SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

[X]    QUARTERLY  REPORT  PURSUANT  TO  SECTION  13 OR 15 (d) OF THE  SECURITIES
       EXCHANGE ACT OF 1934
       For the quarterly period ended June 30, 1999

                                       or

[X]    TRANSITION  REPORT  PURSUANT  TO SECTION  13 OR 15 (d) OF THE  SECURITIES
       EXCHANGE ACT OF 1934 For the transition period from _______ to _______
<TABLE>
<CAPTION>

Commission        Name of Registrant, State of Incorporation,                             IRS Employer
File Number       Address of Principal Executive Offices and Telephone Number    Identification Number
-----------       -----------------------------------------------------------    ---------------------
<S>               <C>                                                                       <C>
1-9894            ALLIANT ENERGY CORPORATION                                                39-1380265
                  (a Wisconsin corporation)
                  222 West Washington Avenue
                  Madison, Wisconsin  53703
                  Telephone (608)252-3311

0-4117-1          IES UTILITIES INC.                                                        42-0331370
                  (an Iowa corporation)
                  Alliant Energy Tower
                  Cedar Rapids, Iowa  52401
                  Telephone (319)398-4411

0-337             WISCONSIN POWER AND LIGHT COMPANY                                         39-0714890
                  (a Wisconsin corporation)
                  222 West Washington Avenue
                  Madison, Wisconsin  53703
                  Telephone (608)252-3311

                  Interstate Energy Corporation
                 (Former name of Alliant Energy Corporation)
</TABLE>

Indicate  by check mark  whether  the  registrants  (1) have  filed all  reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrants  were required to file such  reports),  and (2) have been subject to
such filing requirements for the past (90) days. Yes X No _____

This combined Form 10-Q is separately filed by Alliant Energy  Corporation,  IES
Utilities  Inc. and Wisconsin  Power and Light  Company.  Information  contained
herein relating to any individual  registrant is filed by such registrant on its
own behalf.  Each registrant makes no representation as to information  relating
to the other registrants.

Number of shares outstanding of each class of common stock as of July 31, 1999:


Alliant Energy Corporation          Common  stock,  $.01 par  value,  78,457,664
                                    shares outstanding

IES Utilities Inc.                  Common  stock,  $2.50 par value,  13,370,788
                                    shares  outstanding  (all of which are owned
                                    beneficially and of record by Alliant Energy
                                    Corporation)

Wisconsin Power and Light Company   Common  stock,  $5  par  value,   13,236,601
                                    shares  outstanding  (all of which are owned
                                    beneficially and of record by Alliant Energy
                                    Corporation)




<PAGE>

                                    CONTENTS

                                                                            Page
                                                                            ----
Part I.      Financial Information                                         4

  Item 1.    Consolidated Financial Statements                                4

             Alliant Energy Corporation:
             Consolidated Statements of Income for the Three and Six
                  Months Ended June 30, 1999 and 1998                         4
             Consolidated Balance Sheets as of June 30, 1999 and
                  December 31, 1998                                           5
             Consolidated Statements of Cash Flows for the Six Months
                   Ended June 30, 1999 and 1998                               7
             Notes to Consolidated Financial Statements                       8

             IES Utilities Inc.:
             Consolidated Statements of Income for the Three and Six
                  Months Ended June 30, 1999 and 1998                         10
             Consolidated Balance Sheets as of June 30, 1999 and
                  December 31, 1998                                           11
             Consolidated Statements of Cash Flows for the Six Months
                  Ended June 30, 1999 and 1998                                13
             Notes to Consolidated Financial Statements                       14

             Wisconsin Power and Light Company:
             Consolidated Statements of Income for the Three and Six
                  Months Ended June 30, 1999 and 1998                         15
             Consolidated Balance Sheets as of June 30, 1999 and
                  December 31, 1998                                           16
             Consolidated Statements of Cash Flows for the Six Months
                  Ended June 30, 1999 and 1998                                18
             Notes to Consolidated Financial Statements                       19

  Item 2.    Management's Discussion and Analysis of Financial Condition
                  and Results of Operations                                   20

  Item 3.    Quantitative and Qualitative Disclosures About Market Risk       38

Part II.     Other Information                                                38

  Item 4.    Submission of Matters to a Vote of Security Holders              38

  Item 6.    Exhibits and Reports on Form 8-K                                 41

                Signatures                                                    42


                                       2
<PAGE>



                                   DEFINITIONS

Certain  abbreviations  or acronyms  used in the text and notes of this combined
Form 10-Q are defined below:

Abbreviation or Acronym        Definition
-----------------------        ----------
ADEQ                           Arkansas Department of Environmental Quality
Alliant Energy                 Alliant Energy Corporation
Cargill                        Cargill Incorporated
CEMS                           Continuous Emission Monitoring System
Corporate Services             Alliant Energy Corporate Services, Inc.
Dth                            Dekatherm
EAC                            Energy Adjustment Clause
EPA                            United States Environmental Protection Agency
FASB                           Financial Accounting Standards Board
FERC                           Federal Energy Regulatory Commission
IDNR                           Iowa Department of Natural Resources
IESU                           IES Utilities Inc.
IPC                            Interstate Power Company
ITC                            Independent Transmission Company
IUB                            Iowa Utilities Board
Kewaunee                       Kewaunee Nuclear Power Plant
McLeod                         McLeodUSA Inc.
MD&A                           Management's Discussion and Analysis of Financial
                               Condition and Results of Operations
Midwest ISO                    Midwest Independent System Operator
MW                             Megawatt
MWH                            Megawatt-Hour
NERC                           North American Electric Reliability Council
NOx                            Nitrogen Oxides
NSP                            Northern States Power Company
OCA                            Office of Consumer Advocate
PGA                            Purchased Gas Adjustment
PSCW                           Public Service Commission of Wisconsin
PUHCA                          Public Utility Holding Company Act of 1935
Resources                      Alliant Energy Resources, Inc.
RTO                            Regional Transmission Organization
SEC                            Securities and Exchange Commission
SFAS                           Statement of Financial Accounting Standards
SkyGen                         SkyGen Energy LLC
Whiting                        Whiting Petroleum Corporation
WP&L                           Wisconsin Power and Light Company
WPSC                           Wisconsin Public Service Corporation
WUHCA                          Wisconsin Utility Holding Company Act



                                       3

<PAGE>

                         PART I. FINANCIAL INFORMATION


               ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS

<TABLE>

                           ALLIANT ENERGY CORPORATION
                  CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
<CAPTION>

                                                                   For the Three Months                 For the Six Months
                                                                      Ended June 30,                      Ended June 30,
                                                                  1999             1998               1999              1998
--------------------------------------------------------------------------------------------------------------------------------
                                                                             (in thousands, except per share amounts)
<S>                                                            <C>               <C>                <C>               <C>
Operating revenues:
  Electric utility                                             $ 366,152         $ 380,414          $ 717,490         $ 738,165
  Gas utility                                                     46,200            45,267            179,885           175,313
  Nonregulated and other                                          73,762            65,331            135,594           133,817
                                                           --------------    --------------     --------------    --------------
                                                                 486,114           491,012          1,032,969         1,047,295
                                                           --------------    --------------     --------------    --------------
--------------------------------------------------------------------------------------------------------------------------------

Operating expenses:
  Electric and steam production fuels                             53,360            69,538            118,763           139,094
  Purchased power                                                 72,440            73,417            124,505           129,563
  Cost of utility gas sold                                        22,666            23,907            104,009           101,186
  Other operation                                                148,291           158,679            278,657           316,033
  Maintenance                                                     31,934            33,389             55,746            58,647
  Depreciation and amortization                                   70,475            72,857            144,115           142,690
  Taxes other than income taxes                                   26,690            26,598             53,929            53,575
                                                           --------------    --------------     --------------    --------------
                                                                 425,856           458,385            879,724           940,788
                                                           --------------    --------------     --------------    --------------
--------------------------------------------------------------------------------------------------------------------------------

Operating income                                                  60,258            32,627            153,245           106,507
                                                           --------------    --------------     --------------    --------------
--------------------------------------------------------------------------------------------------------------------------------

Interest expense and other:
  Interest expense                                                34,715            32,231             68,114            63,155
  Allowance for funds used during construction                    (1,782)           (1,638)            (3,716)           (3,141)
  Preferred dividend requirements of subsidiaries                  1,677             1,675              3,353             3,349
  Miscellaneous, net                                             (37,065)           11,035            (43,834)            7,159
                                                           --------------    --------------     --------------    --------------
                                                                  (2,455)           43,303             23,917            70,522
                                                           --------------    --------------     --------------    --------------

--------------------------------------------------------------------------------------------------------------------------------

Income (loss) before income taxes                                 62,713           (10,676)           129,328            35,985
                                                           --------------    --------------     --------------    --------------

--------------------------------------------------------------------------------------------------------------------------------

Income taxes                                                      24,167            (1,578)            49,039            16,208
                                                           --------------    --------------     --------------    --------------

--------------------------------------------------------------------------------------------------------------------------------

 Net income (loss)                                             $  38,546         $  (9,098)         $  80,289         $  19,777
                                                           ==============    ==============     ==============    ==============
--------------------------------------------------------------------------------------------------------------------------------
Average number of common shares outstanding                       78,214            76,800             77,997            76,689
                                                           ==============    ==============     ==============    ==============
--------------------------------------------------------------------------------------------------------------------------------
Earnings per average common share (basic and diluted)          $    0.49         $   (0.12)         $    1.03         $    0.26
                                                           ==============    ==============     ==============    ==============
--------------------------------------------------------------------------------------------------------------------------------

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

</TABLE>


                                        4
<PAGE>


<TABLE>

                           ALLIANT ENERGY CORPORATION
                           CONSOLIDATED BALANCE SHEETS
<CAPTION>

                                                                              June 30,
                                                                                1999           December 31,
ASSETS                                                                       (Unaudited)           1998
--------------------------------------------------------------------------------------------------------------
                                                                                     (in thousands)
<S>                                                                            <C>                <C>
Property, plant and equipment:
  Utility -
    Plant in service -
      Electric                                                                 $ 4,923,657        $ 4,866,152
      Gas                                                                          522,436            515,074
      Other                                                                        432,694            409,711
                                                                           ----------------   ----------------
                                                                                 5,878,787          5,790,937
    Less - Accumulated depreciation                                              2,985,592          2,852,605
                                                                           ----------------   ----------------
                                                                                 2,893,195          2,938,332
    Construction work in progress                                                  128,757            119,032
    Nuclear fuel, net of amortization                                               54,762             44,316
                                                                           ----------------   ----------------
                                                                                 3,076,714          3,101,680
  Other property, plant and equipment, net of accumulated
    depreciation and amortization of $191,728 and $178,248, respectively           357,856            355,100
                                                                           ----------------   ----------------
                                                                                 3,434,570          3,456,780
                                                                           ----------------   ----------------
--------------------------------------------------------------------------------------------------------------

Current assets:
  Cash and temporary cash investments                                               29,403             31,827
  Accounts receivable:
    Customer, less allowance for doubtful accounts
      of $2,201 and $2,518, respectively                                            84,415            102,966
    Other, less allowance for doubtful accounts
      of $807 and $490, respectively                                                25,734             26,054
  Notes receivable, less allowance for doubtful
    accounts of $114 and $120, respectively                                          5,579             13,392
  Income tax refunds receivable                                                     18,399             14,826
  Production fuel, at average cost                                                  42,323             54,140
  Materials and supplies, at average cost                                           55,081             53,490
  Gas stored underground, at average cost                                           12,518             26,013
  Regulatory assets                                                                 25,139             30,796
  Prepaid gross receipts tax                                                        21,912             22,222
  Other                                                                             17,663             15,941
                                                                           ----------------   ----------------
                                                                                   338,166            391,667
                                                                           ----------------   ----------------
--------------------------------------------------------------------------------------------------------------

Investments:
  Investment in McLeodUSA Inc.                                                     527,800            320,280
  Nuclear decommissioning trust funds                                              251,475            225,803
  Investment in foreign entities                                                   133,745             68,882
  Other                                                                             52,977             54,776
                                                                           ----------------   ----------------
                                                                                   965,997            669,741
                                                                           ----------------   ----------------
--------------------------------------------------------------------------------------------------------------

Other assets:
  Regulatory assets                                                                272,086            284,467
  Deferred charges and other                                                       166,317            156,682
                                                                           ----------------   ----------------
                                                                                   438,403            441,149
                                                                           ----------------   ----------------
--------------------------------------------------------------------------------------------------------------

Total assets                                                                   $ 5,177,136        $ 4,959,337
                                                                           ================   ================

--------------------------------------------------------------------------------------------------------------

The accompanying Notes to Consolidated Financial Statements are an integral part
of these statements.
</TABLE>


                                       5
<PAGE>

<TABLE>


                           ALLIANT ENERGY CORPORATION
                     CONSOLIDATED BALANCE SHEETS (CONTINUED)
<CAPTION>

                                                                                      June 30,
                                                                                        1999             December 31,
CAPITALIZATION AND LIABILITIES                                                      (Unaudited)              1998
------------------------------------------------------------------------------------------------------------------------
                                                                                  (in thousands, except share amounts)
<S>                                                                                    <C>                  <C>
Capitalization:
  Common stock - $.01 par value - authorized 200,000,000 shares;
    outstanding 78,424,441 and 77,630,043 shares, respectively                         $       784          $       776
  Additional paid-in capital                                                               926,242              905,130
  Retained earnings                                                                        539,769              537,372
  Accumulated other comprehensive income                                                   300,613              163,017
                                                                                  -----------------    -----------------
    Total common equity                                                                  1,767,408            1,606,295
                                                                                  -----------------    -----------------

  Cumulative preferred stock of subsidiaries:
   Par/Stated       Authorized        Shares                         Mandatory
      Value           Shares        Outstanding       Series        Redemption
      $ 100              *            449,765      4.40% - 6.20%        No                  44,977               44,977
      $ 25               *            599,460          6.50%            No                  14,986               14,986
      $ 50            466,406         366,406      4.30% - 6.10%        No                  18,320               18,320
      $ 50              **            216,381      4.36% - 7.76%        No                  10,819               10,819
      $ 50              **            545,000          6.40%           Yes ***              27,250               27,250
                                                                                  -----------------    -----------------
                                                                                           116,352              116,352
    Less:  unamortized expenses                                                             (2,784)              (2,854)
                                                                                  -----------------    -----------------
      Total cumulative preferred stock of subsidiaries                                     113,568              113,498
                                                                                  -----------------    -----------------
  Long-term debt (excluding current portion)                                             1,514,498            1,543,131
                                                                                  -----------------    -----------------
                                                                                         3,395,474            3,262,924
                                                                                  -----------------    -----------------
*    3,750,000 authorized  shares in total  between  the two classes
**   2,000,000 authorized  shares  in  total  between  the two classes
***  $53.20 mandatory redemption price
------------------------------------------------------------------------------------------------------------------------

Current liabilities:
  Current maturities and sinking funds                                                      53,740               63,414
  Variable rate demand bonds                                                                56,975               56,975
  Commercial paper                                                                         125,500               64,500
  Notes payable                                                                             50,024               51,784
  Capital lease obligations                                                                 12,277               11,978
  Accounts payable                                                                         145,888              204,297
  Accrued taxes                                                                             84,622               84,921
  Other                                                                                    107,544              111,685
                                                                                  -----------------    -----------------
                                                                                           636,570              649,554
                                                                                  -----------------    -----------------
------------------------------------------------------------------------------------------------------------------------

Other long-term liabilities and deferred credits:
  Accumulated deferred income taxes                                                        774,492              691,624
  Accumulated deferred investment tax credits                                               74,585               77,313
  Environmental liabilities                                                                 68,917               68,399
  Customer advances                                                                         35,416               37,171
  Capital lease obligations                                                                 25,611               13,755
  Other                                                                                    166,071              158,597
                                                                                  -----------------    -----------------
                                                                                         1,145,092            1,046,859
                                                                                  -----------------    -----------------

------------------------------------------------------------------------------------------------------------------------

Total capitalization and liabilities                                                   $ 5,177,136          $ 4,959,337
                                                                                  =================    =================

------------------------------------------------------------------------------------------------------------------------

