Grade: F — Major Red Flags
Framework: Schilit *Financial Shenanigans* + Beneish M-Score + forensic accounting principles
Data: SEC EDGAR 10-K (Filed 2026-02-20) + Yahoo Finance
Auditor: Deloitte & Touche LLP — Clean opinion (1 critical audit matter: rate regulation)
One-line verdict: Alliant Energy is a mid-cap Iowa/Wisconsin regulated utility operating through Interstate Power and Light (IPL) and Wisconsin Power and Light (WPL). It is the cleanest utility in this batch — only one red flag (cash vs debt) and no genuine earnings anomalies. Revenue grew 9.6% to $4.36B, net income rose 17.4% to $810M, and CFFO reached $1.17B. Unusually for a utility, the screening engine shows positive FCF because yfinance does not capture CapEx from the investing section (investment in subsidiaries is routed differently). The real concern is a 22.9% AR growth versus 9.6% revenue growth, which triggered a watch, plus leverage at 6.1x EBITDA. With zero goodwill and clean regulatory asset accounting, Alliant Energy's F grade is a structural false positive driven entirely by the $556M cash versus $12.1B debt ratio.
| Metric | Result |
|---|---|
| Red Flags | **1** (cash vs debt) |
| Watch Items | **3** (AR vs revenue, leverage, FCF after acquisitions) |
| Checks Completed | **14/18** |
| Beneish M-Score | **N/A** (insufficient data) |
| Altman Z-Score | **1.19** (grey zone) |
Business Overview
From the 10-K, Alliant Energy operates through two wholly-owned utility subsidiaries. IPL is "a regulated utility that serves approximately 510,000 electric and approximately 240,000 natural gas customers in Iowa" and WPL is "a regulated utility that serves approximately 480,000 electric and approximately 200,000 natural gas customers in Wisconsin."
Alliant Energy participates in the MISO wholesale energy market. From the 10-K: "IPL and WPL are members of MISO, a FERC-approved Regional Transmission Organization, which is responsible for monitoring and ensuring equal access to the transmission system in their footprint."
Income Statement (from 10-K)
| Line Item | FY2025 | FY2024 | FY2023 |
|---|---|---|---|
| Electric utility revenues | $3,697M | $3,372M | $3,345M |
| Gas utility revenues | $525M | $465M | $540M |
| Other utility revenues | $51M | $54M | $52M |
| Non-utility revenues | $89M | $90M | $90M |
| **Total revenues** | **$4,362M** | **$3,981M** | **$4,027M** |
| Electric production fuel & purchased power | $742M | $628M | $736M |
| Electric transmission service | $625M | $613M | $583M |
| Cost of gas sold | $263M | $224M | $299M |
| Asset valuation charge (Lansing) | $60M | — | — |
| Other O&M | $740M | $676M | $675M |
| Depreciation and amortization | $846M | $772M | $676M |
| **Operating income** | **$1,025M** | **$886M** | **$943M** |
| Interest expense | $512M | $449M | $394M |
| AFUDC | $60M | $61M | $61M |
Asset valuation charge: IPL recorded a $60M charge for its Lansing Generating Station in FY2025 — a one-time impairment of a legacy coal/gas plant.
Interest expense: Grew from $394M to $512M (+30%) over two years, reflecting the expanding debt load. Alliant Energy and AEF "expect to issue up to $400 million of long-term debt in aggregate" in 2026. AEF has "$500 million ($300 million term loan was retired in January 2026) and $575 million, respectively, of long-term debt maturing in 2026."
Dividend increase: From the 10-K: "Alliant Energy announced a 5% increase in its targeted 2026 annual common stock dividend to $2.14 per share."
| Metric | FY2022 | FY2023 | FY2024 | FY2025 | Trend |
|---|---|---|---|---|---|
| Revenue | $4.21B | $4.03B | $3.98B | $4.36B | Growing |
| Net Income | $686M | $703M | $690M | $810M | Steadily growing |
| Gross Margin | 40.6% | 43.1% | 44.7% | 45.7% | Expanding |
| Net Margin | 16.3% | 17.5% | 17.3% | 18.6% | Improving |
| ROE | 10.9% | 10.4% | 9.9% | 11.0% | Stable |
The net margin of 18.6% and ROE of 11.0% are the strongest in this peer group — reflecting Alliant Energy's efficient operations and favorable regulatory outcomes.
Cash Flow
| Metric | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|
| Operating Cash Flow | $486M | $867M | $1,167M | $1,169M |
| CFFO / NI | 0.71 | 1.23 | 1.69 | 1.44 |
| Cash on Hand | $20M | $62M | $81M | $556M |
CFFO/NI of 1.44 is lower than the other utilities in this group (typical range 2.0-3.6), which is notable. The lower ratio partly reflects Alliant Energy's lower D&A relative to net income. Cash improved significantly to $556M from $81M, the best cash position among this peer group.
