s regulatory assets related to AROs are being recovered as a component of depreciation rates included in the most recent depreciation study approved by the PSCW in its May 2012 order. Accretion and depreciation expenses related to AROs for Alliant Energy’s non-regulated operations are recorded to depreciation and amortization expense in Alliant Energy’s Consolidated Statements of Income. Upon settlement of the ARO liability, an entity settles the obligation for its recorded amount or incurs a gain or loss. Any gains or losses related to AROs for IPL’s and WPL’s regulated operations are recorded to regulatory liabilities or regulatory assets on the Consolidated Balance Sheets. Refer to Note 13 for additional discussion of AROs.

(l) Debt Issuance and Retirement Costs - Alliant Energy, IPL and WPL defer and amortize debt issuance costs and debt premiums or discounts over the expected lives of respective debt issues, considering maturity dates and, if applicable, redemption rights held by others. Alliant Energy’s non-regulated businesses and Corporate Services expense in the period of retirement any unamortized debt issuance costs and debt premiums or discounts on debt retired early. Refer to Note 2 for information on regulatory assets related to IPL’s and WPL’s debt retired early or refinanced.

(m) Allowance for Doubtful Accounts - Alliant Energy, IPL and WPL maintain allowances for doubtful accounts for estimated losses resulting from the inability of their customers to make required payments. Alliant Energy, IPL and WPL estimate the allowance for doubtful accounts based on historical write-offs, customer arrears and other economic factors within their service territories. Allowance for doubtful accounts at December 31 was as follows (in millions):



	Alliant Energy				IPL				WPL
	2013		2012		2013		2012		2013		2012
Customer (a)		$1.4		$1.3		$—		$—		$1.4		$1.3
Other	3.4		2.7		0.7		0.7		0.3		0.5
		$4.8		$4.0		$0.7		$0.7		$1.7		$1.8


(a)	Refer to Note 5(a) for discussion of IPL’s allowance for doubtful accounts, which is included in its sales of accounts receivable program.

(n) Variable Interest Entities - An entity is considered a VIE if its equity investors do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties or its equity investors lack any of the following characteristics: (1) power, through voting rights or similar rights, to direct the activities of the entity that most significantly impact the entity’s economic performance; (2) the obligation to absorb expected losses of the entity; or (3) the right to receive expected benefits of the entity. The primary beneficiary of a VIE is required to consolidate the VIE. Alliant Energy, IPL and WPL did not reflect any VIEs on a consolidated basis in the consolidated financial statements.

(o) Cash Flows Presentation - Alliant Energy presents cash flows from continuing operations together with cash flows from discontinued operations in its Consolidated Statements of Cash Flows.

(p) Comprehensive Income - In 2013, 2012 and 2011, Alliant Energy’s other comprehensive income was $0.6 million, $0 and $0.6 million, respectively; therefore, its comprehensive income was substantially equal to its net income and its comprehensive income attributable to Alliant Energy common shareowners was substantially equal to its net income attributable to Alliant Energy common shareowners for such periods. In 2013, 2012 and 2011, IPL and WPL had no other comprehensive income; therefore their comprehensive income was equal to their net income and their comprehensive income available for common stock was equal to their earnings available for common stock for such periods.

(2) REGULATORY MATTERS

Regulatory Assets - At December 31, regulatory assets were comprised of the following items (in millions):



	Alliant Energy				IPL				WPL
	2013		2012		2013		2012		2013		2012
Tax-related		$829.7		$770.7		$798.6		$746.2		$31.1		$24.5
Pension and other postretirement benefits costs	355.3		549.2		174.2		279.3		181.1		269.9
AROs	65.7		62.4		36.7		38.6		29.0		23.8
Emission allowances	30.0		30.0		30.0		30.0		—		—
Environmental-related costs	25.0		34.9		21.0		30.3		4.0		4.6
Derivatives	21.1		40.2		5.9		16.3		15.2		23.9
Debt redemption costs	17.9		19.8		12.2		13.6		5.7		6.2
IPL’s electric transmission service costs	8.3		16.6		8.3		16.6		—		—
Other	60.2		88.6		26.6		47.0		33.6		41.6
		$1,413.2		$1,612.4		$1,113.5		$1,217.9		$299.7		$394.5

A portion of the regulatory assets in the above table are not earning a return. These regulatory assets are expected to be recovered from customers in future rates; however, the respective carrying costs of these assets are not expected to be recovered from customers in future rates. At December 31, 2013, IPL and WPL had $39 million and $13 million, respectively, of regulatory assets representing past expenditures that were not earning a return. IPL’s regulatory assets that were not earning a return consisted primarily of debt redemption costs and electric transmission service costs. WPL’s regulatory assets that were not earning a return consisted primarily of amounts related to wholesale customer rate recovery, which is discussed in Note 1(f). The other regulatory assets reported in the above table either earn a return or the cash has not yet been expended, in which case the assets are offset by liabilities that also do not incur a carrying cost.

Tax-related - IPL and WPL record regulatory assets for certain temporary differences (primarily related to utility property, plant and equipment at IPL) that result in a decrease in current rates charged to customers and an increase in future rates charged to customers based on the timing of income tax expense that is used to determine such rates. These temporary differences include the impacts of qualifying deductions for repairs expenditures and allocation of mixed service costs, and Iowa accelerated tax depreciation, which all contribute to lower current income tax expense during the first part of an asset’s useful life and higher current tax expense during the last part of an asset’s useful life. These regulatory assets will be recovered from customers in the future when these temporary differences reverse resulting in additional current income tax expense used to determine customers’ rates. During 2013, Alliant Energy’s and IPL’s “Tax-related” regulatory assets in the above table increased primarily due to qualifying repairs expenditure deductions at IPL.

Pension and other postretirement benefits costs - The IUB and the PSCW have authorized IPL and WPL to record the retail portion of their respective previously unrecognized net actuarial gains and losses, and prior service costs and credits, as regulatory assets in lieu of AOCL on the Consolidated Balance Sheets, as these amounts are expected to be recovered in future rates. IPL and WPL also recognize the wholesale portion of their previously unrecognized net actuarial gains and losses, and prior service costs and credits, as regulatory assets on the Consolidated Balance Sheets because these costs are expected to be recovered in rates in future periods under the formula rate structure. These regulatory assets will be increased or decreased as the net actuarial gains or losses, and prior service costs or credits, are subsequently amortized and recognized as a component of net periodic benefit costs. Regulatory assets are also increased or decreased as a result of the annual defined benefit plan measurement process. During 2013, Alliant Energy’s, IPL’s and WPL’s pension and other postretirement benefits costs regulatory assets decreased due to a decrease in unrecognized net actuarial losses caused by higher discount rates and higher returns on assets compared to assumptions used in the annual defined benefit plan measurement process as of December 31, 2012.

Pension and other postretirement benefits costs are included within the recoverable cost of service component of rates charged to IPL’s and WPL’s customers. The recoverable costs included in customers’ rates are based upon pension and other postretirement benefits costs determined in accordance with GAAP and are calculated using different methods for the various regulatory jurisdictions in which IPL and WPL operate. The methods for IPL’s and WPL’s primary regulatory jurisdictions are described below. The IUB authorized IPL in its most recent Iowa retail electric rate case order to recover from its retail electric customers in Iowa an allocated portion of annual costs equal to a two-year simple average of actual costs incurred during its test year (2009) and an estimate of costs for its forward-looking post-test year (2010). The PSCW authorized WPL in its most recent Wisconsin retail rate case to recover from its electric and gas retail customers in base rates an estimated allocated portion of annual costs equal to the costs expected to be incurred during the 2013 and 2014 test year period. WPL

is authorized to recover from its wholesale customers an allocated portion of actual pension costs incurred each year. In accordance with FERC-approved formula rates, any over- or under-collection of these costs each year are refunded to or recovered from customers through subsequent changes to wholesale customer rates. WPL is authorized to recover from its wholesale customers an allocated portion of other postretirement benefits costs based on the amount of other postretirement benefits costs incurred in 2006. Refer to Note 12(a) for additional details regarding pension and other postretirement benefits costs.

AROs - Alliant Energy, IPL and WPL believe it is probable that any differences between expenses accrued for legal AROs related to their regulated operations and expenses recovered currently in rates will be recoverable in future rates, and are deferring the differences as regulatory assets. Refer to Note 13 for additional details of AROs.

Emission allowances - IPL entered into forward contracts in 2007 to purchase SO2 emission allowances with vintage years of 2014 through 2017 from various counterparties for $34 million to meet future CAIR emission reduction standards. Any SO2 emission allowances acquired under these forward contracts may be used to meet requirements under the existing Acid Rain program regulations or the more stringent CAIR emission reduction standards but are not eligible to be used for compliance requirements under CSAPR. In 2011, the EPA issued CSAPR to replace CAIR with an anticipated effective date in 2012. As a result of the issuance of CSAPR, Alliant Energy and IPL concluded in 2011 that the allowances to be acquired under these forward contracts would not be needed by IPL to comply with expected environmental regulations in the future. The value of these allowances was nominal, which was significantly below the $34 million contract price for these allowances. As a result, Alliant Energy and IPL recognized charges of $34 million for these forward contracts in 2011 with an offsetting obligation recorded in other long-term liabilities and deferred credits. Alliant Energy and IPL concluded that $30 million of the charges are probable of recovery from IPL’s customers, and therefore, were recorded to regulatory assets in 2011. The remaining $4 million of charges were determined not to be probable of recovery from IPL’s customers resulting in $2 million of charges related to electric customers recorded to “Electric production fuel and energy purchases” and $2 million of charges related to steam customers recorded to “Utility - Other operation and maintenance” in Alliant Energy’s and IPL’s Consolidated Statements of Income in 2011. In 2012, the D.C. Circuit Court vacated and remanded CSAPR for further revision to the EPA. The D.C. Circuit Court order also requires the EPA to continue administering CAIR pending the promulgation of a valid replacement for CSAPR. Despite CSAPR being vacated, the current value of these allowances continues to be nominal and significantly below the $34 million contract price for these allowances. Alliant Energy and IPL currently believe that CAIR will be replaced in the future, either by a modified CSAPR or another rule that addresses the interstate transport of air pollutants.

Environmental-related costs - The IUB has permitted IPL to recover prudently incurred costs by allowing a representative level of MGP costs in the recoverable cost of service component of rates, as determined in its most recent retail gas rate case. Under the current rate-making treatment approved by the PSCW, the MGP expenditures of WPL are deferred and collected from retail gas customers over a five-year period after new rates are implemented. The MPUC allows the deferral of MGP-related costs applicable to IPL’s Minnesota sites and IPL has received approval to recover such costs in retail gas rates in Minnesota in its most recent retail gas rate case. Regulatory assets recorded by IPL and WPL reflect the probable future rate recovery of MGP expenditures. Refer to Note 16(e) for additional details of environmental-related MGP costs.

Derivatives - In accordance with IPL’s and WPL’s fuel and natural gas recovery mechanisms, prudently incurred costs from derivative instruments are recovered from customers in the future after any losses are realized and gains from derivative instruments are refunded to customers in the future after any gains are realized. Based on these recovery mechanisms, the changes in the fair value of derivative liabilities/assets resulted in comparable changes to regulatory assets/liabilities on the Consolidated Balance Sheets. Refer to Note 15 for additional details of derivative assets and derivative liabilities.

Debt redemption costs - For debt retired early with no subsequent re-issuance, IPL and WPL defer any debt repayment premiums and unamortized debt issuance costs and discounts as regulatory assets. These regulatory assets are amortized over the remaining original life of the debt retired early. Debt repayment premiums and other losses resulting from the refinancing of debt by IPL and WPL are deferred as regulatory assets and amortized over the life of the new debt issued.

IPL’s electric transmission service costs - In 2010, IPL incurred electric transmission service costs billed by ITC under the Attachment “O” rate for ITC’s under-recovered 2008 costs. In 2010, the IUB issued an order authorizing IPL to defer the Iowa retail portion of these under-recovered costs and amortize the deferred costs over a five-year period ending December 2014. In accordance with this order, IPL is amortizing $8 million of this regulatory asset annually, with an equal and offsetting amount of amortization of IPL’s regulatory liability related to its electric transmission assets sale. The IUB determined that IPL should not include the unamortized balance of these deferred costs in electric rate base during the five-year recovery period.

Other - Alliant Energy, IPL and WPL assess whether IPL’s and WPL’s regulatory assets are probable of future recovery by considering factors such as applicable regulations, recent orders by the applicable regulatory agencies, historical treatment of similar costs by the applicable regulatory agencies and regulatory environment changes. Based on these assessments, Alliant Energy, IPL and WPL believe the regulatory assets recognized as of December 31, 2013 in the above table are probable of future recovery. However, no assurance can be made that IPL and WPL will recover all of these regulatory assets in future rates. If future recovery of a regulatory asset ceases to be probable, the regulatory asset will be charged to expense in the period in which future recovery ceases to be probable.

Based on the PSCW’s July 2012 order related to WPL’s 2013/2014 test period Wisconsin retail electric and gas rate case, WPL was authorized to recover previously incurred costs associated with the acquisition of a 25% ownership interest in Edgewater Unit 5 and proposed emission controls projects. As a result, Alliant Energy and WPL recorded a $5 million increase to regulatory assets, and a $5 million credit to “Utility - Other operation and maintenance” in their Consolidated Statements of Income in 2012.

Based on assessments completed in 2011, Alliant Energy, IPL and WPL recognized impairment charges of $9 million, $2 million and $7 million, respectively, for regulatory assets that were no longer probable of future recovery. The regulatory asset impairment charges were recorded by Alliant Energy, IPL and WPL as reductions in regulatory assets and charges to “Utility - Other operation and maintenance” in their Consolidated Statements of Income in 2011.

Based on the MPUC’s November 2011 order related to IPL’s 2009 test year Minnesota retail electric rate case, IPL was authorized to recover $2 million of previously incurred plant cancellation costs for Sutherland #4 over a 25-year period ending in 2037. As a result, Alliant Energy and IPL recorded a $2 million increase to regulatory assets, and a $2 million credit to “Utility - Other operation and maintenance” in their Consolidated Statements of Income in 2011.

Regulatory Liabilities - At December 31, regulatory liabilities were comprised of the following items (in millions):



	Alliant Energy				IPL				WPL
	2013		2012		2013		2012		2013		2012
Cost of removal obligations		$418.9		$408.7		$277.7		$268.0		$141.2		$140.7
IPL’s tax benefit riders	265.4		355.8		265.4		355.8		—		—
Energy conservation cost recovery	52.7		55.1		9.3		10.0		43.4		45.1
IPL’s electric transmission assets sale	21.6		32.5		21.6		32.5		—		—
IPL’s electric transmission cost recovery	14.6		—		14.6		—		—		—
Commodity cost recovery	7.5		17.7		5.5		5.2		2.0		12.5
Other	40.8		46.3		20.8		29.9		20.0		16.4
		$821.5		$916.1		$614.9		$701.4		$206.6		$214.7

Regulatory liabilities related to cost of removal obligations, to the extent expensed through depreciation rates, reduce rate base. A significant portion of the remaining regulatory liabilities are not used to reduce rate base in the revenue requirement calculations utilized in IPL’s and WPL’s respective rate proceedings.

Cost of removal obligations - Alliant Energy, IPL and WPL collect in rates future removal costs for many assets that do not have associated legal AROs. Alliant Energy, IPL and WPL record a regulatory liability for the estimated amounts they have collected in rates for these future removal costs less amounts spent on removal activities.

IPL’s tax benefit riders - At December 31, 2013, Alliant Energy’s and IPL’s “IPL’s tax benefit riders” regulatory liabilities in the above table consisted of $228.9 million and $36.5 million for the electric and gas tax benefit riders, respectively. These regulatory liabilities decreased $90 million in aggregate in 2013 due to the following items:

Electric tax benefit rider - In January 2011, the IUB approved an electric tax benefit rider proposed by IPL, which utilizes regulatory liabilities to credit bills of Iowa retail electric customers beginning in February 2011 to help offset the impact of rate increases on such customers. These regulatory liabilities are related to tax benefits from tax accounting method changes for repairs expenditures, allocation of mixed service costs and allocation of insurance proceeds from floods in 2008. Alliant Energy and IPL recognize an offsetting reduction to income tax expense for the after-tax amounts credited to IPL’s retail electric customers’ bills in Iowa, resulting in no impact to Alliant Energy’s and IPL’s net income from the electric tax benefit rider. In 2013, 2012 and 2011, Alliant Energy and IPL utilized $79 million, $83 million and $61 million, respectively, of electric tax benefit rider-related regulatory liabilities accumulated in prior years to credit IPL’s Iowa retail electric customers’

bills. In 2013, 2012 and 2011, the $79 million, $83 million and $61 million reductions to “Electric operating revenues” resulted in $33 million, $35 million and $25 million of credits to “Income tax expense (benefit)” as a result of the decrease in taxable income in Alliant Energy’s and IPL’s Consolidated Statements of Income in 2013, 2012 and 2011, respectively. In 2013, 2012 and 2011, additional reductions to “Income tax expense (benefit)” of $46 million, $48 million and $36 million, respectively, were also recognized in Alliant Energy’s and IPL’s Consolidated Statements of Income representing the tax benefits realized related to the electric tax benefit rider. In December 2013, the IUB issued an order authorizing $85 million of regulatory liabilities from tax benefits to be credited to IPL’s retail electric customers’ bills in Iowa during 2014 through the electric tax benefit rider.

Gas tax benefit rider - In November 2012, the IUB approved a gas tax benefit rider proposed by IPL, which utilizes up to $12 million of regulatory liabilities annually to credit bills of Iowa retail gas customers beginning in January 2013 through December 2015 to help offset the impact of rate increases on such customers. These regulatory liabilities are related to tax benefits from tax accounting method changes for repairs expenditures, allocation of mixed service costs and allocation of insurance proceeds from floods in 2008. Any remaining benefit, including any portion not utilized of the agreed upon amount from January 2013 through December 2015, will be credited to Iowa’s retail gas customers’ bills in 2016. In 2013, Alliant Energy and IPL utilized $11 million of gas tax benefit rider-related regulatory liabilities to credit IPL’s Iowa retail gas customers’ bills. In 2013, the $11 million reduction to “Gas operating revenues” resulted in $4 million of credits to “Income tax expense (benefit)” as a result of the decrease in taxable income in Alliant Energy’s and IPL’s Consolidated Statements of Income in 2013. In 2013, additional reductions to “Income tax expense (benefit)” of $7 million were also recognized in Alliant Energy’s and IPL’s Consolidated Statements of Income representing the tax benefits realized related to the gas tax benefit rider.

Refer to Note 11 for additional details regarding IPL’s tax benefit riders.

Energy conservation cost recovery - WPL and IPL collect revenues from their customers to offset certain expenditures incurred by WPL and IPL for conservation programs, including state mandated programs and Shared Savings programs. Differences between forecasted costs used to set rates and actual costs for these programs are deferred as a regulatory asset or regulatory liability.

IPL’s electric transmission assets sale - In 2007, IPL completed the sale of its electric transmission assets to ITC and recognized a gain based on the terms of the agreement. Upon closing of the sale, IPL established a regulatory liability of $89 million pursuant to conditions established by the IUB when it allowed the transaction to proceed. The regulatory liability represented the present value of IPL’s obligation to refund to its customers payments beginning in the year IPL’s customers experience an increase in rates related to the transmission charges assessed by ITC. The regulatory liability accrues interest at the monthly average U.S. Treasury rate for three-year maturities.

Iowa retail portion - In 2009, the IUB issued an order authorizing IPL to use a portion of this regulatory liability to reduce Iowa retail electric customers’ rates by $12 million for the period from July 2009 through February 2010 with billing credits included in the monthly energy adjustment clause. In 2010, the IUB issued an order authorizing IPL to use a portion of this regulatory liability to offset electric transmission service costs expected to be billed to IPL by ITC in 2010 related to ITC’s 2008 transmission revenue adjustment. IPL expects to utilize $41 million of this regulatory liability over a five-year period ending December 2014 to offset the Iowa retail portion of transmission costs billed to IPL by ITC in 2010 related to ITC’s 2008 transmission revenue adjustment. As a result, IPL is amortizing $8 million of this regulatory liability annually, with an equal and offsetting amount of amortization for IPL’s regulatory asset related to electric transmission service costs.

In accordance with the IUB’s 2011 order related to IPL’s 2009 test year Iowa retail electric rate case, IPL was authorized to utilize regulatory liabilities in 2011 to offset transmission service expenses related to the Iowa retail portion of 2009 under-recovered costs billed to IPL. As a result, Alliant Energy and IPL recorded a reduction of $19 million in regulatory liabilities, and a reduction of $19 million in “Electric transmission service” in their Consolidated Statements of Income in 2011. The IUB also authorized IPL to utilize $3 million of this regulatory liability in 2011 to reduce IPL’s Iowa retail electric rate base associated with the Whispering Willow - East wind project.

Minnesota retail portion - In 2010, the MPUC issued an interim rate order authorizing IPL to use a portion of this regulatory liability to implement an alternative transaction adjustment through its energy adjustment clause resulting in annual credits to its Minnesota retail electric customers beginning in July 2010 to coincide with the effective date of the interim rate increase for Minnesota retail customers. The amounts of the annual credits are dependent upon the level of KWhs sold to IPL’s Minnesota retail customers. In accordance with the MPUC’s November 2011 order related to IPL’s 2009 test year Minnesota retail electric rate case, IPL was authorized to refund a higher amount of the gain realized from the sale of its electric

transmission assets in 2007 to its Minnesota retail electric customers than previously estimated. As a result, Alliant Energy and IPL recorded a $5 million increase to regulatory liabilities, and a $5 million charge to “Utility - Other operation and maintenance” in their Consolidated Statements of Income in 2011 for the additional amount to be refunded.

Refunds related to any remaining balance of IPL’s electric transmission assets sale regulatory liability are expected to be determined in future rate proceedings or as part of the proposed sale of Minnesota electric distribution assets.

IPL’s electric transmission cost recovery - Refer to Note 1(g) for additional details of IPL’s electric transmission service cost recovery mechanism.

Commodity cost recovery - Refer to Note 1(g) for additional details of IPL’s and WPL’s cost recovery mechanisms. Refer to “WPL’s Retail Fuel-related Rate Filing (2012 Test Year)” below for discussion of refunds made to WPL’s retail electric customers in 2013.

Utility Rate Cases -

WPL’s Wisconsin Retail Electric and Gas Rate Case (2013/2014 Test Period) - In July 2012, WPL received an order from the PSCW authorizing WPL to implement a decrease in annual base rates for WPL’s retail gas customers of $13 million effective January 1, 2013, followed by a freeze of such gas base rates through the end of 2014. The order also authorized WPL to maintain customer base rates for its retail electric customers at their current levels through the end of 2014. The order included provisions that require WPL to defer a portion of its earnings if its annual regulatory return on common equity exceeds certain levels during 2013 or 2014 and allows WPL to request a change in retail base rates during this period if its annual regulatory return on common equity falls below a certain level. As of December 31, 2013, Alliant Energy and WPL did not record any material deferred amounts for these provisions. Refer to “Regulatory Assets” above for discussion of regulatory-related credits recorded in 2012 as a result of the PSCW’s order authorizing WPL to recover previously incurred costs associated with the acquisition of a 25% interest in Edgewater Unit 5 and proposed emission controls projects.

IPL’s Iowa Retail Gas Rate Case (2011 Test Year) - In May 2012, IPL filed a request with the IUB to increase annual rates for its Iowa retail gas customers based on a 2011 historical test year as adjusted for certain known and measurable changes occurring up to 12 months after the commencement of the proceeding. IPL’s request included a proposal to utilize regulatory liabilities to credit bills of Iowa retail gas customers to help mitigate the impact of the proposed final rate increase on such customers. IPL proposed to reduce customer bills utilizing a gas tax benefit rider over a three-year period by approximately $36 million in aggregate. In conjunction with the filing, IPL implemented an interim retail gas rate increase of $9 million, or approximately 3%, on an annual basis, effective June 4, 2012, without regulatory review and subject to refund pending determination of final rates from the request. In 2012, Alliant Energy and IPL recorded $5 million in gas revenues from IPL’s Iowa retail gas customers related to the interim retail gas rate increase. In November 2012, the IUB approved a settlement agreement between IPL, the OCA and the Iowa Consumers Coalition related to IPL’s request, resulting in a final increase in annual rates for IPL’s Iowa retail gas customers of $11 million, or approximately 4%, effective January 10, 2013. The parties and the IUB also agreed to IPL’s proposed gas tax benefit rider. In 2013, Alliant Energy and IPL recorded $11 million in gas revenues from IPL’s Iowa retail gas customers related to the final retail gas rate increase. Refer to “Regulatory Liabilities” above for additional details on IPL’s gas tax benefit rider.