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

</TABLE>


                                       6

<PAGE>
<TABLE>
                           ALLIANT ENERGY CORPORATION
                CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<CAPTION>
                                                              For the Six Months Ended June 30,
                                                                   1999               1998
-------------------------------------------------------------------------------------------------
                                                                       (in thousands)
<S>                                                           <C>                 <C>
Cash flows from operating activities:
  Net income                                                  $        80,289     $        19,777
  Adjustments to reconcile net income to net cash flows
    from  operating
    activities:
    Depreciation and amortization                                     144,115            142,690
    Amortization of nuclear fuel                                        9,142              8,555
    Amortization of deferred energy efficiency expenditures            13,250             14,443
    Deferred taxes and investment tax credits                          (8,487)           (13,075)
    Refueling outage provision                                          4,412             (9,341)
    Impairment of oil and gas properties                                    -              6,746
    (Gain) loss on disposition of assets, net                         (37,591)            (1,020)
    Other                                                               1,502              4,998
  Other changes in assets and liabilities:
    Accounts receivable                                                18,871             25,338
    Notes receivable                                                    7,813              6,396
    Production fuel                                                    11,817                242
    Gas stored underground                                             13,495             22,232
    Accounts payable                                                  (58,409)           (35,181)
    Accrued taxes                                                        (299)            (6,049)
    Adjustment clause balances                                         (9,240)             5,791
    Benefit obligations and other                                      13,094             28,786
                                                             -----------------   ----------------
       Net cash flows from operating activities                       203,774            221,328
                                                             -----------------   ----------------
-------------------------------------------------------------------------------------------------
Cash flows used for financing activities:
    Common stock dividends declared                                   (77,892)           (63,649)
    Dividends payable                                                     287            (15,806)
    Proceeds from issuance of common stock                             20,888             10,634
    Net change in Alliant Energy Resources, Inc.
      credit facility                                                  15,495             71,587
    Proceeds from issuance of other long-term debt                     12,144              2,516
    Reductions in other long-term debt                                (67,016)            (1,262)
    Net change in short-term borrowings                                59,240            (42,525)
    Principal payments under capital lease obligations                 (6,869)            (8,116)
    Other                                                                  (2)               (36)
                                                             -----------------   ----------------
        Net cash flows used for financing activities                  (43,725)           (46,657)
                                                             -----------------   ----------------
-------------------------------------------------------------------------------------------------
Cashflows used for investing activities:
    Construction and acquisition expenditures:
       Utility                                                       (105,054)           (93,508)
       Nonregulated businesses                                        (78,654)           (63,928)
    Nuclear decommissioning trust funds                               (17,658)           (15,863)
    Proceeds from disposition of assets                                47,209              3,997
    Shared savings expenditures                                       (10,594)            (3,117)
    Other                                                               2,278              2,138
                                                             -----------------   ----------------
       Net cash flows used for investing activities                  (162,473)          (170,281)
                                                             -----------------   ----------------
-------------------------------------------------------------------------------------------------
Net increase (decrease) in cash and temporary cash
    investments                                                        (2,424)             4,390
                                                             -----------------   ----------------
-------------------------------------------------------------------------------------------------
Cash and temporary cash investments at beginning of period             31,827             27,329
                                                             -----------------   ----------------
-------------------------------------------------------------------------------------------------
Cash and temporary cash investments at end of period          $        29,403     $       31,719
                                                             =================   ================
-------------------------------------------------------------------------------------------------
Supplemental cash flow information: Cash paid during
  the period for:
       Interest                                               $        68,166     $       62,132
                                                             =================   ================
       Income taxes                                           $        56,130     $       45,435
                                                             =================   ================
    Noncash investing and financing activities:
       Capital lease obligations incurred                     $        18,252     $        1,271
                                                             =================   ================
-------------------------------------------------------------------------------------------------
The accompanying Notes to Consolidated Financial Statements are an integral part
of these statements.
</TABLE>
                                       7
<PAGE>

                           ALLIANT ENERGY CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1.     At the  Annual  Shareowners  meeting  on May 19,  1999,  the  shareowners
       approved a proposal to change the name of the corporation from Interstate
       Energy  Corporation  to Alliant Energy  Corporation.  The name change was
       effective May 20, 1999.

       The interim  consolidated  financial statements included herein have been
       prepared  by Alliant  Energy,  without  audit,  pursuant to the rules and
       regulations of the SEC.  Accordingly,  certain  information  and footnote
       disclosures   normally  included  in  financial  statements  prepared  in
       accordance  with  generally  accepted  accounting  principles  have  been
       condensed or omitted,  although  management believes that the disclosures
       are  adequate  to make the  information  presented  not  misleading.  The
       consolidated   financial   statements  include  Alliant  Energy  and  its
       consolidated  subsidiaries  (WP&L,  IESU,  IPC,  Resources  and Corporate
       Services).  These financial statements should be read in conjunction with
       the  financial  statements  and the notes  thereto  included  in  Alliant
       Energy's, IESU's and WP&L's latest Annual Report on Form 10-K.

       In the  opinion  of  management,  all  adjustments,  which are normal and
       recurring  in  nature,  necessary  for a fair  presentation  of  (a)  the
       consolidated  results of  operations  for the three and six months  ended
       June 30, 1999 and 1998, (b) the consolidated  financial  position at June
       30, 1999 and  December 31, 1998,  and (c) the  consolidated  statement of
       cash flows for the six months  ended  June 30,  1999 and 1998,  have been
       made.  Because  of the  seasonal  nature  of  IESU's,  WP&L's  and  IPC's
       operations,  results for the three and six months ended June 30, 1999 are
       not  necessarily  indicative of results that may be expected for the year
       ending  December  31,  1999.  Certain  prior  period  amounts  have  been
       reclassified on a basis consistent with the 1999 presentation.

2.     Alliant Energy's comprehensive income (loss), and the components of other
       comprehensive   income  (loss),   net  of  taxes,  were  as  follows  (in
       thousands):
<TABLE>
<CAPTION>

                                                                  For the Three Months           For the Six Months
                                                                     Ended June 30,                Ended June 30,
                                                                  1999           1998            1999           1998
                                                               ------------    ----------    ------------    ----------
<S>                                                              <C>            <C>             <C>             <C>
   Net income (loss)                                             $ 38,546       ($ 9,098)       $ 80,289        $19,777
     Other comprehensive income (loss):
       Unrealized gains (losses) on securities:
         Unrealized holding gains (losses) arising during
           period, net of tax (1)                                  84,742        (20,358)        159,773         41,471
          Less:  reclassification adjustment for gains
            included in net income, net of tax (2)                (21,324)            --         (21,324)            --

                                                               ------------    ----------    ------------    ----------
              Net unrealized gains (losses)                        63,418        (20,358)        138,449         41,471
                                                               ------------    ----------    ------------    ----------
        Foreign currency translation adjustments                     (239)             1            (853)            56
                                                               ------------    ----------    ------------    ----------
          Other comprehensive income (loss)                        63,179        (20,357)        137,596         41,527
                                                               ============    ==========    ============    ==========
   Comprehensive income (loss)                                   $101,725       ($29,455)       $217,885        $61,304
                                                               ============    ==========    ============    ==========

(1)    Primarily due to quarterly  adjustments  to the  estimated  fair value of
       Alliant Energy's investment in McLeod.

                                       8
<PAGE>


(2)    The second quarter 1999 earnings included a pre-tax gain of $33.8 million
       ($0.27 per share) from the sale of approximately 640,000 shares of McLeod
       stock held by Alliant Energy.  Following completion of the May 1999 sale,
       Alliant  Energy  still held  beneficial  ownership in  approximately  9.6
       million  shares of McLeod  stock.  McLeod  declared a 2-for-1 stock split
       effective July 1999.
</TABLE>


  IESU and WP&L had no comprehensive income in the periods presented.

3.     Certain financial  information  relating to Alliant Energy's  significant
       business segments is presented below:
<TABLE>
<CAPTION>

                                                                                                               Alliant
                                  -------------------------------------------
                                         Regulated Domestic Utilities             Nonregulated                 Energy
                                  -------------------------------------------
                                   Electric     Gas        Other      Total        Businesses       Other   Consolidated
                                  ----------------------------------------------------------------------------------------
                                                                       (in thousands)
<S>                                 <C>         <C>        <C>        <C>               <C>       <C>          <C>
      Three Months Ended
      June 30, 1999
      Operating revenues            $366,152    $46,200    $7,820     $420,172          $66,595      ($653)      $486,114
      Operating income (loss)         56,155     (2,018)    1,529       55,666            4,101        491         60,258
      Net income (loss)                                                 17,138           21,560       (152)        38,546

      Three Months Ended
      June 30, 1998
      Operating revenues            $380,414    $45,267    $7,424     $433,105          $58,305      ($398)      $491,012
      Operating income (loss)         38,826     (7,404)    1,327       32,749              689       (811)        32,627
      Net loss                                                          (3,024)          (2,925)    (3,149)        (9,098)

      Six Months Ended
      June 30, 1999
      Operating revenues            $717,490   $179,885   $17,024     $914,399         $119,794    ($1,224)    $1,032,969
      Operating income               124,770     21,921     3,883      150,574            2,265        406        153,245
      Net income (loss)                                                 61,905           19,654     (1,270)        80,289

      Six Months Ended
      June 30, 1998
      Operating revenues            $738,165   $175,313   $15,833     $929,311         $118,627      ($643)    $1,047,295
      Operating income (loss)         94,664     14,971     3,158      112,793           (4,810)    (1,476)       106,507
      Net income (loss)                                                 30,153           (6,925)    (3,451)        19,777

</TABLE>

       Resources'  (i.e.,  the  nonregulated  businesses)  assets increased $263
       million  during  the  first  six  months  of 1999,  primarily  due to the
       increase  in market  value of its  investment  in McLeod  and  additional
       investments in foreign entities.  Intersegment revenues were not material
       to Alliant  Energy's  operations  and there was no single  customer whose
       revenues exceeded 10% or more of Alliant Energy's consolidated revenues.

4.     The  provisions  for  income  taxes  are  based on the  estimated  annual
       effective tax rate, which differs from the federal  statutory rate of 35%
       principally due to: state income taxes,  tax credits,  effects of utility
       rate making and certain nondeductible expenses.

5.     At June 30, 1999,  Alliant  Energy had $133.7  million of  investments in
       foreign  entities  on its  Consolidated  Balance  Sheets  that  primarily
       included   investments  in  several  New  Zealand  utility  entities  and
       investments  in several  generation  facilities in China.  Alliant Energy
       accounts for the China  investments under the equity method and the other
       investments  under  the cost  method.  The  geographic  concentration  of
       Alliant  Energy's  investments  in  foreign  entities  at June 30,  1999,
       included investments of approximately $96.2 million in New Zealand, $37.0
       million in China and $0.5 million in other countries.



                                       9
<PAGE>


<TABLE>
<CAPTION>


                               IES UTILITIES INC.
                  CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

                                                             For the Three Months                    For the Six Months
                                                                Ended June 30,                         Ended June 30,
                                                            1999              1998                1999               1998
-----------------------------------------------------------------------------------------------------------------------------
                                                                                 (in thousands)
<S>                                                      <C>                <C>                 <C>                <C>
Operating revenues:
  Electric utility                                       $ 142,209          $ 147,640           $ 282,226          $ 288,290
  Gas utility                                               22,012             20,921              83,308             81,316
  Steam and other                                            6,572              6,172              14,524             13,405
                                                    ---------------    ---------------     ---------------    ---------------
                                                           170,793            174,733             380,058            383,011
                                                    ---------------    ---------------     ---------------    ---------------
-----------------------------------------------------------------------------------------------------------------------------

Operating expenses:
  Electric and steam production fuels                       12,285             21,284              38,873             51,933
  Purchased power                                           27,142             25,768              40,292             36,817
  Cost of gas sold                                          11,623             10,782              49,535             48,439
  Other operation                                           45,167             44,869              92,607             91,871
  Maintenance                                               12,572             13,960              22,477             24,951
  Depreciation and amortization                             25,481             23,907              50,963             48,242
  Taxes other than income taxes                             12,468             12,407              25,083             24,713
                                                    ---------------    ---------------     ---------------    ---------------
                                                           146,738            152,977             319,830            326,966
                                                    ---------------    ---------------     ---------------    ---------------
-----------------------------------------------------------------------------------------------------------------------------

Operating income                                            24,055             21,756              60,228             56,045
                                                    ---------------    ---------------     ---------------    ---------------
-----------------------------------------------------------------------------------------------------------------------------

Interest expense and other:
  Interest expense                                          14,434             12,955              27,638             26,030
  Allowance for funds used during construction                (535)              (801)             (1,384)            (1,566)
  Miscellaneous, net                                        (2,499)             4,167              (3,355)             4,446
                                                    ---------------    ---------------     ---------------    ---------------
                                                            11,400             16,321              22,899             28,910
                                                    ---------------    ---------------     ---------------    ---------------
-----------------------------------------------------------------------------------------------------------------------------

Income before income taxes                                  12,655              5,435              37,329             27,135
                                                    ---------------    ---------------     ---------------    ---------------
-----------------------------------------------------------------------------------------------------------------------------

Income taxes                                                 5,611              2,474              15,828             12,515
                                                    ---------------    ---------------     ---------------    ---------------
-----------------------------------------------------------------------------------------------------------------------------

Net income                                                   7,044              2,961              21,501             14,620
                                                    ---------------    ---------------     ---------------    ---------------
-----------------------------------------------------------------------------------------------------------------------------

Preferred dividend requirements                                229                229                 457                457
                                                    ---------------    ---------------     ---------------    ---------------
-----------------------------------------------------------------------------------------------------------------------------

Earnings available for common stock                 $        6,815     $        2,732      $       21,044     $       14,163
                                                    ===============    ===============     ===============    ===============
-----------------------------------------------------------------------------------------------------------------------------
The accompanying Notes to Consolidated Financial Statements are an integral part
of these statements.

