LNT - Earnings call transcript Q3 2017 | Alliant Energy Corporation

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Operator

Thank you for holding, ladies and gentlemen, and welcome to Alliant Energy's Third Quarter 2017 Earnings Conference Call. [Operator Instructions] Today's conference is being recorded. And I would now like to turn the call over to your host, Susan Gille, Manager of Investor Relations at Alliant Energy.

Susan Gille

Good morning. I would like to thank all of you on the call and webcast for joining us today. participation. your appreciate We management today and Kampling, CFO Robert as the as here Chief and President Executive well senior of members Officer Durian, other are me Chairman, Pat and Treasurer; team. With Vice President,

Following a time stock the announced take be at XXXX have we investor This earnings results. call, to earnings dividend guidance and last common supplemental release updated by night, will prepared target. XXXX We Energy's our www.alliantenergy.com. questions We issued year-to-date third Pat quarter remarks as community. and Robert, will that are range referenced as well website and and page investment news of the release, from announcing guidance our today's available Alliant financial slides on during

include, the are I Securities be include to the Energy's that to make these and with materially filings answers to we we you and different. Those any statements We in that our obligation last questions could among others, release to actual this to your Before disclaim statements. issued forward-looking press subject update remind discussed Exchange on night These remarks call Commission. Alliant and forward-looking our results risks cause statements. in matters need forward-looking risks begin,

which turn In I'll the are point, presentation, measures. over provided available addition, at non-GAAP our At financial our call this this between in on presentation The to and investor reconciliation contains non-GAAP are GAAP measures the www.alliantenergy.com. Pat. website

Pat Kampling

financial our earnings current thank earnings announced estimated dividend our which also for XXXX. third through Yesterday, issued guidance and target. release, we common through and morning, updated our our included Good capital today. XXXX stock and year-to-date and XXXX and a annual Sue. expenditure CapEx for you provided total range XXXX XXXX us plan joining Thanks, It guidance quarter press results,

we report Like pleased cool per experienced am others our in I quarter, temperatures, very followed $X.XX region, year-to-date plan. earnings a winter. to to impacted the many results by summer, warm were which negatively that according mild the a excessive Before This our share. very

past, update guidance is impacts first the to months. temperature in nine this for quarter As year's this the that include earnings the the we

guidance per is a share of -- later has earnings details new share, than the provided last will is call. which the $X.XX lower for $X.XX November. quarter of provide midpoint So guidance the per for XXXX in the Robert now midpoint

Let share. me common our pleased now increase on announced in with. XXXX focus a be targeted will per $X.XX to which X% XXXX, you We dividend

earnings of announced X% guidance of midpoint We share. with $X.XX also a increase a per

on shown guidance increase the is to As at that slide negative $X.XX temperature per includes share not XX% remains this XX% XXXX X%, X, remains growth long-term earnings X% at earnings our of the also consolidated objective based of our XXXX to that earnings. reaffirm year's and X% ratio impact. and I temperature-normalized payout on want for revised to dividend

on XXXX We capital plan also $X.X shown X. our XXXX as billion, to issued totaling slide expenditure

from provided plan X. a the walk our previous to on In current addition, plan Slide we

by mostly expenditures driven additional generation. with wind increase in we've offset discussing is that the been partially increase CapEx maintenance This lower the megawatts see, was can by XXX you As of you.

additional credits. we Also, the XXX% expenditure plan half includes wind enhancing Under Iowa. systems, gas billion, we meter to as technologies energy is of And for smart which production distribution qualify megawatts XX-year and $XX.X solar of CapEx customers. XXXX, our includes wind our evaluate plan energy. our in current of be for would plans and combination lead needs of plan our law, evolve, capital updated grid X,XXX natural the capital we Our deployment generation. to will anticipate beyond serve best investment of one including to tax all enhancements, projects federal a expect tax gas continue the Approximately electric our

not Our and and but dynamic. now reliable and safe to a expect system, interactive communities us that highly to only a maintain expect more system us is customers to adapt

to on expansion. continue of make the development wind our exciting We progress

plus owned Our power includes existing renewable wind utility farms wind of portfolio megawatts XXX XXX approximately megawatts, agreements. of purchase