IPL’s Iowa Retail Electric Rate Case (2009 Test Year) -

Electric Tax Benefit Rider - In February 2013, the IUB issued an order allowing IPL to recognize a revenue requirement adjustment of $24 million in 2013 related to certain tax benefits from tax accounting method changes. The revenue requirement adjustment is recognized through the energy adjustment clause as a reduction of the credits on IPL’s Iowa retail electric customers’ bills from the electric tax benefit rider. In 2013, Alliant Energy and IPL recognized $24 million of the revenue requirement adjustment resulting in increases to electric revenues in their Consolidated Statements of Income. In December 2013, the IUB authorized IPL to reduce the billing credits on customers’ bills by $15 million in 2014 from tax benefits for the electric tax benefit rider to recognize the revenue requirement impact of the changes in tax accounting methods.

IPL’s Minnesota Retail Electric Rate Case (2009 Test Year) - In May 2010, IPL filed a request with the MPUC to increase annual rates for its Minnesota retail electric customers based on a 2009 historical test year as adjusted for certain known and measurable items at the time of the filing. The key drivers for the filing included recovery of investments in the Whispering Willow - East wind project and emission controls projects at Lansing Unit 4, and recovery of increased electric transmission service costs. In conjunction with the filing, IPL implemented an interim retail rate increase of $14 million, on an annual basis, effective July 6, 2010. In November 2011, IPL received an order from the MPUC authorizing a final annual retail electric rate increase equivalent to $11 million. The final annual retail electric rate increase of $11 million includes $8

million of higher base rates, $2 million from the temporary renewable energy rider and $1 million from the utilization of regulatory liabilities to offset higher electric transmission service costs. Refer to “Regulatory Assets” and “Regulatory Liabilities” above for discussion of changes to regulatory assets and regulatory liabilities in 2011 based on the MPUC’s decisions in this rate case. Refer to Note 3(a) for discussion of adjustments made by Alliant Energy and IPL in 2011 and 2013 to the carrying value of IPL’s Whispering Willow - East wind project, based on amounts IPL determined were probable of being disallowed for recovery from its Minnesota retail electric customers.

WPL’s Retail Fuel-related Rate Filing (2014 Test Year) - In December 2013, WPL received an order from the PSCW authorizing an annual retail electric rate increase of $19 million, or approximately 2%, effective January 1, 2014 to reflect anticipated increases in retail fuel-related costs in 2014 compared to the fuel-related cost estimates used to determine rates for 2013. WPL’s 2014 fuel-related costs will be subject to deferral if they fall outside an annual bandwidth of plus or minus 2% of the approved annual forecasted fuel-related costs.

WPL’s Retail Fuel-related Rate Filing (2013 Test Year) - In December 2012, WPL received an order from the PSCW authorizing an annual retail electric rate decrease of $29 million, or approximately 3%, effective January 1, 2013 to reflect anticipated decreases in retail fuel-related costs in 2013 compared to the fuel-related cost estimates used to determine rates for 2012. WPL’s 2013 fuel-related costs were subject to deferral if they fell outside an annual bandwidth of plus or minus 2% of the approved annual forecasted fuel-related costs. Retail fuel-related costs incurred by WPL for 2013 did not fall outside of the fuel monitoring range.

WPL’s Retail Fuel-related Rate Filing (2012 Test Year) - In December 2011, WPL received an order from the PSCW authorizing an annual retail electric rate increase of $4 million, effective January 1, 2012 to reflect anticipated increases in retail fuel-related costs in 2012 compared to the fuel-related cost estimates used to determine rates for 2011. The 2012 fuel-related costs were subject to an annual bandwidth of plus or minus 2%. Retail fuel-related costs incurred by WPL in 2012 were lower than retail fuel-related costs used to determine rates for such period resulting in an over-collection of fuel-related costs for 2012 of approximately $17 million (including $11 million outside the approved range for 2012 recorded in “Regulatory liabilities” on Alliant Energy’s and WPL’s Consolidated Balance Sheets as of December 31, 2012). In August 2013, WPL received an order from the PSCW to refund $12 million, including interest, to its retail electric customers for these over-collections, which WPL completed in September 2013.

Refer to Note 1(g) for further discussion of WPL’s fuel cost recovery mechanism.

(3) PROPERTY, PLANT AND EQUIPMENT

(a) Utility -

Electric Plant - At December 31, details of electric plant were as follows (in millions):



	Alliant Energy				IPL				WPL
	2013		2012		2013		2012		2013		2012
Plant in service:
Generation (a)		$4,792.0		$4,798.9		$2,513.2		$2,393.0		$2,278.8		$2,405.9
Distribution	4,179.6		3,981.5		2,311.2		2,205.9		1,868.4		1,775.6
Other	286.3		290.3		210.5		216.3		75.8		74.0
Plant anticipated to be retired early (b)	157.8		—		—		—		157.8		—
		$9,415.7		$9,070.7		$5,034.9		$4,815.2		$4,380.8		$4,255.5


(a)	The decrease in Alliant Energy’s and WPL’s generation portion of electric plant in service was primarily due to classifying Edgewater Unit 3 and Nelson Dewey Units 1 and 2 as “Plant anticipated to be retired early” as of December 31, 2013, which is discussed below. Partially offsetting this decrease at Alliant Energy, and contributing to the increase in IPL’s generation portion of electric plant in service, was an increase at IPL due to a scrubber and baghouse at George Neal Unit 4 being placed in service in the fourth quarter of 2013. As of December 31, 2013, the capitalized project costs for the George Neal Unit 4 scrubber and baghouse were $61 million.

(a)

The decrease in Alliant Energy’s and WPL’s generation portion of electric plant in service was primarily due to classifying Edgewater Unit 3 and Nelson Dewey Units 1 and 2 as “Plant anticipated to be retired early” as of December 31, 2013, which is discussed below. Partially offsetting this decrease at Alliant Energy, and contributing to the increase in IPL’s generation portion of electric plant in service, was an increase at IPL due to a scrubber and baghouse at George Neal Unit 4 being placed in service in the fourth quarter of 2013. As of December 31, 2013, the capitalized project costs for the George Neal Unit 4 scrubber and baghouse were $61 million.


(b)	In 2013, WPL received approval from MISO to retire Edgewater Unit 3, and Nelson Dewey Units 1 and 2. WPL currently anticipates retiring these EGUs by December 31, 2015, contingent on completion of transmission network upgrades needed for system reliability. WPL is recovering the remaining net book value of these EGUs over a 10-year period beginning January 1, 2013 pursuant to a May 2012 PSCW order.

(b)

In 2013, WPL received approval from MISO to retire Edgewater Unit 3, and Nelson Dewey Units 1 and 2. WPL currently anticipates retiring these EGUs by December 31, 2015, contingent on completion of transmission network upgrades needed for system reliability. WPL is recovering the remaining net book value of these EGUs over a 10-year period beginning January 1, 2013 pursuant to a May 2012 PSCW order.

Wind Generation Projects -

Wind Site in Franklin County, Iowa - In 2007, IPL acquired approximately 500 MW of wind site capacity in Franklin County, Iowa. The initial 200 MW of the wind site was utilized for IPL’s Whispering Willow - East wind project, which began generating electricity in 2009. In 2011, IPL sold approximately 100 MW of wind site capacity to Resources for construction of a non-regulated wind project referred to as the Franklin County wind project. Future development of the balance of the wind site by IPL will depend on numerous factors such as RPS, environmental legislation, fossil fuel prices, technology advancements and transmission capabilities. As of December 31, 2013, Alliant Energy’s and IPL’s capitalized costs related to the remaining approximately 200 MW of wind site capacity in Franklin County, Iowa were $13 million and were recorded in “Other property, plant and equipment” on their Consolidated Balance Sheets.

IPL’s Whispering Willow - East Wind Project - In 2011, IPL received an order from the MPUC approving a temporary recovery rate for the Minnesota retail portion of its Whispering Willow - East wind project construction costs. In its order, the MPUC did not reach a conclusion as to the prudence of these project costs. The prudence of these project costs and the final recovery rate was addressed in a separate proceeding in 2013. The initial recovery rate approved by the MPUC was below the amount required by IPL to recover the Minnesota retail portion of its total project costs. Based on its interpretation of the order, IPL believed that it was probable it would not be allowed to recover the entire Minnesota retail portion of its project costs. IPL estimated the most likely outcome of the final rate proceeding would result in the MPUC effectively disallowing recovery of approximately $8 million of project costs out of a total of approximately $30 million of project costs allocated to the Minnesota retail jurisdiction. As a result, Alliant Energy and IPL recognized an $8 million impairment related to this probable disallowance, which was recorded as a reduction to electric plant and a charge to “Utility - Other operation and maintenance” in their Consolidated Statements of Income in 2011.

In December 2013, IPL received an order from the MPUC approving full cost recovery of the Minnesota retail portion of IPL’s Whispering Willow - East wind project construction costs effective January 1, 2013. As a result, Alliant Energy and IPL recognized a $7 million regulatory-related credit, which was recorded as an an increase to “Electric plant” on their Consolidated Balance Sheets and a decrease to “Utility - Other operation and maintenance” in their Consolidated Statements of Income in 2013.

Franklin County Wind Project - In 2008, Alliant Energy entered into a master supply agreement with Vestas to purchase 500 MW of wind turbine generator sets and related equipment. Alliant Energy utilized 401 MW of these wind turbine generator sets and related equipment to construct IPL’s Whispering Willow - East and WPL’s Bent Tree - Phase I wind projects. In 2011, IPL sold the remaining 99 MW of wind turbine generator sets and related equipment to Resources for $115.3 million, which represented IPL’s book value for progress payments to date for the wind turbine generator sets and related equipment and land rights in Franklin County, Iowa. In addition, Resources assumed the remaining progress payments to Vestas for the 99 MW of wind turbine generator sets and related equipment. The proceeds received by IPL are presented in investing activities in IPL’s Consolidated Statement of Cash Flows in 2011. Refer to Note 3(b) for further discussion of the Franklin County wind project.

Wind Site in Green Lake and Fond du Lac Counties in Wisconsin - In 2009, WPL purchased development rights to an approximate 100 MW wind site in Green Lake and Fond du Lac Counties in Wisconsin. Due to events in 2011 resulting in uncertainty regarding wind siting requirements in Wisconsin and increased risks with permitting this wind site, WPL determined it would be difficult to sell or effectively use the site for wind development. As a result, WPL recognized a $5 million impairment in 2011 for the amount of capitalized costs incurred for this site. Alliant Energy and WPL recorded the impairment as a reduction in other utility property, plant and equipment, and a charge to “Utility - Other operation and maintenance” in their Consolidated Statements of Income in 2011.

Environmental Compliance Plans Emission Controls Projects -

IPL’s George Neal Units 3 and 4 - In 2011, MidAmerican began installing scrubbers and baghouses at George Neal Units 3 and 4 to reduce SO2 and mercury emissions at the EGUs. The scrubbers and baghouses are expected to help meet requirements under the MATS Rule and CAIR or some alternative to CAIR that may be implemented. IPL owns a 28.0% and 25.695% interest in George Neal Units 3 and 4, respectively.

Construction of the scrubber and baghouse at George Neal Unit 4 was completed in the fourth quarter of 2013, which resulted in a transfer of the capitalized project costs from “Construction work in progress - Other” to “Electric plant” on Alliant Energy’s and IPL’s Consolidated Balance Sheets in 2013. As of December 31, 2013, the capitalized project costs consisted of capital expenditures of $57 million and AFUDC of $4 million for IPL’s allocated portion of the George Neal Unit 4 scrubber and baghouse.

Construction of the scrubber and baghouse at George Neal Unit 3 is expected to be completed in 2014. As of December 31, 2013, Alliant Energy and IPL recorded capitalized expenditures of $53 million and AFUDC of $2 million for IPL’s allocated portion of the George Neal Unit 3 scrubber and baghouse in “Construction work in progress - George Neal Generating Station Unit 3 emission controls” on their Consolidated Balance Sheets.

IPL’s Ottumwa Unit 1 - IPL is currently installing a scrubber and baghouse at Ottumwa Unit 1 to reduce SO2 and mercury emissions at the EGU. IPL owns a 48% interest in Ottumwa Unit 1. Construction began in the second quarter of 2012 and is expected to be completed in 2014. The scrubber and baghouse are expected to help meet requirements under the MATS Rule and CAIR or some alternative to CAIR that may be implemented. As of December 31, 2013, Alliant Energy and IPL recorded capitalized expenditures of $125 million and AFUDC of $10 million for IPL’s allocated portion of the scrubber and baghouse in “Construction work in progress - Ottumwa Generating Station Unit 1 emission controls” on their Consolidated Balance Sheets.

WPL’s Columbia Units 1 and 2 - WPL is currently installing scrubbers and baghouses at Columbia Units 1 and 2 to reduce SO2 and mercury emissions at the EGU. WPL owns a 46.2% interest in Columbia Units 1 and 2. Construction began in the first quarter of 2012 and is expected to be completed in 2014. The scrubbers and baghouses are expected to help meet requirements under the MATS Rule and CAIR or some alternative to CAIR that may be implemented. As of December 31, 2013, Alliant Energy and WPL recorded capitalized expenditures of $254 million and AFUDC of $11 million for WPL’s allocated portion of the scrubbers and baghouses in “Construction work in progress - Columbia Energy Center Units 1 and 2 emission controls” on their Consolidated Balance Sheets.

WPL’s Edgewater Unit 5 - In June 2013, WPL received an order from the PSCW approving WPL’s CA application to install a scrubber and baghouse at Edgewater Unit 5 to reduce SO2 and mercury emissions at the EGU. WPL currently expects to begin construction of the project in 2014 and place it in service in 2016. The scrubber and baghouse are expected to help meet requirements under the MATS Rule and CAIR or some alternative to CAIR that may be implemented.

Proposed Sales of IPL’s Minnesota Electric and Natural Gas Distribution Assets - In September 2013, IPL signed a definitive agreement to sell its Minnesota electric distribution assets to Southern Minnesota Energy Cooperative, a combined group of various neighboring electric cooperatives. Also in September 2013, IPL signed a definitive agreement to sell its Minnesota natural gas distribution assets to Minnesota Energy Resources Corporation, a subsidiary of Integrys Energy Group, Inc. Proceeds from the sales are expected to be approximately $128 million in aggregate, subject to customary closing adjustments. The proceeds are expected to reduce Alliant Energy’s and IPL’s future financing requirements. Pending all necessary federal and state regulatory approvals, including the MPUC, FERC and the IUB, the transactions are expected to be concluded in the second half of 2014.

The sales price of the assets expected to be sold, which primarily consist of property, plant and equipment, and working capital items, is expected to result in a modest gain. Any after-tax gain realized from the transaction may be subject to refund to IPL’s customers. As of December 31, 2013, IPL’s assets and liabilities included in the sale agreements did not meet the criteria to be classified as held for sale due to uncertainties in the regulatory approval process. The operating results of IPL’s Minnesota electric and natural gas distribution businesses also did not qualify as discontinued operations as of December 31, 2013.

The electric distribution asset sales agreement includes a wholesale power supply agreement between IPL and Southern Minnesota Energy Cooperative, which is subject to FERC approval. The agreement contains a five-year termination notice, which may not be given until the fifth anniversary of the effective date of the agreement, resulting in a minimum term of 10 years. The agreement remains in effect indefinitely, unless notice to terminate is provided by either party. This wholesale power supply agreement includes standardized pricing mechanisms that are detailed in IPL’s current tariffs accepted by FERC through wholesale rate case proceedings. IPL’s current return on common equity authorized by FERC related to its wholesale electric rates is 10.97%. As a result of IPL’s requirement to supply electricity to Southern Minnesota Energy Cooperative under the wholesale power supply agreement, the sale of the electric distribution assets is not expected to have a significant impact on IPL’s current generation plans or operating results.

AFUDC - AFUDC represents costs to finance construction additions including a return on equity component and cost of debt component as required by regulatory accounting. The concurrent credit for the amount of AFUDC capitalized is recorded as “Allowance for funds used during construction” in the Consolidated Statements of Income. The amount of AFUDC generated by equity and debt components was as follows (in millions):



	Alliant Energy						IPL						WPL
	2013		2012		2011		2013		2012		2011		2013		2012		2011
Equity		$20.3		$14.1		$7.6		$13.8		$5.2		$3.5		$6.5		$8.9		$4.1
Debt	10.5		7.8		4.4		7.2		3.2		2.3		3.3		4.6		2.1
		$30.8		$21.9		$12.0		$21.0		$8.4		$5.8		$9.8		$13.5		$6.2

AFUDC related to various construction projects was recognized in Alliant Energy’s, IPL’s and WPL’s Consolidated Statements of Income as follows (in millions):



	2013		2012		2011
IPL:
Emission controls - Ottumwa Unit 1		$8.0		$2.0		$—
Emission controls - George Neal Units 3 and 4	5.1		0.9		—
Other	7.9		5.5		5.8
	21.0		8.4		5.8
WPL:
Emission controls - Columbia Units 1 and 2	7.2		3.9		0.2
Emission controls - Edgewater Unit 5	—		7.2		2.9
Other	2.6		2.4		3.1
	9.8		13.5		6.2
Alliant Energy		$30.8		$21.9		$12.0

(b) Non-regulated and Other - The non-regulated and other property, plant and equipment on Alliant Energy’s Consolidated Balance Sheets includes the following:

Franklin County Wind Project - The Franklin County wind project was placed into service in 2012 and is depreciated using the straight-line method over a 30-year period. As of December 31, 2013, Alliant Energy recorded $142 million in “Non-regulated Generation property, plant and equipment” on its Consolidated Balance Sheet related to the wind project. Refer to Note 3(a) for further discussion of the wind project, Note 5(d) for discussion of a cash grant received in 2013 related to the wind project and Note 13 for discussion of the wind project AROs.

Sheboygan Falls - Sheboygan Falls was placed into service in 2005 and is depreciated using the straight-line method over a 35-year period. As of December 31, 2013, Alliant Energy recorded $107 million in “Non-regulated Generation property, plant and equipment” on its Consolidated Balance Sheet related to Sheboygan Falls.

Other - The property, plant and equipment related to Corporate Services, Transportation and other non-regulated investments is recorded in “Alliant Energy Corporate Services, Inc. and other property, plant and equipment” on Alliant Energy’s Consolidated Balance Sheets and is depreciated using the straight-line method over periods ranging from 5 to 30 years.

(4) JOINTLY-OWNED ELECTRIC UTILITY PLANT

Under joint ownership agreements with other utilities, IPL and WPL have undivided ownership interests in jointly-owned coal-fired EGUs. Each of the respective owners is responsible for the financing of its portion of the construction costs. KWh generation and operating expenses are primarily divided between the joint owners on the same basis as ownership. IPL’s and WPL’s shares of expenses from jointly-owned coal-fired EGUs are included in the corresponding operating expenses (e.g., electric production fuel, other operation and maintenance, etc.) in their Consolidated Statements of Income. Refer to Note 2 for further discussion of cost of removal obligations. Information relative to IPL’s and WPL’s ownership interest in these jointly-owned coal-fired EGUs at December 31, 2013 was as follows (dollars in millions):



						Accumulated		Construction		Cost of Removal
	In-service	Ownership		Electric		Provision for		Work in		Obligations Included in
	Dates	Interest %		Plant		Depreciation		Progress		Regulatory Liabilities
IPL
Ottumwa Unit 1	1981	48.0	%		$246.8		$125.3		$154.6		$12.8
George Neal Unit 4	1979	25.7	%	180.4		70.1		0.6		11.8
George Neal Unit 3	1975	28.0	%	59.5		40.3		59.1		5.7
Louisa Unit 1	1983	4.0	%	35.2		19.7		0.1		3.2
				521.9		255.4		214.4		33.5
WPL
Columbia Units 1-2	1975-1978	46.2	%	255.5		159.4		270.5		10.1
Edgewater Unit 4	1969	68.2	%	93.2		51.6		0.7		2.3
				348.7		211.0		271.2		12.4
Alliant Energy					$870.6		$466.4		$485.6		$45.9

(5) RECEIVABLES

(a) Sales of Accounts Receivable - IPL maintains a Receivables Agreement whereby it may sell its customer accounts receivables, unbilled revenues and certain other accounts receivables to a third party through wholly-owned and consolidated special purpose entities. In March 2014, the purchase commitment from the third party to which it sells its receivables expires. IPL is currently pursuing the extension of the purchase commitment. IPL accounts for sales of receivables under the Receivables Agreement as transfers of financial assets. In exchange for the receivables sold, IPL receives cash proceeds from the third party (based on seasonal limits up to $180 million, including $150 million as of December 31, 2013), and deferred proceeds recorded in accounts receivable on Alliant Energy’s and IPL’s Consolidated Balance Sheets. IPL makes monthly payments to the third party of an amount that varies based on interest rates, the length of time the cash proceeds remain outstanding and the total amount under commitment by the third party. IPL has historically used proceeds from the sales of receivables to maintain flexibility in its capital structure, take advantage of favorable short-term rates and finance a portion of its cash needs.

Deferred proceeds are payable by the third party solely from the collections of the receivables, but only after paying any required expenses to the third party and the collection agent. Corporate Services acts as collection agent for the third party and receives a fee for collection services. IPL believes that the allowance for doubtful accounts related to its sales of receivables is a reasonable approximation of any credit risk of the customers that generated the receivables. Therefore, the carrying amount of deferred proceeds, after being reduced by the allowance for doubtful accounts, approximates the fair value of the deferred proceeds due to the short-term nature of the collection period. The carrying amount of deferred proceeds represents IPL’s maximum exposure to loss related to the receivables sold.

As of December 31, 2013 and 2012, IPL sold $238.0 million and $198.4 million aggregate amounts of receivables, respectively. IPL’s maximum and average outstanding cash proceeds, and costs incurred related to the sales of accounts receivable program, were as follows (in millions):



	2013	2012	2011
Maximum outstanding aggregate cash proceeds (based on daily outstanding balances)	$170.0	$160.0	$160.0
Average outstanding aggregate cash proceeds (based on daily outstanding balances)	105.9	119.8	118.1
Costs incurred	1.1	1.4	1.5

As of December 31, the attributes of IPL’s receivables sold under the Receivables Agreement were as follows (in millions):



	2013	2012
Customer accounts receivable	$151.6	$118.2
Unbilled utility revenues	86.2	77.4
Other receivables	0.2	2.8
Receivables sold	238.0	198.4
Less: cash proceeds (a)	29.0	130.0
Deferred proceeds	209.0	68.4
Less: allowance for doubtful accounts	5.5	1.6
Fair value of deferred proceeds	$203.5	$66.8
Outstanding receivables past due	$21.5	$16.1


(a)	Changes in cash proceeds are presented in “Sales of accounts receivable” in operating activities in Alliant Energy’s and IPL’s Consolidated Statements of Cash Flows.

Refer to Note 9(b) for discussion of IPL’s issuance of $250.0 million of senior debentures in 2013. A portion of the proceeds from the issuance was used by IPL in 2013 to reduce cash proceeds received from the third party under its sales of accounts receivable program.

Additional attributes of IPL’s receivables sold under the Receivables Agreement were as follows (in millions):



	2013	2012	2011
Collections reinvested in receivables	$1,880.8	$1,771.6	$1,795.7
Credit losses, net of recoveries	11.9	10.0	10.9

(b) Whiting Petroleum Tax Sharing Agreement - Prior to an IPO of Whiting Petroleum in 2003, Alliant Energy and Whiting Petroleum entered into a tax separation and indemnification agreement pursuant to which Alliant Energy and Whiting Petroleum made tax elections. These tax elections had the effect of increasing the tax basis of the assets of Whiting Petroleum’s consolidated tax group based on the sales price of Whiting Petroleum’s shares in the IPO. The increase in the tax basis of the assets was included in income in Alliant Energy’s U.S. federal income tax return for the calendar year 2003. Pursuant to the tax separation and indemnification agreement, Whiting Petroleum will be obligated to pay Resources 90% of any tax benefits realized annually due to the additional tax deductions from the increase in tax basis for years ending on or prior to December 31, 2013. Such tax benefits will generally be calculated by comparing Whiting Petroleum’s actual taxes to the taxes that would have been owed by Whiting Petroleum had the increase in basis not occurred. In 2014, Whiting Petroleum will be obligated to pay Resources the present value of the remaining tax benefits assuming all such tax benefits will be realized in future years. At the IPO closing date, Alliant Energy recorded a receivable from Whiting Petroleum based on the estimated present value of the payments expected from Whiting Petroleum. At December 31, the carrying values of this receivable were recorded on Alliant Energy’s Consolidated Balance Sheets as follows (in millions):



	2013		2012
Prepayments and other		$25		$2
Deferred charges and other	—		25
		$25		$27

(c) Advances for Customer Energy Efficiency Projects - WPL and IPL have historically offered energy efficiency programs to certain of their customers in Wisconsin and Minnesota, respectively. The energy efficiency programs have provided low-cost financing to help customers identify, purchase and install energy efficiency improvement projects. The customers repay WPL and IPL with monthly payments over a term up to 5 years. The advances for and collections of customer energy efficiency projects are presented as investing activities in the Consolidated Statements of Cash Flows. The current portion and non-current portion of outstanding advances for customer energy efficiency projects are recorded in “Accounts receivable - other” and “Deferred charges and other,” respectively, on the Consolidated Balance Sheets. At December 31, outstanding advances for customer energy efficiency projects were as follows (in millions):



	Alliant Energy				IPL				WPL
	2013		2012		2013		2012		2013		2012
Current portion		$8.2		$14.9		$0.4		$0.8		$7.8		$14.1
Non-current portion	7.3		13.0		0.2		0.6		7.1		12.4
		$15.5		$27.9		$0.6		$1.4		$14.9		$26.5

(d) Franklin County Wind Project Cash Grant - The ARRA provides incentives for wind projects placed into service between January 1, 2009 and December 31, 2012. In accordance with the ARRA, Alliant Energy filed an application with the U.S. Department of the Treasury in February 2013 requesting a cash grant for a portion of the qualifying project expenditures of the Franklin County wind project that was placed into service in December 2012. Alliant Energy elected to record the anticipated cash grant as a reduction of the carrying value of the Franklin County wind project, which resulted in a decrease of $62 million in “Property, plant and equipment - Non-regulated Generation” on its Consolidated Balance Sheet in 2012. In 2013, Alliant Energy received the proceeds from the cash grant, resulting in a $62.4 million decrease in “Accounts receivable - other” on its Consolidated Balance Sheets in 2013. The grant proceeds received by Alliant Energy are presented in investing activities in Alliant Energy’s Consolidated Statements of Cash Flows. The grant proceeds were used by Alliant Energy to reduce short-term borrowings incurred during the construction of the wind project.