</TABLE>



                                       10

<PAGE>

<TABLE>

                               IES UTILITIES INC.
                           CONSOLIDATED BALANCE SHEETS
<CAPTION>

                                                                               June 30,
                                                                                 1999            December 31,
ASSETS                                                                       (Unaudited)             1998
----------------------------------------------------------------------------------------------------------------
                                                                                      (in thousands)
<S>                                                                        <C>                 <C>
Property, plant and equipment:
  Utility -
    Plant in service -
      Electric                                                             $      2,163,280    $      2,140,322
      Gas                                                                           200,955             198,488
      Steam                                                                          55,794              55,797
      Common                                                                        126,385             106,940
                                                                           -----------------   -----------------
                                                                                  2,546,414           2,501,547
    Less - Accumulated depreciation                                               1,266,117           1,209,204
                                                                           -----------------   -----------------
                                                                                  1,280,297           1,292,343
    Construction work in progress                                                    44,849              48,991
    Leased nuclear fuel, net of amortization                                         37,804              25,644
                                                                           -----------------   -----------------
                                                                                  1,362,950           1,366,978
  Other property, plant and equipment, net of accumulated
    depreciation and amortization of $2,021 and $1,948, respectively                  5,549               5,623
                                                                           -----------------   -----------------
                                                                                  1,368,499           1,372,601
                                                                           -----------------   -----------------

----------------------------------------------------------------------------------------------------------------

Current assets:
  Cash and temporary cash investments                                                 2,195               4,175
  Temporary cash investments with associated companies                                    -              53,729
  Accounts receivable:
    Customer, less allowance for doubtful accounts
      of $593 and $1,058, respectively                                                5,420               16,703
    Associated companies                                                              1,718                2,662
    Other, less allowance for doubtful accounts
      of $672 and $357, respectively                                                  9,036               10,346
  Production fuel, at average cost                                                   11,445              11,863
  Materials and supplies, at average cost                                            25,050              25,591
  Gas stored underground, at average cost                                             3,798              12,284
  Regulatory assets                                                                  16,790              23,487
  Prepayments and other                                                              10,788               4,185
                                                                           -----------------   -----------------
                                                                                     86,240             165,025
                                                                           -----------------   -----------------
----------------------------------------------------------------------------------------------------------------

Investments:
  Nuclear decommissioning trust funds                                                99,459              91,691
  Other                                                                               6,457               6,019
                                                                           -----------------   -----------------
                                                                                    105,916              97,710
                                                                           -----------------   -----------------
----------------------------------------------------------------------------------------------------------------

Other assets:
  Regulatory assets                                                                 130,217             137,908
  Deferred charges and other                                                         15,038              15,734
                                                                           -----------------   -----------------
                                                                                    145,255             153,642
                                                                           -----------------   -----------------

----------------------------------------------------------------------------------------------------------------

Total assets                                                               $      1,705,910    $       1,788,978
                                                                           =================   =================
----------------------------------------------------------------------------------------------------------------

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

</TABLE>



                                       11


<PAGE>

<TABLE>

                               IES UTILITIES INC.
                     CONSOLIDATED BALANCE SHEETS (CONTINUED)
<CAPTION>

                                                                                June 30,
                                                                                  1999               December 31,
CAPITALIZATION AND LIABILITIES                                                 (Unaudited)               1998
--------------------------------------------------------------------------------------------------------------------
                                                                             (in thousands, except share amounts)
<S>                                                                         <C>                    <C>
Capitalization:
  Common stock - $2.50 par value - authorized 24,000,000
    shares; 13,370,788 shares outstanding                                   $          33,427      $         33,427
  Additional paid-in capital                                                          279,042               279,042
  Retained earnings                                                                   237,783               275,372
                                                                            ------------------     -----------------
    Total common equity                                                               550,252               587,841
  Cumulative preferred stock, not mandatorily redeemable -
    $50 par value - authorized 466,406 shares; 366,406 shares outstanding              18,320                18,320
  Long-term debt (excluding current portion)                                          550,952               602,020
                                                                            ------------------     -----------------
                                                                                    1,119,524             1,208,181
                                                                            ------------------     -----------------
--------------------------------------------------------------------------------------------------------------------

Current liabilities:
  Current maturities and sinking funds                                                 51,196                50,140
  Capital lease obligations                                                            12,263                11,965
  Notes payable to associated companies                                                29,706                     -
  Accounts payable                                                                     23,733                43,953
  Accounts payable to associated companies                                             20,140                22,487
  Accrued payroll and vacations                                                         7,546                 6,365
  Accrued interest                                                                     10,817                12,045
  Accrued taxes                                                                        47,128                55,295
  Accumulated refueling outage provision                                               11,017                 6,605
  Environmental liabilities                                                             5,448                 5,660
  Other                                                                                 7,823                17,617
                                                                            ------------------     -----------------
                                                                                      226,817               232,132
                                                                            ------------------     -----------------
--------------------------------------------------------------------------------------------------------------------

Other long-term liabilities and deferred credits:
  Accumulated deferred income taxes                                                   221,362               224,510
  Accumulated deferred investment tax credits                                          27,963                29,243
  Environmental liabilities                                                            28,243                29,195
  Pension and other benefit obligations                                                28,317                25,655
  Capital lease obligations                                                            25,541                13,679
  Other                                                                                28,143                26,383
                                                                            ------------------     -----------------
                                                                                      359,569               348,665
                                                                            ------------------     -----------------
--------------------------------------------------------------------------------------------------------------------

Total capitalization and liabilities                                        $       1,705,910      $      1,788,978
                                                                            ==================     =================
--------------------------------------------------------------------------------------------------------------------

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

</TABLE>


                                       12

<PAGE>

<TABLE>


                               IES UTILITIES INC.
                CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<CAPTION>

                                                                                   For the Six Months Ended June 30,
                                                                                        1999                1998
------------------------------------------------------------------------------------------------------------------------
                                                                                             (in thousands)
<S>                                                                              <C>                  <C>
Cash flows from operating activities:
  Net income                                                                     $           21,501   $          14,620
  Adjustments to reconcile net income to net cash
   flows from operating activities:
     Depreciation and amortization                                                           50,963              48,242
     Amortization of leased nuclear fuel                                                      6,092               5,549
     Amortization of deferred energy efficiency expenditures                                  9,518              10,103
     Deferred taxes and investment tax credits                                               (6,745)             (4,040)
     Refueling outage provision                                                               4,412              (9,341)
     Other                                                                                      529                 536
  Other changes in assets and liabilities:
     Accounts receivable                                                                     13,537              26,121
     Gas stored underground                                                                   8,486              15,056
     Accounts payable                                                                       (22,567)            (10,188)
     Accrued taxes                                                                           (8,167)            (13,734)
     Adjustment clause balances                                                              (8,488)              2,157
     Benefit obligations and other                                                           10,397              20,444
                                                                                 -------------------  ------------------
       Net cash flows from operating activities                                              79,468             105,525
                                                                                 -------------------  ------------------
------------------------------------------------------------------------------------------------------------------------

Cash flows used for financing activities:
    Common stock dividends declared                                                         (58,633)            (18,840)
    Dividends payable                                                                        (4,840)              4,840
    Preferred stock dividends                                                                  (457)               (457)
    Reductions in long-term debt                                                            (50,140)               (140)
    Net change in short-term borrowings                                                      29,706                   -
    Principal payments under capital lease obligations                                       (6,869)             (8,116)
    Other                                                                                        (3)                  -
                                                                                 -------------------  ------------------
      Net cash flows used for financing activities                                          (91,236)            (22,713)
                                                                                 -------------------  ------------------
------------------------------------------------------------------------------------------------------------------------

Cash flows used for investing activities:
    Utility construction expenditures                                                       (41,173)            (42,404)
    Nuclear decommissioning trust funds                                                      (3,004)             (3,004)
    Other                                                                                       236                 100
                                                                                 -------------------  ------------------
      Net cash flows used for investing activities                                          (43,941)            (45,308)
                                                                                 -------------------  ------------------
------------------------------------------------------------------------------------------------------------------------

Net increase (decrease) in cash and temporary cash investments                              (55,709)             37,504
                                                                                 -------------------  ------------------
------------------------------------------------------------------------------------------------------------------------

Cash and temporary cash investments at beginning of period                                   57,904                 230
                                                                                 -------------------  ------------------
------------------------------------------------------------------------------------------------------------------------

Cash and temporary cash investments at end of period                             $            2,195   $          37,734
                                                                                 ===================  ==================
------------------------------------------------------------------------------------------------------------------------

Supplemental cash flow information:
 Cash paid during the period for:
    Interest                                                                     $           24,714   $          24,702
                                                                                 ===================  ==================
    Income taxes                                                                 $           30,824   $          33,468
                                                                                 ===================  ==================
 Noncash investing and financing activities - Capital lease obligations incurred $           18,252   $           1,271
                                                                                 ===================  ==================
------------------------------------------------------------------------------------------------------------------------

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

</TABLE>

                                       13


<PAGE>



                               IES UTILITIES INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

         Except as modified  below,  the Alliant  Energy  Notes to  Consolidated
         Financial  Statements  are  incorporated  by reference  insofar as they
         relate  to IESU.  Alliant  Energy  Note 5 does not  relate to IESU and,
         therefore, is not incorporated by reference.

1.       The interim consolidated financial statements included herein have been
         prepared by IESU, without audit,  pursuant to the rules and regulations
         of the SEC.  Accordingly,  certain information and footnote disclosures
         normally included in financial  statements  prepared in accordance with
         generally  accepted  accounting   principles  have  been  condensed  or
         omitted, although management believes that the disclosures are adequate
         to make the  information  presented not  misleading.  The  consolidated
         financial  statements  include IESU and its  consolidated  wholly-owned
         subsidiary,  IES Ventures Inc. IESU is a subsidiary of Alliant  Energy.
         These  financial  statements  should  be read in  conjunction  with the
         financial  statements  and the notes thereto  included in IESU's latest
         Annual Report on Form 10-K.

         In the opinion of  management,  all  adjustments,  which are normal and
         recurring  in  nature,  necessary  for a fair  presentation  of (a) the
         consolidated  results of operations  for the three and six months ended
         June 30, 1999 and 1998, (b) the consolidated financial position at June
         30, 1999 and December 31, 1998, and (c) the  consolidated  statement of
         cash flows for the six months  ended June 30, 1999 and 1998,  have been
         made. Because of the seasonal nature of IESU's operations,  results for
         the  three  and six  months  ended  June 30,  1999 are not  necessarily
         indicative of results that may be expected for the year ending December
         31, 1999.  Certain  prior period  amounts have been  reclassified  on a
         basis consistent with the 1999 presentation.



                                       14
<PAGE>


<TABLE>


                        WISCONSIN POWER AND LIGHT COMPANY
                  CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
<CAPTION>

                                                           For the Three Months                    For the Six Months
                                                              Ended June 30,                         Ended June 30,
                                                          1999               1998                1999               1998
------------------------------------------------------------------------------------------------------------------------------
                                                                                   (in thousands)
<S>                                                  <C>                <C>                 <C>                <C>
Operating revenues:
  Electric utility                                   $      150,510     $      154,314      $      300,455     $      305,624
  Gas utility                                                15,358             16,943              67,151             67,261
  Water                                                       1,248              1,252               2,500              2,428
                                                     ---------------    ---------------     ---------------    ---------------
                                                            167,116            172,509             370,106            375,313
                                                     ---------------    ---------------     ---------------    ---------------
------------------------------------------------------------------------------------------------------------------------------

Operating expenses:
  Electric production fuels                                  26,014             29,471              53,380             58,368
  Purchased power                                            28,425             30,238              52,424             58,839
  Cost of gas sold                                            5,798              8,515              36,979             39,229
  Other operation                                            35,432             39,894              61,540             73,897
  Maintenance                                                13,775             14,479              22,879             24,447
  Depreciation and amortization                              28,407             31,580              59,546             60,838
  Taxes other than income taxes                               7,355              7,504              15,057             15,215
                                                     ---------------    ---------------     ---------------    ---------------
                                                            145,206            161,681             301,805            330,833
                                                     ---------------    ---------------     ---------------    ---------------
------------------------------------------------------------------------------------------------------------------------------

Operating income                                             21,910             10,828              68,301             44,480
                                                     ---------------    ---------------     ---------------    ---------------

------------------------------------------------------------------------------------------------------------------------------

Interest expense and other:
  Interest expense                                           10,078              8,984              19,943             17,367
  Allowance for funds used during construction               (1,109)              (742)             (2,032)            (1,398)
  Miscellaneous, net                                          1,996              3,142              (2,348)             1,276
                                                     ---------------    ---------------     ---------------    ---------------
                                                             10,965             11,384              15,563             17,245
                                                     ---------------    ---------------     ---------------    ---------------
------------------------------------------------------------------------------------------------------------------------------

Income (loss) before income taxes                            10,945               (556)             52,738             27,235
                                                     ---------------    ---------------     ---------------    ---------------
---------------------------------------------------------------------------------------     ----------------------------------

Income taxes                                                  3,992                677              19,497             10,870
                                                     ---------------    ---------------     ---------------    ---------------
------------------------------------------------------------------------------------------------------------------------------

Net income (loss)                                             6,953             (1,233)             33,241             16,365
                                                     ---------------    ---------------     ---------------    ---------------
------------------------------------------------------------------------------------------------------------------------------

Preferred dividend requirements                                 828                828               1,656              1,656
                                                     ---------------    ---------------     ---------------    ---------------
------------------------------------------------------------------------------------------------------------------------------

Earnings available for common stock                         $ 6,125           $ (2,061)           $ 31,585           $ 14,709
                                                     ===============    ===============     ===============    ===============
------------------------------------------------------------------------------------------------------------------------------

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

</TABLE>

                                       15


<PAGE>

<TABLE>


                        WISCONSIN POWER AND LIGHT COMPANY
                           CONSOLIDATED BALANCE SHEETS
<CAPTION>

                                                                             June 30,
                                                                               1999             December 31,
ASSETS                                                                     (Unaudited)              1998
---------------------------------------------------------------------------------------------------------------
                                                                                    (in thousands)
<S>                                                                      <C>                  <C>
Property, plant and equipment:
  Utility -
    Plant in service -
      Electric                                                           $      1,863,733     $      1,839,545
      Gas                                                                         248,576              244,518
      Water                                                                        26,769               26,567
      Common                                                                      222,206              219,268
                                                                         -----------------    -----------------
                                                                                2,361,284            2,329,898
    Less - Accumulated depreciation                                             1,231,444            1,168,830
                                                                         -----------------    -----------------
                                                                                1,129,840            1,161,068
    Construction work in progress                                                  72,024               56,994
    Nuclear fuel, net of amortization                                              16,958               18,671
                                                                         -----------------    -----------------
                                                                                1,218,822            1,236,733
  Other property, plant and equipment, net of accumulated
    depreciation and amortization of $49 and $44, respectively                        627                  630
                                                                         -----------------    -----------------
                                                                                1,219,449            1,237,363
                                                                         -----------------    -----------------
---------------------------------------------------------------------------------------------------------------

Current assets:
  Cash and temporary cash investments                                               4,279                1,811
  Accounts receivable:
    Customer                                                                        5,092               13,372
    Associated companies                                                            1,869                3,019
    Other                                                                           8,378                8,298
  Income tax refunds receivable                                                    10,844                2,715
  Production fuel, at average cost                                                 15,477               20,105
  Materials and supplies, at average cost                                          22,154               20,025
  Gas stored underground, at average cost                                           7,801               10,738
  Regulatory assets                                                                 3,707                3,707
  Prepaid gross receipts tax                                                       21,912               22,222
  Other                                                                             1,399                4,272
                                                                         -----------------    -----------------
                                                                                  102,912              110,284
                                                                         -----------------    -----------------
---------------------------------------------------------------------------------------------------------------

Investments:
  Nuclear decommissioning trust funds                                             152,015              134,112
  Other                                                                            15,408               15,960
                                                                         -----------------    -----------------
                                                                                  167,423              150,072
                                                                         -----------------    -----------------
---------------------------------------------------------------------------------------------------------------

Other assets:
  Regulatory assets                                                                73,244               76,284
  Deferred charges and other                                                      121,508              111,147
                                                                         -----------------    -----------------
                                                                                  194,752              187,431
                                                                         -----------------    -----------------
---------------------------------------------------------------------------------------------------------------

Total assets                                                             $      1,684,536     $      1,685,150
                                                                         =================    =================
---------------------------------------------------------------------------------------------------------------

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

</TABLE>

                                       16


<PAGE>


<TABLE>


                        WISCONSIN POWER AND LIGHT COMPANY
                     CONSOLIDATED BALANCE SHEETS (CONTINUED)
<CAPTION>

                                                                                            June 30,
                                                                                              1999                  December 31,
CAPITALIZATION AND LIABILITIES                                                             (Unaudited)                  1998
-----------------------------------------------------------------------------------------------------------------------------------
                                                                                            (in thousands, except share amounts)
<S>                                                                                    <C>                       <C>
Capitalization:
  Common stock - $5 par value - authorized 18,000,000
    shares; 13,236,601 shares outstanding                                              $           66,183        $          66,183
  Additional paid-in capital                                                                      199,438                  199,438
  Retained earnings                                                                               296,718                  294,309
                                                                                       -------------------       ------------------
    Total common equity                                                                           562,339                  559,930
                                                                                       -------------------       ------------------

  Cumulative  preferred  stock, not mandatorily  redeemable  without par value -
    authorized 3,750,000 shares, maximum aggregate stated value $150,000,000:
      $100 stated value - 449,765 shares outstanding                                               44,977                   44,977
        $25 stated value - 599,460 shares outstanding                                              14,986                   14,986
                                                                                       -------------------       ------------------
        Total cumulative preferred stock                                                           59,963                   59,963
                                                                                       -------------------       ------------------

  Long-term debt (excluding current portion)                                                      414,626                  414,579
                                                                                       -------------------       ------------------
                                                                                                1,036,928                1,034,472
                                                                                       -------------------       ------------------
-----------------------------------------------------------------------------------------------------------------------------------

