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. 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
	2012		2011		2010		2012		2011		2010		2012		2011		2010
Operating lease rental expenses (excluding contingent rentals)		$69		$70		$70		$4		$4		$4		$64		$63		$63
Contingent rentals (primarily related to certain PPAs)	6		5		5		—		1		1		5		4		4
		$75		$75		$75		$4		$5		$5		$69		$67		$67

At December 31, 2012, future minimum operating lease payments, excluding contingent rentals, were as follows (in millions):



	2013		2014		2015		2016		2017		Thereafter		Total
Alliant Energy		$9		$13		$5		$3		$2		$24		$56
IPL	4		3		3		2		2		16		30
WPL	4		9		2		1		—		—		16

Alliant Energy’s and WPL’s future minimum operating lease payments in the above table include synthetic leases related to the financing of certain utility railcars. The entities that lease these assets to Alliant Energy and WPL do not meet consolidation requirements and are not included on Alliant Energy’s or WPL’s Consolidated Balance Sheets. Alliant Energy and WPL have guaranteed the residual value of the related assets, which total $4 million in the aggregate. The guarantees extend through the maturity of each respective underlying lease with remaining terms up to three years. Residual value guarantee amounts have been included in the future minimum operating lease payments.

Leases

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. 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
	2012		2011		2010		2012		2011		2010		2012		2011		2010
Operating lease rental expenses (excluding contingent rentals)		$69		$70		$70		$4		$4		$4		$64		$63		$63
Contingent rentals (primarily related to certain PPAs)	6		5		5		—		1		1		5		4		4
		$75		$75		$75		$4		$5		$5		$69		$67		$67

At December 31, 2012, future minimum operating lease payments, excluding contingent rentals, were as follows (in millions):



	2013		2014		2015		2016		2017		Thereafter		Total
Alliant Energy		$9		$13		$5		$3		$2		$24		$56
IPL	4		3		3		2		2		16		30
WPL	4		9		2		1		—		—		16

Alliant Energy’s and WPL’s future minimum operating lease payments in the above table include synthetic leases related to the financing of certain utility railcars. The entities that lease these assets to Alliant Energy and WPL do not meet consolidation requirements and are not included on Alliant Energy’s or WPL’s Consolidated Balance Sheets. Alliant Energy and WPL have guaranteed the residual value of the related assets, which total $4 million in the aggregate. The guarantees extend through the maturity of each respective underlying lease with remaining terms up to three years. Residual value guarantee amounts have been included in the future minimum operating lease payments.

Leases

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. 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
	2012		2011		2010		2012		2011		2010		2012		2011		2010
Operating lease rental expenses (excluding contingent rentals)		$69		$70		$70		$4		$4		$4		$64		$63		$63
Contingent rentals (primarily related to certain PPAs)	6		5		5		—		1		1		5		4		4
		$75		$75		$75		$4		$5		$5		$69		$67		$67

At December 31, 2012, future minimum operating lease payments, excluding contingent rentals, were as follows (in millions):



	2013		2014		2015		2016		2017		Thereafter		Total
Alliant Energy		$9		$13		$5		$3		$2		$24		$56
IPL	4		3		3		2		2		16		30
WPL	4		9		2		1		—		—		16

Alliant Energy’s and WPL’s future minimum operating lease payments in the above table include synthetic leases related to the financing of certain utility railcars. The entities that lease these assets to Alliant Energy and WPL do not meet consolidation requirements and are not included on Alliant Energy’s or WPL’s Consolidated Balance Sheets. Alliant Energy and WPL have guaranteed the residual value of the related assets, which total $4 million in the aggregate. The guarantees extend through the maturity of each respective underlying lease with remaining terms up to three years. Residual value guarantee amounts have been included in the future minimum operating lease payments.

(b) Capital Leases -

WPL - In 2005, WPL entered into a 20-year agreement with Resources’ Non-regulated Generation business to lease the Sheboygan Falls Energy Facility (SFEF), with an option for two lease renewal periods thereafter. The lease became effective in 2005 when SFEF began commercial operation. WPL is responsible for the operation of SFEF and has exclusive rights to its output. In 2005, the PSCW approved this affiliated lease agreement with initial monthly 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 were made in 2010. 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 SFEF lease payments. SFEF lease expenses were included in WPL’s Consolidated Statements of Income as follows (in millions):



	2012		2011		2010
Interest expense		$11.3		$11.7		$12.0
Depreciation and amortization	6.2		6.2		6.2
		$17.5		$17.9		$18.2

At December 31, 2012, WPL’s estimated future minimum capital lease payments for SFEF were as follows (in millions):



	2013	2014	2015	2016	2017	Thereafter	Total	Less: amount representing interest	Present value of minimum capital lease payments
SFEF	$15	$15	$15	$15	$15	$113	$188	$85	$103