(6) INVESTMENTS

(a) Unconsolidated Equity Investments - Alliant Energy’s and WPL’s unconsolidated investments accounted for under the equity method of accounting are as follows (in millions):



	Ownership	Carrying Value at
	Interest at	December 31,				Equity (Income) / Loss
	December 31, 2013	2013		2012		2013			2012			2011
Alliant Energy
ATC (a)	16%		$272.1		$257.0		($42.7	)		($41.3	)		($37.8	)
Wisconsin River Power Company	50%	7.0		7.3		(1.0		)	(0.8		)	(0.9		)
Other	Various	2.3		2.3		—			0.8			(0.6		)
			$281.4		$266.6		($43.7	)		($41.3	)		($39.3	)
WPL
ATC (a)	16%		$272.1		$257.0		($42.7	)		($41.3	)		($37.8	)
Wisconsin River Power Company	50%	7.0		7.3		(1.0		)	(0.8		)	(0.9		)
			$279.1		$264.3		($43.7	)		($42.1	)		($38.7	)


(a)	Alliant Energy and WPL have the ability to exercise significant influence over ATC’s financial and operating policies through their participation on ATC’s Board of Directors. Refer to Note 18 for information regarding related party transactions with ATC.

Summary aggregate financial information from the financial statements of these investments is as follows (in millions):



	Alliant Energy						WPL
	2013		2012		2011		2013		2012		2011
Operating revenues		$634		$611		$575		$634		$611		$575
Operating income	334		326		307		334		325		308
Net income	248		234		218		250		239		226
As of December 31:
Current assets	86		67				84		66
Non-current assets	3,553		3,321				3,527		3,292
Current liabilities	383		252				383		252
Non-current liabilities	1,682		1,652				1,681		1,651

(b) Cash Surrender Value of Life Insurance Policies - Alliant Energy, IPL and WPL have various life insurance policies that cover certain current and former employees and directors. At December 31, the cash surrender value of these investments was as follows (in millions):



	Alliant Energy		IPL		WPL
	2013	2012	2013	2012	2013	2012
Cash surrender value	$46.5	$50.5	$17.3	$16.0	$12.3	$12.1

(7) COMMON EQUITY

Common Share Activity - A summary of Alliant Energy’s common stock activity was as follows:



	2013		2012		2011
Shares outstanding, January 1	110,987,400		111,018,821		110,893,901
Equity-based compensation plans (Note 12(b))	(23,374	)	20,195		164,400
Other	(20,357	)	(51,616	)	(39,480	)
Shares outstanding, December 31	110,943,669		110,987,400		111,018,821

At December 31, 2013, Alliant Energy had a total of 6.9 million shares available for issuance in the aggregate, pursuant to its OIP, Shareowner Direct Plan and 401(k) Savings Plan.

Shareowner Rights Agreement - Alliant Energy has established an amended and restated Shareowner Rights Agreement. The rights under this agreement will only become exercisable if a person or group has acquired, or announced an intention to acquire, 15% or more of Alliant Energy’s outstanding common stock. Each right will initially entitle registered shareowners to purchase from Alliant Energy one-half of one share of Alliant Energy’s common stock. The rights will be exercisable at an initial price of $110.00 per full share, subject to adjustment. If any shareowner acquires 15% or more of the outstanding common stock of Alliant Energy, each right (subject to limitations) will entitle its holder to purchase, at the right’s then current exercise price, a number of common shares of Alliant Energy or of the acquirer having a market value at the time of twice the right’s per full share exercise price. Alliant Energy’s Board of Directors is authorized to reduce the 15% ownership threshold to not less than 10%. The amended and restated Shareowner Rights Agreement expires in December 2018.

Dividend Restrictions - Alliant Energy does not have any significant common stock dividend restrictions. IPL and WPL each have common stock dividend restrictions based on applicable regulatory limitations. IPL also has common stock dividend restrictions based on the terms of its outstanding preferred stock. As of December 31, 2013, IPL and WPL were in compliance with all such dividend restrictions.

IPL is restricted from paying common stock dividends to its parent company, Alliant Energy, if for any past or current dividend period, dividends on its preferred stock have not been paid, or declared and set apart for payment. IPL has paid all dividends on its preferred stock through 2013.

IPL’s most significant regulatory limitation on distributions to its parent company requires IPL to obtain IUB approval for a reasonable utility capital structure if its actual 13-month average common equity ratio (calculated on a financial basis consistent with IPL’s rate cases) falls below 42% of total capitalization. As of December 31, 2013, IPL’s amount of retained earnings that were free of dividend restrictions was $494 million.

Currently, WPL’s most significant regulatory limitation on distributions to its parent company is included in an order issued by the PSCW in 2012 that prohibits WPL from paying annual common stock dividends in excess of $119 million in 2014 if WPL’s actual 13-month average common equity ratio (calculated on a financial basis consistent with WPL’s rate cases) would fall below 51.03%. As of December 31, 2013, WPL’s amount of retained earnings that were free of dividend restrictions was $119 million for 2014.

Restricted Net Assets of Subsidiaries - IPL and WPL do not have regulatory authority to lend or advance any amounts to their parent company. As of December 31, the amount of net assets of IPL and WPL that were not available to be transferred to their parent company, Alliant Energy, in the form of loans, advances or cash dividends without the consent of IPL’s and WPL’s regulatory authorities was as follows (in billions):



	2013		2012
IPL		$1.2		$1.1
WPL	1.5		1.5

Capital Transactions With Subsidiaries - IPL, WPL and Resources paid common stock dividends and repayments of capital to their parent company, Alliant Energy, as follows (in millions):



	IPL						WPL						Resources
	2013		2012		2011		2013		2012		2011		2013		2012		2011
Common stock dividends		$128.1		$122.9		$73.4		$116.3		$112.0		$112.1		$—		$—		$—
Repayments of capital	—		—		100.7		—		—		—		95.0		—		—
Total distributions from common equity		$128.1		$122.9		$174.1		$116.3		$112.0		$112.1		$95.0		$—		$—

IPL, WPL, Resources and Corporate Services received capital contributions from their parent company, Alliant Energy, as follows (in millions):



	2013		2012		2011
IPL		$120.0		$110.0		$54.0
WPL	—		90.0		25.0
Corporate Services	—		30.0		—
Resources	—		—		65.0

(8) REDEEMABLE PREFERRED STOCK

Information related to the carrying value of cumulative preferred stock, net at December 31 was as follows (dollars in millions):



Liquidation Preference/ Stated Value	Shares Outstanding	Series	Redemption (none are mandatorily redeemable)	2013		2012
IPL (16,000,000 shares authorized):
$25	8,000,000	5.1%	On or after March 15, 2018		$200.0		$—
$25	6,000,000	8.375%	(a)	—		150.0
Less: discount				—		(4.9		)
				200.0		145.1
WPL (16,000,000 and 3,750,000 shares authorized as of December 31, 2013 and 2012, respectively):
$25 to $100	1,049,225	4.40-6.50%	(b)	—		60.0
Alliant Energy					$200.0		$205.1


(a)	In 2013, IPL redeemed all 6,000,000 outstanding shares of its 8.375% cumulative preferred stock for $150 million plus accrued and unpaid dividends to the redemption date. Alliant Energy and IPL recorded a $5 million charge in 2013 related to this transaction in “Preferred dividend requirements” in their Consolidated Statements of Income.


(b)	In 2013, WPL redeemed all 1,049,225 outstanding shares of its 4.40% through 6.50% cumulative preferred stock for $61 million plus accrued and unpaid dividends to the redemption date. Alliant Energy and WPL recorded a $1 million charge in 2013 related to this transaction in “Preferred dividend requirements” in their Consolidated Statements of Income.

IPL - In 2013, IPL issued 8,000,000 shares of 5.1% cumulative preferred stock and received proceeds of $200 million. The proceeds were used by IPL to redeem its 8.375% cumulative preferred stock, reduce commercial paper classified as long-term debt by $40 million and for other general corporate purposes. Alliant Energy and IPL incurred $5 million of issuance costs related to this transaction, which were recorded as a reduction of “Additional paid-in capital” on Alliant Energy’s and IPL’s Consolidated Balance Sheets in 2013. On or after March 15, 2018, IPL may, at its option, redeem the 5.1% cumulative preferred stock for cash at a redemption price of $25 per share plus accrued and unpaid dividends up to the redemption date.

The current articles of incorporation of IPL contain a provision that grants the holders of its cumulative preferred stock voting rights to elect two members of IPL’s Board of Directors if preferred dividends equal to six or more quarterly dividend requirements (whether or not consecutive) are in arrears. Such voting rights would not provide the holders of IPL’s preferred stock control of the decision on redemption of IPL’s preferred stock and could not force IPL to exercise its call option. The articles of incorporation of IPL in effect as of December 31, 2012 contained similar provisions as the current articles of incorporation of IPL. Therefore, IPL’s 5.1% and 8.375% cumulative preferred stock were presented in total equity on Alliant Energy’s and IPL’s Consolidated Balance Sheets in a manner consistent with noncontrolling interests.

WPL - The articles of organization of WPL in effect as of December 31, 2012 contained a provision that granted the holders of its preferred stock voting rights to elect a majority of WPL’s Board of Directors if preferred dividends equal to the annual

dividend requirements were in arrears. The exercise of such voting rights would have provided the holders of WPL’s preferred stock control of the decision on redemption of WPL’s preferred stock and could have forced WPL to exercise its call option. Therefore, the contingent control right and the embedded call option caused WPL’s preferred stock to be presented outside of total equity on Alliant Energy’s and WPL’s Consolidated Balance Sheets at December 31, 2012 in a manner consistent with temporary equity.

Refer to Note 14 for information on the fair value of cumulative preferred stock.

(9) DEBT

(a) Short-term Debt - Alliant Energy and its subsidiaries maintain committed bank lines of credit to provide short-term borrowing flexibility and back-stop liquidity for commercial paper outstanding. At December 31, 2013, Alliant Energy’s short-term borrowing arrangements included three revolving credit facilities totaling $1 billion ($300 million for Alliant Energy at the parent company level, $300 million for IPL and $400 million for WPL), which expire in December 2017. Information regarding commercial paper classified as short-term debt and back-stopped by the credit facilities was as follows (dollars in millions):



	Alliant Energy		IPL		WPL
	2013	2012	2013	2012	2013	2012
December 31
Commercial paper:
Amount outstanding	$279.4	$217.5	$—	$26.3	$183.7	$86.6
Weighted average interest rates	0.2%	0.4%	N/A	0.4%	0.1%	0.3%
Weighted average remaining maturity	4 days	11 days	N/A	2 days	6 days	19 days
Available credit facility capacity (a)	$720.6	$732.5	$300.0	$223.7	$216.3	$313.4



	Alliant Energy		IPL		WPL
	2013	2012	2013	2012	2013	2012
For the year ended
Maximum amount outstanding (based on daily outstanding balances)	$293.9	$217.5	$26.3	$35.4	$190.0	$86.6
Average amount outstanding (based on daily outstanding balances)	$210.5	$99.8	$1.3	$5.9	$123.5	$11.7
Weighted average interest rates	0.2%	0.4%	0.4%	0.4%	0.2%	0.3%


(a)	At December 31, 2012, Alliant Energy’s and IPL’s available credit facility capacities reflect outstanding commercial paper classified as both short- and long-term debt. Refer to Note 9(b) for further discussion of $50.0 million of commercial paper outstanding at December 31, 2012 classified as long-term debt on Alliant Energy’s and IPL’s Consolidated Balance Sheets. Alliant Energy and its subsidiaries did not have any commercial paper classified as long-term debt as of December 31, 2013.

(a)

At December 31, 2012, Alliant Energy’s and IPL’s available credit facility capacities reflect outstanding commercial paper classified as both short- and long-term debt. Refer to Note 9(b) for further discussion of $50.0 million of commercial paper outstanding at December 31, 2012 classified as long-term debt on Alliant Energy’s and IPL’s Consolidated Balance Sheets. Alliant Energy and its subsidiaries did not have any commercial paper classified as long-term debt as of December 31, 2013.

Alliant Energy’s, IPL’s and WPL’s credit facility agreements each contain a financial covenant, which requires the entities to maintain certain debt-to-capital ratios in order to borrow under the credit facilities. The required debt-to-capital ratios compared to the actual debt-to-capital ratios at December 31, 2013 were as follows:



	Alliant Energy	IPL	WPL
Requirement	Less than 65%	Less than 58%	Less than 58%
Actual	51%	45%	50%

The debt component of the capital ratios includes long- and short-term debt (excluding non-recourse debt and hybrid securities to the extent the total carrying value of such hybrid securities does not exceed 15% of consolidated capital of the applicable borrower), capital lease obligations, certain letters of credit, guarantees of the foregoing and new synthetic leases. Unfunded vested benefits under qualified pension plans are not included in the debt-to-capital ratios. The equity component of the capital ratios excludes accumulated other comprehensive income (loss).

(b) Long-Term Debt - Long-term debt, net as of December 31 was as follows (dollars in millions):



	2013									2012
	Alliant Energy			IPL			WPL			Alliant Energy			IPL			WPL
Senior Debentures:
3.3%, due 2015		$150.0			$150.0			$—			$150.0			$150.0			$—
5.875%, due 2018	100.0			100.0			—			100.0			100.0			—
7.25%, due 2018	250.0			250.0			—			250.0			250.0			—
3.65%, due 2020	200.0			200.0			—			200.0			200.0			—
5.5%, due 2025	50.0			50.0			—			50.0			50.0			—
6.45%, due 2033	100.0			100.0			—			100.0			100.0			—
6.3%, due 2034	125.0			125.0			—			125.0			125.0			—
6.25%, due 2039	300.0			300.0			—			300.0			300.0			—
4.7%, due 2043 (a)	250.0			250.0			—			—			—			—
	1,525.0			1,525.0			—			1,275.0			1,275.0			—
Debentures:
5%, due 2019	250.0			—			250.0			250.0			—			250.0
4.6%, due 2020	150.0			—			150.0			150.0			—			150.0
2.25%, due 2022	250.0			—			250.0			250.0			—			250.0
6.25%, due 2034	100.0			—			100.0			100.0			—			100.0
6.375%, due 2037	300.0			—			300.0			300.0			—			300.0
7.6%, due 2038	250.0			—			250.0			250.0			—			250.0
	1,300.0			—			1,300.0			1,300.0			—			1,300.0
Pollution Control Revenue Bonds:
5%, due 2014	38.4			38.4			—			38.4			38.4			—
5%, due 2014 and 2015	24.5			—			24.5			24.5			—			24.5
5.375%, due 2015	14.6			—			14.6			14.6			—			14.6
	77.5			38.4			39.1			77.5			38.4			39.1
Other:
Commercial paper, 0.4% at December 31, 2012 (b)	—			—			—			50.0			50.0			—
4% senior notes, due 2014	250.0			—			—			250.0			—			—
Term loan credit agreement through 2014, 1% at December 31, 2013	60.0			—			—			60.0			—			—
3.45% senior notes, due 2022	75.0			—			—			75.0			—			—
5.06% senior secured notes, due 2014 to 2024	60.5			—			—			61.9			—			—
Other, 1% at December 31, 2013, due 2014 to 2025	0.4			—			—			0.5			—			—
	445.9			—			—			497.4			50.0			—
Subtotal	3,348.4			1,563.4			1,339.1			3,149.9			1,363.4			1,339.1
Current maturities	(358.5		)	(38.4		)	(8.5		)	(1.5		)	—			—
Unamortized debt (discount) and premium, net	(12.1		)	(5.0		)	(7.0		)	(11.8		)	(3.9		)	(7.6		)
Long-term debt, net		$2,977.8			$1,520.0			$1,323.6			$3,136.6			$1,359.5			$1,331.5


(a)	In 2013, IPL issued $250.0 million of 4.7% senior debentures due 2043. The proceeds from the issuance were used by IPL to reduce cash proceeds received from its sales of accounts receivable program, reduce commercial paper classified as long-term debt by $65 million and for general working capital purposes.


(b)	At December 31, 2012, $50.0 million of commercial paper was recorded in “Long-term debt, net” on Alliant Energy’s and IPL’s Consolidated Balance Sheets due to the existence of long-term credit facilities that back-stop this commercial paper balance, along with Alliant Energy’s and IPL’s intent and ability to refinance these balances on a long-term basis.

Five-Year Schedule of Debt Maturities - At December 31, 2013, debt maturities for 2014 to 2018 were as follows (in millions):



	2014		2015		2016		2017		2018
IPL		$38		$150		$—		$—		$350
WPL	9		31		—		—		—
Resources	62		2		3		4		5
Alliant Energy parent company	250		—		—		—		—
Alliant Energy		$359		$183		$3		$4		$355

At December 31, 2013, there were no significant sinking fund requirements related to the long-term debt on the Consolidated Balance Sheets.

Indentures - Alliant Energy maintains an indenture related to its 4% senior notes due 2014. IPL maintains an indenture related to its senior debentures due 2015 through 2043. WPL maintains an indenture related to its debentures due 2019 through 2038. Sheboygan Power, Resources’ wholly-owned subsidiary, maintains an indenture related to the issuance of its 5.06% senior secured notes due 2014 to 2024.

Optional Redemption Provisions - Alliant Energy and its subsidiaries have certain issuances of long-term debt that contain optional redemption provisions which, if elected by the issuer at its sole discretion, could require material redemption premium payments by the issuer. The redemption premium payments under these optional redemption provisions are variable and dependent on applicable U.S. Treasury rates at the time of redemption. At December 31, 2013, the debt issuances that contained these optional redemption provisions included all of IPL’s outstanding senior debentures, all of WPL’s outstanding debentures, Alliant Energy’s senior notes due 2014, Corporate Services’ senior notes due 2022 and Sheboygan Power’s senior secured notes due 2014 to 2024.

Security Provisions - Sheboygan Power’s 5.06% senior secured notes due 2014 to 2024 are secured by Sheboygan Falls and related assets.

Unamortized Debt Issuance Costs - Unamortized debt issuance costs recorded in “Deferred charges and other” on the Consolidated Balance Sheets at December 31 were as follows (in millions):



	Alliant Energy		IPL		WPL
	2013	2012	2013	2012	2013	2012
Unamortized debt issuance costs	$19.9	$19.5	$9.7	$8.0	$9.0	$9.8

Carrying Amount and Fair Value of Long-term Debt - Refer to Note 14 for information on the carrying amount and fair value of long-term debt outstanding at December 31, 2013 and 2012.

(10) LEASES

(a) Operating Leases - Alliant Energy, IPL and WPL have entered into various agreements related to property, plant and equipment rights that are accounted for as operating leases. Historically, Alliant Energy’s and WPL’s most significant operating lease related to the Riverside PPA, which contained fixed rental payments related to capacity and contingent rental payments related to the energy portion (actual MWhs) of the PPA. Costs associated with the Riverside PPA were included in “Electric production fuel and energy purchases” and “Purchased electric capacity” in Alliant Energy’s and WPL’s Consolidated Statements of Income based on monthly payments for the Riverside PPA. In December 2012, WPL purchased Riverside, thereby terminating the Riverside PPA. Rental expenses associated with operating leases were as follows (in millions):



	Alliant Energy						IPL						WPL
	2013		2012		2011		2013		2012		2011		2013		2012		2011
Operating lease rental expenses (excluding contingent rentals)		$9		$69		$70		$4		$4		$4		$5		$64		$63
Contingent rentals (primarily related to Riverside PPA)	—		6		5		—		—		1		—		5		4
		$9		$75		$75		$4		$4		$5		$5		$69		$67

At December 31, 2013, future minimum operating lease payments, excluding contingent rentals, were as follows (in millions):



	2014		2015		2016		2017		2018		Thereafter		Total
Alliant Energy		$10		$9		$3		$3		$2		$22		$49
IPL	4		3		2		2		1		15		27
WPL	6		5		1		1		—		—		13

(b) Capital Leases -

WPL - In 2005, WPL entered into a 20-year agreement with Resources’ Non-regulated Generation business to lease Sheboygan Falls, with an option for two lease renewal periods thereafter. The lease became effective in 2005 when Sheboygan Falls began commercial operation. WPL is responsible for the operation of Sheboygan Falls and has exclusive rights to its output. In 2005, the PSCW approved this affiliated lease agreement with initial monthly lease payments of approximately $1.3 million. The lease payments were based on a 50% debt to capital ratio, a return on equity of 10.9%, a cost of debt based on the cost of senior notes issued by Resources’ Non-regulated Generation business in 2005 and certain costs incurred to construct the facility. In accordance with its order approving the lease agreement, the PSCW reserved the right to review the capital structure, return on equity and cost of debt every five years from the date of the order. No revisions to the lease have been made since its inception. The capital lease asset is amortized using the straight-line method over the 20-year lease term. Since the inception of the lease in 2005, WPL’s retail and wholesale rates have included recovery of the monthly Sheboygan Falls lease payments. Sheboygan Falls lease expenses were included in WPL’s Consolidated Statements of Income as follows (in millions):



	2013		2012		2011
Interest expense		$10.9		$11.3		$11.7
Depreciation and amortization	6.2		6.2		6.2
		$17.1		$17.5		$17.9

At December 31, 2013, WPL’s estimated future minimum capital lease payments for Sheboygan Falls were as follows (in millions):



	2014	2015	2016	2017	2018	Thereafter	Total	Less: amount representing interest	Present value of minimum capital lease payments
Sheboygan Falls	$15	$15	$15	$15	$15	$98	$173	$74	$99

(11) INCOME TAXES

Income Tax Expense (Benefit) - The components of “Income tax expense (benefit)” in the Consolidated Statements of Income were as follows (in millions):



	Alliant Energy									IPL									WPL
	2013			2012			2011			2013			2012			2011			2013			2012			2011
Current tax expense (benefit):
Federal		$4.4			($29.3	)		$58.6			$11.7			($7.7	)		$54.5			($5.7	)		$7.2			($4.3	)
State	(3.6		)	11.6			15.7			(0.1		)	9.1			20.0			6.0			(0.9		)	(7.1		)
IPL’s tax benefit riders	(52.9		)	(48.3		)	(35.9		)	(52.9		)	(48.3		)	(35.9		)	—			—			—
Deferred tax expense (benefit):
Federal	123.9			157.8			99.0			20.0			37.4			(11.6		)	92.7			81.1			111.3
State	15.6			23.9			(16.8		)	(0.8		)	3.2			(16.4		)	11.8			20.3			19.0
Production tax credits	(31.0		)	(24.8		)	(27.1		)	(14.4		)	(12.5		)	(12.3		)	(16.6		)	(12.3		)	(14.8		)
Investment tax credits	(1.6		)	(1.7		)	(1.8		)	(0.6		)	(0.6		)	(0.6		)	(1.0		)	(1.1		)	(1.2		)
Provision recorded as a change in uncertain tax positions:
Current	—			8.0			16.3			—			8.1			16.6			—			(0.1		)	(0.3		)
Deferred	(0.4		)	(7.6		)	(38.3		)	—			(8.2		)	(17.6		)	(0.4		)	0.6			(20.7		)
Provision recorded as a change in accrued interest	(0.5		)	(0.2		)	(0.5		)	(0.8		)	(0.3		)	(0.3		)	0.4			(0.2		)	—
		$53.9			$89.4			$69.2			($37.9	)		($19.8	)		($3.6	)		$87.2			$94.6			$81.9

Income Tax Rates - The overall income tax rates shown in the following table were computed by dividing income tax expense (benefit) by income from continuing operations before income taxes.