Current liabilities:
  Variable rate demand bonds                                                                       56,975                   56,975
  Notes payable                                                                                    50,000                   50,000
  Notes payable to associated companies                                                            59,035                   26,799
  Accounts payable                                                                                 62,920                   84,754
  Accounts payable to associated companies                                                         21,790                   20,315
  Accrued payroll and vacations                                                                     8,227                    5,276
  Accrued interest                                                                                  4,240                    6,863
  Other                                                                                             8,014                   14,600
                                                                                       -------------------       ------------------
                                                                                                  271,201                  265,582
                                                                                       -------------------       ------------------
-----------------------------------------------------------------------------------------------------------------------------------

Other long-term liabilities and deferred credits:
  Accumulated deferred income taxes                                                               240,909                  245,489
  Accumulated deferred investment tax credits                                                      32,240                   33,170
  Customer advances                                                                                32,687                   34,367
  Environmental liabilities                                                                        11,366                   11,683
  Other                                                                                            59,205                   60,387
                                                                                       -------------------       ------------------
                                                                                                  376,407                  385,096
                                                                                       -------------------       ------------------
-----------------------------------------------------------------------------------------------------------------------------------

Total capitalization and liabilities                                                   $        1,684,536        $       1,685,150
                                                                                       ===================       ==================
-----------------------------------------------------------------------------------------------------------------------------------

The accompanying Notes to Consolidated Financial Statements are an integral part
of these statements.
</TABLE>


                                       17
<PAGE>

<TABLE>

                        WISCONSIN POWER AND LIGHT COMPANY
                CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<CAPTION>

                                                                                         For the Six Months Ended June 30,
                                                                                            1999                   1998
--------------------------------------------------------------------------------------------------------------------------------
                                                                                                  (in thousands)
<S>                                                                                 <C>                    <C>
Cash flows from operating activities:
  Net income                                                                        $             33,241   $             16,365
  Adjustments to reconcile net income to net cash
   flows from operating activities:
     Depreciation and amortization                                                                59,546                 60,838
     Amortization of nuclear fuel                                                                  3,050                  3,006
     Deferred taxes and investment tax credits                                                    (4,258)                (1,736)
     Other                                                                                          (620)                (3,927)
  Other changes in assets and liabilities:
     Accounts receivable                                                                           9,350                 20,317
     Income tax refunds receivable                                                                (8,129)               (11,224)
     Production fuel                                                                               4,628                  2,402
     Gas stored underground                                                                        2,937                  5,732
     Accounts payable                                                                            (20,359)                   154
     Benefit obligations and other                                                                (7,192)                14,869
                                                                                    ---------------------  ---------------------
       Net cash flows from operating activities                                                   72,194                106,796
                                                                                    ---------------------  ---------------------
--------------------------------------------------------------------------------------------------------------------------------

Cash flows from (used for) financing activities:
    Common stock dividends                                                                       (29,176)               (29,170)
    Preferred stock dividends                                                                     (1,656)                (1,656)
    Net change in short-term borrowings                                                           32,236                (23,697)
                                                                                    ---------------------  ---------------------
      Net cash flows from (used for) financing activities                                          1,404                (54,523)
                                                                                    ---------------------  ---------------------
--------------------------------------------------------------------------------------------------------------------------------

Cash flows used for investing activities:
    Utility construction expenditures                                                            (48,600)               (38,980)
    Nuclear decommissioning trust funds                                                          (14,654)               (12,859)
    Shared savings expenditures                                                                   (7,723)                (3,021)
    Other                                                                                           (153)                 2,023
                                                                                    ---------------------  ---------------------
      Net cash flows used for investing activities                                               (71,130)               (52,837)
                                                                                    ---------------------  ---------------------
--------------------------------------------------------------------------------------------------------------------------------

Net increase (decrease) in cash and temporary cash investments                                     2,468                   (564)
                                                                                    ---------------------  ---------------------
--------------------------------------------------------------------------------------------------------------------------------

Cash and temporary cash investments at beginning of period                                         1,811                  2,492
                                                                                    ---------------------  ---------------------
--------------------------------------------------------------------------------------------------------------------------------

Cash and temporary cash investments at end of period                                $              4,279   $              1,928
                                                                                    =====================  =====================
--------------------------------------------------------------------------------------------------------------------------------

Supplemental cash flow information: Cash paid during the period for:
    Interest                                                                        $             21,860   $             13,085
                                                                                    =====================  =====================
    Income taxes                                                                    $             32,885   $             22,784
                                                                                    =====================  =====================
--------------------------------------------------------------------------------------------------------------------------------

The accompanying Notes to Consolidated Financial Statements are an integral part
of these statements.
</TABLE>



                                       18

<PAGE>




                        WISCONSIN POWER AND LIGHT COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

         Except as modified  below,  the Alliant  Energy  Notes to  Consolidated
         Financial  Statements  are  incorporated  by reference  insofar as they
         relate  to WP&L.  Alliant  Energy  Note 5 does not  relate to WP&L and,
         therefore, is not incorporated by reference.

1.       The interim consolidated financial statements included herein have been
         prepared by WP&L, without audit,  pursuant to the rules and regulations
         of the SEC.  Accordingly,  certain information and footnote disclosures
         normally included in financial  statements  prepared in accordance with
         generally  accepted  accounting   principles  have  been  condensed  or
         omitted, although management believes that the disclosures are adequate
         to make the  information  presented not  misleading.  The  consolidated
         financial statements include WP&L and its consolidated subsidiary. WP&L
         is a subsidiary of Alliant Energy. These financial statements should be
         read in conjunction with the financial statements and the notes thereto
         included in WP&L's latest Annual Report on Form 10-K.

         In the opinion of  management,  all  adjustments,  which are normal and
         recurring  in  nature,  necessary  for a fair  presentation  of (a) the
         consolidated  results of operations  for the three and six months ended
         June 30, 1999 and 1998, (b) the consolidated financial position at June
         30, 1999 and December 31, 1998, and (c) the  consolidated  statement of
         cash flows for the six months  ended June 30, 1999 and 1998,  have been
         made. Because of the seasonal nature of WP&L's operations,  results for
         the  three  and six  months  ended  June 30,  1999 are not  necessarily
         indicative of results that may be expected for the year ending December
         31, 1999.  Certain  prior period  amounts have been  reclassified  on a
         basis consistent with the 1999 presentation.


                                       19
<PAGE>




     ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                             RESULTS OF OPERATIONS

Alliant  Energy was formed as the result of a  three-way  merger  involving  WPL
Holdings,  Inc., IES  Industries  Inc. and IPC that was completed in April 1998.
The first  tier  subsidiaries  of  Alliant  Energy  include:  WP&L,  IESU,  IPC,
Resources and Corporate  Services.  Among various other regulatory  constraints,
Alliant  Energy is operating  as a registered  public  utility  holding  company
subject to the limitations imposed by PUHCA.

This MD&A includes  information  relating to Alliant  Energy,  IESU and WP&L (as
well as IPC, Resources and Corporate Services).  Where appropriate,  information
relating  to a specific  entity has been  segregated  and  labeled as such.  The
following  discussion  and  analysis  should  be read in  conjunction  with  the
Consolidated Financial Statements and Notes to Consolidated Financial Statements
included  in this  report as well as the  financial  statements,  notes and MD&A
included in Alliant  Energy's,  IESU's and WP&L's  latest  Annual Report on Form
10-K.

                           FORWARD-LOOKING STATEMENTS

Statements  contained in this report (including MD&A) that are not of historical
fact are  forward-looking  statements  intended to qualify for the safe  harbors
from liability  established by the Private  Securities  Litigation Reform Act of
1995.  From  time  to  time,  Alliant  Energy,  IESU  or  WP&L  may  make  other
forward-looking  statements  within the meaning of the federal  securities  laws
that involve judgments,  assumptions and other uncertainties  beyond the control
of such companies.  These forward-looking  statements may include, among others,
statements  concerning  revenue and cost trends,  cost recovery,  cost reduction
strategies and anticipated outcomes, pricing strategies,  changes in the utility
industry,  planned  capital  expenditures,  financing  needs  and  availability,
statements of expectations,  beliefs,  future plans and strategies,  anticipated
events or trends and similar comments concerning matters that are not historical
facts. Investors and other users of the forward-looking statements are cautioned
that such  statements  are not a guarantee of future  performance  and that such
forward-looking  statements  are subject to risks and  uncertainties  that could
cause actual results to differ  materially  from those  expressed in, or implied
by, such statements.  Some, but not all, of the risks and uncertainties  include
weather effects on sales and revenues,  competitive  factors,  general  economic
conditions in the relevant  service  territory,  federal and state regulatory or
government  actions,  resolution  of issues  being  addressed  by the  Wisconsin
legislature relating to proposed amendments to WUHCA, unanticipated construction
and acquisition expenditures,  issues related to stranded costs and the recovery
thereof,  the operations of Alliant Energy's nuclear  facilities,  unanticipated
issues or costs associated with achieving Year 2000  compliance,  the ability of
Alliant Energy to successfully  integrate its operations and unanticipated costs
associated therewith, unanticipated difficulties in achieving expected synergies
from the merger,  unanticipated  costs  associated  with  certain  environmental
remediation   efforts  being   undertaken  by  Alliant   Energy,   technological
developments,  employee workforce factors,  including changes in key executives,
collective  bargaining  agreements  or  work  stoppages,  political,  legal  and
economic  conditions in foreign  countries Alliant Energy has investments in and
changes in the rate of inflation.

                            UTILITY INDUSTRY OUTLOOK

A summary of the  current  regulatory  environment  is included in the Form 10-K
filed by Alliant Energy, IESU and WP&L for the year ended December 31, 1998. Set
forth below are several developments relating to such regulatory environment.

Across the nation,  approximately  half of the states have passed legislation or
issued regulatory  rulings granting customers the right to choose their electric
energy supplier.  At the federal level, a number of proposals to restructure the
electric industry are currently under consideration. However, there continues to
be a lack of consensus over how restructuring should be implemented and how much
control the federal  government should have over this process.  Until one of the
proposals gains significant  bipartisan  support,  there is unlikely to be final
federal action to either facilitate or force states to open electricity  markets
to competition.

                                       20
<PAGE>


The IUB has been  reviewing  all forms of  competition  in the electric  utility
industry  for several  years.  A group  comprised  of the IUB,  Alliant  Energy,
MidAmerican Energy Company, rural electric cooperatives, municipal utilities and
Iowans  for Choice in  Electricity  (a diverse  group of  industrial  customers,
marketers,  such as  Enron,  and a low  income  customer  representative,  among
others) endorsed a bill to allow for such competition that was introduced in the
Iowa  Legislature  in March  1999.  The bill was  opposed  by the OCA,  which is
charged by Iowa law with  representation of all consumers  generally.  While the
bill did not pass,  it will by operation of Iowa General  Assembly  rules remain
alive in the General Assembly upon adjournment in the spring of its 1999 regular
session.  By  operation  of House  rules,  it will be  re-referred  to the House
Commerce  Committee and will again be inserted into the  legislative  process in
the Second Regular Session of the 78th General Assembly (2000).

"Reliability 2000" legislation was introduced in Wisconsin in the second quarter
of 1999.  This  legislation  includes,  among other items,  a relaxation  of the
non-utility  asset  limitations  included  in the WUHCA and the  formation  of a
Wisconsin transmission company (Transco) for those investor-owned  utilities who
elect to take  advantage of the new asset cap law. If passed,  it is anticipated
that the three large  Wisconsin  investor-owned  electric  utilities,  including
WP&L,  would  have  incentives  to  include  their  transmission  systems in the
Transco.  Should the legislation pass,  Alliant Energy would review the possible
inclusion of the transmission systems of IESU and IPC in the Transco as well.

The Transco,  structured  as a  single-purpose  corporation,  would operate as a
member of the  Midwest  ISO.  It would be a public  utility,  as  defined  under
Wisconsin law, with a board of directors  comprised of one  representative  from
each utility  having at least a 10% ownership  interest in the Transco.  Smaller
utilities  could  combine  their  transmission  assets  with others to reach the
minimum level for board  membership.  In addition,  the original  members of the
board would select four at-large directors.

Alliant Energy is unable to predict  whether the  Reliability  2000  legislation
will  be  enacted.  As a  result,  it has  also  been  reviewing  various  other
initiatives  as it  relates  to the  future  of its  transmission  system.  Such
initiatives include:

a.   ITC - In November 1998,  Alliant Energy and NSP announced  plans to develop
     an ITC to provide  electric  transmission  services  to the Upper  Midwest.
     Based on the merger announcement  between NSP and New Century Energies Inc.
     as well as  NSP's  recent  announcement  to join  the  Midwest  ISO in some
     capacity,  the companies are no longer  proceeding  with the development of
     the ITC in the manner previously contemplated.
b.   Midwest ISO - Alliant  Energy had  originally  filed to  participate in the
     Midwest ISO, which was conditionally  approved by the FERC on September 16,
     1998.  However,  as a result of the  earlier  decision to form the ITC with
     NSP,  Alliant Energy withdrew its Midwest ISO  membership.  In August 1999,
     Alliant Energy informed the Midwest ISO that it will rejoin the Midwest ISO
     in some capacity (i.e., as part of the Wisconsin Transco,  as an integrated
     utility or as part of a regional independent transmission company).

In addition,  in May 1999,  FERC issued a Notice of Proposed  Rulemaking  (NOPR)
concerning the development of RTOs. The proposed rules outline the  requirements
for utilities to voluntarily turn over control of their transmission system to a
regional  entity  either  by  leasing  the  system  to an  RTO,  or by  outright
divestiture.  FERC's timeline is to have a final rule issued by January 1, 2000,
and have the RTOs in operation by the end of 2001.  Alliant  Energy is currently
reviewing the NOPR.

Each of the utilities  complies with the provisions of SFAS 71,  "Accounting for
the  Effects  of  Certain   Types  of   Regulation."   SFAS  71  provides   that
rate-regulated  public utilities record certain costs and credits allowed in the
rate making process in different periods than for nonregulated  entities.  These
are deferred as regulatory  assets or regulatory  liabilities and are recognized
in the  consolidated  statements  of income at the time  they are  reflected  in
rates. If a portion of the utility  subsidiaries'  operations  becomes no longer
subject to the provisions of SFAS 71 as a result of  competitive  restructurings
or  otherwise,  a write-down  of related  regulatory  assets and possibly  other
charges  would be  required,  unless some form of  transition  cost  recovery is
established by the appropriate  regulatory body that would meet the requirements
under  generally  accepted  accounting  principles  for continued  accounting as
regulatory  assets  during such  recovery  period.  In  addition,  each  utility
subsidiary  would be required to determine

                                       21
<PAGE>




any impairment of other assets and write-down any impaired  assets to their fair
value. The utility  subsidiaries believe they currently meet the requirements of
SFAS 71.

                      ALLIANT ENERGY RESULTS OF OPERATIONS

Overview - Second Quarter Results

Alliant Energy  reported net income of $38.5 million,  or $0.49 per share (basic
and  diluted),  for the  second  quarter of 1999,  compared  with a loss of $9.1
million, or $0.12 per share (basic and diluted), for the second quarter of 1998.

The second quarter 1999 earnings included a pre-tax gain of $33.8 million ($0.27
per share) from the sale of approximately 640,000 shares of McLeod stock held by
Alliant Energy.  Higher  electric and natural gas margins from Alliant  Energy's
utility  operations  and improved  earnings  from Alliant  Energy's  diversified
operations also contributed to the increase in earnings.  These items,  however,
were partially  offset by higher  utility  operation and  maintenance  expenses,
largely  due to outages at several  generating  facilities  and higher  employee
benefits costs, and increased  utility  depreciation  expenses in 1999. The 1998
results included  approximately $35 million of pre-tax  merger-related  expenses
($0.28 per share).

Alliant Energy's utility operations  reported net income of approximately  $17.1
million  for the second  quarter of 1999  compared  with a loss of $3.0  million
(income of $14.8 million excluding  merger-related expenses) for the same period
in 1998.  The  increase  in utility  earnings  resulted  primarily  from  higher
electric and natural gas margins.  Higher  operation  and  maintenance  expenses
(excluding  merger-related  expenses) and depreciation  expense partially offset
the increased earnings.

The higher  electric  margins  stemmed  primarily from separate $15 million rate
increases  implemented  at WP&L in July 1998 and  early  March  1999 to  recover
higher purchased power and transmission  costs. A 4% increase in sales to retail
customers,  largely due to continued economic growth in Alliant Energy's service
territory,  also contributed to the higher electric margins.  Lower margins from
sales to off-system customers partially offset the increase.