Our of electric reach of customers. renewable than capacity sources almost megawatts from energy be forecast X,XXX would that double We Energy's for by will generation new XXXX. plans rated renewable to wind XX% more our Alliant

activities energy Board share principal we the XX% that to return equity our rate-making Let resources. some utility-owned August, in requested XXX with we me proceeding. Iowa up underway or approval for megawatts to now Utilities new additional request advanced the In the of to key of you with In RPU, filed was of approved application, the last a expand RPU, wind. same

We last of the in also which $X,XXX per including transmission, and the requested kilowatt proceeding. cost cost AFUDC cap than lower is cap approved a

Prairie expect We begin approval quarter XXXX. our in at Upland Wind soon Farm. In first of construction, the we'll

farms, acquiring also wind is our X,XXX-megawatt progress Iowa. expansion which of are making additional part good We wind on in all

along Our XXXX. megawatts will in signed forecast megawatts and forward that with We agreement a an be Recently, WPS remaining wind to XXX we assumes MG&E. XXX the the in purchase be placed Energies XXXX, in in energy service with stake of wind will service and center, in

realize regulatory purchase the evening, additional wind last If of in with purchase approximately XXXX, to This in spring existing expected included plan of joint will this XXX of of year-end. million. of of will power agreement utility-owned. share PSCW Wisconsin WP&L. megawatts subject for approved, We is purchase for expenditure a We are we from savings total farm application closing a before with a for for this calls released an of capital the facility the the which the purchase to to a wind anticipate customers the megawatts, $XX investment WPL's approvals. be price transfer farm wind file XX

Public additional customers. Commission also the before We anticipate are options Wisconsin for filing proposal our from energy the for wind benefit our for completing We a year-end. evaluations request with investments request Service the additional to wind

fortunate thank rural of We we partners customers future. them. are communities economic and fueling families where this and region cannot serve farm wind great support in is a energy without our in that I that our We are and abundant, very do must

on good to West investments, progress we with stages in gas-generation of are our Energy the Wisconsin's early making Center. Riverside Moving

and XX of expect approximately of We electric be is that have West by be early XXXX. The West cooperatives million, Riverside will our XXX will and received project that including Riverside total in output signed anticipated of Its megawatts intent approximately acquire approval. three megawatts, the service cost PSCW approximately to AFUDC letters transmission. $XXX share

wholesale agreement wholesale coming the co-ops These and that supply within for in we decades, our FERC delighted have WPL's months. be been West expect the they'll We of Riverside. partners customers approval are

our newest addition energy mix. the Solar generation is to

are We with customers. in These projects XXX Center and projects our about our Iowa. existing to the Lansing laboratory Indian Nature our Rock Creek collaboration are of two our the city which Dubuque, facilities on for running our energy headquarters at located our excited Rapids, addition are campus, at solar in producing solar now River Cedar

investments, distributed energy. cleaner help Solar and meet customers' in growing interest our these, forms of will such as

in install in Southern Central solar We Center at and Station Riverside Energy are Generating Marshalltown Iowa. Wisconsin planning West also to

potential bill expected in the Before and tax our the I impacts are yesterday. for tax customers, wrap changes briefly reform especially coming It's I company Congress on to address would of released up, know that weeks. given early us too like reform in the to

to will today. like and also privileged but response moment approximately proud to would thank for take and Veterans a keeping take veterans of restoration ones top to tribute storm at our the I proud Energy away, at Florida. military to from are for and recovery to their customers all extremely here care also the I to economic they dedicated veterans thanks want appreciation continue week away for everything employees do Alliant serve. mind. my not would With home, this the for just the communities are home. while advocate like pay of I work in extend that involved those with customer during XXX the that are on challenging safety us in loved to their to to also We only and Day I'm the growth families great a call remain process all to our opportunity while will assistance efforts, in the quick we

Let me summarize key my focus areas XXXX and for XXXX.

quarter will on and delivered financial results objectives. full deliver dedicated Our operating solid third and year employees

plan target. Our continues dividend X% and X% earnings growth to to provide common XX% the XX% to payout

or We on and below budget large construction time safe a at and in manner. complete very expect to our projects

faster; Alliant while groups, organization cost manage We our for regulators, investment, collaborative to to customers our and on partners will between And operational in Thank to consumer to impact communities, continue call you neighboring continue turn and our to good being Robert. utilities customers working continue customers. the will discipline advocates, and serving financial focus a leaner we and company with be reshaping now interest in balance I'll manner; Energy. environmental the and strike in over capital the the and your