	Alliant Energy						IPL						WPL
	2013		2012		2011		2013		2012		2011		2013		2012		2011
Statutory federal income tax rate	35.0	%	35.0	%	35.0	%	35.0	%	35.0	%	35.0	%	35.0	%	35.0	%	35.0	%
State income taxes, net of federal benefits	5.7		5.7		4.6		5.4		5.8		4.3		6.0		5.5		5.0
IPL’s tax benefit riders	(12.1	)	(11.2	)	(8.8	)	(34.8	)	(37.0	)	(26.5	)	—		—		—
Production tax credits	(7.1	)	(5.8	)	(6.6	)	(9.5	)	(9.6	)	(9.1	)	(6.3	)	(4.7	)	(6.0	)
Effect of rate-making on property-related differences	(6.0	)	(5.0	)	(2.0	)	(15.9	)	(14.2	)	(5.3	)	(0.8	)	(1.1	)	(0.5	)
Adjustment of prior period taxes	(1.3	)	—		0.2		(3.6	)	0.2		1.7		(0.1	)	(0.3	)	—
State apportionment change due to announced sale of RMT	—		3.5		—		—		6.2		—		—		2.7		—
Wisconsin tax legislation	—		—		(4.6	)	—		—		—		—		—		—
Other items, net	(1.8	)	(1.4	)	(0.9	)	(1.5	)	(1.6	)	(2.8	)	(0.9	)	(0.8	)	(0.1	)
Overall income tax rate	12.4	%	20.8	%	16.9	%	(24.9	%)	(15.2	%)	(2.7	%)	32.9	%	36.3	%	33.4	%

IPL’s tax benefit riders - Alliant Energy’s and IPL’s effective income tax rates include the impact of reducing income tax expense with offsetting reductions to regulatory liabilities as a result of implementing the tax benefit riders. Refer to Note 2 for additional details on IPL’s tax benefit riders.

Production tax credits - Alliant Energy, IPL and WPL earn production tax credits from the wind projects they own and operate. Production tax credits are based on the electricity generated by each wind project during the first 10 years of operation. Alliant Energy has three wind projects that are currently generating production tax credits: WPL’s 68 MW Cedar Ridge wind project, which began generating electricity in 2008; IPL’s 200 MW Whispering Willow - East wind project, which began generating electricity in 2009; and WPL’s 201 MW Bent Tree - Phase I wind project, which began generating electricity in 2010. Production tax credits (net of state tax impacts) resulting from these wind projects are included in the table below (in millions). Production tax credits for the Whispering Willow - East and Bent Tree - Phase I wind projects increased in 2013 primarily due to higher levels of electricity output generated by the wind projects.



	Alliant Energy							IPL						WPL
	2013		2012			2011		2013		2012		2011		2013		2012			2011
Whispering Willow - East (IPL)		$14.4		$12.5			$12.3		$14.4		$12.5		$12.3		$—		$—			$—
Bent Tree - Phase I (WPL)	12.5		9.3			9.3		—		—		—		12.5		9.3			9.3
Cedar Ridge (WPL)	4.1		4.0			4.5		—		—		—		4.1		4.0			4.5
	31.0		25.8			26.1		14.4		12.5		12.3		16.6		13.3			13.8
Deferral	—		(1.0		)	1.0		—		—		—		—		(1.0		)	1.0
		$31.0		$24.8			$27.1		$14.4		$12.5		$12.3		$16.6		$12.3			$14.8

Effect of rate-making on property-related differences - Alliant Energy’s and IPL’s income tax expense and benefits are impacted by certain property-related differences at IPL for which deferred tax is not recognized in the income statement pursuant to Iowa rate-making principles. In 2012, the IRS audit to review the change in accounting method for allocation of mixed service costs and repairs expenditures was completed. Prior to 2012, tax expense and benefits at IPL related to mixed service costs and repairs expenditures book-to-tax differences were recorded in the tax benefit riders regulatory liability. Upon completion of the IRS audit, the tax expenses and benefits related to mixed service costs and repairs expenditures at IPL were recorded as a component of income tax expense beginning in 2012 pursuant to Iowa rate-making principles. The impact of the change in tax accounting methods for allocation of mixed service costs and repairs expenditures at IPL resulted in an increase in tax benefits for Alliant Energy and IPL in 2012. In 2013, the primary factor contributing to the increase in the current tax benefits recorded for the effect of rate-making on property-related differences was increased repairs expenditures and the equity component of AFUDC at IPL. Refer to Note 2 for additional details on IPL’s tax benefit riders.

State apportionment change due to announced sale of RMT - Alliant Energy, IPL and WPL utilize state apportionment projections to record their deferred tax assets and liabilities each reporting period. Deferred tax assets and liabilities for temporary differences between the tax basis of assets and liabilities and the amounts reported in the consolidated financial statements are recorded utilizing currently enacted tax rates and estimates of future state apportionment rates expected to be in effect at the time the temporary differences reverse. These state apportionment projections are most significantly impacted by the estimated amount of revenues expected in the future from each state jurisdiction for Alliant Energy’s consolidated tax groups, including both its regulated and its non-regulated operations. In the first quarter of 2012, Alliant Energy, IPL and WPL recorded $15 million, $8 million and $7 million, respectively, of deferred income tax expense due to changes in state apportionment projections caused by the announced sale of Alliant Energy’s RMT business.

Wisconsin tax legislation - In 2011, Act 32 was enacted. The most significant provision of Act 32 for Alliant Energy authorizes combined groups to share net operating loss carryforwards that were incurred by group members prior to January 1, 2009 and utilize these shared net operating losses over 20 years beginning after December 31, 2011. Based on this provision of Act 32, Alliant Energy anticipated its Wisconsin combined group would be able to fully utilize $368 million of Wisconsin net operating losses incurred by Alliant Energy and Resources prior to January 1, 2009 to offset future taxable income, and therefore, reversed previously recorded deferred tax asset valuation allowances related to state net operating loss carryforwards of $19 million in 2011.

Deferred Tax Assets and Liabilities - The deferred income tax (assets) and liabilities included on Alliant Energy’s Consolidated Balance Sheets at December 31 arise from the following temporary differences (in millions):



	2013								2012
	Deferred			Deferred Tax					Deferred			Deferred Tax
Alliant Energy	Tax Assets			Liabilities		Net			Tax Assets			Liabilities		Net
Property		$—			$2,316.3		$2,316.3			$—			$2,143.8		$2,143.8
Investment in ATC	—			120.7		120.7			—			104.3		104.3
Net operating losses carryforward - state	(35.3		)	—		(35.3		)	(46.8		)	—		(46.8		)
Regulatory liability - IPL’s tax benefit riders	(107.8		)	—		(107.8		)	(144.6		)	—		(144.6		)
Federal credit carryforward	(167.8		)	—		(167.8		)	(133.8		)	—		(133.8		)
Net operating losses carryforward - federal	(251.9		)	—		(251.9		)	(306.0		)	—		(306.0		)
Other	(108.9		)	210.7		101.8			(113.7		)	258.9		145.2
Subtotal	(671.7		)	2,647.7		1,976.0			(744.9		)	2,507.0		1,762.1
Valuation allowances	—			—		—			1.9			—		1.9
		($671.7	)		$2,647.7		$1,976.0			($743.0	)		$2,507.0		$1,764.0



	2013			2012
Current deferred tax assets		($136.7	)		($170.2	)
Non-current deferred tax liabilities	2,112.7			1,934.2
Total net deferred tax liabilities		$1,976.0			$1,764.0

The deferred income tax (assets) and liabilities included on IPL’s Consolidated Balance Sheets at December 31 arise from the following temporary differences (in millions):



	2013								2012
	Deferred			Deferred Tax					Deferred			Deferred Tax
IPL	Tax Assets			Liabilities		Net			Tax Assets			Liabilities		Net
Property		$—			$1,338.1		$1,338.1			$—			$1,243.9		$1,243.9
Federal credit carryforward	(52.9		)	—		(52.9		)	(37.4		)	—		(37.4		)
Regulatory liability - tax benefit riders	(107.8		)	—		(107.8		)	(144.6		)	—		(144.6		)
Net operating losses carryforward - federal	(111.3		)	—		(111.3		)	(131.0		)	—		(131.0		)
Other	(64.0		)	103.2		39.2			(70.4		)	147.5		77.1
		($336.0	)		$1,441.3		$1,105.3			($383.4	)		$1,391.4		$1,008.0



	2013			2012
Current deferred tax assets		($87.7	)		($79.3	)
Non-current deferred tax liabilities	1,193.0			1,087.3
Total net deferred tax liabilities		$1,105.3			$1,008.0

The deferred income tax (assets) and liabilities included on WPL’s Consolidated Balance Sheets at December 31 arise from the following temporary differences (in millions):



	2013								2012
	Deferred			Deferred Tax					Deferred			Deferred Tax
WPL	Tax Assets			Liabilities		Net			Tax Assets			Liabilities		Net
Property		$—			$859.1		$859.1			$—			$793.3		$793.3
Investment in ATC	—			120.7		120.7			—			104.3		104.3
Federal credit carryforward	(57.1		)	—		(57.1		)	(39.4		)	—		(39.4		)
Net operating losses carryforward - federal	(106.9		)	—		(106.9		)	(142.2		)	—		(142.2		)
Other	(37.6		)	75.6		38.0			(41.2		)	83.7		42.5
		($201.6	)		$1,055.4		$853.8			($222.8	)		$981.3		$758.5



	2013			2012
Current deferred tax assets		($43.3	)		($85.6	)
Non-current deferred tax liabilities	897.1			844.1
Total net deferred tax liabilities		$853.8			$758.5

Property - Property-related differences were primarily related to accelerated depreciation, including bonus depreciation. In January 2013, the ATR Act was enacted. The most significant provisions of the ATR Act for Alliant Energy, IPL and WPL are related to the extension of bonus depreciation deductions for certain expenditures for property that were incurred through December 31, 2013. Based on property expenditures incurred in 2013, Alliant Energy currently estimates its total bonus depreciation deductions to be claimed on its U.S. federal income tax return for calendar year 2013 will be approximately $130 million ($70 million for IPL and $45 million for WPL).

Investment in ATC - WPL has a partial ownership interest in ATC, which has generated deferred tax liabilities primarily from tax depreciation deductions taken at ATC in excess of book depreciation. The increase in deferred tax liabilities in 2013 was primarily due to bonus depreciation deductions estimated at ATC.

Carryforwards - At December 31, 2013, tax carryforwards and associated deferred tax assets and expiration dates were estimated as follows (in millions):



Alliant Energy	Tax Carryforwards		Deferred Tax Assets		Earliest Expiration Date
Federal net operating losses		$735		$252	2029
State net operating losses	686		35		2018
Federal tax credits	170		168		2022
				$455



IPL	Tax Carryforwards		Deferred Tax Assets		Earliest Expiration Date
Federal net operating losses		$325		$111	2029
State net operating losses	189		10		2018
Federal tax credits	54		53		2022
				$174



WPL	Tax Carryforwards		Deferred Tax Assets		Earliest Expiration Date
Federal net operating losses		$312		$107	2029
State net operating losses	99		5		2018
Federal tax credits	58		57		2022
				$169

At December 31, 2013, Alliant Energy’s state net operating losses carryforwards had expiration dates ranging from 2018 to 2031 with 98% expiring after 2024. At December 31, 2013, IPL’s state net operating losses carryforwards had expiration dates ranging from 2018 to 2031 with 95% expiring after 2024. At December 31, 2013, WPL’s state net operating losses carryforwards had expiration dates ranging from 2018 to 2031 with 98% expiring after 2024.

Regulatory liability - tax benefit riders - Refer to Note 2 for discussion of regulatory liabilities associated with IPL’s tax benefit riders.

Uncertain Tax Positions - A reconciliation of the beginning and ending amounts of uncertain tax positions, excluding interest, is as follows (in millions):



	Alliant Energy									IPL								WPL
	2013			2012			2011			2013		2012			2011			2013			2012			2011
Balance, January 1		$0.7			$23.5			$66.7			$—		$10.9			$33.0			$0.7			$12.6			$33.7
Additions based on tax positions related to the current year	—			0.7			0.7			—		—			0.1			—			0.7			0.6
Reductions for tax positions of prior years (a)	(0.7		)	(23.5		)	(43.9		)	—		(10.9		)	(22.2		)	(0.7		)	(12.6		)	(21.7		)
Balance, December 31		$—			$0.7			$23.5			$—		$—			$10.9			$—			$0.7			$12.6


(a)	In 2012, the reductions for tax positions of prior years were due to the finalization of Alliant Energy’s federal income tax return audits for calendar years 2005 through 2009. In 2011, the reductions for tax positions of prior years were related to guidance published by the IRS clarifying the treatment of repairs expenditures for electric distribution property.

At December 31, 2013, 2012 and 2011, there were no penalties accrued related to uncertain tax positions, and interest accrued and tax positions favorably impacting future effective tax rates for continuing operations were not material. As of December 31, 2013, Alliant Energy, IPL and WPL do not expect to have material changes to their unrecognized tax benefits during the next 12 months.

Open tax years - Tax years that remain subject to the statute of limitations are as follows:



Major Jurisdiction	Alliant Energy			IPL			WPL
Consolidated federal income tax returns (a)	2010	-	2012	2010	-	2012	2010	-	2012
Consolidated Iowa income tax returns (b)	2010	-	2012	2010	-	2012	2010	-	2012
Wisconsin combined tax returns (c)	2009	-	2012	2009	-	2012	2009	-	2012

(a)

2010 through 2012 federal tax returns are effectively settled as a result of participation in the IRS Compliance Assurance Program, which allows Alliant Energy and the IRS to work together to resolve issues related to Alliant Energy’s current tax year before filing its federal income tax return. The statute of limitations for 2010 through 2012 federal tax returns expires three years from their respective filing dates.


(b)	The statute of limitations for the 2010 through 2012 Iowa tax returns expires three years from their respective filing dates.


(c)	The statute of limitations for the 2009 through 2012 Wisconsin combined tax returns expires four years from their respective filing dates.

(12) BENEFIT PLANS

(a) Pension and Other Postretirement Benefits Plans - Alliant Energy, IPL and WPL provide retirement benefits to substantially all of their employees through various qualified and non-qualified non-contributory defined benefit pension plans, and/or through defined contribution plans (including 401(k) savings plans). Alliant Energy’s, IPL’s and WPL’s qualified and non-qualified non-contributory defined benefit pension plans are currently closed to new hires. Benefits of the non-contributory defined benefit pension plans are based on the plan participant’s years of service, age and compensation. Benefits of the defined contribution plans are based on the plan participant’s years of service, age, compensation and contributions. Alliant Energy, IPL and WPL also provide certain defined benefit postretirement health care and life benefits to eligible retirees. In general, the retiree health care plans consist of fixed benefit subsidy structures and the retiree life insurance plans are non-contributory.

Assumptions - The assumptions for defined benefit pension and other postretirement benefits plans at the measurement date of December 31 were as follows:



Alliant Energy	Defined Benefit Pension Plans												Other Postretirement Benefits Plans
	2013				2012				2011				2013	2012	2011
Discount rate for benefit obligations	4.97%				4.11%				4.86%				4.59%	3.82%	4.60%
Discount rate for net periodic cost	4.11%				4.86%				5.56%				3.82%	4.60%	5.25%
Expected rate of return on plan assets	7.60%				7.90%				7.90%				7.40%	7.50%	7.00%
Rate of compensation increase	3.50	%	-	4.50%	3.50	%	-	4.50%	3.50	%	-	4.50%	3.50%	3.50%	3.50%
Medical cost trend on covered charges:
Initial trend rate (end of year)	N/A				N/A				N/A				7.00%	7.50%	8.00%
Ultimate trend rate	N/A				N/A				N/A				5.00%	5.00%	5.00%



IPL	Qualified Defined Benefit Pension Plan			Other Postretirement Benefits Plans
	2013	2012	2011	2013	2012	2011
Discount rate for benefit obligations	5.05%	4.20%	4.95%	4.55%	3.76%	4.60%
Discount rate for net periodic cost	4.20%	4.95%	5.70%	3.76%	4.60%	5.25%
Expected rate of return on plan assets	7.60%	7.90%	7.90%	7.50%	7.40%	7.30%
Rate of compensation increase	3.50%	3.50%	3.50%	3.50%	3.50%	3.50%
Medical cost trend on covered charges:
Initial trend rate (end of year)	N/A	N/A	N/A	7.00%	7.50%	8.00%
Ultimate trend rate	N/A	N/A	N/A	5.00%	5.00%	5.00%



WPL	Qualified Defined Benefit Pension Plan			Other Postretirement Benefits Plans
	2013	2012	2011	2013	2012	2011
Discount rate for benefit obligations	5.05%	4.20%	4.95%	4.56%	3.81%	4.60%
Discount rate for net periodic cost	4.20%	4.95%	5.70%	3.81%	4.60%	5.25%
Expected rate of return on plan assets	7.60%	7.90%	7.90%	7.20%	7.00%	6.30%
Rate of compensation increase	3.50%	3.50%	3.50%	3.50%	3.50%	3.50%
Medical cost trend on covered charges:
Initial trend rate (end of year)	N/A	N/A	N/A	7.00%	7.50%	8.00%
Ultimate trend rate	N/A	N/A	N/A	5.00%	5.00%	5.00%

Expected rate of return on plan assets - The expected rate of return on plan assets is determined by analysis of projected asset class returns based on the target asset class allocations. Alliant Energy, IPL and WPL use a forward-looking building blocks approach and also review historical returns, survey information and capital market information to support the expected rate of return on plan assets assumption. Refer to “Investment Policy and Strategy for Plan Assets” below for additional information related to Alliant Energy’s, IPL’s and WPL’s investment policy and strategy and mix of assets for the pension and other postretirement benefits plans.

Medical cost trend on covered charges - The assumed medical trend rates are assumptions used in determining the service and interest cost and accumulated postretirement benefit obligation related to postretirement benefits costs. A 1% change in the medical trend rates for 2013, holding all other assumptions constant, would have the following effects (in millions):



	Alliant Energy					IPL					WPL
	1% Increase		1% Decrease			1% Increase		1% Decrease			1% Increase		1% Decrease
Effect on total of service and interest cost components		$0.4		($0.3	)		$0.2		($0.2	)		$0.2		($0.2	)
Effect on postretirement benefit obligation	2.4		(2.2		)	1.1		(1.0		)	1.2		(1.1		)

Net Periodic Benefit Costs (Credits) - The components of net periodic benefit costs (credits) for Alliant Energy’s, IPL’s and WPL’s sponsored defined benefit pension and other postretirement benefits plans are included in the tables below (in millions). In the “IPL” and “WPL” tables below, the defined benefit pension plans costs represent those respective costs for IPL’s and WPL’s bargaining unit employees covered under the qualified plans that are sponsored by IPL and WPL, respectively, as well as amounts directly assigned to each of IPL and WPL related to IPL’s and WPL’s current and former non-bargaining employees who are participants in the Alliant Energy and Corporate Services sponsored qualified and non-

qualified defined benefit pension plans. In the “IPL” and “WPL” tables below, the other postretirement benefits plans costs (credits) represent costs (credits) for IPL and WPL employees, respectively.



Alliant Energy	Defined Benefit Pension Plans												Other Postretirement Benefits Plans
2013				2012				2011				2013				2012				2011
Service cost		$15.7				$13.5				$11.4				$6.3				$6.9				$7.0
Interest cost	49.0				51.6				52.0				8.5				10.2				12.3
Expected return on plan assets (a)	(74.0		)		(68.8		)		(63.8		)		(8.1		)		(7.5		)		(7.9		)
Amortization of prior service cost (credit) (b)	0.2				0.3				0.7				(11.9		)		(12.0		)		(10.0		)
Amortization of actuarial loss (c)	36.2				33.3				21.1				4.9				6.3				5.3
Additional benefit costs (d) (e)	9.0				0.1				10.2				—				—				—
Settlement losses (f)	—				5.4				1.1				—				—				—
		$36.1				$35.4				$32.7				($0.3	)			$3.9				$6.7



IPL	Defined Benefit Pension Plans												Other Postretirement Benefits Plans
2013				2012				2011				2013				2012				2011
Service cost		$8.6				$7.5				$6.1				$2.9				$3.0				$2.6
Interest cost	22.9				24.1				24.0				3.6				4.4				5.5
Expected return on plan assets (a)	(35.2		)		(32.6		)		(29.7		)		(5.6		)		(5.1		)		(5.4		)
Amortization of prior service cost (credit) (b)	0.1				0.2				0.3				(6.3		)		(6.3		)		(5.0		)
Amortization of actuarial loss (c)	15.2				14.1				8.7				2.7				3.5				2.9
Additional benefit costs (d) (e)	2.6				—				2.8				—				—				—
		$14.2				$13.3				$12.2				($2.7	)			($0.5	)			$0.6



WPL	Defined Benefit Pension Plans												Other Postretirement Benefits Plans
2013				2012				2011				2013				2012				2011
Service cost		$5.9				$5.2				$4.5				$2.5				$2.7				$2.9
Interest cost	20.7				21.6				21.6				3.4				4.1				4.9
Expected return on plan assets (a)	(31.9		)		(29.6		)		(27.3		)		(1.3		)		(1.3		)		(1.3		)
Amortization of prior service cost (credit) (b)	0.3				0.4				0.3				(3.9		)		(3.9		)		(3.4		)
Amortization of actuarial loss (c)	17.1				15.7				10.1				1.9				2.3				2.1
Additional benefit costs (d) (e)	0.6				0.1				0.7				—				—				—
		$12.7				$13.4				$9.9				$2.6				$3.9				$5.2


(a)	The expected return on plan assets is based on the expected rate of return on plan assets and the fair value approach to the market-related value of plan assets.


(b)	Unrecognized prior service costs (credits) for the postretirement benefits plans are amortized over the average future service period to full eligibility of the participants of each plan.


(c)	Unrecognized net actuarial gains or losses in excess of 10% of the greater of the plans’ benefit obligations or assets are amortized over the average future service lives of plan participants, except for the Cash Balance Plan where gains or losses outside the 10% threshold are amortized over the time period the participants are expected to receive benefits.

(d)

In 2013, Alliant Energy filed a stipulation agreement with the Court related to the class-action lawsuit against the Cash Balance Plan. As a result, Alliant Energy recognized $9.0 million of additional benefits costs in 2013 related to the agreement. IPL recognized $5.5 million ($2.6 million directly assigned and $2.9 million allocated by Corporate Services) and WPL recognized $2.8 million ($0.6 million directly assigned and $2.2 million allocated by Corporate Services) of additional benefits costs in 2013 related to the agreement. Refer to Note 16(c) for additional information regarding the Cash Balance Plan.

(e)

Alliant Energy reached an agreement with the IRS, which resulted in a favorable determination letter for the Cash Balance Plan in 2011. The agreement with the IRS required Alliant Energy to amend the Cash Balance Plan, which was completed in 2011 resulting in aggregate additional benefits of $10.2 million paid by Alliant Energy to certain former participants in the Cash Balance Plan in 2011. Alliant Energy recognized $10.2 million of additional benefits costs in 2011 related to these benefits. IPL recognized $6.3 million ($2.8 million directly assigned and $3.5 million allocated by Corporate Services) and WPL recognized $3.4 million ($0.7 million directly assigned and $2.7 million allocated by Corporate Services) of additional benefits costs in 2011 related to these benefits. Refer to Note 16(c) for additional information regarding the Cash Balance Plan.


(f)	Settlement losses related to payments made to retired executives of Alliant Energy.

Corporate Services provides services to IPL and WPL, and as a result, IPL and WPL are allocated pension and other postretirement benefits costs (credits) associated with Corporate Services employees. Such costs (credits) are allocated to IPL and WPL based on labor costs of plan participants. The following table includes the allocated qualified and non-qualified pension and other postretirement benefits costs (credits) associated with Corporate Services employees providing services to IPL and WPL (in millions):



	Pension Benefits Costs (a)						Other Postretirement Benefits Costs (Credits)
	2013		2012		2011		2013			2012		2011
IPL		$4.8		$4.9		$5.8		($0.3	)		$0.1		$0.3
WPL	3.6		3.6		4.2		(0.2		)	0.1		0.2


(a)	Refer to IPL’s and WPL’s “Net Periodic Benefit Costs (Credits)” tables above for additional benefits costs related to the Cash Balance Plan allocated to IPL and WPL by Corporate Services in 2013 and 2011.

The estimated amortization from “Regulatory assets” and “Regulatory liabilities” on the Consolidated Balance Sheets and AOCL on Alliant Energy’s Consolidated Balance Sheet into net periodic benefit cost in 2014 is as follows (in millions):



	Alliant Energy					IPL					WPL
			Other					Other					Other
	Defined Benefit		Postretirement			Defined Benefit		Postretirement			Defined Benefit		Postretirement
	Pension Plans		Benefits Plans			Pension Plans		Benefits Plans			Pension Plans		Benefits Plans
Actuarial loss		$19.5		$2.4			$8.0		$1.1			$9.2		$1.2
Prior service cost (credit)	—		(11.9		)	—		(6.3		)	0.3		(3.9		)
		$19.5		($9.5	)		$8.0		($5.2	)		$9.5		($2.7	)

Alliant Energy’s, IPL’s and WPL’s net periodic benefit costs are primarily included in “Utility - Other operation and maintenance” in the Consolidated Statements of Income.