The increase in operation  and  maintenance  expenses  resulted  primarily  from
higher operating costs at Alliant Energy's generating facilities, largely due to
outages at several facilities,  and an increase in employee benefits costs. Such
items  were  partially  offset  by lower  costs  in 1999  due to  merger-related
operating efficiencies.

Alliant Energy's  diversified  (nonregulated)  operations reported net income of
$21.6  million in the  second  quarter  of 1999  compared  to a net loss of $2.9
million ($1.8 million excluding  merger-related expenses) for the same period in
1998.  The  increased  earnings  were largely due to the gain on the sale of the
McLeod shares.  Improved  results from Alliant  Energy's  electric trading joint
venture also contributed to the increase.





                                       22
<PAGE>




Electric Utility Operations

Electric  margins and MWH sales for Alliant  Energy for the three  months  ended
June 30 were as follows:
<TABLE>
<CAPTION>

                                        Revenues and Costs                            MWHs Sold
                                          (in thousands)                           (in thousands)
                                    ----------------------------             ----------------------------
                                        1999           1998        Change        1999           1998        Change
                                    -------------  -------------  ---------  -------------  -------------  ---------
<S>                                    <C>            <C>             <C>           <C>            <C>         <C>
Residential                            $ 123,379      $ 120,708         2%          1,575          1,525         3%
Commercial                                77,534         74,762         4%          1,251          1,167         7%
Industrial                               116,780        118,451        (1%)         3,239          3,150         3%
                                    -------------  -------------             -------------  -------------
   Total from ultimate customers         317,693        313,921         1%          6,065          5,842         4%
Sales for resale                          37,364         56,957       (34%)         1,339          2,036       (34%)
Other                                     11,095          9,536        16%             39             37         5%
                                    -------------  -------------             -------------  -------------
   Total                                 366,152        380,414        (4%)         7,443          7,915        (6%)
                                                                             =============  =============  =========
Electric production fuels                 49,827         66,387       (25%)
Purchased power                           72,440         73,417        (1%)
                                    -------------  -------------
   Margin                              $ 243,885      $ 240,610         1%
                                    =============  =============  =========

Electric  margins and MWH sales for Alliant Energy for the six months ended June
30 were as follows:
<CAPTION>

                                        Revenues and Costs                            MWHs Sold
                                          (in thousands)                           (in thousands)
                                    ----------------------------             ----------------------------
                                        1999           1998        Change        1999           1998        Change
                                    -------------  -------------  ---------  -------------  -------------  ---------
<S>                                    <C>            <C>             <C>           <C>            <C>         <C>
Residential                            $ 253,659      $ 247,777         2%          3,385          3,237         5%
Commercial                               149,557        146,794         2%          2,495          2,352         6%
Industrial                               219,381        224,854        (2%)         6,314          6,150         3%
                                    -------------  -------------             -------------  -------------
   Total from ultimate customers         622,597        619,425         1%         12,194         11,739         4%
Sales for resale                          73,578         99,769       (26%)         2,684          3,706       (28%)
Other                                     21,315         18,971        12%             81             80         1%
                                    -------------  -------------             -------------  -------------
   Total                                 717,490        738,165        (3%)        14,959         15,525        (4%)
                                                                             =============  =============  =========
Electric production fuels                111,136        132,089       (16%)
Purchased power                          124,505        129,563        (4%)
                                    -------------  -------------
   Margin                              $ 481,849      $ 476,513         1%
                                    =============  =============  =========
</TABLE>

Electric margin increased $3.3 million,  or 1%, and $5.3 million, or 1%, for the
three and six months ended June 30, 1999,  respectively,  compared with the same
periods in 1998. The increases were primarily due to separate $15 million annual
rate increases  implemented at WP&L in July 1998 and early March 1999 to recover
higher  purchased  power and  transmission  costs,  and 4% increases in sales to
retail customers.  The sales increases  resulted from continued  economic growth
within Alliant Energy's service territory.  In addition,  more favorable weather
conditions  in the first  quarter  of 1999  also  contributed  to the  six-month
increase.

Partially offsetting the increase in electric margin for both periods,  were: 1)
decreased  sales to off-system  customers,  and 2) decreased  recoveries of $1.6
million and $6.3 million of concurrent and previously deferred  expenditures for
Iowa-mandated  energy  efficiency  program  costs for the three-  and  six-month
periods,  respectively.  Recoveries for energy  efficiency  program costs are in
accordance  with IUB orders (a portion of these  recoveries is also amortized to
expense in other  operation  expenses).  The second  quarter of 1998 margin also
included $3.2 million of revenues  collected from WP&L customers for a surcharge
related to Kewaunee (a  corresponding  amount was included in  depreciation  and
amortization expense).


                                       23
<PAGE>



IESU's and IPC's electric  tariffs  include EAC's that are designed to currently
recover the costs of fuel and the energy portion of purchased power billings.

Gas Utility Operations

Gas margins and Dth sales for the three months ended June 30 were as follows:
<TABLE>
<CAPTION>

                                        Revenues and Costs                       Dekatherms Sold
                                          (in thousands)                          (in thousands)
                                    ---------------------------             ---------------------------
                                        1999          1998        Change       1999           1998       Change
                                    ------------- -------------  ---------  ------------  ------------- ---------
<S>                                     <C>           <C>            <C>         <C>            <C>          <C>
Residential                             $ 26,602      $ 25,999         2%         3,969          3,779        5%
Commercial                                12,495        11,936         5%         2,532          2,352        8%
Industrial                                 3,649         3,030        20%         1,038            820       27%
Transportation and other                    3,454         4,302      (20%)       10,834         11,953       (9%)
                                    ------------- -------------             ------------  -------------
   Total                                  46,200        45,267         2%        18,373         18,904       (3%)
                                                                            ============  ============= =========
Cost of gas sold                          22,666        23,907        (5%)
                                    ------------- -------------
   Margin                               $ 23,534      $ 21,360        10%
                                    ============= =============  =========

<CAPTION>

Gas margins and Dth sales for the six months ended June 30 were as follows:

                                        Revenues and Costs                       Dekatherms Sold
                                          (in thousands)                          (in thousands)
                                    ---------------------------             ---------------------------
                                        1999          1998        Change       1999           1998       Change
                                    ------------- -------------  ---------  ------------  ------------- ---------
<S>                                    <C>           <C>              <C>        <C>            <C>          <C>
Residential                            $ 109,041     $ 106,292         3%        18,805         17,557        7%
Commercial                                51,654        51,134         1%        11,091         10,466        6%
Industrial                                10,416        10,158         3%         2,957          2,661       11%
Transportation and other                   8,774         7,729        14%        25,443         26,744       (5%)
                                    ------------- -------------             ------------  -------------
   Total                                 179,885       175,313         3%        58,296         57,428        2%
                                                                            ============  ============= =========
Cost of gas sold                         104,009       101,186         3%
                                    ------------- -------------
   Margin                               $ 75,876      $ 74,127         2%
                                    ============= =============  =========
</TABLE>

Gas margin  increased $2.2 million,  or 10%, and increased $1.7 million,  or 2%,
for the three and six months ended June 30, 1999,  respectively,  compared  with
the same periods in 1998,  primarily due to more favorable weather conditions in
1999. The six-month increase was partially offset by a reduction of $1.2 million
in recoveries of Iowa-mandated  energy efficiency costs and gas cost adjustments
at IPC.  Refer to  "Interest  Expense  and  Other"  for a  discussion  of income
realized from a weather hedge in the first quarter of 1999.

IESU's and IPC's gas tariffs  include PGA clauses that are designed to currently
recover the cost of utility gas sold.

                                       24

<PAGE>



Nonregulated and Other Revenues

Nonregulated  and other revenues for the three and six months ended June 30 were
as follows (in thousands):
<TABLE>
<CAPTION>

                                                 For the three months               For the six months
                                                    ended June 30,                    ended June 30,
                                                 1999            1998             1999              1998
                                              ------------    ------------    --------------    -------------
<S>                                              <C>             <C>               <C>              <C>
Environmental and engineering services           $ 18,962        $ 16,687          $ 35,135         $ 33,324
Oil and gas production                             16,608          17,477            29,442           34,624
Nonregulated energy                                14,892           9,682            25,067           23,127
Transportation, rents and other                    12,059          10,751            22,123           20,427
Steam                                               6,894           6,381            15,155           13,826
Affordable housing                                  3,099           3,100             6,172            6,061
Water                                               1,248           1,253             2,500            2,428
                                              ------------    ------------    --------------    -------------
                                                 $ 73,762        $ 65,331          $135,594       $ 133,817
                                              ============    ============    ==============    =============
</TABLE>

Nonregulated  energy revenues increased by $5.2 million and $1.9 million for the
three and six months ended June 30, 1999,  respectively,  compared with the same
periods in 1998, primarily due to the second quarter 1999 acquisition of a small
oil  gathering  and  transportation  business in Texas.  Oil and gas  production
revenues  declined  $5.2 million for the  six-month  period,  due to lower sales
volumes  and  gas  prices,  partially  offset  by an  increase  in  oil  prices.
Environmental and engineering  services revenues increased $2.3 million and $1.8
million for the three- and six-month  periods due to an increase in construction
management services.

Operating Expenses

Other  operation  expenses  for the three and six  months  ended June 30 were as
follows (in thousands):
<TABLE>
<CAPTION>

                                              For the three months            For the six months
                                                 ended June 30,                 ended June 30,
                                              1999           1998             1999            1998
                                          -------------  --------------   -------------  --------------
<S>                                          <C>             <C>             <C>             <C>
       Utility - WP&L / IESU / IPC           $  98,383       $ 113,193       $ 186,212       $ 215,940
       Nonregulated and other                   49,908          45,486          92,445         100,093
                                          -------------  --------------   -------------  --------------
                                             $ 148,291       $ 158,679       $ 278,657       $ 316,033
                                          =============  ==============   =============  ==============
</TABLE>

Other operation expenses at the utility subsidiaries decreased $14.8 million and
$29.7  million for the three and six months ended June 30,  1999,  respectively,
compared  with the same  periods in 1998,  primarily  due to  incurring  pre-tax
merger-related   expenses  of  $20.1   million   and  $29.8   million  in  1998,
respectively,  and lower costs in 1999 due to operating efficiencies  associated
with the merger.  Such decreases were partially offset by increased expenses for
employee benefits, nuclear operations and Year 2000 readiness efforts.

Maintenance expenses at the utility subsidiaries decreased $1.6 million and $3.2
million for the three and six months ended June 30, 1999, respectively, compared
with  the same  periods  in 1998  primarily  due to  lower  nuclear  maintenance
expenses  partially  offset by  expenses  associated  with  outages  at  several
generating facilities.

Other operation expenses at the nonregulated  businesses  increased $4.4 million
and  decreased  $7.6  million for the three and six months  ended June 30, 1999,
respectively,  compared with the same periods in 1998. The three-month  increase
was  primarily  due to expenses  associated  with the  increase in  construction
management  services and the acquisition of the oil gathering and transportation
business. Pre-tax merger-related expenses of $1.2 million for both the three and
six months ended June 30,  1998,  contributed  to a decrease in other  operation
expenses in 1999.  Also  contributing  to the  decrease for the six months ended
June 30, 1999, were lower operation expenses in the gas

                                       25


<PAGE>



marketing  business  and a $6.7  million  asset  impairment  charge in the first
quarter of 1998 at Whiting. Partially offsetting the six-month decrease were the
increased expenses from the oil gathering and transportation business.

Depreciation and amortization  expense decreased $2.4 million and increased $1.4
million for the three and six months ended June 30, 1999, respectively, compared
with the same periods in 1998.  The decrease for the three months ended June 30,
1999 was primarily  due to reduced  earnings in WP&L's  nuclear  decommissioning
trust  fund,  which was offset  entirely in  "Miscellaneous,  net," and the $3.2
million  Kewaunee  surcharge in the second  quarter of 1998 at WP&L (recorded in
depreciation and amortization expense with a corresponding  increase in revenues
resulting  in no  earnings  impact).  Higher  depreciation  expense  related  to
property additions partially offset the decrease.

Interest Expense and Other

Interest  expense  increased $2.5 million and $5.0 million for the three and six
months  ended June 30,  1999,  respectively,  compared  with the same periods in
1998, due to higher nuclear decommissioning trust fund interest expense at IESU,
which was offset entirely in "Miscellaneous,  net." In addition,  higher utility
and nonregulated  borrowings outstanding during 1999 contributed to the increase
for the six months ended June 30, 1999.

The accounting for earnings on the nuclear  decommissioning  trust funds results
in no net income impact. Miscellaneous, net income increases for earnings on the
nuclear  decommissioning  funds at both WP&L and IESU. In accordance  with their
respective  regulatory  requirements,  the  corresponding  offset is recorded as
depreciation expense at WP&L and interest expense at IESU.

Miscellaneous,  net income  increased  $48.1  million and $51.0  million for the
three and six months ended June 30, 1999, respectively.  Alliant Energy realized
a pre-tax gain of $33.8  million in the second  quarter of 1999 from the sale of
approximately  640,000  shares of McLeod  stock.  The three and six months ended
June  30,  1998,   included   $13.5   million  and  $13.7   million  of  pre-tax
merger-related expenses. Also contributing to the increase for the three and six
months  ended June 30,  1999,  were  improved  operating  results  from  Alliant
Energy's  electric  trading  joint venture and for the six months ended June 30,
1999, $2.5 million of income realized from settlement of a weather hedge at WP&L
for the November 1, 1998 to March 31, 1999 heating season.  Partially offsetting
these increases were lower earnings on Alliant Energy's nuclear  decommissioning
trust funds.

Income Taxes

Alliant  Energy's  income tax expense  increased $25.7 million and $32.8 million
for the three and six months ended June 30, 1999,  respectively,  compared  with
the same  periods  last  year,  primarily  due to  higher  pre-tax  income.  The
six-month increase was partially offset by a lower effective income tax rate.

                           IESU RESULTS OF OPERATIONS

Overview - Second Quarter Results

IESU's earnings  available for common stock increased $4.1 million for the three
months ended June 30, 1999, compared with the same period in 1998. The increased
earnings were primarily due to $10.3 million of pre-tax merger-related  expenses
incurred during the three months ended June 30, 1998.  Higher  electric  margins
also contributed to the increase. Such increases were partially offset by higher
operation and maintenance  expenses  (excluding  merger-related  expenses),  and
higher depreciation and amortization expense.