Robert Durian

$X.XX review. from third earnings the of our share. per charge We reached everyone. intervening a non-GAAP recent non-recurring write-downs rate share morning, our quarter major The last earnings retail $X.XX to is the and settlement with share released parties per XXXX Good regulatory due with electric earnings night assets IPL's difference of GAAP per of and proposed $X.XX

and to primarily service higher base non-GAAP the electric Our the to due third rates electric impacts interim and contribute in electric $X.XX non-GAAP earnings of the year. of continue summer than rates last of earnings sales quarter of new XXXX. retail were to $X.XX third cooler quarter IPL per base to our gas retail XXXX, earnings in territory compared share temperatures lower in WPL on

additions, these summary facility, from X, by the be and energy can on slides including recovery cost Marshalltown Marshalltown of found XXXX on and higher X. increased of earnings quarter-over-quarter offset rate earnings amortizations base impacts A X at higher WPL. in drivers depreciation as expected, the expense efficiency earned the were AFUDC However,

earnings XXXX Turning updated to our guidance.

midpoint to temperatures losses milder gas our our the in temperature-normalized non-GAAP The updated range. to generated of earnings change the $X.XX much the guidance, our of to $X.XX impact consistent territory of guidance quarters to is due us this is of XXXX the Our earnings sales XXXX. during the the quarters of through service electric three been have narrow first per with original share. updated range on earnings allowing earnings guidance three first and $X.XX year The the from

see in impacts our segments. increased this first of X.X%. temperatures, increased approximately industrial by the three excluding temperature-normalized we growth these of Through commercial and our through sales, sales of year, driven much sales leap territories, year, continue milder Excluding quarters to service modest the impact the

range EPS Last share. $X.XX quarter rate to to midpoint XXXX Also, rates our last XXXX. the review final by of since from sometime earnings of review earnings range issuing issued rates; proposed first the a reflecting by this approved under a review let's gas the XXXX non-GAAP the currently effect on gas per we IPL's XXXX X% written electric temperature-normalized is of recover as shown remain night, final utility the file investments guidance. to Utilities $X.XX guidance the and walk year Iowa Now, approve gas IPL's to gas earnings rates XXXX in consolidated in review electric XXXX our the retail in in key distribution retail expected are rates will plans A midpoint in X. drivers and settlement investments in rate IPL The retail system in the filed next our until infrastructure of growth slide business, guidance range EPS Board. of core WPL's interim IUB the XXXX. decision its

in into assumes information year-over-year the XXXX tax earnings. to most has have riders. no for you through assist increase the assumes come year. concerning ATC including impact would rate of XXXX. annual estimate commercial We note when next associated sales assist range industrial assumed go AEC, The ROE's that earnings. forecasted benefit effective will to riders embedded XXXX XXXX temperature-normalized changes an you in effective for XX.XX% modeling, end this we to rates to WPL riders MISO benefit ROE are you Also, interim of primarily to base in retail investment classes. year with gas XXXX. and with growth the XX% and electric for XXXX tax normal a IPL, provided effect and XX% rates we related been credits, for IPL's like the X in XXXX second We to Slide sale. on impact growth tax for and of the electric tax the and year's to Please provide of This tax X% expect approximately IPL's increase earnings this The X% forecast benefit from modeling of consolidated sales of Similar the is guidance in tax quarter temperatures the XXXX. of and compared forecasting sales,

forecast earnings XX.X%. complaint ROE We expect half MISO an second XXXX, the For assumes of first the currently of XXXX. FERC ROE sometime resolve will in

Finally, as O&M amortizations, our forecasted focus a recent in benefit WPL's flat the the customers. in we electric trend The most excludes trend on for rate XXXX forecasted XXXX cost cost have gas from expect we of O&M to we included efficiency order. flat and continue through fluctuations recovery energy which were controls

our to plans. financing Turning

And few credit There operating taken material amounts WPL. income additional expect the returns does XXXX into cash issuance debt on and and bonus positions to flows federal entered the extension master anticipate reductions make the XXXX. of any $XXX to Energy next continues not significant through to This currently forecast billion reductions have the over with business years. tax from In in current strong depreciation investments at our new on based as long-term Our facility. by from losses no a $X credits is forecast generated payment to of earnings completed expected well million Alliant XXXX, tax wind through X-year we been bonus net carryforward financing tax XXXX be depreciation payments August, October, our tax the after changes income current to federal of as of plan. we due expected credit included federal plan. in future

$XXX this Our XXXX IPL to assume of later we long-term million debt continues to issue up will at plan year.