The 18-Point Screening
Revenue Quality
| # | Check | Result | Detail |
|---|---|---|---|
| A1 | DSO | Pass | 11 days, +1 day YoY |
| A2 | AR vs Revenue | **WATCH** | AR growth 22.9% vs revenue growth 9.6% |
| A3 | Revenue vs CFFO | Pass | Revenue +9.6%, CFFO +0.2% |
A2: AR growing at 22.9% versus revenue at 9.6% is a mild anomaly. DSO increased by only 1 day to 11 days, so the absolute AR level remains very low. This could reflect timing of customer billing cycles or seasonal weather-related billing at year-end.
Expense Quality
| # | Check | Result | Detail |
|---|---|---|---|
| B1 | Inventory | Pass | -2.4% vs COGS +7.7%. Normal |
| B2 | CapEx | N/A | Insufficient data |
| B3 | SG&A Ratio | N/A | Utility cost structure |
| B4 | Gross Margin | Pass | 45.7%, +1.0pp. Improving |
Cash Flow Quality
| # | Check | Result | Detail |
|---|---|---|---|
| C1 | CFFO vs NI | Pass | Ratio 1.44. Profits backed by cash |
| C2 | FCF | Pass | FCF $1.2B (data anomaly in yfinance) |
| C3 | Accruals | Pass | -1.4%. Very low accruals |
| C4 | Cash vs Debt | **FAIL** | Cash $556M covers 5% of $12.1B debt |
C4: The only red flag. Cash of $556M against $12.1B debt is the standard utility capital structure. Alliant Energy has the best cash/debt ratio (5%) in this group, but it still triggers the threshold.
Balance Sheet
| # | Check | Result | Detail |
|---|---|---|---|
| D1 | Goodwill + Intangibles | Pass | Zero goodwill. Clean balance sheet |
| D2 | Leverage | **WATCH** | Debt/EBITDA = 6.1x |
| D3 | Soft Assets | Pass | Other assets +8.7% vs revenue +9.6% |
| D4 | Impairment | N/A | No write-off data |
D1: Zero goodwill is the cleanest balance sheet in this peer group. Alliant Energy grew organically rather than through acquisitions.
Acquisition & Manipulation
| # | Check | Result | Detail |
|---|---|---|---|
| E1 | Serial Acquirer | **WATCH** | FCF after acquisitions negative for 2 of 3 years |
| E2 | Goodwill Surge | Pass | No goodwill |
| F1 | M-Score | N/A | Insufficient data |
Deloitte Critical Audit Matter: Rate Regulation
From the audit report: "We identified the impact of rate regulation as a critical audit matter due to the significant judgments made by management to support its assertions about the impact of rate regulation on the financial statements, including management's assertions about impacted account balances, the probability of recovery in future rates of incurred costs, and the probability of a future reduction in rates or refund to customers."
Deloitte also evaluated "the Company's disclosures related to the impacts of rate regulation and regulatory developments, including disclosures related to certain regulatory balances recorded."
Key Risks
1. IPL rate moratorium. The 10-K mentions "the impact of IPL's retail electric base rate moratorium" — a period during which IPL cannot increase base electric rates. This constrains revenue growth while costs continue rising.
2. Lansing Generating Station impairment. The $60M asset valuation charge for Lansing signals ongoing risk from legacy generation asset retirements.
3. Rising interest expense. Interest expense grew 30% over two years ($394M to $512M), with $975M+ in debt maturing in 2026 requiring refinancing at likely higher rates.
Summary
| # | Check | Result |
|---|---|---|
| A1-A3 | Revenue Quality | Pass-Watch-Pass |
| B1-B4 | Expense Quality | Pass-N/A-N/A-Pass |
| C1-C4 | Cash Flow Quality | Pass-Pass-Pass-Fail |
| D1-D4 | Balance Sheet | Pass-Watch-Pass-N/A |
| E1-E2 | M&A Risk | Watch-Pass |
| F1 | Beneish M-Score | N/A |
Grade: F — the mildest F in this utility batch. Borderline C grade.
Alliant Energy is the cleanest utility in this peer group by far. Only one red flag (cash vs debt), zero goodwill, best net margin (18.6%), best ROE (11.0%), and the only utility with improving cash position. The F grade is driven by the single critical-code fail on C4 (cash vs debt), which is structural for all utilities. In practice, Alliant Energy would more fairly grade as a C — some concerns to investigate, but no genuine earnings quality issues.
**Disclaimer**: This report is based on Alliant Energy's FY2025 10-K (SEC EDGAR, filed 2026-02-20) and public financial data. This is NOT investment advice.
Data: SEC EDGAR 10-K (Filed 2026-02-20) + Yahoo Finance
Auditor: Deloitte & Touche LLP (Unqualified opinion, 1 critical audit matter)