                                       26
<PAGE>




Electric Utility Operations

Electric  margins and MWH sales for IESU for the three months ended June 30 were
as follows:
<TABLE>
<CAPTION>

                                        Revenues and Costs                          MWHs Sold
                                          (in thousands)                          (in thousands)
                                    ---------------------------             ---------------------------
                                        1999          1998        Change       1999           1998       Change
                                    ------------- -------------  ---------  ------------  ------------- ---------
<S>                                     <C>           <C>           <C>           <C>            <C>        <C>
Residential                             $ 51,226      $ 50,269         2%           595            571        4%
Commercial                                38,884        37,255         4%           618            564       10%
Industrial                                43,211        44,498        (3%)        1,292          1,238        4%
                                    ------------- -------------             ------------  -------------
   Total from ultimate customers         133,321       132,022         1%         2,505          2,373        6%
Sales for resale                           6,382        13,251       (52%)          341            532      (36%)
Other                                      2,506         2,367         6%            11             10       10%
                                    ------------- -------------             ------------  -------------
   Total                                 142,209       147,640        (4%)        2,857          2,915       (2%)
                                                                            ============  ============= =========
Electric production fuels                  8,752        18,133       (52%)
Purchased power                           27,142        25,768         5%
                                    ------------- -------------
   Margin                              $ 106,315     $ 103,739         2%
                                    ============= =============  =========

<CAPTION>

Electric margins and MWH sales for IESU for the six months ended June 30 were as
follows:

                                        Revenues and Costs                          MWHs Sold
                                          (in thousands)                          (in thousands)
                                    ---------------------------             ---------------------------
                                        1999          1998        Change       1999           1998       Change
                                    ------------- -------------  ---------  ------------  ------------- ---------
<S>                                    <C>           <C>             <C>          <C>            <C>         <C>
Residential                            $ 105,579     $ 104,838         1%         1,288          1,234        4%
Commercial                                77,432        74,866         3%         1,246          1,147        9%
Industrial                                81,093        84,737        (4%)        2,474          2,401        3%
                                    ------------- -------------             ------------  -------------
   Total from ultimate customers         264,104       264,441        --          5,008          4,782        5%
Sales for resale                          12,735        18,963       (33%)          682            721       (5%)
Other                                      5,387         4,886        10%            21             21       --
                                    ------------- -------------             ------------  -------------
   Total                                 282,226       288,290        (2%)        5,711          5,524        3%
                                                                            ============  ============= =========
Electric production fuels                 31,247        44,928       (30%)
Purchased power                           40,292        36,817         9%
                                    ------------- -------------
   Margin                              $ 210,687     $ 206,545         2%
                                    ============= =============  =========
</TABLE>


Electric margin increased $2.6 million,  or 2%, and $4.1 million, or 2%, for the
three and six months ended June 30, 1999,  respectively,  compared with the same
periods in 1998, primarily due to increases of 6% and 5%, respectively, in sales
volumes to retail  customers  due to  continued  economic  growth in the service
territory.  More favorable  weather  conditions in 1999 also  contributed to the
six-month  increase.  Increased  purchased  power capacity costs in both periods
partially offset the increases. Sales for resale decreased significantly for the
three- and six-month periods,  primarily due to various resale customers of IESU
selecting another utility as their electricity  provider effective in early 1999
and lower sales from the  merger-related  joint sales  agreement.  IESU does not
anticipate the loss of the resale  customers will have a material  impact on its
electric  margins in the future.  Under the joint sales  agreement,  the margins
resulting from Alliant  Energy's  off-system sales are allocated among IESU, IPC
and WP&L.  Off-system sales revenues are passed through IESU's EAC and therefore
have no impact on electric margin.

IESU's electric tariffs include EAC's that are designed to currently recover the
costs of fuel and the energy portion of purchased power billings.


                                       27
<PAGE>

Gas Utility Operations

Gas  margins and Dth sales for IESU for the three  months  ended June 30 were as
follows:
<TABLE>
<CAPTION>

                                        Revenues and Costs                       Dekatherms Sold
                                          (in thousands)                          (in thousands)
                                    ---------------------------             ---------------------------
                                        1999          1998        Change       1999           1998       Change
                                    ------------- -------------  ---------  ------------  ------------- ---------
<S>                                     <C>           <C>                         <C>            <C>         <C>
Residential                             $ 13,034      $ 12,994         --         1,783          1,793       (1%)
Commercial                                 5,968         5,513         8%         1,146          1,060        8%
Industrial                                 2,033         1,530        33%           605            431       40%
Transportation and other                     977           884        11%         2,267          2,500       (9%)
                                    ------------- -------------             ------------  -------------
   Total                                  22,012        20,921         5%         5,801          5,784       --
                                                                            ============  ============= =========
Cost of gas sold                          11,623        10,782         8%
                                    ------------- -------------
   Margin                               $ 10,389      $ 10,139         2%
                                    ============= =============  =========

<CAPTION>

Gas  margins  and Dth sales for IESU for the six  months  ended  June 30 were as
follows:

                                        Revenues and Costs                       Dekatherms Sold
                                          (in thousands)                          (in thousands)
                                    ---------------------------             ---------------------------
                                        1999          1998        Change       1999           1998       Change
                                    ------------- -------------  ---------  ------------  ------------- ---------
<S>                                     <C>           <C>             <C>        <C>            <C>          <C>
Residential                             $ 52,195      $ 50,996         2%         8,638          8,417        3%
Commercial                                23,938        23,505         2%         5,035          4,936        2%
Industrial                                 4,836         4,692         3%         1,478          1,345       10%
Transportation and other                   2,339         2,123        10%         5,462          5,736      (5%)
                                    ------------- -------------             ------------  -------------
   Total                                  83,308        81,316         2%        20,613         20,434        1%
                                                                            ============  ============= =========
Cost of gas sold                          49,535        48,439         2%
                                    ------------- -------------
   Margin                               $ 33,773      $ 32,877         3%
                                    ============= =============  =========

Gas margin increased $0.3 million, or 2%, and $0.9 million, or 3%, for the three
and six months ended June 30, 1999, respectively, compared with the same periods
in 1998, primarily due to more favorable weather conditions in 1999.

IESU's gas tariffs  include PGA clauses that are  designed to currently  recover
the cost of gas sold.

Operating Expenses

IESU's other operation  expenses increased $0.3 million and $0.7 million for the
three and six months ended June 30, 1999,  respectively,  compared with the same
periods in 1998,  largely due to increased  expenses  for  employee  pension and
benefits,  nuclear  operations and Year 2000 readiness  efforts.  Such increases
were largely offset by pre-tax merger-related  expenses of $6.1 million and $7.9
million  incurred  during  the  three  and  six  months  ended  June  30,  1998,
respectively.  In addition,  merger-related  operating  efficiencies realized in
1999 also contributed to a reduction in other operation expenses.

IESU's  maintenance  expenses  decreased  $1.4  million and $2.5 million for the
three and six months ended June 30, 1999,  respectively,  compared with the same
periods in 1998, primarily due to reduced nuclear maintenance expenses.

IESU's  depreciation  and amortization  expense  increased $1.6 million and $2.7
million for the three and six months ended June 30, 1999, respectively, compared
with the same periods in 1998, primarily due to property additions.


                                       28
<PAGE>

Interest Expense and Other

Interest  expense  increased $1.5 million and $1.6 million for the three and six
months  ended June 30,  1999,  respectively,  compared  with the same periods in
1998, due to higher nuclear  decommissioning trust fund interest expense,  which
was offset  entirely in  "Miscellaneous,  net." A decrease  in interest  expense
resulting from lower  borrowings  outstanding  during 1999 partially  offset the
increase.

The accounting for earnings on the nuclear  decommissioning  trust funds results
in no net income impact. Miscellaneous, net income increases for earnings on the
trust fund and the corresponding offset is recorded as interest expense.

Miscellaneous,  net income increased $6.7 million and $7.8 million for the three
and six months ended June 30, 1999, respectively, compared with the same periods
in  1998,   primarily   due  to  $4.2   million  and  $4.4  million  of  pre-tax
merger-related  expenses incurred during the three and six months ended June 30,
1998,   respectively.   Also  contributing  to  the  increase  was  the  nuclear
decommissioning trust fund interest previously described.

Income Taxes

IESU's income tax expense  increased $3.1 million and $3.3 million for the three
and six months ended June 30, 1999, respectively, compared with the same periods
in 1998,  primarily due to higher taxable income.  A lower effective  income tax
rate in 1999, primarily due to a reduction in flow-through  depreciation expense
and  nondeductible  merger  expenses  in 1998,  partially  offset the  six-month
increase.

                           WP&L RESULTS OF OPERATIONS

Overview - Second Quarter Results

WP&L's earnings  available for common stock increased $8.2 million for the three
months ended June 30, 1999, compared with the same period in 1998. The increased
earnings were primarily due to $10.6 million of pre-tax merger-related  expenses
incurred  during the three  months  ended  June 30,  1998,  and higher  electric
margins.  Higher operation and maintenance  expenses  (excluding  merger-related
expenses) and increased interest expense partially offset the increase.

Electric Utility Operations

Electric  margins and MWH sales for WP&L for the three months ended June 30 were
as follows:
<CAPTION>

                                        Revenues and Costs                          MWHs Sold
                                          (in thousands)                          (in thousands)
                                    ---------------------------             ---------------------------
                                        1999          1998        Change       1999           1998       Change
                                    ------------- -------------  ---------  ------------  ------------- ---------
<S>                                     <C>           <C>              <C>          <C>            <C>        <C>
Residential                             $ 49,660      $ 47,950         4%           717            698        3%
Commercial                                29,445        27,764         6%           494            472        5%
Industrial                                41,880        41,606         1%         1,115          1,112       --
                                    ------------- -------------             ------------  -------------
   Total from ultimate customers         120,985       117,320         3%         2,326          2,282        2%
Sales for resale                          23,937        33,898       (29%)          762          1,105      (31%)
Other                                      5,588         3,096        80%            14             14       --
                                    ------------- -------------             ------------  -------------
   Total                                 150,510       154,314        (2%)        3,102          3,401       (9%)
                                                                            ============  ============= =========
Electric production fuels                 26,014        29,471       (12%)
Purchased power                           28,425        30,238        (6%)
                                    ------------- -------------
   Margin                               $ 96,071      $ 94,605         2%
                                    ============= =============  =========


                                       29
<PAGE>




Electric margins and MWH sales for WP&L for the six months ended June 30 were as
follows:
<CAPTION>

                                        Revenues and Costs                          MWHs Sold
                                          (in thousands)                          (in thousands)
                                    ---------------------------             ---------------------------
                                        1999          1998        Change       1999           1998       Change
                                    ------------- -------------  ---------  ------------  ------------- ---------
<S>                                    <C>            <C>              <C>        <C>            <C>          <C>
Residential                            $ 103,549      $ 97,704         6%         1,518          1,456        4%
Commercial                                56,461        53,368         6%           959            931        3%
Industrial                                81,479        78,675         4%         2,201          2,153        2%
                                    ------------- -------------             ------------  -------------
   Total from ultimate customers         241,489       229,747         5%         4,678          4,540        3%
Sales for resale                          48,866        69,302       (29%)        1,575          2,520      (38%)
Other                                     10,100         6,575        54%            29             31       (6%)
                                    ------------- -------------             ------------  -------------
   Total                                 300,455       305,624        (2%)        6,282          7,091      (11%)
                                                                            ============  ============= =========
Electric production fuels                 53,380        58,368        (9%)

Purchased power                           52,424        58,839       (11%)
                                    ------------- -------------
   Margin                              $ 194,651     $ 188,417         3%
                                    ============= =============  =========
</TABLE>


Electric margin increased $1.5 million,  or 2%, and $6.2 million, or 3%, for the
three and six months ended June 30, 1999,  respectively,  compared with the same
periods in 1998,  primarily  due to separate $15 million  annual rate  increases
implemented in July 1998 and early March 1999 to recover higher  purchased power
and transmission  costs.  Sales to retail customers  increased 2% and 3% for the
three and six months ended June 30, 1999,  respectively,  compared with the same
periods in 1998,  primarily due to economic  strength in the service  territory.
More  favorable  weather  conditions in 1999 also  contributed  to the six-month
sales  increase.  Other revenues  increased for both periods due to conservation
programs for which WP&L receives a return on its invested capital.

Lower income from off-system  sales, due to increased  transmission  constraints
and implementation of the merger-related joint sales agreement, partially offset
these items. Under the joint sales agreement, the margins resulting from Alliant
Energy's  off-system  sales are allocated  among IESU,  IPC and WP&L. The second
quarter of 1998 margin also  included  $3.2  million of revenues for a surcharge
related to Kewaunee (a  corresponding  amount was included in  depreciation  and
amortization expense).

Gas Utility Operations

Gas  margins and Dth sales for WP&L for the three  months  ended June 30 were as
follows:
<TABLE>

<CAPTION>

                                        Revenues and Costs                       Dekatherms Sold
                                          (in thousands)                          (in thousands)
                                    ---------------------------             ---------------------------
                                        1999          1998        Change       1999           1998       Change
                                    ------------- -------------  ---------  ------------  ------------- ---------
<S>                                     <C>           <C>             <C>         <C>            <C>         <C>
Residential                             $  8,670      $  8,979        (3%)        1,470          1,490       (1%)
Commercial                                 4,290         4,506        (5%)          991            998       (1%)
Industrial                                   662           784       (16%)          178            198      (10%)
Transportation and other                   1,736         2,674       (35%)        2,695          2,643        2%
                                    ------------- -------------             ------------  -------------
   Total                                  15,358        16,943        (9%)        5,334          5,329       --
                                                                            ============  ============= =========
Cost of gas sold                           5,798         8,515       (32%)
                                    ------------- -------------
   Margin                               $  9,560      $  8,428        13%
                                    ============= =============  =========

                                       30
<PAGE>

Gas  margins  and Dth sales for WP&L for the six  months  ended  June 30 were as
follows:

                                        Revenues and Costs                       Dekatherms Sold
                                          (in thousands)                          (in thousands)
                                    ---------------------------             ---------------------------
                                        1999          1998        Change       1999           1998       Change
                                    ------------- -------------  ---------  ------------  ------------- ---------
<S>                                     <C>           <C>                         <C>            <C>          <C>
Residential                             $ 39,930      $ 39,989         --         7,327          6,717        9%
Commercial                                19,390        19,743        (2%)        4,484          4,119        9%
Industrial                                 3,166         3,458        (8%)          837            800        5%
Transportation and other                   4,665         4,071        15%         6,738          6,473        4%
                                    ------------- -------------             ------------  -------------
   Total                                  67,151        67,261        --         19,386         18,109        7%
                                                                            ============  ============= =========
Cost of gas sold                          36,979        39,229        (6%)
                                    ------------- -------------
   Margin                               $ 30,172      $ 28,032         8%
                                    ============= =============  =========
</TABLE>

Gas margin  increased  $1.1 million,  or 13%, and $2.1  million,  or 8%, for the
three and six months ended June 30, 1999,  respectively,  compared with the same
periods in 1998.  The increase for the three  months was  primarily  due to more
favorable  contributions  to gas  margin in 1999 from  WP&L's  gas cost  sharing
mechanism.  The increase for the six months  resulted  primarily  from increased
sales due to customer  growth and colder  weather in the first  quarter of 1999.
Refer to "Interest Expense and Other" for a discussion of income realized from a
weather hedge in the first quarter of 1999.

Operating Expenses

Other operation  expenses decreased $4.5 million and $12.4 million for the three
and six months ended June 30, 1999,  respectively,  compared to the same periods
in  1998,   primarily   due  to  $6.1   million  and  $9.3  million  of  pre-tax
merger-related   expenses   incurred  during  1998,   lower   transmission   and
distribution   expenses  and  lower  costs  due  to   merger-related   operating
efficiencies.  Such expenses  were  partially  offset by increased  conservation
expense.

Maintenance  expenses  decreased $0.7 million and $1.6 million for the three and
six months  ended June 30, 1999,  respectively,  due to lower  transmission  and
distribution  maintenance  expenses,  which were  partially  offset by increased
operating costs at WP&L's generating facilities, largely due to several outages.

Depreciation  and amortization  expense  decreased $3.2 million and $1.3 million
for the three and six months ended June 30, 1999,  respectively,  compared  with
the same  periods in 1998,  primarily  due to reduced  earnings  on the  nuclear
decommissioning  trust fund (offset  entirely in  "Miscellaneous,  net") and the
second quarter 1998 Kewaunee surcharge. These decreases were partially offset by
increased property additions.

The accounting for earnings on the nuclear  decommissioning  trust funds results
in no net income impact. Miscellaneous, net income increases for earnings on the
trust fund and the corresponding offset is recorded as depreciation expense.

Interest Expense and Other

Interest  expense  increased $1.1 million and $2.6 million for the three and six
months  ended June 30,  1999,  respectively,  compared  with the same periods in
1998, primarily due to higher borrowings outstanding in 1999.

Miscellaneous,  net income increased $1.1 million and $3.6 million for the three
and six months ended June 30, 1999, respectively, compared with the same periods
in 1998, due to $4.5 million and $4.6 million of pre-tax merger-related expenses
incurred in 1998. Also  contributing to the six-month  increase was $2.5 million
of pre-tax  income  realized in the first  quarter of 1999 from  settlement of a
weather  hedge for the  November 1, 1998,  to March 31,  1999,  heating  season.
Partially  offsetting  such  increases  were  reduced  earnings  on the  nuclear
decommissioning trust fund.



                                      31
<PAGE>

Income Taxes

Income  taxes  increased  $3.3  million  and $8.6  million for the three and six
months  ended June 30,  1999,  respectively,  compared  with the same periods in
1998, due to higher pre-tax income.  A lower effective income tax rate partially
offset the six-month increase.