Our long-term IPL, plan of we million will debt to which refinancing at $XXX XXXX debt XXXX. assumes financing issue of million up maturing includes long-term $XXX in

maturing finance, to $XXX of year. Energy issue also We which next Alliant million debt billion includes of to refinancing $X at loans plan up term

as of will plan and plan the in financing XXXX our continue through issue at our most The program Finally, combination assumes common maintain financing warrant adjust We us to to structures equity may IPL retail if be plans as conditions on capital $XXX reassessed. deemed and allow million share the a our program. market included and up we the rate these of external prudent, new needs ATM an in to will recent decision. WPL financing direct

for regulatory our Finally, schedule.

on XXXX, for current we XX. and which dockets several We of regulatory have planned note XXXX and summarized have slide

our the await we an year this rate base decision of filed before this concerning review a XXXX. expect customers of end of rate-making April the electric IPL, written of of the Board in investment the for the We principals for next we retail and year. in For Utilities second Also, advanced a year. XXX-megawatt first concerning decision anticipate IUB oral early from decision Iowa a end Iowa from the the wind the quarter at decision

will The continued and look we you gas for retail appreciate rate XXXX of WPL, very electric gas our year. company, a and support filing the next next West Riverside We construction. submit to to facility much rate under XXXX recovery years with the conference seek at week. your currently of and many EEI forward test filing finance meeting For plan review of

construction through base work-in-progress call back time, convenience, your separate the the expenditures operator IPL on presentation, we have this facilitate and For question-and-answer I'll rate estimates. capital our as updated and posted session. already turn well WPL updated which as to to the details XXXX the the At EEI website over investor

Operator

Merrill And Lynch. first [Operator from we'll take Campanella question with our Instructions] Nicholas

Nicholas Campanella

XXXX respectively? the and does I for electric reflect ROE IPL, businesses that was just base curious WPL what guidance, your earned given at

Robert Durian

roughly is our authorized will in to This XX% They're that returns. both be close Nick. range. It Robert, Yes.

Nicholas Campanella

wind that Got settle on the apologize there fully? if then playing to see it it proposal, still the Is you already, touched past deadline. you And I it. expansion settlement but prior seems you're Or out do hearing? the to it ability an

Pat Kampling

active still, litigated. at it course, parties. as dialog being point, At of see this fully. We're out it we point, we having all the with playing this see fully But

XXXX. we'll expect in So decision a early

Nicholas Campanella

you it. X-year, million financing, thinking equity kind your of Is quick, real $XXX way question there of needs kind that And any we last your XXXX? forecast period about be in think Got of then I should through said the on just 'XX. forward

Robert Durian

Nick. is I it to approved structures the way maintain reviews. capital included again, Yes. rate look is This our Robert in at trying The would we're or most recent

modest so given that should expect common XXXX And some height and equity level the there. we in CapEx we see XXXX, in of

Operator

our next from Ashar Khan with to Visium. we'll And go question

Ashar Khan

effect Pat, can provided which you just just in to activity, slides rate is terms Wisconsin deck. for the the you remind higher that there in EEI on be you, steps rate 'XX? on the the remind move-up new base, on up the cases time can? huge so you will jurisdictions, us you I in ask rate would rate rate 'XX -- be case of Can and from base deck you Could if based significantly earning you in frame Iowa a us, XXXX

Robert Durian

Yes.

test to this you're to And proposing require of the that's And yes, in for early for expansion Yes, slides will us that note, to we posted review Robert. the to Ashar, the XXXX. time. XXXX. conference. is review at service this into that about from would million in you go And, XXXX year finance $XXX as the rate EEI I'm pointing a wind assuming lot point XXXX so specifically a IPL that increased with put a rate in we're

and a in increase based million we're type for as on and cannot as over current a XXXX plan WPL on the And assuming then or of XXXX turn the likely test review currently increase, that's winds into And we XXXX. that file assumes. of XXXX, that about 'XX rate the side, you'll then, the XXXX go to we review put our to that some a quarter WPL see some in a of of modest from if XXXX Riverside early And to period. is for what second well expect service expecting levels West for $XXX rate lot you to so late get plant in to before And settlement most sometime agreement too.