Benefit Plan Assets and Obligations - A reconciliation of the funded status of Alliant Energy’s qualified and non-qualified defined benefit pension and other postretirement benefits plans to the amounts recognized on Alliant Energy’s Consolidated Balance Sheets at December 31 was as follows (in millions):



Alliant Energy	Defined Benefit						Other Postretirement
	Pension Plans						Benefits Plans
	2013			2012			2013			2012
Change in projected benefit obligation:
Net projected benefit obligation at January 1		$1,207.5			$1,081.4			$223.2			$224.2
Service cost	15.7			13.5			6.3			6.9
Interest cost	49.0			51.6			8.5			10.2
Plan participants’ contributions	—			—			2.6			2.7
Additional benefit costs	9.0			0.1			—			—
Actuarial (gain) loss	(94.1		)	135.4			(13.2		)	(1.6		)
Gross benefits paid	(73.7		)	(74.5		)	(18.7		)	(19.2		)
Net projected benefit obligation at December 31	1,113.4			1,207.5			208.7			223.2
Change in plan assets:
Fair value of plan assets at January 1	965.6			897.4			123.1			120.4
Actual return on plan assets	128.5			126.9			14.4			14.3
Employer contributions	2.5			15.8			3.5			4.9
Plan participants’ contributions	—			—			2.6			2.7
Gross benefits paid	(73.7		)	(74.5		)	(18.7		)	(19.2		)
Fair value of plan assets at December 31	1,022.9			965.6			124.9			123.1
Under funded status at December 31		($90.5	)		($241.9	)		($83.8	)		($100.1	)



Alliant Energy	Defined Benefit						Other Postretirement
	Pension Plans						Benefits Plans
	2013			2012			2013			2012
Amounts recognized on the Consolidated Balance Sheets consist of:
Non-current assets		$—			$—			$14.5			$3.5
Other current liabilities	(2.4		)	(2.4		)	(4.8		)	(2.8		)
Pension and other benefit obligations	(88.1		)	(239.5		)	(93.5		)	(100.8		)
Net amount recognized at December 31		($90.5	)		($241.9	)		($83.8	)		($100.1	)
Amounts recognized in Regulatory Assets, Regulatory Liabilities and AOCL consist of (a):
Net actuarial loss		$348.6			$533.4			$38.1			$62.1
Prior service credit	(7.4		)	(7.2		)	(28.6		)	(40.5		)
		$341.2			$526.2			$9.5			$21.6


(a)	Refer to Note 2 and Alliant Energy’s Consolidated Statements of Common Equity for amounts recognized in “Regulatory assets” and “AOCL,” respectively, on Alliant Energy’s Consolidated Balance Sheets. At December 31, 2013 and 2012, $5.1 million and $2.7 million, respectively, of regulatory liabilities were recognized related to Alliant Energy’s other postretirement benefits plans.

In the “IPL” and “WPL” tables below, the defined benefit pension plans amounts represent those respective amounts for IPL’s and WPL’s bargaining unit employees covered under the qualified plans that are sponsored by IPL and WPL, respectively, as well as amounts directly assigned to each of IPL and WPL related to IPL’s and WPL’s current and former non-bargaining employees who are participants in the Alliant Energy and Corporate Services sponsored qualified and non-qualified defined benefit pension plans.

A reconciliation of the funded status of IPL’s qualified and non-qualified defined benefit pension and other postretirement benefits plans to the amounts recognized on IPL’s Consolidated Balance Sheets at December 31 was as follows (in millions):



IPL	Defined Benefit						Other Postretirement
	Pension Plans						Benefits Plans
	2013			2012			2013			2012
Change in projected benefit obligation:
Net projected benefit obligation at January 1		$559.2			$499.9			$96.0			$97.5
Service cost	8.6			7.5			2.9			3.0
Interest cost	22.9			24.1			3.6			4.4
Plan participants’ contributions	—			—			0.9			0.9
Additional benefit costs	2.6			—			—			—
Actuarial (gain) loss	(44.3		)	56.1			(7.0		)	(1.4		)
Gross benefits paid	(35.0		)	(28.4		)	(8.6		)	(8.4		)
Net projected benefit obligation at December 31	514.0			559.2			87.8			96.0
Change in plan assets:
Fair value of plan assets at January 1	458.8			426.1			78.8			74.7
Actual return on plan assets	61.2			60.4			10.0			9.4
Employer contributions	0.9			0.7			0.1			2.2
Plan participants’ contributions	—			—			0.9			0.9
Gross benefits paid	(35.0		)	(28.4		)	(8.6		)	(8.4		)
Fair value of plan assets at December 31	485.9			458.8			81.2			78.8
Under funded status at December 31		($28.1	)		($100.4	)		($6.6	)		($17.2	)



IPL	Defined Benefit						Other Postretirement
	Pension Plans						Benefits Plans
	2013			2012			2013			2012
Amounts recognized on the Consolidated Balance Sheets consist of:
Non-current assets		$—			$—			$8.8			$—
Other current liabilities	(0.8		)	(0.8		)	—			—
Pension and other benefit obligations	(27.3		)	(99.6		)	(15.4		)	(17.2		)
Net amount recognized at December 31		($28.1	)		($100.4	)		($6.6	)		($17.2	)
Amounts recognized in Regulatory Assets and Regulatory Liabilities consist of (a):
Net actuarial loss		$146.1			$231.6			$18.2			$32.0
Prior service credit	(2.6		)	(2.5		)	(15.0		)	(21.3		)
		$143.5			$229.1			$3.2			$10.7


(a)	Refer to Note 2 for amounts recognized in “Regulatory assets” on IPL’s Consolidated Balance Sheets. At December 31, 2013 and 2012, $1.0 million and $1.4 million, respectively, of regulatory liabilities were recognized related to IPL’s other postretirement benefits plans.

A reconciliation of the funded status of WPL’s qualified and non-qualified defined benefit pension and other postretirement benefits plans to the amounts recognized on WPL’s Consolidated Balance Sheets at December 31 was as follows (in millions):



WPL	Defined Benefit						Other Postretirement
	Pension Plans						Benefits Plans
	2013			2012			2013			2012
Change in projected benefit obligation:
Net projected benefit obligation at January 1		$506.7			$447.7			$89.1			$89.6
Service cost	5.9			5.2			2.5			2.7
Interest cost	20.7			21.6			3.4			4.1
Plan participants’ contributions	—			—			1.2			1.2
Additional benefit costs	0.6			0.1			—			—
Actuarial (gain) loss	(41.1		)	57.9			(3.0		)	0.3
Gross benefits paid	(32.0		)	(25.8		)	(7.6		)	(8.8		)
Net projected benefit obligation at December 31	460.8			506.7			85.6			89.1
Change in plan assets:
Fair value of plan assets at January 1	415.4			386.6			22.3			25.1
Actual return on plan assets	55.2			54.5			2.5			2.5
Employer contributions	0.2			0.1			3.3			2.3
Plan participants’ contributions	—			—			1.2			1.2
Gross benefits paid	(32.0		)	(25.8		)	(7.6		)	(8.8		)
Fair value of plan assets at December 31	438.8			415.4			21.7			22.3
Under funded status at December 31		($22.0	)		($91.3	)		($63.9	)		($66.8	)



WPL	Defined Benefit						Other Postretirement
	Pension Plans						Benefits Plans
	2013			2012			2013			2012
Amounts recognized on the Consolidated Balance Sheets consist of:
Non-current assets		$—			$—			$5.8			$3.5
Other current liabilities	(0.2		)	(0.2		)	(4.8		)	(2.8		)
Pension and other benefit obligations	(21.8		)	(91.1		)	(64.9		)	(67.5		)
Net amount recognized at December 31		($22.0	)		($91.3	)		($63.9	)		($66.8	)
Amounts recognized in Regulatory Assets and Regulatory Liabilities consist of (a):
Net actuarial loss		$152.2			$233.7			$18.3			$24.3
Prior service credit	(0.7		)	(0.4		)	(9.5		)	(13.4		)
		$151.5			$233.3			$8.8			$10.9


(a)	Refer to Note 2 for amounts recognized in “Regulatory assets” on WPL’s Consolidated Balance Sheets. At December 31, 2013 and 2012, $1.1 million and $0.2 million, respectively, of regulatory liabilities were recognized related to WPL’s other postretirement benefits plans.

Included in the following tables are accumulated benefit obligations, aggregate amounts applicable to defined benefit pension and other postretirement benefits plans with accumulated benefit obligations in excess of plan assets, as well as defined benefit pension plans with projected benefit obligations in excess of plan assets as of the December 31 measurement date (in millions):



Alliant Energy	Defined Benefit				Other Postretirement
	Pension Plans				Benefits Plans
	2013		2012		2013		2012
Accumulated benefit obligations		$1,071.7		$1,155.5		$208.7		$223.2
Plans with accumulated benefit obligations in excess of plan assets:
Accumulated benefit obligations	406.5		1,155.5		208.7		223.2
Fair value of plan assets	347.6		965.6		124.9		123.1
Plans with projected benefit obligations in excess of plan assets:
Projected benefit obligations	1,113.4		1,207.5		N/A		N/A
Fair value of plan assets	1,022.9		965.6		N/A		N/A



IPL	Defined Benefit				Other Postretirement
	Pension Plan				Benefits Plans
	2013		2012		2013		2012
Accumulated benefit obligations		$491.5		$530.4		$87.8		$96.0
Plans with accumulated benefit obligations in excess of plan assets:
Accumulated benefit obligations	159.3		530.4		87.8		96.0
Fair value of plan assets	144.6		458.8		81.2		78.8
Plans with projected benefit obligations in excess of plan assets:
Projected benefit obligations	514.0		559.2		N/A		N/A
Fair value of plan assets	485.9		458.8		N/A		N/A



WPL	Defined Benefit				Other Postretirement
	Pension Plan				Benefits Plans
	2013		2012		2013		2012
Accumulated benefit obligations		$446.7		$490.2		$85.6		$89.1
Plans with accumulated benefit obligations in excess of plan assets:
Accumulated benefit obligations	115.6		490.2		85.6		89.1
Fair value of plan assets	106.8		415.4		21.7		22.3
Plans with projected benefit obligations in excess of plan assets:
Projected benefit obligations	460.8		506.7		N/A		N/A
Fair value of plan assets	438.8		415.4		N/A		N/A

In addition to the amounts recognized in “Regulatory assets and regulatory liabilities” in the above tables for IPL and WPL, “Regulatory assets” and “Regulatory liabilities” were recognized for amounts associated with Corporate Services employees participating in other Alliant Energy sponsored benefit plans that were allocated to IPL and WPL at December 31 as follows (in millions):



	IPL				WPL
	2013		2012		2013		2012
Regulatory assets		$26.5		$38.1		$19.8		$25.5
Regulatory liabilities	1.7		0.6		1.3		0.4

Estimated Future Employer Contributions and Benefit Payments - Estimated funding for the qualified and non-qualified defined benefit pension and other postretirement benefits plans for 2014 is as follows (in millions):



	Alliant Energy		IPL		WPL
Defined benefit pension plans (a)		$2.4		$0.7		$0.2
Other postretirement benefits plans	5.1		—		5.0

(a)

Alliant Energy sponsors several non-qualified defined benefit pension plans that cover certain current and former key employees of IPL and WPL. Alliant Energy allocates pension costs to IPL and WPL for these plans. In addition, IPL and WPL amounts reflect funding for their non-bargaining employees who are participants in the Alliant Energy and Corporate Services sponsored qualified and non-qualified defined benefit pension plans.

Expected benefit payments for the qualified and non-qualified defined benefit plans, which reflect expected future service, as appropriate, are as follows (in millions):



Alliant Energy	2014		2015		2016		2017		2018		2019 - 2023
Defined benefit pension benefits		$71.2		$68.0		$66.3		$67.8		$71.2		$378.6
Other postretirement benefits	17.0		16.7		16.3		16.3		16.7		83.5
		$88.2		$84.7		$82.6		$84.1		$87.9		$462.1



IPL	2014		2015		2016		2017		2018		2019 - 2023
Defined benefit pension benefits		$32.2		$29.9		$31.3		$32.8		$34.4		$180.4
Other postretirement benefits	7.7		7.3		7.1		7.0		7.2		35.4
		$39.9		$37.2		$38.4		$39.8		$41.6		$215.8



WPL	2014		2015		2016		2017		2018		2019 - 2023
Defined benefit pension benefits		$26.4		$27.2		$27.1		$28.3		$29.4		$155.8
Other postretirement benefits	6.9		7.0		6.7		6.7		6.9		33.9
		$33.3		$34.2		$33.8		$35.0		$36.3		$189.7

Investment Policy and Strategy for Plan Assets - Alliant Energy’s, IPL’s and WPL’s investment policies and their strategies employed with respect to assets of defined benefit pension and other postretirement benefits plans are to combine both preservation of principal and prudent and reasonable risk-taking to protect the integrity of plan assets, in order to meet the obligations to plan participants while minimizing benefit costs over the long term. It is recognized that risk and volatility are present with all types of investments. However, risk is mitigated at the total fund level through diversification by asset class including U.S. and international equity and fixed income exposure, global asset and risk parity strategies, the number of individual investments, and sector and industry limits. Global asset and risk parity strategies include investments in global equity, global debt, commodities and currencies.

Defined Benefit Pension Plans Assets - For assets of defined benefit pension plans, the mix among asset classes is controlled by asset allocation targets. Historical performance results and future expectations suggest that equity securities will provide higher total investment returns than debt securities over a long-term investment horizon. Consistent with the goals of meeting obligations to plan participants and minimizing benefit costs over the long-term, the defined benefit pension plans have a long-term investment posture more heavily weighted towards equity holdings. The asset allocation is monitored regularly and appropriate steps are taken as needed to rebalance the assets within the prescribed ranges. Alliant Energy, IPL and WPL also use an overlay management service to help maintain target allocations and liquidity needs. The overlay manager is authorized to use derivative financial instruments to facilitate this service. For separately managed accounts, prohibited investment vehicles include, but may not be limited to, direct ownership of real estate, margin trading, oil and gas limited partnerships and securities of the managers’ firms or affiliate firms. At December 31, 2013, the current target ranges and actual allocations for Alliant Energy’s, IPL’s and WPL’s defined benefit pension plan assets were as follows:



	Target Range				Actual
	Allocation				Allocation
Cash and equivalents	—	%	-	5%	3%
Equity securities:
U.S. large cap core	8	%	-	18%	13%
U.S. large cap value	2.5	%	-	12.5%	7%
U.S. large cap growth	2.5	%	-	12.5%	8%
U.S. small cap value	—	%	-	4%	2%
U.S. small cap growth	—	%	-	4%	2%
International - developed markets	7	%	-	19%	13%
International - emerging markets	—	%	-	10%	5%
Global asset allocation securities	5	%	-	15%	10%
Risk parity allocation securities	5	%	-	15%	9%
Fixed income securities	20	%	-	40%	28%

Other Postretirement Benefits Plans Assets - Other postretirement benefits plans assets are comprised of specific assets within certain defined benefit pension plans (401(h) assets) as well as assets held in VEBA trusts. The investment policy and strategy of the 401(h) assets mirrors those of the defined benefit pension plans, which are discussed above. For VEBA trusts with assets greater than $5 million, the mix among asset classes is controlled by allocation targets. The asset allocation is monitored regularly and appropriate steps are taken as needed to rebalance the assets within the prescribed ranges. Mutual funds are used to achieve the desired diversification. At December 31, 2013, the current target ranges and actual allocations for Alliant Energy’s, IPL’s and WPL’s VEBA trusts with assets greater than $5 million were as follows:



	Target Range				Actual
	Allocation				Allocation
Cash and equivalents	—	%	-	5%	1%
Equity securities:
Domestic	25	%	-	45%	37%
International	10	%	-	20%	15%
Global asset allocation securities	20	%	-	40%	28%
Fixed income securities	10	%	-	30%	19%

Securities Lending Program - In 2013, Alliant Energy, IPL and WPL terminated their securities lending program with a third party agent. The program allowed the agent to lend certain securities from their defined benefit pension and other postretirement benefits plans to selected entities against receipt of collateral (in the form of cash, government and agency securities or letters of credit) as provided for and determined in accordance with its securities lending agency agreement. Refer to “Fair Value Measurements” below for details of fair value of invested collateral and amounts due to borrowers for the securities lending program at December 31, 2012.

Fair Value Measurements - The following tables report a framework for measuring fair value. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value. The three levels of the fair value hierarchy and examples of each are as follows:

Level 1 - Pricing inputs are quoted prices available in active markets for identical assets or liabilities as of the reporting date. Alliant Energy’s, IPL’s and WPL’s investments in securities held in registered investment companies and directly held equity securities are valued at the closing price reported in the active market in which the securities are traded.

Level 2 - Pricing inputs are quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in inactive markets, inputs other than quoted prices that are observable for the asset or liability and inputs that are derived principally from or corroborated by observable market data by correlation or other means. Alliant Energy’s, IPL’s and WPL’s investments in corporate bonds and government and agency obligations are valued at the closing price reported in the active market for similar assets in which the individual securities are traded or based on yields currently available on comparable securities of issuers with similar credit ratings. Alliant Energy’s, IPL’s and WPL’s investments in common/collective trusts are valued at the net asset value of shares held by the plans, which is based on the fair market value of the underlying investments in the common/collective trusts. Level 2 plan assets at December 31, 2012 also consisted of asset-backed securities within their securities lending invested collateral.

Level 3 - Pricing inputs are unobservable inputs for assets or liabilities for which little or no market data exist and require significant management judgment or estimation. At December 31, 2012, Alliant Energy’s, IPL’s and WPL’s Level 3 plan assets included certain asset-backed securities and corporate bonds within their securities lending invested collateral.

The fair value hierarchy gives the highest priority to quoted prices in active markets (Level 1) and the lowest priority to unobservable data (Level 3). In some cases, the inputs used to measure fair value might fall in different levels of the fair value hierarchy. The lowest level input that is significant to a fair value measurement in its entirety determines the applicable level in the fair value hierarchy. Assessing the significance of a particular input to the fair value measurement in its entirety requires judgment, considering factors specific to the asset or liability.

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while Alliant Energy, IPL and WPL believe their valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

At December 31, the fair values of Alliant Energy’s qualified and non-qualified defined benefit pension plans assets by asset category and fair value hierarchy level were as follows (in millions):



	2013									2012
	Fair			Level		Level		Level		Fair			Level		Level		Level
	Value			1		2		3		Value			1		2		3
Cash and equivalents		$32.6			$—		$32.6		$—		$43.9			$—		$43.9		$—
Equity securities:
U.S. large cap core	134.1			134.1		—		—		129.0			129.0		—		—
U.S. large cap value	77.0			—		77.0		—		107.9			—		107.9		—
U.S. large cap growth	77.4			—		77.4		—		105.8			—		105.8		—
U.S. small cap value	20.7			—		20.7		—		30.4			—		30.4		—
U.S. small cap growth	20.8			20.8		—		—		25.0			25.0		—		—
International - developed markets	136.3			68.0		68.3		—		153.7			80.3		73.4		—
International - emerging markets	48.4			48.4		—		—		38.5			38.5		—		—
Global asset allocation securities	99.1			56.7		42.4		—		94.5			56.3		38.2		—
Risk parity allocation securities	96.1			—		96.1		—		—			—		—		—
Fixed income securities:
Corporate bonds	29.2			—		29.2		—		30.7			—		30.7		—
Government and agency obligations	49.1			—		49.1		—		49.2			—		49.2		—
Fixed income funds	202.2			0.2		202.0		—		162.6			0.2		162.4		—
Securities lending invested collateral	—			—		—		—		4.4			—		2.9		1.5
	1,023.0				$328.2		$694.8		$—	975.6				$329.3		$644.8		$1.5
Accrued investment income	0.7									0.6
Due to brokers, net (pending trades with brokers)	(0.8		)							(1.5		)
Due to borrowers for securities lending program	—									(9.1		)
Total pension plan assets		$1,022.9									$965.6

At December 31, the fair values of IPL’s qualified and non-qualified defined benefit pension plans assets by asset category and fair value hierarchy level were as follows (in millions):



	2013									2012
	Fair			Level		Level		Level		Fair			Level		Level		Level
	Value			1		2		3		Value			1		2		3
Cash and equivalents		$15.4			$—		$15.4		$—		$20.8			$—		$20.8		$—
Equity securities:
U.S. large cap core	63.7			63.7		—		—		61.3			61.3		—		—
U.S. large cap value	36.6			—		36.6		—		51.3			—		51.3		—
U.S. large cap growth	36.8			—		36.8		—		50.3			—		50.3		—
U.S. small cap value	9.8			—		9.8		—		14.4			—		14.4		—
U.S. small cap growth	9.9			9.9		—		—		11.9			11.9		—		—
International - developed markets	64.8			32.3		32.5		—		73.0			38.2		34.8		—
International - emerging markets	23.0			23.0		—		—		18.3			18.3		—		—
Global asset allocation securities	47.1			27.0		20.1		—		44.9			26.7		18.2		—
Risk parity allocation securities	45.7			—		45.7		—		—			—		—		—
Fixed income securities:
Corporate bonds	13.9			—		13.9		—		14.6			—		14.6		—
Government and agency obligations	23.3			—		23.3		—		23.4			—		23.4		—
Fixed income funds	96.1			0.1		96.0		—		77.3			0.1		77.2		—
Securities lending invested collateral	—			—		—		—		2.1			—		1.4		0.7
	486.1				$156.0		$330.1		$—	463.6				$156.5		$306.4		$0.7
Accrued investment income	0.2									0.3
Due to brokers, net (pending trades with brokers)	(0.4		)							(0.8		)
Due to borrowers for securities lending program	—									(4.3		)
Total pension plan assets		$485.9									$458.8

At December 31, the fair values of WPL’s qualified and non-qualified defined benefit pension plans assets by asset category and fair value hierarchy level were as follows (in millions):



	2013									2012
	Fair			Level		Level		Level		Fair			Level		Level		Level
	Value			1		2		3		Value			1		2		3
Cash and equivalents		$14.0			$—		$14.0		$—		$18.9			$—		$18.9		$—
Equity securities:
U.S. large cap core	57.5			57.5		—		—		55.5			55.5		—		—
U.S. large cap value	33.1			—		33.1		—		46.4			—		46.4		—
U.S. large cap growth	33.2			—		33.2		—		45.5			—		45.5		—
U.S. small cap value	8.9			—		8.9		—		13.1			—		13.1		—
U.S. small cap growth	8.9			8.9		—		—		10.8			10.8		—		—
International - developed markets	58.5			29.2		29.3		—		66.1			34.5		31.6		—
International - emerging markets	20.8			20.8		—		—		16.6			16.6		—		—
Global asset allocation securities	42.5			24.3		18.2		—		40.6			24.2		16.4		—
Risk parity allocation securities	41.2			—		41.2		—		—			—		—		—
Fixed income securities:
Corporate bonds	12.5			—		12.5		—		13.2			—		13.2		—
Government and agency obligations	21.0			—		21.0		—		21.2			—		21.2		—
Fixed income funds	86.8			0.1		86.7		—		70.0			0.1		69.9		—
Securities lending invested collateral	—			—		—		—		1.9			—		1.2		0.7
	438.9				$140.8		$298.1		$—	419.8				$141.7		$277.4		$0.7
Accrued investment income	0.2									0.2
Due to brokers, net (pending trades with brokers)	(0.3		)							(0.7		)
Due to borrowers for securities lending program	—									(3.9		)
Total pension plan assets		$438.8									$415.4

At December 31, the fair values of Alliant Energy’s other postretirement benefits plans assets by asset category and fair value hierarchy level were as follows (in millions):



	2013								2012
	Fair		Level		Level		Level		Fair			Level		Level		Level
	Value		1		2		3		Value			1		2		3
Cash and equivalents		$3.9		$—		$3.9		$—		$8.4			$—		$8.4		$—
Equity securities:
U.S. blend	36.8		36.8		—		—		32.9			32.9		—		—
U.S. large cap core	2.9		2.9		—		—		2.8			2.8		—		—
U.S. large cap value	1.7		—		1.7		—		2.4			—		2.4		—
U.S. large cap growth	1.7		—		1.7		—		2.3			—		2.3		—
U.S. small cap value	0.5		—		0.5		—		0.7			—		0.7		—
U.S. small cap growth	0.5		0.5		—		—		0.6			0.6		—		—
International - blend	15.4		15.4		—		—		14.3			14.3		—		—
International - developed markets	3.0		1.5		1.5		—		3.4			1.8		1.6		—
International - emerging markets	1.1		1.1		—		—		0.8			0.8		—		—
Global asset allocation securities	30.4		29.5		0.9		—		30.4			29.6		0.8		—
Risk parity allocation securities	2.1		—		2.1		—		—			—		—		—
Fixed income securities:
Corporate bonds	0.6		—		0.6		—		0.7			—		0.7		—
Government and agency obligations	1.1		—		1.1		—		1.1			—		1.1		—
Fixed income funds	23.2		18.8		4.4		—		22.4			18.8		3.6		—
Securities lending invested collateral	—		—		—		—		0.1			—		0.1		—
	124.9			$106.5		$18.4		$—	123.3				$101.6		$21.7		$—
Due to borrowers for securities lending program	—								(0.2		)
Total other postretirement benefits plan assets		$124.9								$123.1

At December 31, the fair values of IPL’s other postretirement benefits plans assets by asset category and fair value hierarchy level were as follows (in millions):



	2013								2012
	Fair		Level		Level		Level		Fair			Level		Level		Level
	Value		1		2		3		Value			1		2		3
Cash and equivalents		$1.5		$—		$1.5		$—		$3.3			$—		$3.3		$—
Equity securities:
U.S. blend	27.8		27.8		—		—		24.3			24.3		—		—
U.S. large cap core	0.7		0.7		—		—		0.8			0.8		—		—
U.S. large cap value	0.4		—		0.4		—		0.7			—		0.7		—
U.S. large cap growth	0.4		—		0.4		—		0.7			—		0.7		—
U.S. small cap value	0.1		—		0.1		—		0.2			—		0.2		—
U.S. small cap growth	0.1		0.1		—		—		0.2			0.2		—		—
International - blend	11.6		11.6		—		—		10.6			10.6		—		—
International - developed markets	0.8		0.4		0.4		—		1.0			0.5		0.5		—
International - emerging markets	0.3		0.3		—		—		0.2			0.2		—		—
Global asset allocation securities	21.6		21.4		0.2		—		21.5			21.3		0.2		—
Risk parity allocation securities	0.5		—		0.5		—		—			—		—		—
Fixed income securities:
Corporate bonds	0.1		—		0.1		—		0.2			—		0.2		—
Government and agency obligations	0.3		—		0.3		—		0.3			—		0.3		—
Fixed income funds	15.0		13.9		1.1		—		14.9			13.9		1.0		—
Securities lending invested collateral	—		—		—		—		—			—		—		—
	81.2			$76.2		$5.0		$—	78.9				$71.8		$7.1		$—
Due to borrowers for securities lending program	—								(0.1		)
Total other postretirement benefits plan assets		$81.2								$78.8

At December 31, the fair values of WPL’s other postretirement benefits plans assets by asset category and fair value hierarchy level were as follows (in millions):



	2013								2012
	Fair		Level		Level		Level		Fair			Level		Level		Level
	Value		1		2		3		Value			1		2		3
Cash and equivalents		$1.4		$—		$1.4		$—		$3.9			$—		$3.9		$—
Equity securities:
U.S. blend	3.6		3.6		—		—		3.1			3.1		—		—
U.S. large cap core	1.5		1.5		—		—		1.3			1.3		—		—
U.S. large cap value	0.8		—		0.8		—		1.2			—		1.2		—
U.S. large cap growth	0.8		—		0.8		—		1.1			—		1.1		—
U.S. small cap value	0.2		—		0.2		—		0.3			—		0.3		—
U.S. small cap growth	0.2		0.2		—		—		0.3			0.3		—		—
International - blend	1.5		1.5		—		—		1.3			1.3		—		—
International - developed markets	1.5		0.7		0.8		—		1.6			0.8		0.8		—
International - emerging markets	0.5		0.5		—		—		0.4			0.4		—		—
Global asset allocation securities	3.8		3.3		0.5		—		3.6			3.2		0.4		—
Risk parity allocation securities	1.1		—		1.1		—		—			—		—		—
Fixed income securities:
Corporate bonds	0.3		—		0.3		—		0.3			—		0.3		—
Government and agency obligations	0.5		—		0.5		—		0.5			—		0.5		—
Fixed income funds	4.0		1.8		2.2		—		3.5			1.8		1.7		—
Securities lending invested collateral	—		—		—		—		—			—		—		—
	21.7			$13.1		$8.6		$—	22.4				$12.2		$10.2		$—
Due to borrowers for securities lending program	—								(0.1		)
Total other postretirement benefits plan assets		$21.7								$22.3

For the various defined benefit pension and other postretirement benefits plans, Alliant Energy common stock represented less than 1% of assets held in the plans at December 31, 2013 and 2012.