                         LIQUIDITY AND CAPITAL RESOURCES

Cash flows from operating activities at Alliant Energy decreased $18 million for
the six  months  ended June 30,  1999,  compared  with the same  period in 1998,
primarily  due to changes in working  capital,  which were  partially  offset by
changes in net income,  the refueling  outage  provision and deferred  taxes and
investment tax credits.  Cash flows used for financing  activities  decreased $3
million for the six months ended June 30, 1999, compared with the same period in
1998,  primarily  as a result of proceeds  from the  issuance  of common  stock,
partially offset by changes in the amount of debt  outstanding.  Cash flows used
for investing  activities decreased $8 million for the six months ended June 30,
1999,  compared with the same period in 1998, due to increased proceeds from the
disposition  of  assets,  which were  partially  offset by  increased  levels of
construction and acquisition expenditures.

Cash flows from  operating  activities at IESU decreased $26 million for the six
months ended June 30, 1999, compared with the same period in 1998, primarily due
to changes  in working  capital,  partially  offset by changes in the  refueling
outage  provision  and net  income.  Cash  flows used for  financing  activities
increased $69 million for the six months ended June 30, 1999,  compared with the
same period in 1998,  due to a reduction  in the amount of debt  outstanding  in
1999 and increased  common stock dividends as no dividend  payments were made in
the last three quarters of 1998 due to merger-related tax  considerations.  As a
result, the dividend payment in the first quarter of 1999 was larger than IESU's
historical quarterly payment.

Cash flows from  operating  activities at WP&L decreased $35 million for the six
months ended June 30, 1999, compared with the same period in 1998, primarily due
to changes in working capital, which were partially offset by higher net income.
Cash flows used for  financing  activities  decreased  $56  million  for the six
months ended June 30, 1999, compared with the same period in 1998, primarily due
to changes in the amount of short-term borrowings. Cash flows used for investing
activities  increased  $18  million  for the six  months  ended  June 30,  1999,
compared with the same period in 1998,  primarily due to increased  construction
expenditures.

Future Considerations

At June 30, 1999,  Alliant  Energy had an investment  in the stock of McLeod,  a
telecommunications  company,  valued at $527.8 million (based on a June 30, 1999
closing  price  of  $55.00  per  share  and  compared  to a cost  basis of $28.4
million).  McLeod  declared a 2-for-1  stock split which was  effective  in July
1999.  Pursuant to the applicable  accounting  rules, the carrying value of this
investment  is adjusted to the  estimated  fair value each quarter  based on the
closing  price at the end of the  quarter.  The  adjustments  do not  impact net
income as the unrealized gains or losses, net of taxes, are recorded directly to
the common  equity  section of the balance  sheet and are a  component  of other
comprehensive  income.  In addition,  any such gains or losses are  reflected in
current  earnings  only at the time they are  realized  through a sale.  Alliant
Energy  entered into an agreement in November 1998 with McLeod  whereby  Alliant
Energy's ability to sell the McLeod stock is subject to various restrictions.

Under  PUHCA,   certain  investments  of  Alliant  Energy  in  exempt  wholesale
generators and foreign utility  companies are limited to 50% of Alliant Energy's
consolidated retained earnings.  Alliant Energy is pursuing making the necessary
regulatory filings requesting an increase in this limitation. Under WUHCA, there
is an asset cap provision that generally limits  non-utility assets in a utility
holding company to 25% of utility assets.  This provision is currently  limiting
Alliant  Energy's  ability to make  additional  investments  in its  non-utility
businesses. Members of Energize Wisconsin (Alliant Energy, NSP, Wisconsin Energy
Corporation,  Wisconsin  Gas Company and WPSC) have been  working  with  various
interest groups on a set of proposals that would provide  significant  asset cap
relief for Wisconsin utility holding companies.  Such legislation was introduced
in the second  quarter of 1999.  In


                                       32
<PAGE>


addition to seeking legislative  relief,  Alliant Energy has also been seeking a
regulatory  increase in its limitation under the statutory language as currently
enacted.  As part of this  regulatory  process,  the PSCW granted Alliant Energy
interim relief from the asset cap limitations in the third quarter of 1999. Such
relief  temporarily  removed  the asset cap  provision  for  non-utility  assets
currently  held by Alliant  Energy and granted the company $75 million above the
current  asset cap  limit for new  non-utility  investments.  Alliant  Energy is
continuing to pursue  permanent  regulatory  relief under the current  statutory
language.  If  Alliant  Energy  is unable to  obtain  permanent  legislative  or
regulatory relief from the WUHCA provisions,  it may be forced to divest certain
assets to stay in compliance.

Under terms of comprehensive  restructuring  legislation  passed in New Zealand,
Alliant Energy is required to sell a portion of its current New Zealand  utility
investments. Alliant Energy realized a pre-tax gain of $2.4 million in July 1999
on the sale of a portion of these  investments  and  anticipates it will realize
additional gains on the remaining sales.

Whiting has entered  into an  agreement  to sell  50%-100% of its interest in an
offshore oil and gas production property (the percentage interest sold is based
on the buyer having the option to make various installment payments to Whiting).
Whiting expects to realize a pre-tax gain on the sale in the second half of 1999
of  approximately  $3  (50%)  million  to $6  (100%)  million.  As  part  of the
transaction,  Whiting does retain the liability for certain  dismantlement  and
abandonment  costs  associated  with the  properties.  Such costs are  currently
estimated at $13 million and have been fully accrued by Whiting.

Financing and Capital Structure

At June 30, 1999, Resources had $268 million of commercial paper outstanding and
backed  by  its  3-Year  Credit  Agreement  with  interest  rates  ranging  from
4.88%-5.35%.  Resources  intends to continue issuing  commercial paper backed by
this facility, and no conditions existed at June 30, 1999 that would prevent the
issuance of commercial paper or direct borrowings on its bank lines.
Accordingly, this debt is classified as long-term.

On March 23, 1999,  IPC issued $7.7 million of pollution  control  revenue bonds
due January 1, 2013.  The proceeds were used to refinance $7.7 million of 6.375%
pollution control revenue bonds that were due serially 1999-2007.  The new bonds
have a fixed  interest rate of 4.20% for the first five years.  Thereafter,  IPC
will  have  the  option  to reset  the  interest  rate at one of three  variable
short-term interest rates or at a new long-term interest rate, based on the then
prevailing market conditions, provided the rate does not exceed 12% per annum.

On March 1, 1999,  IESU  retired  $50  million of Series Z, 7.6% First  Mortgage
Bonds due in March  1999.  Internally  generated  funds  were used to retire the
bonds.

On February 11,  1999,  IPC issued $3.25  million of pollution  control  revenue
bonds due February 1, 2010.  The proceeds  were used to retire $3.25  million of
6.375% pollution control revenue bonds that were due serially 1999-2007. The new
bonds have a fixed interest rate of 4.05% for the first five years.  Thereafter,
IPC will have the  option to reset the  interest  rate at one of three  variable
short-term interest rates or at a new long-term interest rate, based on the then
prevailing market conditions, provided the rate does not exceed 12% per annum.

Capital Requirements

Nuclear Facilities

On April 7, 1998, the PSCW approved  WPSC's  application  for replacement of the
two  steam  generators  at  Kewaunee.  The  total  cost of  replacing  the steam
generators would be approximately  $90.7 million,  with WP&L's share of the cost
being approximately  $37.2 million.  The replacement work originally planned for
the  spring  of 2000 is now  scheduled  for the  fall  of  2001  and  will  take
approximately  60 days. The delay is  attributable to the inability of the steam
generator  manufacturer  to meet the spring 2000  delivery  schedule.  Delays in
meeting the delivery  schedule did not allow for steam generator  replacement to
occur prior to the start of the summer weather in 2000. Therefore,  the decision
was made to store the steam  generators  after they are  received and wait until
the next scheduled  refueling outage in the fall of 2001. It is anticipated that
the delay will not adversely  impact the reliability of Kewaunee in the interim.
Plans to shutdown the plant for a spring 2000 refueling remain unchanged.

Rates and Regulatory Matters

In May 1998, the PSCW approved the deferral by WP&L of certain costs  associated
with its Year 2000 program. In November 1998, as amended in May 1999, WP&L filed
for rate recovery of $12.2 million  related to the Wisconsin  retail  portion of
Year 2000 costs. In accordance with the order received from the PSCW, WP&L began
deferring its

                                       33
<PAGE>


Year 2000 project  costs,  other than internal  labor and  associated  overheads
(approximately  $6.5 million of  expenditures  had been  deferred as of June 30,
1999).  However,  the PSCW ruled at an oral hearing in early August 1999 that it
will not allow WP&L to recover any of its Year 2000 program costs in rates. WP&L
has filed a motion asking the PSCW to reconsider its decision and, if necessary,
will file an appeal in district  court.  Pending final  resolution of the issue,
WP&L expects to record a pre-tax reserve of $6.5 million in the third quarter of
1999  relating to the costs it had deferred as of June 30, 1999.  WP&L will also
record a reserve for the Year 2000 program expenditures it incurs after June 30,
1999.  Refer to "Other Matters - Year 2000" for a further  discussion of Alliant
Energy's Year 2000 program.

In January 1999, WP&L made a filing with the PSCW proposing to begin  deferring,
on January 1, 1999,  all costs  associated  with the EPA's required NOx emission
reductions.  In connection  with a statewide  docket to  investigate  compliance
issues associated with the EPA's NOx emission reductions, on March 30, 1999, the
PSCW authorized deferral of all non-labor related costs incurred after March 30,
1999. However, the utilities are not allowed to defer costs of replacement power
associated with NOx compliance.  WP&L has requested  expedited approval to start
construction of NOx reduction  investments at several  generating units operated
by WP&L and has  requested  recovery of all the NOx  reduction  costs  through a
surcharge mechanism. WP&L anticipates receiving a final order in this proceeding
in the first quarter of 2000.  No assurance  can be given as to what relief,  if
any, will be granted by the PSCW.  Refer to the "Other Matters -  Environmental"
section for a further discussion of the NOx issue.

Pursuant to PSCW  requirements,  WP&L  recognizes  annual demand side management
expense based on: 1) an annual fixed expenditure  amount as approved by the PSCW
in the rate making process, and 2) PSCW approved  amortization of any difference
in historical demand side management expenditures and associated rate recoveries
of such costs.  Effective  with WP&L's rates  implemented  April 29,  1997,  the
annual rate recovery for demand side  management  expenses  (and the  associated
demand side management  expense) was reduced to $6.9 million  reflecting  annual
demand  side  management  expenditures  of $14.4  million  reduced by a two-year
amortization  of prior period  expenditures  which were less than the associated
rate  recoveries  ($7.5  million per year).  At the  completion  of the two-year
amortization  period, the annual demand side management expense to be recognized
by WP&L returned to the $14.4 million level.  Given the price freeze WP&L has in
effect in Wisconsin,  the annual rate recovery of demand side management expense
is still $6.9 million.

The OCA has  requested  certain  financial  information  related to the electric
utility operations within the state of Iowa for IESU and IPC and the gas utility
operations  within the state of Iowa for IPC. IESU and IPC responded to the data
requests in a timely manner.  It is unknown if additional  data requests will be
received by either IESU or IPC. While IESU and IPC cannot predict the outcome of
this process,  such data  requests  could lead to an effort by the OCA to seek a
rate reduction for one or both of IESU and IPC in Iowa.

                                  OTHER MATTERS

Year 2000

A summary of Alliant  Energy's  Year 2000  program is  included in the Form 10-K
filed by Alliant Energy, IESU and WP&L for the year ended December 31, 1998. Set
forth below are developments relating to the Year 2000 program.

Remediation and Testing Year 2000 remediation and testing has been completed for
all  mission-critical   operational  areas  of  Alliant  Energy,  which  include
generating  stations,  substations,  transmission and distribution  substations,
natural gas distribution  systems,  system and distribution  operating  centers,
customer inquiry,  customer billing and all key building  infrastructure.  As of
July  31,  1999,  Alliant  Energy  was  still  expecting  an  upgrade  from  one
information  technology vendor. Alliant Energy considers the potential impact on
the Year 2000 program from this upgrade to be minimal as operational contingency
plans have already been developed and deployed. Alliant Energy has complied with
the   NERC's   requirements   for   completing   remediation   and   testing  of
mission-critical systems by June 30, 1999, without exceptions, and has filed the
required letter with NERC informing them of such compliance.

                                       34
<PAGE>



A.  Embedded Systems -
All  post-remediation  testing  for  assessing  Year  2000  compliance  has been
completed.  Remaining work includes minor upgrades on less than 5  miscellaneous
non-critical systems.

B.  Information Technology -
As of June 30, 1999,  approximately  98% of Alliant Energy's  applications  have
been  remediated and tested and all  remediation  and testing has been completed
for Alliant Energy's infrastructure components, customer information systems and
financial systems.  Alliant Energy has also initiated an independent  validation
and verification process for all mission-critical  mainframe applications.  This
process  started in June 1999,  and is expected to be finished by  September  1,
1999.

Costs to Address Year 2000  Compliance  Alliant  Energy's  historical  Year 2000
project  expenditures as well as CURRENT ESTIMATES for the remaining costs to be
incurred on the project are as follows (incremental costs, in millions):
<TABLE>
<CAPTION>

                     Description             Total             IESU           WP&L          Other
                                          -------------     -----------    -----------    -----------
<S>                                        <C>              <C>            <C>             <C>
  Costs incurred from 1/1/98 - 12/31/98    $      8.7       $     4.8      $      3.2      $    0.7
  Costs incurred from 1/1/99 - 3/31/99            5.2             2.3            1.9            1.0
  Costs incurred from 4/1/99 - 6/30/99            6.5             1.8            2.4            2.3
  Current estimate of remaining costs            11.0             3.6            6.2            1.2
                                          -------------     -----------    -----------    -----------
            Total                           $    31.4        $   12.5      $    13.7       $    5.2
                                          =============     ===========    ===========    ===========
</TABLE>

In  addition,  Alliant  Energy  estimates  it  incurred  $3 million in costs for
internal labor and associated overheads in 1998 and anticipates  expenditures of
$6 million in 1999 ($3.5  million  was  incurred  in the first two  quarters  of
1999). The total estimated  project cost has decreased from the figures reported
in the Form 10-K due to lower than anticipated remediation costs and a reduction
in the contingency estimate.

In accordance  with an order received from the PSCW,  WP&L is deferring its Year
2000  project  costs,  other  than  internal  labor  and  associated   overheads
(approximately $6.5 million of the expenditures incurred at WP&L from January 1,
1998  through June 30, 1999 have been  deferred).  Refer to the  "Liquidity  and
Capital  Resources - Rates and Regulatory  Matters"  section for a discussion of
the status of the filing WP&L made with the PSCW for rate  recovery of a portion
of its Year 2000 program costs,  including a recent PSCW ruling which disallowed
WP&L's requested recovery of such costs.

Risks and Contingency  Planning Alliant Energy continues to work on refining and
implementing its Year 2000 contingency plan. The planning process includes three
components:  1) base contingency  planning,  2) emergency  preparedness,  and 3)
electric and gas industry-wide coordination. The base contingency planning phase
involves the development of operating  procedures to handle the malfunction of a
specific  device.  This work was  completed  in the first  quarter of 1999.  The
emergency preparedness phase involves the development of operating procedures to
handle the  malfunction of major business  processes.  This work started in late
1998 and will  continue  through  early  December  1999.

The  electric  and gas  industry-wide  coordination  is a major focus of Alliant
Energy's  efforts  in  preparation  for  industry-wide  drills  which  are being
coordinated by NERC. As part of its contingency planning process, NERC scheduled
two  nation-wide  electric  utility  industry drills in April 1999 and September
1999. These drills focus on safe and reliable  electrical system operations with
the  partial  loss  of  telecommunications.   The  April  1999  NERC  drill  was
successful.   All  contingency  plans  worked  as  anticipated,   however,  some
procedures and manual data forms will be refined to enhance efficiency.