Ashar Khan

Okay.

So so, in we can if bases or allowed activity, billion earning based -- if we the our that be add we pretty two that assume together, the rate that I'm equal on much ROE $XX.X year? right, can to we should so rate assume, for

Robert Durian

that's yes. assumption, I a fair think

Ashar Khan

on then can add AFUDC if we you it. AFUDC, I that, And separate, right, do to the way The right? understand is Correct? the

Robert Durian

are correct. You

Ashar Khan

okay. And Okay, then going to just your back comments.

fair? then increases. You because needs is as XXXX, it's Is in right? down only required equity said to go that you time and two rate 'XX, So frame. the fair? the get go that really these 'XX we years the CapEx be that in XXXX And Would to

Pat Kampling

only we just guided XXXX really for So needs. equity

guided CapEx, absolutely in for historically, to you those. is ratios haven't We at the right. But equity we've years our on some to with you're say issue utilities, fair But in equity it to needed yet common the 'XX. order expensive maintain

you decline, As need that as see the with CapEx will starting well. equity to decline for the definitely

Ashar Khan

okay. Okay,

as missing on the your based something? be XXXX. like you Pat, So growth you approach Am it high end this couldn't I easily rate, of seems especially forecast, on

Pat Kampling

kind that's targets, to. I We've really organization. I the everybody like consistent been to people on midpoint. say just we've the going to your on just the knew and planning enthusiasm But growth X% that. prefer I in because that's to you been were middle where appreciate X% very to and we're get guide our historically would Robert to would we focus really of and what that historically

Operator

Angie from take we'll question Macquarie. And Storozynski with our next

Angie Storozynski

changed of actually demonstrate And be in so is how ones in ones bit know how the the your operation to economics would construction? these change us be harbor gauge CapEx. early reform a pursuing ones tax wind start especially I actually would you projects, announced going change projects, the future? you that safe that impact continuous to for But were you in PTC, there a fare they needed give of sense that to that how a for might proposed under provision the it's also, already as your and the would the to if the the XXXX,

Pat Kampling

appropriately. Sure, all Angie. It's really you for question, and up No, too understand opened question very the thanks this. to early the

yesterday. the our us community. And we'll was have speculate for in our that As debate. what be what the That's you phase the that reform And how word the impact this yesterday too very as but of of going not customers. know active debate we exactly first so going willing understand, we'll all my is definitely we with to really as it's of the very construction the only give these current But change, consider very the to tax on advocating was and to involved, We'll issued discussions, more in process early to I'd issued the and important is program. be clarity, be on soon you share investment matters. discussion we behalf

Angie Storozynski

frankly, before be entail. there that type that the know, acquirement? just understand. I But don't no the know, progress could against work of future cited it mean, what To sites for any you do, end would idea on yourselves something hide have don't of construction of year? farms? I this honest, are I I the I construction is wind

Pat Kampling

we're can when share that now. we'll Yes. that it have we on guarantee at definitely with right of looking Angie, And more clarity that, I all you.

at So now. that's something right we're that looking actively

Operator

from Millennium. question with we'll Reiss Greg next go to And our

Greg Reiss

cap for Just -- I guess, you a Can perspective? plan is you're consolidated the kind said tell It sounds a guys debt equity entity? you [indiscernible] us quick an equity what the with of question. authorized the know I to targeting like utilities. the

Robert Durian

would at is the ratings level. context in of maintain This to credit current it consolidated of have we're Robert. the the Greg. trying think Sure, I we

pretty group. XX% now, right for that the probably consistent going we're I say I'd in to to percentage stay consolidated so, with And XX% think equity And we're that.

Operator

at this Gille, there are questions no Ms. time. And further

Susan Gille

A at call. reference XX, this will available should US for or Canada international. our November Callers concludes for and through XXXX. and If conference replay XXXXXXX XXX-XXX-XXXX PIN XXXX XXX-XXX-XXXX the ID, no more of questions, be

remarks an to your the of today. and you free a continued company's the made me feel with of questions. archive the section We thank Investors be Alliant the contact will prepared script any later on call addition, In website the available conference on and follow-up Energy, support call of of for

Alliant Energy (LNT) 5 Nov 172017 Q3 Earnings call transcript