Cash Balance Plan - Alliant Energy’s defined benefit pension plans include the Cash Balance Plan, which provides benefits for certain non-bargaining unit employees. The Cash Balance Plan has been closed to new hires since 2005. Effective 2008, Alliant Energy amended the Cash Balance Plan by discontinuing additional contributions into employees’ Cash Balance Plan accounts and increased its level of contributions to its 401(k) Savings Plan. In 2009, Alliant Energy amended the Cash Balance Plan by changing participants’ future interest credit formula to use the annual change in the consumer price index. This amendment provides participants an interest crediting rate that is 3% more than the annual change in the consumer price index. Refer to Note 16(c) for discussion of a class-action lawsuit filed against the Cash Balance Plan in 2008.

401(k) Savings Plans - A significant number of Alliant Energy, IPL and WPL employees participate in defined contribution retirement plans (401(k) savings plans). Alliant Energy common stock represented 11.3% and 12.5% of total assets held in 401(k) savings plans at December 31, 2013 and 2012, respectively. Costs related to the 401(k) savings plans, which are partially based on the participants’ contributions, were as follows (in millions):



	Alliant Energy						IPL (a)						WPL (a)
	2013		2012		2011		2013		2012		2011		2013		2012		2011
401(k) costs		$19.2		$18.5		$18.4		$9.9		$9.6		$9.2		$8.5		$8.1		$8.4


(a)	IPL’s and WPL’s amounts include allocated costs associated with Corporate Services employees.

(b) Equity-based Compensation Plans - In 2010, Alliant Energy’s shareowners approved the OIP, which permits the grant of stock options, restricted stock, restricted stock units, performance shares, performance units, and other stock-based awards and performance-based cash awards to key employees. At December 31, 2013, performance shares and restricted stock were outstanding and 4.1 million shares of Alliant Energy’s common stock remained available for grants under the OIP. Alliant Energy satisfies payouts related to equity awards under the OIP through the issuance of new shares of its common stock. Alliant Energy also has the DLIP, which permits the grant of long-term performance-based awards, including performance units and restricted cash awards to certain key employees. At December 31, 2013, performance units and performance contingent cash awards were outstanding under the DLIP. There is no limit to the number of grants that can be made under the DLIP and Alliant Energy satisfies all payouts under the DLIP through cash payments.

A summary of compensation expense (including amounts allocated to IPL and WPL) and the related income tax benefits recognized for share-based compensation awards was as follows (in millions):



	Alliant Energy						IPL						WPL
	2013		2012		2011		2013		2012		2011		2013		2012		2011
Compensation expense		$12.0		$6.9		$10.1		$6.2		$3.6		$5.5		$5.2		$3.0		$4.1
Income tax benefits	4.8		2.8		4.0		2.5		1.5		2.2		2.1		1.2		1.7

As of December 31, 2013, total unrecognized compensation cost related to share-based compensation awards was $5.4 million, which is expected to be recognized over a weighted average period of between 1 and 2 years. Share-based compensation expense is recognized on a straight-line basis over the requisite service periods and is primarily recorded in “Utility - Other operation and maintenance” in the Consolidated Statements of Income.

Performance Shares and Units - Payouts of performance shares and units to key employees are contingent upon achievement over 3-year periods of specified performance criteria, which currently include metrics of total shareowner return relative to investor-owned utility peer groups. Payouts of nonvested performance shares and units issued in 2012 and after are prorated at retirement, death or disability based on time worked during the first year of the performance period and achievement of the performance criteria. Upon achievement of the performance criteria, payouts of these performance shares and units to participants who terminate employment after the first year of the performance period due to retirement, death or disability are not prorated. Payouts of nonvested performance shares and units issued prior to 2012 are prorated at retirement, death, disability or involuntary termination without cause based on time worked during the full or entire performance period and achievement of the performance criteria. Participants’ nonvested performance shares and units are forfeited if the participant voluntarily leaves Alliant Energy or is terminated for cause. Nonvested performance shares and units do not have non-forfeitable rights to dividends when dividends are paid to common shareowners. Alliant Energy assumes it will make future payouts of its performance shares and units in cash; therefore, performance shares and units are accounted for as liability awards.

Performance Shares - Performance shares can be paid out in shares of Alliant Energy’s common stock, cash or a combination of cash and stock and are adjusted by a performance multiplier, which ranges from zero to 200% based on the performance criteria. A summary of the performance shares activity was as follows:



	2013		2012		2011
	Shares (a)		Shares (a)		Shares (a)
Nonvested shares, January 1	145,277		236,979		234,518
Granted	49,093		45,612		64,217
Vested (b)	(54,430	)	(111,980	)	(57,838	)
Forfeited (c)	—		(25,334	)	(3,918	)
Nonvested shares, December 31	139,940		145,277		236,979


(a)	Share amounts represent the target number of performance shares. Each performance share’s value is based on the price of one share of Alliant Energy’s common stock at the end of the performance period. The actual number of shares that will be paid out upon vesting is dependent upon actual performance and may range from zero to 200% of the target number of shares.

(b)

In 2013, 54,430 performance shares granted in 2010 vested at 197.5% of the target, resulting in payouts valued at $4.8 million, which consisted of a combination of cash and common stock (4,177 shares). In 2012, 111,980 performance shares granted in 2009 vested at 162.5% of the target, resulting in payouts valued at $8.0 million, which consisted of a combination of cash and common stock (6,399 shares). In 2011, 57,838 performance shares granted in 2008 vested at 75% of the target, resulting in payouts valued at $1.6 million, which consisted of a combination of cash and common stock (1,387 shares).


(c)	Forfeitures were primarily caused by retirements and voluntary terminations of participants.

Performance Units - Performance units must be paid out in cash and are adjusted by a performance multiplier, which ranges from zero to 200% based on the performance criteria. A summary of the performance unit activity was as follows:



	2013		2012		2011
	Units (a)		Units (a)		Units (a)
Nonvested units, January 1	64,969		42,996		23,128
Granted	22,201		24,686		23,975
Vested (b)	(19,760	)	—		—
Forfeited	(1,498	)	(2,713	)	(4,107	)
Nonvested units, December 31	65,912		64,969		42,996


(a)	Unit amounts represent the target number of performance units. Each performance unit’s value is based on the average price of one share of Alliant Energy’s common stock on the grant date of the award. The actual payout for performance units is dependent upon actual performance and may range from zero to 200% of the target number of units.


(b)	In 2013, 19,760 performance units granted in 2010 vested at 197.5% of the target, resulting in cash payouts valued at $1.3 million.

Fair Value of Awards - Information related to fair values of nonvested performance shares and units at December 31, 2013, by year of grant, were as follows:



	Performance Shares									Performance Units
	2013 Grant			2012 Grant			2011 Grant			2013 Grant			2012 Grant			2011 Grant
Nonvested awards	49,093			45,612			45,235			21,935			23,226			20,751
Alliant Energy common stock closing price on December 31, 2013		$51.60			$51.60			$51.60
Alliant Energy common stock average price on grant date											$47.58			$43.05			$38.75
Estimated payout percentage based on performance criteria	110		%	109		%	148		%	110		%	109		%	148		%
Fair values of each nonvested award		$56.76			$56.24			$76.11			$52.34			$46.92			$57.16

At December 31, 2013, fair values of nonvested performance shares and units were calculated using a Monte Carlo simulation to determine the anticipated total shareowner returns of Alliant Energy and its investor-owned utility peer groups. Expected volatility was based on historical volatilities using daily stock prices over the past three years. Expected dividend yields were calculated based on the most recent quarterly dividend rates announced prior to the measurement date and stock prices at the measurement date. The risk-free interest rate was based on the three-year U.S. Treasury rate in effect as of the measurement date.

Performance-contingent Restricted Stock - Vesting of performance-contingent restricted stock grants are based on the achievement of certain performance targets (currently specified growth of consolidated income from continuing operations). If performance targets are not met within the performance period, which currently ranges from two to four years, these restricted stock grants are forfeited. Payouts of nonvested performance-contingent restricted stock issued in 2012 and after are prorated at retirement, death or disability based on time worked during the first year of the performance period and achievement of the performance criteria. Upon achievement of the performance criteria, payouts of this performance-contingent restricted stock to participants who terminate employment after the first year of the performance period due to retirement, death or disability are not prorated. Nonvested shares of performance-contingent restricted stock issued prior to 2012 are prorated at retirement based on time worked during the full or entire performance period and vest only if and when the performance criteria are met. Participants’ nonvested performance-contingent restricted stock is forfeited if the participant voluntarily leaves Alliant Energy or is terminated for cause. The fair value of performance-contingent restricted stock is based on the average market price at the grant date. A summary of the performance-contingent restricted stock activity was as follows:



	2013				2012				2011
	Shares		Weighted Average Fair Value		Shares		Weighted Average Fair Value		Shares		Weighted Average Fair Value
Nonvested shares, January 1	211,651			$32.42	301,738			$32.60	296,190			$32.32
Granted	49,093		47.58		45,612		43.05		64,217		38.75
Vested (a)	—		—		(65,172	)	32.56		(53,274	)	37.93
Forfeited (b)	(101,822	)	23.67		(70,527	)	39.93		(5,395	)	38.00
Nonvested shares, December 31	158,922		42.71		211,651		32.42		301,738		32.60


(a)	In 2012 and 2011, 65,172 and 53,274 performance-contingent restricted shares granted in 2010 and 2007, respectively, vested because the specified performance criteria for such shares were met.


(b)	In 2013 and 2012, 101,822 and 65,516 performance-contingent restricted shares granted in 2009 and 2008, respectively, were forfeited because the specified performance criteria for such shares were not met. The remaining forfeitures during 2012 and 2011 were primarily caused by retirements and terminations of participants.

Time-based Restricted Stock - At December 31, 2013, the amount of nonvested shares of time-based restricted stock was not material.

Performance Contingent Cash Awards - Performance contingent cash award payouts to key employees are based on the achievement of certain performance targets (currently specified growth of consolidated income from continuing operations). If performance targets are not met within the performance period, which currently ranges from two to four years, there are no payouts for these awards. Payouts of nonvested awards issued in 2012 and after are prorated at retirement, death or disability based on time worked during the first year of the performance period and achievement of the performance criteria. Upon achievement of the performance criteria, payouts of these awards to participants who terminate employment after the first year of the performance period due to retirement, death or disability are not prorated. Nonvested awards issued prior to 2012 are prorated at retirement based on time worked during the full or entire performance period and achievement of the performance criteria. Participants’ nonvested awards are forfeited if the participant voluntarily leaves Alliant Energy or is terminated for cause. Each performance contingent cash award’s value is based on the price of one share of Alliant Energy’s common stock at the end of the performance period. Alliant Energy accounts for performance contingent cash awards as liability awards because payouts will be made in the form of cash. A summary of the performance contingent cash awards activity was as follows:



	2013		2012		2011
	Awards		Awards		Awards
Nonvested awards, January 1	59,639		46,676		23,428
Granted	39,530		36,936		23,975
Vested (a)	—		(21,605	)	—
Forfeited	(2,192	)	(2,368	)	(727	)
Nonvested awards, December 31	96,977		59,639		46,676


(a)	In 2012, 21,605 performance contingent cash awards granted in 2010 vested, resulting in cash payouts valued at $0.9 million.

Non-qualified Stock Options - Alliant Energy has not granted any options since 2004. In 2013, the last of the outstanding options were exercised, resulting in no options outstanding at December 31, 2013.

(c) Deferred Compensation Plan - Alliant Energy maintains a DCP under which key employees may defer up to 100% of base salary and performance-based compensation and directors may elect to defer all or part of their retainer and committee fees. Key employees who have made the maximum allowed contribution to the Alliant Energy 401(k) Savings Plan may receive an additional credit to the DCP. Key employees and directors may elect to have their deferrals credited to a company stock account, an interest account or equity accounts based on certain benchmark funds.

Company Stock Accounts - The DCP does not permit diversification of deferrals credited to the company stock account and all distributions from participants’ company stock accounts are made in the form of shares of Alliant Energy common stock. The deferred compensation obligations for participants’ company stock accounts are recorded in “Additional paid-in capital” and the shares of Alliant Energy common stock held in a rabbi trust to satisfy this obligation are recorded in “Shares in deferred compensation trust” on Alliant Energy’s Consolidated Balance Sheets. At December 31, the carrying value of the

deferred compensation obligation for the company stock accounts and the shares in the deferred compensation trust based on the historical value of the shares of Alliant Energy common stock contributed to the rabbi trust, and the fair market value of the shares held in the rabbi trust were as follows (in millions):



	2013		2012
Carrying value		$8.0		$7.3
Fair market value	11.7		9.5

Interest and Equity Accounts - Distributions from participants’ interest and equity accounts are in the form of cash payments. The deferred compensation obligations for participants’ interest and equity accounts are recorded in “Pension and other benefit obligations” on Alliant Energy’s and IPL’s Consolidated Balance Sheets. At December 31, the carrying value of Alliant Energy’s and IPL’s deferred compensation obligations for participants’ interest and equity accounts, which approximates fair market value, was as follows (in millions):



	Alliant Energy		IPL
	2013	2012	2013	2012
Carrying value	$15.9	$16.3	$5.2	$5.0

(13) ASSET RETIREMENT OBLIGATIONS

AROs recognized by Alliant Energy, IPL and WPL relate to legal obligations for the removal, closure or dismantlement of several assets including, but not limited to, wind projects, certain ash ponds, certain coal yards, active ash landfills and above ground storage tanks. Alliant Energy’s, IPL’s and WPL’s recognized AROs also include legal obligations for the management and final disposition of asbestos and polychlorinated biphenyls. Alliant Energy’s, IPL’s and WPL’s AROs are recorded in “Other long-term liabilities and deferred credits” on the Consolidated Balance Sheets. Refer to Note 2 for information regarding regulatory assets related to AROs. A reconciliation of the changes in AROs associated with long-lived assets is as follows (in millions):



	Alliant Energy						IPL						WPL
	2013			2012			2013			2012			2013			2012
Balance, January 1		$101.5			$91.1			$45.5			$56.2			$46.9			$34.9
Revisions in estimated cash flows (a)	5.6			(6.4		)	0.1			(9.2		)	5.5			2.8
Liabilities settled	(2.3		)	(3.4		)	(0.6		)	(3.3		)	(1.7		)	(0.1		)
Liabilities incurred (b)	1.2			16.8			1.2			—			—			7.7
Accretion expense	3.7			3.4			1.7			1.8			1.7			1.6
Balance, December 31		$109.7			$101.5			$47.9			$45.5			$52.4			$46.9


(a)	In 2012, IPL recorded revisions in estimated cash flows of ($8.2) million based on revised remediation timing and cost information for asbestos remediation at Sixth Street.


(b)	In 2012, Resources recorded AROs of $9.1 million related to its Franklin County wind project and WPL recorded AROs of $7.6 million related to Nelson Dewey.

In addition, certain of Alliant Energy’s, IPL’s and WPL’s AROs related to EGU assets have not been recognized. Due to an indeterminate remediation date, the fair values of the AROs for these assets cannot be currently estimated. A liability for these AROs will be recorded when fair value is determinable. Removal costs of these facilities are being recovered in rates and are recorded in regulatory liabilities.

(14) FAIR VALUE MEASUREMENTS

Fair Value of Financial Instruments - The carrying amounts of Alliant Energy’s, IPL’s and WPL’s current assets and current liabilities approximate fair value because of the short maturity of such financial instruments. Carrying amounts and the related estimated fair values of other financial instruments at December 31 were as follows (in millions):



	Alliant Energy				IPL				WPL
	Carrying Amount		Fair Value		Carrying Amount		Fair Value		Carrying Amount		Fair Value
2013
Assets:
Derivative assets (Note 15)		$26.7		$26.7		$21.1		$21.1		$5.6		$5.6
Deferred proceeds (sales of receivables) (Note 5(a))	203.5		203.5		203.5		203.5		—		—
Capitalization and liabilities:
Long-term debt (including current maturities) (Note 9(b))	3,336.3		3,712.3		1,558.4		1,726.4		1,332.1		1,532.9
Cumulative preferred stock (Note 8)	200.0		167.0		200.0		167.0		—		—
Derivative liabilities (Note 15)	20.8		20.8		5.2		5.2		15.6		15.6
2012
Assets:
Derivative assets (Note 15)	26.2		26.2		17.5		17.5		8.7		8.7
Deferred proceeds (sales of receivables) (Note 5(a))	66.8		66.8		66.8		66.8		—		—
Capitalization and liabilities:
Long-term debt (including current maturities) (Note 9(b))	3,138.1		3,860.5		1,359.5		1,679.9		1,331.5		1,713.3
Cumulative preferred stock (Note 8)	205.1		212.6		145.1		151.8		60.0		60.8
Derivative liabilities (Note 15)	40.4		40.4		16.1		16.1		24.3		24.3

Valuation Hierarchy - Fair value measurement accounting establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The three levels of the fair value hierarchy and examples of each are as follows:

Level 1 - Pricing inputs are quoted prices available in active markets for identical assets or liabilities as of the reporting date. As of December 31, 2013, Level 1 items included IPL’s 5.1% cumulative preferred stock. As of December 31, 2012, Level 1 items included IPL’s 8.375% cumulative preferred stock and WPL’s 4.50% cumulative preferred stock.

Level 2 - Pricing inputs are quoted prices for similar assets or liabilities in active markets or quoted prices for identical or similar assets or liabilities in markets that are not active as of the reporting date. As of December 31, 2013 and 2012, Level 2 items included certain of IPL’s and WPL’s non-exchange traded commodity contracts and substantially all of the long-term debt instruments. Level 2 items as of December 31, 2012 also included the remainder of WPL’s cumulative preferred stock.

Level 3 - Pricing inputs are unobservable inputs for assets or liabilities for which little or no market data exist and require significant management judgment or estimation. As of December 31, 2013 and 2012, Level 3 items included IPL’s deferred proceeds, and IPL’s and WPL’s FTRs and certain non-exchange traded commodity contracts.

Valuation Techniques -

Derivative assets and derivative liabilities - Alliant Energy, IPL and WPL periodically use derivative instruments for risk management purposes to mitigate exposures to fluctuations in certain commodity prices and transmission congestion costs, and maintain risk policies that govern the use of such derivative instruments. As of December 31, 2013 and 2012, Alliant Energy’s, IPL’s and WPL’s derivative instruments were not designated as hedging instruments and included the following:



Risk management purpose	Type of instrument
Mitigate pricing volatility for:
Electricity purchased to supply customers	Electric swap and physical forward contracts (IPL and WPL)
Fuel used to supply natural gas-fired EGUs	Natural gas swap (IPL and WPL)
	Natural gas options (WPL)
Natural gas supplied to retail customers	Natural gas options and physical forward contracts (IPL and WPL)
	Natural gas swap contracts (IPL)
Fuel used at coal-fired EGUs	Coal physical forward contract with volumetric optionality (IPL and WPL)
Optimize the value of natural gas pipeline capacity	Natural gas physical forward contracts (IPL and WPL)
	Natural gas swap contracts (IPL)
Manage transmission congestion costs	FTRs (IPL and WPL)

IPL’s and WPL’s swap, option and physical forward commodity contracts were non-exchange-based derivative instruments and were valued using indicative price quotations from a pricing vendor that provides daily exchange forward price settlements, from broker or dealer quotations, from market publications or from on-line exchanges. The indicative price quotations reflected the average of the bid-ask mid-point prices and were obtained from sources believed to provide the most liquid market for the commodity. IPL and WPL corroborated a portion of these indicative price quotations using quoted prices for similar assets or liabilities in active markets and categorized derivative instruments based on such indicative price quotations as Level 2. IPL’s and WPL’s commodity contracts that were valued using indicative price quotations based on significant assumptions such as seasonal or monthly shaping and indicative price quotations that could not be readily corroborated were categorized as Level 3. IPL’s and WPL’s swap, option and physical forward commodity contracts were predominately at liquid trading points. IPL’s and WPL’s FTRs were valued using monthly or annual auction shadow prices from relevant auctions and were categorized as Level 3. Refer to Note 15 for additional details of derivative assets and derivative liabilities.

Level 3 inputs include observable and unobservable inputs used in the fair value measurements of IPL’s and WPL’s commodity contracts. The observable inputs are obtained from third-party pricing sources, counterparties and brokers and include bids, offers, historical transactions (including historical price differences between locations with both observable and unobservable prices) and executed trades. The significant unobservable inputs used in the fair value measurement of IPL’s and WPL’s commodity contracts are forecasted electricity, natural gas and coal prices, and the expected volatility of such prices. Significant changes in any of those inputs would result in a significantly lower or higher fair value measurement.

Deferred proceeds (sales of receivables) - The fair value of IPL’s deferred proceeds related to its sales of accounts receivable program was calculated each reporting date using the cost approach valuation technique. The fair value represents the carrying amount of receivables sold less the allowance for doubtful accounts associated with the receivables sold and cash proceeds received from the receivables sold due to the short-term nature of the collection period. These inputs were considered unobservable and deferred proceeds were categorized as Level 3. Deferred proceeds represent IPL’s maximum exposure to loss related to the receivables sold. Refer to Note 5(a) for additional information regarding deferred proceeds.

Long-term debt (including current maturities) - The fair value of long-term debt instruments was based on quoted market prices for similar liabilities at each reporting date or on a discounted cash flow methodology, which utilizes assumptions of current market pricing curves at each reporting date. Refer to Note 9(b) for additional information regarding long-term debt.