In addition to these NERC  drills,  Alliant  Energy has  conducted  two internal
drills,  the first of which was completed in March 1999.  In June 1999,  Alliant
Energy had its own functional drill that focused on communications  and

                                       35
<PAGE>


involved  exercising  200  contingency   scripts,   11  information   technology
applications  and  over  250  employees.  Communication  and  contingency  plans
generally worked according to plan and efficiency  enhancements will be made for
future drills. Alliant Energy also has three additional internal drills planned.
An August 1999  full-scale  drill will be conducted in which key employees  will
test and critique Alliant Energy's  contingency plans. Two other internal drills
will be scheduled after the September NERC drill.

Alliant  Energy also  retained an outside third party to assess and evaluate its
Year 2000 program and such study did not find any material  deficiencies  in the
program.

Summary  Alliant  Energy  believes  its plan is  adequate  to  secure  Year 2000
readiness of its critical systems.  Nevertheless,  achieving Year 2000 readiness
is subject to many risks and uncertainties. If Alliant Energy, or third parties,
fail to achieve Year 2000  readiness  with  respect to critical  systems and, as
such, there are systematic problems, there could be a material adverse effect on
Alliant Energy's results of operations and financial condition.

Market Risk Sensitive Instruments and Positions

Whiting is exposed to market risk in the pricing of its oil and gas  production.
Historically,  prices  received for oil and gas  production  have been  volatile
because of seasonal weather patterns, supply and demand factors,  transportation
availability  and price, and general economic  conditions.  Worldwide  political
developments  have  historically  also had an impact on oil prices. In the past,
Alliant Energy  generally has not utilized  derivative  instruments  designed to
reduce its  exposure  to these  price  fluctuations.  However,  during the first
quarter of 1999,  Alliant  Energy  entered  into a limited  amount of  commodity
derivative  transactions  to fix the  ultimate  sales  price  for  approximately
two-thirds of Whiting's  anticipated  gas production for 1999. At June 30, 1999,
the estimated fair value of the outstanding  agreements would have resulted in a
settlement payment by Alliant Energy of approximately $2.4 million.

WP&L settled the weather insurance agreement it entered into for the November 1,
1998, to March 31, 1999, heating season and recognized income of $2.5 million in
the first quarter of 1999 relating to such settlement.

At June 30, 1999,  Alliant  Energy had an investment  in the stock of McLeod,  a
telecommunications  company,  valued at $527.8 million (based on a June 30, 1999
closing  price  of  $55.00  per  share  and  compared  to a cost  basis of $28.4
million).  McLeod  declared a 2-for-1  stock split which was  effective  in July
1999.  Pursuant to the applicable  accounting  rules, the carrying value of this
investment  is adjusted to the  estimated  fair value each quarter  based on the
closing  price  at the  end of the  quarter.  Alliant  Energy  entered  into  an
agreement in November 1998 with McLeod whereby Alliant  Energy's ability to sell
the McLeod stock is subject to various restrictions.

Alliant Energy has a 50% interest in an  electricity  trading joint venture with
Cargill.  Guarantees  of  approximately  $61  million  have been issued of which
approximately  $14 million were outstanding at June 30, 1999. Under the terms of
the joint venture agreement, any payments required under the guarantees would be
shared by Alliant  Energy and  Cargill on a 50/50  basis to the extent the joint
venture is not able to  reimburse  the  guarantor  for  payments  made under the
guarantee.

Accounting Pronouncements

In June 1999, the FASB issued SFAS 137,  "Accounting for Derivative  Instruments
and Hedging  Activities - Deferral of the Effective  Date of FASB  Statement No.
133." SFAS 137 amended SFAS 133's effective date to fiscal years beginning after
June 15, 2000 (January 1, 2001 for Alliant  Energy).  Also, SFAS 137 amended the
date required to recognize all derivatives  embedded in hybrid  instruments that
were issued,  acquired,  or  substantively  modified  from  December 31, 1997 to
December 31, 1998.

                                       36
<PAGE>

Environmental

A summary of Alliant Energy's  environmental issues is included in the Form 10-K
filed by Alliant Energy, IESU and WP&L for the year ended December 31, 1998. Set
forth below are several developments relating to Alliant Energy's  environmental
issues.

In October  1998,  the EPA issued a final rule  requiring  22 states,  including
Wisconsin,  to modify  their  state  implementation  plans to address  the ozone
transport  issue.  However,  a federal  appeals  court on May 25, 1999,  delayed
indefinitely the  implementation of the rule. Should the courts find in favor of
EPA, the  implementation of the rule would likely require WP&L to reduce its NOx
emissions at all of its plants to a fleet average of .15 lbs/mmbtu by 2003. WP&L
is following  this issue  closely and continues to evaluate  various  options to
meet  the  emission  levels.  Based  on  existing  technology,  the  preliminary
estimates  indicate  that capital  investments  would be in the range of $150 to
$215  million.  Refer  to the  "Liquidity  and  Capital  Resources  - Rates  and
Regulatory Matters" section for a discussion of a filing WP&L made with the PSCW
regarding seeking rate recovery of these costs.

On February 28,  1998,  the EPA issued the final report to Congress on the Study
of Hazardous Air Pollutant  Emissions  from  Electric  Utility Steam  Generating
Units regarding  hazardous air pollutant  emissions from electric utilities (the
HAPs report).  The HAPs report concluded that mercury  emissions from coal-fired
generating  plants were a concern.  However,  the EPA does not believe they have
sufficient  information  regarding  such  emissions.  To  remedy  this  lack  of
information,  the EPA required IESU, WP&L, IPC and all other applicable electric
utilities in the U.S. to start  collecting  information  regarding the types and
amount of mercury  emitted as of January 1, 1999. To better  understand  mercury
emissions,  the EPA also  required WP&L to conduct stack tests at several of its
generating stations in the fall of 1999. In addition,  the Wisconsin legislature
has  introduced  legislation  that would  require the control and  reduction  of
mercury  emissions from coal-fired  generating  plants.  Although the control of
mercury  emissions  from  generating  plants is uncertain at this time,  Alliant
Energy believes that the capital  investments and/or  modifications  required to
control mercury emissions could be significant.

In March 1998 and January  1999,  IPC received  Notices of Intent to Sue from an
environmental group alleging certain violations of effluent limits,  established
pursuant to the Clean Water Act, at IPC's generating facility in Clinton,  Iowa.
On May 14, 1998,  IPC received from the IDNR an inspection  report and notice of
violation  addressing  the  same  and  other  concerns  as  were  raised  by the
environmental  group.  On May 4,  1999,  IPC  received  a  letter  from the IDNR
indicating it does not anticipate  taking any enforcement  action regarding this
issue.  Therefore,  management  believes that any likely actions  resulting from
this matter will not have a material adverse effect on IPC's financial  position
or results of operations.

Pursuant to an internal  review of operations in 1998, IPC discovered  that Unit
No. 6 at its generating facility in Dubuque,  Iowa required a Clean Air Act Acid
Rain permit and CEMS.  IPC has informed  its  environmental  regulators  and has
installed the CEMS and obtained the permit. Pursuant to its internal review, IPC
also identified and disclosed to regulators a potentially  similar  situation at
its  Lansing,  Iowa  generating  facility.  In the second  quarter of 1999,  EPA
determined that Lansing units 1 and 2 are affected units. Therefore, IPC will be
installing  CEMS and  applying for Acid Rain permits for these units by December
1, 1999.  IPC may be subject to a penalty for not having  installed the CEMS and
for not having obtained the permits previously.  However,  IPC believes that any
likely  actions  resulting  from this  matter  will not have a material  adverse
effect on its financial position or results of operations.

On  February 4, 1999,  Whiting  received a Notice of  Violation  letter from the
ADEQ,  citing  Whiting for flaring  sour gas in excess of permit  limits and not
having  a  valid  permit.  In  June  1999,  the  ADEQ  sent  Whiting  a  Consent
Administrative  Order  proposing  a  voluntary  civil  penalty of  $225,000  for
Whiting's alleged emission violations. Whiting is presently negotiating with the
ADEQ to offset as much of the fine as possible by participating in or funding an
approved  mitigation  project.  Management  believes  that  any  likely  actions
resulting from this matter will not have a material  adverse effect on Whiting's
financial position or results of operations.

                                       37
<PAGE>

Alliant Energy has been notified by the EPA that it is a Potentially Responsible
Party (PRP) with respect to environmental  impacts  identified at the MIG/DeWane
Landfill Superfund Site. Alliant Energy is participating in the initiation of an
Alternate Dispute Resolution  process to allocate liability  associated with the
investigation  and  remediation  of the site. It is not possible at this time to
reasonably  estimate  the  amount  of any  obligation  associated  with the site
because   allocation   among  the  PRPs,  and   concurrence  of  the  regulatory
authorities,  have not yet advanced to the stage where a reasonable estimate can
be made. However, management believes that any likely action resulting from this
matter will not have a material  adverse  effect on Alliant  Energy's  financial
position or results of operations.

Power Supply

In July 1998,  Alliant Energy and SkyGen  announced an agreement  whereby SkyGen
would build, own and operate a power plant in southeastern  Wisconsin capable of
producing up to 450 MW of electricity.  Under the agreement, Alliant Energy will
purchase the capacity to meet the electric  needs of its utility  customers,  as
outlined by the Wisconsin  Reliability  Act. Recent  developments for the 450 MW
SkyGen project include an appeal to the EPA Appeals Board on the NOx mitigation.
The appeal,  if successful,  would require selective  catalytic  reduction to be
used for NOx  mitigation  instead of dry low NOx burners.  Management  currently
believes  that the EPA will rule in favor of  SkyGen,  but is unable to  predict
when the power plant may be in-service.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Quantitative  and Qualitative  Disclosures  About Market Risk are reported under
Item 2. MD&A "Other Matters - Market Risk Sensitive Instruments and Positions."


                           PART II - OTHER INFORMATION

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

ALLIANT ENERGY

At Alliant  Energy's annual meeting of shareowners held on May 19, 1999, Alan B.
Arends,  Rockne G.  Flowers,  Katharine  C. Lyall,  Robert D. Ray and Anthony R.
Weiler were elected as directors of Alliant  Energy for terms  expiring in 2002.
The  following  sets forth certain  information  with respect to the election of
these directors at the annual meeting.

Name of Nominee                    Votes For         Votes Withheld
---------------                    ---------         --------------
Alan B. Arends                    61,341,679            1,776,251
Rockne G. Flowers                 61,334,647            1,783,283
Katharine C. Lyall                61,312,326            1,805,604
Robert D. Ray                     61,155,262            1,962,668
Anthony R. Weiler                 61,335,067            1,782,863



                                       38
<PAGE>




The following table sets forth the other directors of Alliant Energy whose terms
of office continued after the 1999 annual meeting.

Name of Director               Year in Which Term Expires
----------------               --------------------------
Erroll B. Davis, Jr.                      2000
Lee Liu                                   2000
Milton E. Neshek                          2000
Robert W. Schlutz                         2000
Wayne H. Stoppelmoor                      2000
Joyce L. Hanes                            2001
Arnold M. Nemirow                         2001
Jack R. Newman                            2001
Judith D. Pyle                            2001
David Q. Reed                             2001 *

*  In July 1999, Mr. Reed resigned from the Alliant Energy board of directors.

Also at Alliant Energy's annual meeting of shareowners held on May 19, 1999, the
following matters were submitted to a vote of shareowners.
<TABLE>
<CAPTION>

                                                               Votes        Votes         Votes        Broker
                                                                For        Against       Abstain      Non-Votes
                                                                ---        -------       -------      ---------
<S>                                                         <C>            <C>          <C>               <C>
Approval of the name change from Interstate Energy
     Corporation to Alliant Energy Corporation              59,300,156     2,537,051    1,280,719         4
Approval of the Long-Term Equity Incentive Plan, as
     amended                                                47,566,918    12,721,346    2,829,660         6
</TABLE>


WP&L

At WP&L's annual  meeting of shareowners  held on May 26, 1999,  Alan B. Arends,
Rockne G. Flowers,  Katharine C. Lyall, Robert D. Ray and Anthony R. Weiler were
elected as  directors of WP&L for terms  expiring in 2002.  The  following  sets
forth certain information with respect to the election of these directors at the
annual meeting.

Name of Nominee                    Votes For         Votes Withheld
---------------                    ---------         --------------
Alan B. Arends                    13,597,997              6,409
Rockne G. Flowers                 13,597,546              6,860
Katharine C. Lyall                13,597,726              6,680
Robert D. Ray                     13,597,504              6,902
Anthony R. Weiler                 13,598,106              6,300



                                       39
<PAGE>




The following table sets forth the other directors of WP&L whose terms of office
continued after the 1999 annual meeting.

Name of Director               Year in Which Term Expires
----------------               --------------------------
Erroll B. Davis, Jr.                      2000
Lee Liu                                   2000
Milton E. Neshek                          2000
Robert W. Schlutz                         2000
Wayne H. Stoppelmoor                      2000
Joyce L. Hanes                            2001
Arnold M. Nemirow                         2001
Jack R. Newman                            2001
Judith D. Pyle                            2001
David Q. Reed                             2001 *

*  In July 1999, Mr. Reed resigned from the WP&L board of directors.

IESU

At IESU's annual  meeting of shareowners  held on May 24, 1999,  Alan B. Arends,
Rockne G. Flowers,  Katharine C. Lyall, Robert D. Ray and Anthony R. Weiler were
elected as directors of IESU for terms  expiring in 2002.  Alliant  Energy voted
all of the outstanding  shares of common stock of IESU (consisting of 13,370,778
shares) in favor of the election of the aforementioned individuals.

The following table sets forth the other directors of IESU whose terms of office
continued.

Name of Director               Year in Which Term Expires
----------------               --------------------------
Erroll B. Davis, Jr.                      2000
Lee Liu                                   2000
Milton E. Neshek                          2000
Robert W. Schlutz                         2000
Wayne H. Stoppelmoor                      2000
Joyce L. Hanes                            2001
Arnold M. Nemirow                         2001
Jack R. Newman                            2001
Judith D. Pyle                            2001
David Q. Reed                             2001 *

*  In July 1999, Mr. Reed resigned from the IESU board of directors.


                                       40
<PAGE>


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits:

     The following Exhibits are filed herewith.

     3.1        Form of  Amendment  to  Restated  Articles of  Incorporation  of
                Alliant Energy Corporation

     3.2        Restated   Articles   of   Incorporation   of   Alliant   Energy
                Corporation, as amended

     10.1       Long-Term Equity Incentive Plan, as amended

     10.2       Consulting Agreement by and between  Alliant Energy  Corporation
                and Wayne H. Stoppelmoor

     27.1       Financial  Data Schedule for Alliant  Energy  Corporation at and
                for the period ended June 30, 1999

     27.2       Financial  Data Schedule for IES  Utilities  Inc. at and for the
                period ended June 30, 1999

     27.3       Financial Data Schedule for Wisconsin Power and Light Company at
                and for the period ended June 30, 1999

(b)  Reports on Form 8-K:

None.





                                       41
<PAGE>



                                                    SIGNATURES

Pursuant to the  requirements  of the Securities  Exchange Act of 1934,  Alliant
Energy  Corporation,  IES Utilities  Inc. and Wisconsin  Power and Light Company
have each duly caused this report to be signed on its behalf by the  undersigned
thereunto duly authorized on the 13th day of August 1999.

<TABLE>
<CAPTION>

ALLIANT ENERGY CORPORATION
--------------------------
Registrant

<S>                                 <C>
By: /s/ Thomas M. Walker            Executive Vice President and Chief Financial Officer
Thomas M. Walker                                    (Principal Financial Officer)

By: /s/ John E. Ebright               Vice President-Controller (Principal Accounting Officer)
John E. Ebright


IES UTILITIES INC.
------------------
Registrant

By: /s/ Thomas M. Walker            Executive Vice President and Chief Financial Officer
Thomas M. Walker                                    (Principal Financial Officer)

By: /s/ John E. Ebright                  Vice President-Controller (Principal Accounting Officer)
 John E. Ebright


WISCONSIN POWER AND LIGHT COMPANY
---------------------------------
Registrant

By: /s/ Thomas M. Walker            Executive Vice President and Chief Financial Officer
Thomas M. Walker                                    (Principal Financial Officer)

By: /s/ John E. Ebright                  Vice President-Controller (Principal Accounting Officer)
John E. Ebright

</TABLE>


                                       42