Cumulative preferred stock - As of December 31, 2013, the fair value of IPL’s 5.1% cumulative preferred stock was based on its closing market price quoted by the NYSE. As of December 31, 2012, the fair value of IPL’s 8.375% cumulative preferred stock was based on its closing market price quoted by the NYSE, the fair value of WPL’s 4.50% cumulative preferred stock was based on the closing market price quoted by the NYSE Amex LLC, and the fair value of WPL’s remaining preferred stock was calculated based on the market yield of similar securities. Refer to Note 8 for additional information regarding cumulative preferred stock.

Items subject to fair value measurement disclosure requirements were as follows (in millions):



Alliant Energy	2013								2012
	Fair		Level		Level		Level		Fair		Level		Level		Level
	Value		1		2		3		Value		1		2		3
Assets:
Derivatives - commodity contracts		$26.7		$—		$4.7		$22.0		$26.2		$—		$4.8		$21.4
Deferred proceeds	203.5		—		—		203.5		66.8		—		—		66.8
Capitalization and liabilities:
Long-term debt (including current maturities)	3,712.3		—		3,711.8		0.5		3,860.5		—		3,860.0		0.5
Cumulative preferred stock	167.0		167.0		—		—		212.6		162.3		50.3		—
Derivatives - commodity contracts	20.8		—		3.2		17.6		40.4		—		30.9		9.5



IPL	2013								2012
	Fair		Level		Level		Level		Fair		Level		Level		Level
	Value		1		2		3		Value		1		2		3
Assets:
Derivatives - commodity contracts		$21.1		$—		$3.0		$18.1		$17.5		$—		$3.1		$14.4
Deferred proceeds	203.5		—		—		203.5		66.8		—		—		66.8
Capitalization and liabilities:
Long-term debt (including current maturities)	1,726.4		—		1,726.4		—		1,679.9		—		1,679.9		—
Cumulative preferred stock	167.0		167.0		—		—		151.8		151.8		—		—
Derivatives - commodity contracts	5.2		—		1.7		3.5		16.1		—		14.2		1.9



WPL	2013								2012
	Fair		Level		Level		Level		Fair		Level		Level		Level
	Value		1		2		3		Value		1		2		3
Assets:
Derivatives - commodity contracts		$5.6		$—		$1.7		$3.9		$8.7		$—		$1.7		$7.0
Capitalization and liabilities:
Long-term debt (including current maturities)	1,532.9		—		1,532.9		—		1,713.3		—		1,713.3		—
Cumulative preferred stock	—		—		—		—		60.8		10.5		50.3		—
Derivatives - commodity contracts	15.6		—		1.5		14.1		24.3		—		16.7		7.6

Alliant Energy, IPL and WPL generally record gains and losses from IPL’s and WPL’s derivative instruments with offsets to regulatory assets or regulatory liabilities, based on their fuel and natural gas cost recovery mechanisms, as well as other specific regulatory authorizations. Based on these recovery mechanisms, the changes in the fair value of derivative liabilities resulted in comparable changes to regulatory assets, and the changes in the fair value of derivative assets resulted in comparable changes to regulatory liabilities on the Consolidated Balance Sheets.

Information for fair value measurements using significant unobservable inputs (Level 3 inputs) was as follows (in millions):



Alliant Energy	Commodity Contract Derivative
	Assets and (Liabilities), net						Deferred Proceeds
	2013			2012			2013		2012
Beginning balance, January 1		$11.9			($0.9	)		$66.8		$53.7
Total net losses (realized/unrealized) included in changes in net assets (a)	(12.7		)	(7.6		)	—		—
Transfers into Level 3 (b)	0.1			(1.1		)	—		—
Transfers out of Level 3 (c)	2.0			8.3			—		—
Purchases	50.9			35.8			—		—
Settlements (d)	(47.8		)	(22.6		)	136.7		13.1
Ending balance, December 31		$4.4			$11.9			$203.5		$66.8
The amount of total net losses for the period included in changes in net assets attributable to the change in unrealized losses relating to assets and liabilities held at December 31 (a)		($12.7	)		($2.6	)		$—		$—



IPL	Commodity Contract Derivative
	Assets and (Liabilities), net						Deferred Proceeds
	2013			2012			2013		2012
Beginning balance, January 1		$12.5			$4.3			$66.8		$53.7
Total net losses (realized/unrealized) included in changes in net assets (a)	(4.6		)	(3.5		)	—		—
Transfers into Level 3 (b)	—			(1.1		)	—		—
Transfers out of Level 3 (c)	1.0			2.4			—		—
Purchases	46.1			26.8			—		—
Settlements (d)	(40.4		)	(16.4		)	136.7		13.1
Ending balance, December 31		$14.6			$12.5			$203.5		$66.8
The amount of total net gains (losses) for the period included in changes in net assets attributable to the change in unrealized gains (losses) relating to assets and liabilities held at December 31 (a)		($4.6	)		$1.5			$—		$—



WPL	Commodity Contract Derivative
	Assets and (Liabilities), net
	2013			2012
Beginning balance, January 1		($0.6	)		($5.2	)
Total net losses (realized/unrealized) included in changes in net assets (a)	(8.1		)	(4.1		)
Transfers into Level 3 (b)	0.1			—
Transfers out of Level 3 (c)	1.0			5.9
Purchases	4.8			9.0
Settlements	(7.4		)	(6.2		)
Ending balance, December 31		($10.2	)		($0.6	)
The amount of total net losses for the period included in changes in net assets attributable to the change in unrealized losses relating to assets and liabilities held at December 31 (a)		($8.1	)		($4.1	)


(a)	Gains and losses related to derivative assets and derivative liabilities are generally recorded in “Regulatory assets” and “Regulatory liabilities” on the Consolidated Balance Sheets.


(b)	Markets for similar assets and liabilities became inactive and observable market inputs became unavailable for transfers into Level 3. The transfers were valued as of the beginning of the period.


(c)	Observable market inputs became available for certain commodity contracts previously classified as Level 3 for transfers out of Level 3. The transfers were valued as of the beginning of the period.


(d)	Settlements related to deferred proceeds are due to the change in the carrying amount of receivables sold less the allowance for doubtful accounts associated with the receivables sold and cash proceeds received from the receivables sold.

Commodity Contracts - As of December 31, 2013, the fair values of Alliant Energy’s, IPL’s and WPL’s electric, natural gas and coal commodity contracts categorized as Level 3, excluding FTRs, were recognized as net derivative liabilities of $13.9 million, $2.1 million and $11.8 million, respectively. As of December 31, 2013, Alliant Energy’s, IPL’s and WPL’s FTRs categorized as Level 3 were recognized as net derivative assets of $18.3 million, $16.7 million and $1.6 million, respectively.

(15) DERIVATIVE INSTRUMENTS

Commodity Derivatives -

Purpose - Alliant Energy, IPL and WPL periodically use derivative instruments for risk management purposes to mitigate exposures to fluctuations in certain commodity prices and transmission congestion costs. Refer to Note 14 for detailed discussion of Alliant Energy’s, IPL’s and WPL’s derivative instruments as of December 31, 2013 and 2012.

Notional Amounts - As of December 31, 2013, gross notional amounts by delivery year related to outstanding swap contracts, option contracts, physical forward contracts, FTRs and coal contracts that were accounted for as commodity derivative instruments were as follows (units in thousands):



	2014	2015	2016	2017	2018	Total
Alliant Energy
Electricity (MWhs)	5,895	2,717	1,318	1,314	1,314	12,558
FTRs (MWhs)	7,707	—	—	—	—	7,707
Natural gas (Dths)	47,669	8,956	1,639	—	—	58,264
Coal (tons)	1,591	936	955	868	714	5,064
IPL
Electricity (MWhs)	2,159	527	—	—	—	2,686
FTRs (MWhs)	4,923	—	—	—	—	4,923
Natural gas (Dths)	37,535	7,381	1,639	—	—	46,555
Coal (tons)	270	—	216	129	184	799
WPL
Electricity (MWhs)	3,736	2,190	1,318	1,314	1,314	9,872
FTRs (MWhs)	2,784	—	—	—	—	2,784
Natural gas (Dths)	10,134	1,575	—	—	—	11,709
Coal (tons)	1,321	936	739	739	530	4,265

Financial Statement Presentation - Alliant Energy, IPL and WPL record derivative instruments at fair value each reporting date on the balance sheet as assets or liabilities. At December 31, the fair values of current derivative assets are included in “Other current assets,” non-current derivative assets are included in “Deferred charges and other,” current derivative liabilities are included in “Other current liabilities” and non-current derivative liabilities are included in “Other long-term liabilities and deferred credits” on the Consolidated Balance Sheets as follows (in millions):



	Alliant Energy				IPL				WPL
Commodity contracts	2013		2012		2013		2012		2013		2012
Current derivative assets		$25.6		$23.5		$20.2		$17.0		$5.4		$6.5
Non-current derivative assets	1.1		2.7		0.9		0.5		0.2		2.2
Current derivative liabilities	6.7		31.1		3.0		14.1		3.7		17.0
Non-current derivative liabilities	14.1		9.3		2.2		2.0		11.9		7.3

Changes in unrealized gains (losses) from commodity derivative instruments not designated as hedging instruments were recorded with offsets to regulatory assets or regulatory liabilities on the Consolidated Balance Sheets as follows (in millions):



	Alliant Energy									IPL									WPL
	2013			2012			2011			2013			2012			2011			2013			2012			2011
Regulatory assets		($14.7	)		($37.9	)		($79.6	)		($6.6	)		($16.8	)		($42.4	)		($8.1	)		($21.1	)		($37.2	)
Regulatory liabilities	22.2			20.3			9.3			11.8			13.5			6.4			10.4			6.8			2.9

Net unrealized gains (losses) from commodity contracts during 2013, 2012 and 2011 were primarily due to changes in electricity and natural gas prices during such periods.

Credit Risk-related Contingent Features - Alliant Energy, IPL and WPL have entered into various agreements that contain credit risk-related contingent features including requirements for them to maintain certain credit ratings from each of the major credit rating agencies and/or limitations on their liability positions under the various agreements based upon their credit ratings. In the event of a downgrade in their credit ratings or if their liability positions exceed certain contractual limits, Alliant Energy, IPL or WPL may need to provide credit support in the form of letters of credit or cash collateral up to the amount of their exposure under the contracts, or may need to unwind the contracts and pay the underlying liability positions.

Certain of these agreements with credit risk-related contingency features are accounted for as derivative instruments. The aggregate fair value of all derivatives with credit risk-related contingent features that were in a net liability position on December 31, 2013 was $20.8 million, $5.2 million and $15.6 million for Alliant Energy, IPL and WPL, respectively. At December 31, 2013, Alliant Energy, IPL and WPL all had investment-grade credit ratings. If the most restrictive credit risk-related contingent features for derivative agreements in a net liability position were triggered on December 31, 2013, Alliant Energy, IPL and WPL would be required to post $20.8 million, $5.2 million and $15.6 million, respectively, of credit support to their counterparties.

Balance Sheet Offsetting - Alliant Energy, IPL and WPL do not net the fair value amounts of derivative instruments subject to a master netting arrangement by counterparty on the Consolidated Balance Sheets. However, if Alliant Energy, IPL and WPL did net the fair value amounts of derivative instruments by counterparty, derivative assets and derivative liabilities related to commodity contracts would have been presented on their Consolidated Balance Sheets as follows (in millions):



	Alliant Energy				IPL				WPL
	Gross				Gross				Gross
	(as reported)		Net		(as reported)		Net		(as reported)		Net
December 31, 2013
Derivative assets		$26.7		$23.5		$21.1		$19.5		$5.6		$4.0
Derivative liabilities	20.8		17.6		5.2		3.6		15.6		14.0
December 31, 2012
Derivative assets	26.2		19.3		17.5		14.5		8.7		4.8
Derivative liabilities	40.4		33.5		16.1		13.1		24.3		20.4

Alliant Energy, IPL and WPL also do not offset fair value amounts recognized for the right to reclaim cash collateral (receivable) or the obligation to return cash collateral (payable) against fair value amounts recognized for derivative instruments executed with the same counterparty under the same master netting arrangement. In addition, trade receivables and payables associated with derivative assets and derivative liabilities are also subject to a master netting arrangement. As of December 31, 2013 and 2012, the related cash collateral and trade receivables and payables were not material and were not included in the above table.

(16) COMMITMENTS AND CONTINGENCIES

(a) Capital Purchase Obligations - Alliant Energy, IPL and WPL have entered into capital purchase obligations that contain minimum future commitments related to capital expenditures for certain of their emission controls and generation performance improvement projects. These projects include the installation of scrubbers and baghouses at IPL’s Ottumwa Unit 1 and WPL’s Columbia Units 1 and 2 to reduce SO2 and mercury emissions at the EGUs and generation performance improvements at IPL’s Ottumwa Unit 1. At December 31, 2013, Alliant Energy’s, IPL’s and WPL’s minimum future commitments related to these projects were $86 million, $35 million and $51 million, respectively.

(b) Operating Expense Purchase Obligations - Alliant Energy, IPL and WPL have entered into various commodity supply, transportation and storage contracts to meet their obligations to provide electricity and natural gas to IPL’s and WPL’s utility customers. Alliant Energy, IPL and WPL also enter into other operating expense purchase obligations with various vendors for other goods and services. At December 31, 2013, minimum future commitments related to these operating expense purchase obligations were as follows (in millions):



Alliant Energy	2014		2015		2016		2017		2018		Thereafter		Total
Purchased power (a):
DAEC (IPL) (b)		$120		$119		$127		$138		$128		$1,025		$1,657
Other	52		73		45		44		44		—		258
	172		192		172		182		172		1,025		1,915
Natural gas	187		65		34		10		2		6		304
Coal (c)	128		81		59		30		21		—		319
SO2 emission allowances (d)	—		12		14		8		—		—		34
Other (e)	8		3		—		—		—		—		11
		$495		$353		$279		$230		$195		$1,031		$2,583



IPL	2014		2015		2016		2017		2018		Thereafter		Total
Purchased power (a):
DAEC (b)		$120		$119		$127		$138		$128		$1,025		$1,657
Other	—		—		1		—		—		—		1
	120		119		128		138		128		1,025		1,658
Natural gas	129		37		15		3		1		6		191
Coal (c)	63		32		27		11		6		—		139
SO2 emission allowances (d)	—		12		14		8		—		—		34
Other (e)	5		1		—		—		—		—		6
	$317			$201		$184		$160		$135		$1,031		$2,028



WPL	2014		2015		2016		2017		2018		Thereafter		Total
Purchased power (a)		$52		$73		$44		$44		$44		$—		$257
Natural gas	58		28		19		7		1		—		113
Coal (c)	65		49		32		19		15		—		180
Other (e)	2		—		—		—		—		—		2
		$177		$150		$95		$70		$60		$—		$552


(a)	Includes payments required by PPAs for capacity rights (Alliant Energy and IPL only) and minimum quantities of MWhs required to be purchased. Refer to Note 18 for additional information on purchased power transactions.

(b)

Includes commitments incurred under an existing PPA that expires February 2014 and a new PPA effective February 2014. The new PPA grants IPL rights to purchase 431 MWs of capacity and the resulting energy from DAEC for a term from the expiration of the existing PPA in February 2014 through December 31, 2025. If energy delivered under the new PPA is less than the targeted energy amount, an adjustment payment will be made to IPL, which will be reflected in IPL’s fuel adjustment clause.


(c)	Corporate Services entered into system-wide coal contracts on behalf of IPL and WPL that include minimum future commitments. These commitments were assigned to IPL and WPL based on information available as of December 31, 2013 regarding expected future usage, which is subject to change.


(d)	Refer to Note 2 for discussion of $34 million of charges recognized by Alliant Energy and IPL in 2011 for forward contracts to purchase SO2 emission allowances.


(e)	Includes individual commitments incurred during the normal course of business that exceeded $1 million at December 31, 2013.

Alliant Energy, IPL and WPL enter into certain contracts that are considered leases and are therefore not included here, but are included in Note 10.

Cash Balance Plan - In 2008, a class-action lawsuit was filed against the Cash Balance Plan in the Court. The complaint alleged that certain Cash Balance Plan participants who received distributions prior to their normal retirement age did not receive the full benefit to which they were entitled in violation of ERISA because the Cash Balance Plan applied an improper interest crediting rate to project the cash balance account to their normal retirement age. These Cash Balance Plan participants were limited to individuals who, prior to normal retirement age, received a lump-sum distribution or an annuity payment.

In 2011, the Cash Balance Plan was amended and the Cash Balance Plan subsequently made approximately $10 million in additional payments in 2011 to certain former participants in the Cash Balance Plan. This amendment was required based on an agreement Alliant Energy reached with the IRS, which resulted in a favorable determination letter for the Cash Balance Plan in 2011. In 2012, the Court entered a final judgment in the class-action lawsuit, which was appealed to the Seventh Circuit Court of Appeals. In August 2013, the Seventh Circuit Court of Appeals ruled on the case and remanded it to the Court to determine final damages. The Cash Balance Plan entered into a stipulation agreement with the plaintiffs, which was filed with the Court in December 2013 settling all open matters in the case. In January 2014, the Court entered final judgment in the total amount of $9.0 million. Plaintiffs’ attorney’s fees and costs will be paid from the final damages.

Due to the stipulation agreement filed with the Court in December 2013, Alliant Energy, IPL and WPL recognized the additional benefits to be paid to the plaintiffs in their Consolidated Statements of Income in 2013. As a result of the January 2014 final Court order requiring plaintiffs’ attorney’s fees and costs to be paid out of the final judgment, Alliant Energy, IPL and WPL reversed the reserve previously recorded related to payment of plaintiffs’ attorney’s fees and costs. As a result of recognizing the additional benefits of $9.0 million to be paid to the plaintiffs and reversing the previously recorded reserve of $6.7 million for plaintiffs’ attorney’s fees and costs, there was not a net material impact on Alliant Energy’s, IPL’s or WPL’s results of operations for 2013.

Flood Damage Claims - In June 2013, several plaintiffs purporting to represent a class of residential and commercial property owners filed a complaint against CRANDIC, Alliant Energy and various other defendants in the Iowa District Court for Linn County. Plaintiffs asserted claims of negligence and strict liability based on their allegations that CRANDIC (along with other defendants) caused or exacerbated flooding of the Cedar River in June 2008. In July 2013, the case was removed from state court to federal court based on federal jurisdiction. In September 2013, the U.S. District Court for the Northern District of Iowa dismissed the plaintiffs’ claims and transferred the case for resolution to the Surface Transportation Board, the administrative agency that oversees the Interstate Commerce Commission Termination Act. In October 2013, the plaintiffs appealed the federal court’s dismissal of the case to the Eighth Circuit Court of Appeals. Alliant Energy and CRANDIC believe the case is without merit and will continue to vigorously contest the case. As a result, Alliant Energy does not currently believe any material losses from these claims are both probable and reasonably estimated, and therefore, has not recognized any material loss contingency amounts for this complaint as of December 31, 2013. Due to the early stages of the claim and the lack of specific damages identified, Alliant Energy is currently unable to provide an estimate of potential loss or range of potential loss.

Smart Meters Patents - In 2011, a lawsuit was filed against WPL in the Court by TransData, a company that is claiming it has valid patents covering wireless smart electric meter technology. TransData alleges in the lawsuit that WPL used meters that contain technology that allegedly infringe on patents owned by TransData. In 2012, the lawsuit was transferred to the U.S. District Court for the Western District of Oklahoma, whereby the lawsuit was consolidated with lawsuits TransData previously filed against various other utility companies. The smart meters in question were purchased by WPL from a third-party vendor. The third-party vendor, while not a party to the litigation, is defending WPL. WPL also believes that it has an indemnification agreement with the third-party vendor for any judgment that may result from the litigation. TransData is seeking injunctive relief and recovery of an unspecified amount of damages. Alliant Energy and WPL do not currently believe any material losses from this lawsuit are both probable and reasonably estimated, and therefore, have not recognized any material loss contingency amounts for this lawsuit as of December 31, 2013. Due to the lack of specific damages identified and the status of the litigation, WPL is currently unable to provide an estimate of potential loss or range of potential loss.

Other - Alliant Energy, IPL and WPL are involved in other legal and administrative proceedings before various courts and agencies with respect to matters arising in the ordinary course of business. Although unable to predict the outcome of these matters, Alliant Energy, IPL and WPL believe that appropriate reserves have been established and final disposition of these actions will not have a material effect on their financial condition or results of operations.

(d) Guarantees and Indemnifications -

RMT - In January 2013, Alliant Energy sold RMT. RMT provided renewable energy services including construction and high voltage connection services for wind and solar projects. As part of the sale, Alliant Energy provided indemnifications to the buyer of RMT for losses resulting from potential breach of the representations and warranties made by Alliant Energy as of the sale date and for the potential breach of its obligations under the sale agreement. These indemnifications are limited to $3 million and expire in July 2014.

In addition, Alliant Energy, as part of the sale, indemnified the buyer for any claims, including claims of warranty under the project obligations that were commenced or are based on actions that occurred prior to the sale, except for liabilities already accounted for through adjustments to the purchase price. The indemnification obligations either cease to exist when the statute of limitation for such claims is met or, in the case of RMT’s projects, when the warranty period under the agreements expires. The warranty periods for RMT’s projects generally range from 12 to 60 months with the latest expiring in 2016.

Alliant Energy also continues to guarantee RMT’s performance obligations related to certain of RMT’s projects that were commenced prior to Alliant Energy’s sale of RMT. As of December 31, 2013, Alliant Energy had $347 million of performance guarantees outstanding with $294 million and $53 million expiring in 2014 and 2015, respectively.

Although Alliant Energy has received warranty claims related to certain of these projects, it does not currently believe that material losses are both probable and reasonably estimated, and therefore, has not recognized any material liabilities related to these matters as of December 31, 2013. Due to the early stages of the warranty claims, Alliant Energy is currently unable to provide an estimate of potential loss or range of potential loss. Refer to Note 19 for further discussion of RMT.

Whiting Petroleum - In 2004, Alliant Energy sold its remaining interest in Whiting Petroleum. Whiting Petroleum is an independent oil and gas company. Alliant Energy continues to guarantee the obligations related to the abandonment of certain platforms off the coast of California and related onshore plant and equipment that were owned by Whiting Petroleum prior to Alliant Energy’s sale of Whiting Petroleum. The guarantee does not include a maximum limit. As of December 31, 2013, the present value of the abandonment obligations is estimated at $32 million. Alliant Energy believes that no payments will be made under this guarantee. Alliant Energy has not recognized any material liabilities related to this guarantee as of December 31, 2013.

(e) Environmental Matters - Alliant Energy, IPL and WPL are subject to environmental regulations as a result of their current and past operations. These regulations are designed to protect public health and the environment and have resulted in compliance, remediation, containment and monitoring obligations, which are recorded as environmental liabilities. At December 31, current environmental liabilities were included in “Other current liabilities” and non-current environmental liabilities were included in “Other long-term liabilities and deferred credits” on the Consolidated Balance Sheets as follows (in millions):



	Alliant Energy				IPL				WPL
	2013		2012		2013		2012		2013		2012
Current environmental liabilities		$3.6		$3.7		$2.8		$2.5		$0.8		$1.2
Non-current environmental liabilities	15.4		25.3		13.6		23.2		1.7		2.1
		$19.0		$29.0		$16.4		$25.7		$2.5		$3.3

MGP Sites - IPL and WPL have current or previous ownership interests in various sites that are previously associated with the production of gas for which IPL and WPL have, or may have in the future, liability for investigation, remediation and monitoring costs. IPL and WPL are working pursuant to the requirements of various federal and state agencies to investigate, mitigate, prevent and remediate, where necessary, the environmental impacts to property, including natural resources, at and around these former MGP sites in order to protect public health and the environment. IPL and WPL are currently monitoring and/or remediating 27 and 5 sites, respectively.

Alliant Energy, IPL and WPL record environmental liabilities related to these former MGP sites based upon periodic studies. Such amounts are based on the best current estimate of the remaining amount to be incurred for investigation, remediation and monitoring costs for those sites where the investigation process has been or is substantially completed, and the minimum of the estimated cost range for those sites where the investigation is in its earlier stages. There are inherent uncertainties associated with the estimated remaining costs for MGP projects primarily due to unknown site conditions and potential changes in regulatory agency requirements. It is possible that future cost estimates will be greater than current estimates as the investigation process proceeds and as additional facts become known. The amounts recognized as liabilities are reduced for expenditures incurred and are adjusted as further information develops or circumstances change. Costs of future

expenditures for environmental remediation obligations are not discounted. Management currently estimates the range of remaining costs to be incurred for the investigation, remediation and monitoring of these sites to be $13 million ($11 million for IPL and $2 million for WPL) to $30 million ($27 million for IPL and $3 million for WPL). At December 31, 2013, Alliant Energy, IPL and WPL recorded $19 million, $16 million and $3 million, respectively, in other current and non-current environmental liabilities for their remaining costs to be incurred for these MGP sites.

Refer to Note 2 for discussion of regulatory assets recorded by IPL and WPL, which reflect the probable future rate recovery of MGP expenditures. Considering the current rate treatment, and assuming no material change therein, Alliant Energy, IPL and WPL believe that the clean-up costs incurred for these MGP sites will not have a material effect on their financial condition or results of operations. Settlement has been reached with all of IPL’s and WPL’s insurance carriers regarding reimbursement for their MGP-related costs and such amounts have been accounted for as directed by the applicable regulatory jurisdiction.

WPL Consent Decree - In 2009, the EPA sent an NOV to WPL as an owner and the operator of Edgewater, Nelson Dewey and Columbia alleging that the owners of Edgewater, Nelson Dewey and Columbia failed to comply with appropriate pre-construction review and permitting requirements and as a result violated the PSD program requirements, Title V Operating Permit requirements of the CAA and the Wisconsin SIP. In 2010, the Sierra Club filed complaints against WPL, as owner and operator of Nelson Dewey and Columbia, and separately as owner and operator of Edgewater, based on allegations that modifications were made at the facilities without complying with the PSD program requirements, Title V Operating Permit requirements of the CAA and state regulatory counterparts contained within the Wisconsin SIP designed to implement the CAA.

In April 2013, WPL, along with the other owners of Edgewater and Columbia, entered into a Consent Decree with the EPA and the Sierra Club to resolve the claims relating to Edgewater, Columbia and Nelson Dewey, while admitting no liability. In June 2013, the Consent Decree was approved by the Court, thereby resolving all claims against WPL. Under the Consent Decree, WPL is required to install the following emission controls systems:


•	SCR system at Edgewater Unit 5 by May 1, 2013 (placed in-service in December 2012);


•	Scrubbers and baghouses at Columbia Units 1 and 2 by December 31, 2014;


•	Scrubber and baghouse at Edgewater Unit 5 by December 31, 2016; and


•	SCR system at Columbia Unit 2 by December 31, 2018.

WPL is also required to fuel switch or retire Nelson Dewey Units 1 and 2 and Edgewater Unit 3 by December 31, 2015, and Edgewater Unit 4 by December 31, 2018. In addition, the Consent Decree establishes emission rate limits for SO2, NOx and PM for Columbia Units 1 and 2, Nelson Dewey Units 1 and 2 and Edgewater Units 4 and 5. The Consent Decree also includes annual plant-wide emission caps for SO2 and NOx for Columbia, Edgewater and Nelson Dewey. WPL paid a civil penalty of approximately $2 million in 2013 and will complete approximately $7 million in environmental mitigation projects.

Final recovery of the costs expected to be incurred related to the Consent Decree will be decided by the PSCW in future rate cases or other proceedings. Alliant Energy and WPL currently expect to recover any material costs incurred by WPL related to compliance with the terms of the Consent Decree from WPL’s electric customers, except for costs related to certain of the environmental mitigation projects and the civil penalty.

Other Environmental Contingencies - In addition to the environmental liabilities discussed above, Alliant Energy, IPL and WPL are also monitoring various environmental regulations that may have a significant impact on their future operations. Several of these environmental regulations are subject to legal challenges, reconsideration and/or other uncertainties. Given uncertainties regarding the outcome, timing and compliance plans for these environmental matters, Alliant Energy, IPL and WPL are currently not able to determine the complete financial impact of these regulations but do believe that future capital investments and/or modifications to their EGUs to comply with these regulations could be significant. Specific current, proposed or potential environmental matters that may require significant future expenditures are included below along with a brief description of these environmental regulations.

Air Quality -

CAIR is an emissions trading program that requires SO2 and NOx emissions reductions at certain of IPL’s and WPL’s fossil-fueled EGUs located in Iowa and Wisconsin through installation of emission controls and/or purchases of allowances.

CAVR requires states to develop and implement plans to address visibility impairment in designated national parks and wilderness areas. These implementation plans require BART emission controls and other additional measures needed for reducing state contributions to regional haze.

MATS Rule requires compliance with emission limits for mercury and other HAPs. Compliance is required by April 2015; however, an entity can request an additional year for compliance for certain EGUs.

Wisconsin State Mercury Rule requires WPL’s existing coal-fueled EGUs to comply with mercury emission limits beginning in 2010.

Industrial Boiler and Process Heater MACT Rule requires compliance with HAPs emission limitations at certain EGUs and fossil-fueled auxiliary boilers and process heaters located at EGUs by early 2016.

Ozone NAAQS Rule - The ozone NAAQS rule may require a reduction of NOx emissions in certain non-attainment areas based on classifications assigned by the EPA. In 2012, the EPA issued a final rule that classifies Sheboygan County in Wisconsin as marginal ozone non-attainment, which requires this area to achieve compliance with the ozone NAAQS by December 2015. WPL operates Edgewater and Sheboygan Falls in Sheboygan County, Wisconsin.

Fine Particulate (PM2.5) NAAQS Rule requires a reduction of SO2, NOx and PM emissions in certain non-attainment areas. The EPA is expected to designate non-attainment areas for the revised annual PM2.5 NAAQS by December 2014. Compliance with the final rule is expected to be required by 2020 for non-attainment areas designated in 2014.

EPA NSPS for GHG Emissions from Electric Utilities would establish CO2 emissions limits for certain new fossil-fueled EGUs. Marshalltown is expected to be impacted by these proposed standards and would be constructed to achieve compliance with these standards. Also, WPL’s potential generation investment could be impacted by these standards. A date for finalizing these standards has not yet been established. The EPA is expected to issue proposed and final NSPS for GHG emissions for existing EGUs by June 1, 2014 and June 1, 2015, respectively, which would provide guidelines that states must follow to achieve required GHG emissions reductions. SIPs that provide details of how these guidelines are to be met would be required from state agencies by June 30, 2016.

Water Quality -

Section 316(b) of the Federal Clean Water Act proposal would require modifications to cooling water intake structures to assure that these structures reflect the “best technology available” for minimizing adverse environmental impacts to fish and other aquatic life.

Hydroelectric Fish Passage Device - WPL is currently required to install an agency-approved fish passage device at its Prairie du Sac hydro plant by July 1, 2015.

Effluent Limitation Guidelines proposal would require changes to discharge limits for wastewater from steam EGUs. Compliance with these proposed guidelines would be required after July 1, 2017 but before July 1, 2022, depending on each facility’s wastewater permit cycle for existing steam EGUs and immediately upon operation for new steam EGUs constructed after the issuance of the final guidelines.

Land and Solid Waste -

CCR could impose additional requirements for CCR management, beneficial use applications and disposal including operation and maintenance of coal ash surface impoundments (ash ponds) and/or landfills.

(f) Credit Risk - Alliant Energy, IPL and WPL are subject to credit risk related to the ability of counterparties to meet their contractual payment obligations or the potential non-performance of counterparties to deliver contracted commodities and other goods or services at the contracted price.

IPL and WPL provide regulated electricity and natural gas services to residential, commercial, industrial and wholesale customers in the Midwest region of the U.S. The geographic concentration of their customers did not contribute significantly to their overall exposure to credit risk. In addition, as a result of their diverse customer base, IPL and WPL did not have any significant concentration of credit risk for receivables arising from the sale of electricity or natural gas services.

IPL and WPL are typically net buyers of commodities (primarily electricity, coal and natural gas) required to provide regulated electricity and natural gas services to their customers. As a result, IPL and WPL are also subject to credit risk related to their counterparties’ failures to deliver commodities at the contracted price.

Alliant Energy, IPL and WPL maintain credit policies to minimize their credit risk. These credit policies include evaluation of the financial condition of counterparties, use of credit risk-related contingent provisions in certain commodity agreements that require credit support from counterparties that exceed certain exposure limits, diversification of counterparties to minimize concentrations of credit risk and the use of standardized agreements that facilitate the netting of cash flows associated with a single counterparty.

In 2013, IPL entered into a new PPA, which grants IPL rights to purchase 431 MWs of capacity and the resulting energy from DAEC for a term from the expiration of the existing PPA in February 2014 through December 31, 2025. This PPA exposes Alliant Energy and IPL to risk of counterparty non-performance. However, such risk is mitigated by IPL’s fuel-related cost recovery mechanisms. Refer to Note 16(b) for further discussion of the DAEC PPA.

Based on these credit policies and utility cost recovery mechanisms, it is unlikely that a material effect on Alliant Energy’s, IPL’s or WPL’s financial condition or results of operations would occur as a result of counterparty non-performance. However, there is no assurance that such policies will protect Alliant Energy, IPL and WPL against all losses from non-performance by counterparties.

Refer to Notes 1(m) and 15 for details of allowances for doubtful accounts and credit risk-related contingent features, respectively.

(g) Collective Bargaining Agreements - At December 31, 2013, employees covered by collective bargaining agreements represented 57%, 67% and 80% of total employees of Alliant Energy, IPL and WPL, respectively. In May 2014, WPL’s collective bargaining agreement with IBEW Local 965 expires, representing 26% and 80% of total employees of Alliant Energy and WPL, respectively.

(17) SEGMENTS OF BUSINESS

Alliant Energy - Alliant Energy’s principal businesses as of December 31, 2013 are:

•

Utility - includes the operations of IPL and WPL, which serve customers in Iowa, Wisconsin and Minnesota. The utility business has three reportable segments: a) utility electric operations; b) utility gas operations; and c) utility other, which includes steam operations and the unallocated portions of the utility business. Various line items in the following tables are not allocated to the electric and gas segments for management reporting purposes, and therefore, are included only in “Total Utility.”


•	Non-regulated, Parent and Other - includes the operations of Resources and its subsidiaries, Corporate Services, the Alliant Energy parent company, and any Alliant Energy parent company consolidating adjustments. Resources’ businesses include Transportation, Non-regulated Generation and other non-regulated investments described in Note 1(a).

Alliant Energy’s administrative support services are directly charged to the applicable segment where practicable. In all other cases, administrative support services are allocated to the applicable segment based on services agreements. Intersegment revenues were not material to Alliant Energy’s operations and there was no single customer whose revenues were 10% or more of Alliant Energy’s consolidated revenues. Certain financial information relating to Alliant Energy’s business segments, products and services and geographic information was as follows (in millions):



	Utility										Non-Regulated,			Alliant Energy
2013	Electric			Gas		Other		Total			Parent and Other			Consolidated
Operating revenues		$2,689.0			$464.8		$71.3		$3,225.1			$51.7			$3,276.8
Depreciation and amortization	333.0			28.8		1.5		363.3			7.6			370.9
Operating income	444.5			57.3		6.3		508.1			25.8			533.9
Interest expense, net of AFUDC								135.5			6.5			142.0
Equity income from unconsolidated investments, net	(43.7		)	—		—		(43.7		)	—			(43.7		)
Interest income and other								(0.4		)	—			(0.4		)
Income taxes								49.3			4.6			53.9
Income from continuing operations, net of tax								367.4			14.7			382.1
Loss from discontinued operations, net of tax								—			(5.9		)	(5.9		)
Net income								367.4			8.8			376.2
Preferred dividends								17.9			—			17.9
Net income attributable to Alliant Energy common shareowners								349.5			8.8			358.3
Total assets	9,018.6			859.3		732.5		10,610.4			502.0			11,112.4
Investments in equity method subsidiaries	279.1			—		—		279.1			2.3			281.4
Construction and acquisition expenditures	677.3			47.0		7.3		731.6			66.7			798.3



	Utility										Non-Regulated,			Alliant Energy
2012	Electric			Gas		Other		Total			Parent and Other			Consolidated
Operating revenues		$2,589.3			$396.3		$56.7		$3,042.3			$52.2			$3,094.5
Depreciation and amortization	299.3			29.1		1.4		329.8			2.6			332.4
Operating income	426.2			51.5		7.4		485.1			34.6			519.7
Interest expense, net of AFUDC								136.8			(2.0		)	134.8
Equity (income) loss from unconsolidated investments, net	(42.1		)	—		—		(42.1		)	0.8			(41.3		)
Interest income and other								(0.3		)	(3.7		)	(4.0		)
Income taxes								74.8			14.6			89.4
Income from continuing operations, net of tax								315.9			24.9			340.8
Loss from discontinued operations, net of tax								—			(5.1		)	(5.1		)
Net income								315.9			19.8			335.7
Preferred dividends								15.9			—			15.9
Net income attributable to Alliant Energy common shareowners								300.0			19.8			319.8
Total assets	8,438.8			814.8		966.0		10,219.6			565.9			10,785.5
Investments in equity method subsidiaries	264.3			—		—		264.3			2.3			266.6
Construction and acquisition expenditures	994.0			31.4		0.1		1,025.5			132.6			1,158.1



	Utility											Non-Regulated,			Alliant Energy
2011	Electric			Gas		Other			Total			Parent and Other			Consolidated
Operating revenues		$2,635.8			$476.7		$62.0			$3,174.5			$46.9			$3,221.4
Depreciation and amortization	289.0			28.4		1.8			319.2			1.8			321.0
Operating income (loss)	444.2			47.8		(3.2		)	488.8			24.5			513.3
Interest expense, net of AFUDC									146.6			(0.3		)	146.3
Equity income from unconsolidated investments, net	(38.7		)	—		—			(38.7		)	(0.6		)	(39.3		)
Interest income and other									(0.2		)	(4.1		)	(4.3		)
Income tax expense (benefit)									78.3			(9.1		)	69.2
Income from continuing operations, net of tax									302.8			38.6			341.4
Loss from discontinued operations, net of tax									—			(19.5		)	(19.5		)
Net income									302.8			19.1			321.9
Preferred dividends									18.3			—			18.3
Net income attributable to Alliant Energy common shareowners									284.5			19.1			303.6
Total assets	7,524.5			831.9		781.1			9,137.5			550.4			9,687.9
Investments in equity method subsidiaries	246.5			—		—			246.5			3.1			249.6
Construction and acquisition expenditures	542.7			38.0		27.4			608.1			65.3			673.4

Products and Services - Alliant Energy’s consolidated operating revenues by segment were as follows:



	2013		2012		2011
Utility electric operations	82	%	84	%	82	%
Utility gas operations	14	%	13	%	15	%
Utility other	2	%	2	%	2	%
Other	2	%	1	%	1	%
	100	%	100	%	100	%

Geographic Information - At December 31, 2013, 2012 and 2011, Alliant Energy, IPL and WPL did not have any long-lived assets to be held and used in foreign countries.

IPL - IPL is a utility serving customers in Iowa and Minnesota and includes three reportable segments: a) electric operations; b) gas operations; and c) other, which includes steam operations and the unallocated portions of the utility business. Various line items in the following tables are not allocated to the electric and gas segments for management reporting purposes, and therefore, are included only in “Total.” Intersegment revenues were not material to IPL’s operations and there was no single customer whose revenues were 10% or more of IPL’s consolidated revenues. Certain financial information relating to IPL’s business segments was as follows (in millions):



2013	Electric		Gas		Other		Total
Operating revenues		$1,491.8		$273.9		$53.1		$1,818.8
Depreciation and amortization	173.1		16.5		1.5		191.1
Operating income	173.1		29.8		9.1		212.0
Interest expense, net of AFUDC							60.3
Interest income and other							(0.3		)
Income tax benefit							(37.9		)
Net income							189.9
Preferred dividends							16.3
Earnings available for common stock							173.6
Total assets	4,905.3		518.8		381.9		5,806.0
Construction and acquisition expenditures	365.4		27.5		7.3		400.2



2012	Electric		Gas		Other		Total
Operating revenues		$1,371.1		$226.7		$52.5		$1,650.3
Depreciation and amortization	171.2		16.3		1.4		188.9
Operating income	166.2		24.2		9.9		200.3
Interest expense, net of AFUDC							70.1
Interest income and other							(0.2		)
Income tax benefit							(19.8		)
Net income							150.2
Preferred dividends							12.6
Earnings available for common stock							137.6
Total assets	4,500.9		479.5		476.6		5,457.0
Construction and acquisition expenditures	291.0		16.4		0.1		307.5



2011	Electric		Gas		Other		Total
Operating revenues		$1,408.3		$276.3		$55.5		$1,740.1
Depreciation and amortization	161.3		16.0		1.8		179.1
Operating income	181.6		20.6		6.2		208.4
Interest expense, net of AFUDC							72.9
Interest income and other							(0.2		)
Income tax benefit							(3.6		)
Net income							139.3
Preferred dividends							15.0
Earnings available for common stock							124.3
Total assets	4,208.2		471.1		414.2		5,093.5
Construction and acquisition expenditures	245.6		21.2		26.9		293.7

WPL - WPL is a utility serving customers in Wisconsin and includes three reportable segments: a) electric operations; b) gas operations; and c) other, which includes the unallocated portions of the utility business. Various line items in the following tables are not allocated to the electric and gas segments for management reporting purposes, and therefore, are included only in “Total.” Intersegment revenues were not material to WPL’s operations and there was no single customer whose revenues were 10% or more of WPL’s consolidated revenues. Certain financial information relating to WPL’s business segments was as follows (in millions):



2013	Electric			Gas		Other			Total
Operating revenues		$1,197.2			$190.9		$18.2			$1,406.3
Depreciation and amortization	159.9			12.3		—			172.2
Operating income (loss)	271.4			27.5		(2.8		)	296.1
Interest expense, net of AFUDC									75.2
Equity income from unconsolidated investments	(43.7		)	—		—			(43.7		)
Interest income and other									(0.1		)
Income taxes									87.2
Net income									177.5
Preferred dividends									1.6
Earnings available for common stock									175.9
Total assets	4,113.3			340.5		350.6			4,804.4
Investments in equity method subsidiaries	279.1			—		—			279.1
Construction and acquisition expenditures	311.9			19.5		—			331.4



2012	Electric	Gas		Other			Total
Operating revenues	$1,218.2		$169.6		$4.2			$1,392.0
Depreciation and amortization	128.1	12.8		—			140.9
Operating income (loss)	260.0	27.3		(2.5		)	284.8
Interest expense, net of AFUDC							66.7
Equity income from unconsolidated investments	(42.1)	—		—			(42.1		)
Interest income and other							(0.1		)
Income taxes							94.6
Net income							165.7
Preferred dividends							3.3
Earnings available for common stock							162.4
Total assets	3,937.9	335.3		489.4			4,762.6
Investments in equity method subsidiaries	264.3	—		—			264.3
Construction and acquisition expenditures	703.0	15.0		—			718.0



2011	Electric	Gas		Other			Total
Operating revenues	$1,227.5		$200.4		$6.5			$1,434.4
Depreciation and amortization	127.7	12.4		—			140.1
Operating income (loss)	262.6	27.2		(9.4		)	280.4
Interest expense, net of AFUDC							73.7
Equity income from unconsolidated investments	(38.7)	—		—			(38.7		)
Income taxes							81.9
Net income							163.5
Preferred dividends							3.3
Earnings available for common stock							160.2
Total assets	3,316.3	360.8		366.9			4,044.0
Investments in equity method subsidiaries	246.5	—		—			246.5
Construction and acquisition expenditures	297.1	16.8		0.5			314.4

(18) RELATED PARTIES

Service Agreements - IPL and WPL are parties to service agreements with an affiliate, Corporate Services. Pursuant to these service agreements, IPL and WPL receive various administrative and general services. These services are billed to IPL and WPL at cost based on expenses incurred by Corporate Services for the benefit of IPL and WPL, respectively. These costs consisted primarily of employee compensation and benefits, fees associated with various professional services and a return on net assets. Corporate Services also acts as agent on behalf of IPL and WPL pursuant to the service agreements. As agent, Corporate Services enters into energy, capacity, ancillary services, and transmission sale and purchase transactions within MISO and PJM. Corporate Services assigns such sales and purchases among IPL and WPL based on statements received from MISO and PJM.

The amounts billed for services provided to IPL and WPL were as follows (in millions):



	IPL						WPL
	2013		2012		2011		2013		2012		2011
Corporate Services billings		$140		$129		$153		$103		$102		$119

The sales credited to and purchases billed to IPL and WPL were as follows (in millions):



	IPL						WPL
	2013		2012		2011		2013		2012		2011
Sales credited		$7		$10		$31		$12		$14		$28
Purchases billed	365		301		307		68		61		77

As of December 31, net intercompany payables to Corporate Services were as follows (in millions):



	2013		2012
IPL		$62		$72
WPL	46		40

ATC - Pursuant to various agreements, WPL receives a range of transmission services from ATC. WPL provides operation, maintenance, and construction services to ATC. WPL and ATC also bill each other for use of shared facilities owned by each party. The related amounts billed between the parties were as follows (in millions):



	2013		2012		2011
ATC billings to WPL		$96		$90		$90
WPL billings to ATC	12		11		12

As of December 31, 2013 and 2012, WPL owed ATC net amounts of $8 million and $6 million, respectively.

IPL’s Sale of Certain Wind Project Assets to Resources - Pursuant to a wind development asset purchase and sale agreement, in 2011, IPL sold Resources assets for the Franklin County wind project at IPL’s cost of $115.3 million. Refer to Note 3(a) for additional information.

WPL’s Sheboygan Falls Lease - Refer to Note 10(b) for discussion of WPL’s Sheboygan Falls lease.

(19) DISCONTINUED OPERATIONS AND ASSETS AND LIABILITIES HELD FOR SALE

In 2011, Alliant Energy sold its IEA business and RMT’s environmental business unit to narrow its strategic focus and risk profile and received aggregate net proceeds of $17 million for these businesses. In 2013, Alliant Energy sold the remainder of its RMT business to further narrow its strategic focus and risk profile. Alliant Energy did not recognize any material gains or losses related to the sales of these businesses. Alliant Energy does not currently believe that adjustments to the gain or loss related to the sale of the remainder of RMT in periods after December 31, 2013 will be material.

The operating results of RMT and IEA have been separately classified and reported as discontinued operations in Alliant Energy’s Consolidated Statements of Income. A summary of the components of discontinued operations in Alliant Energy’s Consolidated Statements of Income was as follows (in millions):



	2013			2012			2011
Operating revenues		$0.9			$289.2			$445.0
Operating expenses	9.9			297.0			476.9
Interest expense and other	—			0.7			—
Loss before income taxes	(9.0		)	(8.5		)	(31.9		)
Income tax benefit	(3.1		)	(3.4		)	(12.4		)
Loss from discontinued operations, net of tax		($5.9	)		($5.1	)		($19.5	)

As of December 31, 2012, Alliant Energy’s Consolidated Balance Sheet included assets held for sale recorded in “Other current assets” and liabilities held for sale recorded in “Other current liabilities” as follows (in millions):



Current assets		$27.9
Current liabilities	31.4
Net liabilities held for sale		($3.5	)

(20) SELECTED CONSOLIDATED QUARTERLY FINANCIAL DATA (UNAUDITED)

Alliant Energy - All “per share” references refer to earnings per diluted share. Summation of the individual quarters may not equal annual totals due to rounding. Refer to Note 19 for additional information on discontinued operations.



	2013												2012
	March 31			June 30			Sep. 30			Dec. 31			March 31			June 30		Sep. 30		Dec. 31
	(in millions, except per share data)
Operating revenues		$859.6			$718.0			$866.6			$832.6			$765.7			$690.3		$887.6		$750.9
Operating income	120.7			103.2			201.4			108.6			95.6			108.8		213.7		101.6
Amounts attributable to Alliant Energy common shareowners:
Income from continuing operations, net of tax	72.9			65.9			158.9			66.5			39.3			65.5		149.0		71.1
Income (loss) from discontinued operations, net of tax	(3.0		)	(0.6		)	(1.3		)	(1.0		)	(4.4		)	0.4		1.7		(2.8		)
Net income	69.9			65.3			157.6			65.5			34.9			65.9		150.7		68.3
Earnings per weighted average common share attributable to Alliant Energy common shareowners:
Income from continuing operations, net of tax	0.66			0.59			1.43			0.60			0.36			0.60		1.34		0.64
Income (loss) from discontinued operations, net of tax	(0.03		)	—			(0.01		)	(0.01		)	(0.04		)	—		0.02		(0.02		)
Net income	0.63			0.59			1.42			0.59			0.32			0.60		1.36		0.62

IPL - Earnings per share data is not disclosed for IPL given Alliant Energy is the sole shareowner of all shares of IPL’s common stock outstanding during the periods presented.



	2013								2012
	March 31		June 30		Sep. 30		Dec. 31		March 31			June 30		Sep. 30		Dec. 31
	(in millions)
Operating revenues		$477.9		$383.4		$494.4		$463.1		$398.7			$360.7		$497.7		$393.2
Operating income	41.1		34.7		100.0		36.2		23.9			35.4		112.0		29.0
Net income (loss)	31.5		24.7		112.6		21.1		(1.5		)	19.6		106.5		25.6
Earnings available (loss) for common stock	22.9		22.2		110.0		18.5		(4.7		)	16.6		103.3		22.4

WPL - Earnings per share data is not disclosed for WPL given Alliant Energy is the sole shareowner of all shares of WPL’s common stock outstanding during the periods presented.



	2013								2012
	March 31		June 30		Sep. 30		Dec. 31		March 31		June 30		Sep. 30		Dec. 31
	(in millions)
Operating revenues		$369.8		$319.9		$360.9		$355.7		$354.5		$315.7		$376.6		$345.2
Operating income	72.7		59.7		95.9		67.8		64.6		61.5		93.4		65.3
Net income	43.6		34.4		61.3		38.2		31.9		36.1		56.7		41.0
Earnings available for common stock	42.0		34.4		61.3		38.2		31.1		35.2		55.9		40.2

Previous: Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK · Next: Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE