LNT - Earnings call transcript Q1 2020 | Alliant Energy Corporation

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Operator

Good morning, ladies and gentlemen, and welcome to Alliant Energy's Conference Call for First Quarter 2020 Results. This call is being recorded for rebroadcast. At this time, all lines are in a listen-only mode.

I would now like to turn the call over to your host, Susan Gille, Investor Relations Manager at Alliant Energy.

Susan Gille

Good morning. thank for you joining to and the like webcast the us would all on of call I today. We appreciate your participation.

this Officer; Executive Joining and on call Larsen, John me Chairman, Chief Executive President and Vice Durian, Robert and CFO. are President

Robert, John take the remarks community. have from will and prepared time we Following investment by to questions

release, supplemental a issued results night, issued reaffirmed website that consolidated the last November and call referenced guidance in Energy's during range as of www.alliantenergy.com. at Alliant the are We announcing release as XXXX. be will available This our XXXX slides investor news financial first well earnings today's quarter page on

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

the XX-Q, and our references addition, reconciliation release non-GAAP In financial provided www.alliantenergy.com. GAAP at earnings website which our in measures. measures contains non-GAAP and will between be are on A this to presentation available

this point, At I'll turn to John. the over call

John Larsen

X. you we customers us. I’ll attention the joining our slide review actions during pandemic. and start for service several to have taken draw Thank current thank you, continue everyone, your communities Good Sue. a of our to and morning, I’ll to with critical

every life the decision. brings indeed are that values to These guide times and our unprecedented

reliable The the we for caring responsibility service understand to the of and and customers to has that provide. comes team values essential communities. with One Energy safe steps taken We our continue those others. service Alliant is

energy ensure now are to focused ever than delivery. We uninterrupted more

health Charitable and provide operate So in those organizations can most vulnerable, need those and can their products lines front the those critical businesses can and customers services. well-being. on and support on our can help focus

Like of the work we’ve gas operations home. to the on we many keep safely we and way now changes We’ve employees our the and made many of flowing. can from lights adjusted to you, work ensure our

the following we CDC, additional for coverings precautions and are shifts important requires. to guidance We physical are situation and disruption. distancing rotating And the limit wearing maintaining when from like the certain adding and gloves, business exposure functions face

thing our to and the Another the was one suspending right values is customers Temporarily thing. of our to right fees late do do. core for disconnections waiving

time filed to knew In now way proposal This was is for steady addition, through our predictable keep we low a the customers. the efforts our of maintain continuation a that to ongoing of keep to rates We among customer filing rates Wisconsin for state. rates the lowest end in the a XXXX. creative and in

reached unmet Iowa, continued of focus health we to out reductions our non-profit the review understand next rate to not in anticipate do communities an new the needs years. for electric privileged And renewable and first so crisis energy to with we the couple partners in the we rider, When filing our serve. are on the started, cost

the we’ve food weeks, Cross charities, as made Way. to American several United such donations several the past the local banks, and Over Red

support facilities local University, healthcare contribution face their State Iowa million medical a partnership bills. We families shields Care paying in through need the been $X providing And, to to a provided also and Hometown workers. to assistance XD who Energy we’ve Fund printed with

matters I most. the can think times part that social of all the like we agree when is ESG these

our customers Energy our impacts, to our and build I our Alliant doing our been serve for and am has proud to work pandemic on living has remarkable. They our personal are Despite values all employees’ purpose the to to customers. had disruption and for help are communities communities. commitment customers delivering strong teams am this many thankful and and

make Times decisions. like and these also require accurate, to allows of energy real-time better monitoring use us

we a smart been critical meter investments our has planning efforts. in of made important part technology The

to base. crisis the impacts began, have we the on Robert services. across for seeing commercial, and are Since we and residential, demand spent customers will understand industrial time the our address our trends our customer

in our factors both However, we and I impacts. want larger have to energy in Robert outlines a keep place and as regulatory the electric an diverse Two, in and industrial pricing base in we jurisdictions. commercial component. our One, include business margins have and mention operate to three, three two important constructive customer summer mind, Iowa demand

managed are keeping through upon we financial cycles our on our XXX-year experience over discipline. have many drawing a over that economic and and We focus operational strong history

Therefore, and our our XXXX of XX% reaffirming I to to to earnings growth targets, our We guidance am XX% X% committed $X.XX. $X.XX X% dividend payout remain ratio. to

to direct and smart operationally. year, a financially strategy the was Our term and focus of costs, to of was long- customer XXXX start solid and on clean advancing the a result first both future. This our quarter designed of investments, planning execution a energy

the when uncertainty, into megawatts milestone Despite efficient, customers. for to progress first a make great to time our XXX advancing Iowa a wind we quarter, service another and energy of we we operating more balanced great placed major continue our portfolio. modern, transition achieved in of new In

long year. of XXX farms, on-schedule request authority an Whispering from customers for we of wind our and on Wisconsin expectations meeting completed Willow end exceeding when below regulators. wind our by These the continuing or our and new this North, to and are Iowa And Golden megawatts construction new install of established two track additional were budget, record we the track Plains,

by XXX Service approved Iowa the X,XXX of investment Commission Board also, the Public megawatts Wisconsin. investment complete full will renewable approved of This renewable a by the Utility and, megawatts

customers planning, developing energy great for constructing even in puts energy resources in . a advance position experience renewable renewable us Our and to more our

phase the X,XXX in approval regulatory entering now build-out of solar megawatt are our We Wisconsin.

authority anticipate of of X,XXX and certificate discussion this by two-thirds the in quarter. with for end are We megawatts the approximately of advance filing a developers

with Our the portfolio Energy to year-long be a Clean the of a and will XXX,XXX energy resource the Wisconsin sun. was result resource than clean of affordable homes planning The more renewable Wisconsin voluntary Blueprint. expansion called process Wisconsin solar from investments enough we power

We of started our process, communities may the Energy Blueprint plans the many including Clean have the for Iowa our building goals, share impacts affordability, and year. important to towards - stronger plan and end transitions talented employees. dedicated reliability, plan balance These resource proposed and proposal the on a Iowa this

strategy. our that great making report are to toward major generation achieving pleased transformation am strides another we milestone I in

Energy meet has resource several highly-efficient met criteria. to testing near upcoming We demand. Wisconsin and located below anticipate this West Beloit, completed key in Center XXX-megawatt customer to the be – budget time Riverside natural gas

resource in the our to will the significant Midwest. lower renewable bring as customers fuel through complement to This continued resources costs benefits and a reliability

to providing Platinum. economical for is our also in committed to Center a am Energy West that I has Alliant Riverside the certification, reliable, Sustainable and Energy awarded Institute sustainable manner. pleased Infrastructure with energy is which highest report very its

achievement. Team certification with stewardship owners. commitment our to reinforces West land distinguished for our projects Riverside this accomplishing communities collaboration local and and This construct sustainable Congratulations important commitment and and to our environmental recognizes to

key messages. summarize In closing, me let the

energy We and investments customer-focused solid budget schedule, our the are ensuring our reliable to communities. to strategy, of our delivering to and continuing on investors, customers provide returns and our safe, employees, safety, continuing and energy efficient and affordable and focus our are health, on clean on for customers, and advancing well-being

call turn Alliant your interest I in you the now Energy. Thank over will Robert. for to

Robert Durian

per Thanks compared John. first share share, morning $X.XX quarter in to announced of $X.XX per Good the quarter Yesterday, XXXX. first GAAP everyone. earnings of we XXXX

from and income tax utilities timing year-over-year, expense. Our had by higher increasing base rate driven of earnings and gas higher electric margins

earnings depreciation These the quarter due sales increases lower temperatures were partially in the winter warmer expense. to higher by first and offset in

on the earnings X. provided X drivers and We variance slides quarter have on additional for the details

The solid per earnings and guidance reaffirm $X.XX year accounts start for us earnings $X.XX to per our allows XX% of to our share approximately XXXX of targets the XXXX share. to

in were WPL’s key electric business for in facility to our in of wind WPL’s These and Riverside the XXXX. West reflected growth core are approved XXXX and EPS The rates utility program. including investments drivers investments expansion IPL’s related IPL’s generating

utility of expecting due As in of we peers, the to John like are XXXX the pandemic. lower indicated, retail sales impacts our many

April, on Slide noted As largely by increase in people in driven we more working X, from home. sales residential experienced a X%

customers nearly approximately residential Our retail X% margins earnings equates sales and every represent XX% electric residential of change share. per $X.XX of our to in

side, story C&I EPS. decreased industrial approximately sales in different. April the is equates commercial in the annual X% every C&I of $X.XX change to and and by sales On XX%

the second slower lower sales year, the that the quarter, Under approximately through recovery forecasting the a end are through year. of pandemic-related the and overall more an end sales significant declines assumption, we retail this X% extend of

are COVID- XX delivering to noted track mitigating record on impacts, growth our by continue X. as positioned on We slide long of targets earnings

We will the lower transformation offsetting portion spending impact. and accelerate discretionary of costs activities COVID-XX reduce large a to

In COVID-XX. to issued addition, incremental have orders regulatory authorizing and Iowa of Board both Service defer the the to of Public Utilities related Wisconsin the Commission accounts use costs

cost which help is and XXXX. Lastly, keep of portion we sharing during COVID-XX to now, portion WPL’s to in mechanism, fuel a times the of impacts low also like savings a have an opportunity energy prices of through offset capture fuel expected

will that important the this recognized be in projected To ratably our the not quarterly for year, to assist increase year. earnings you earnings in XXXX modeling is note throughout it

example, interim earnings XXXX. of first year April For rate by XXXX IPL’s quarter increase skewing thus more the to into the effect full increase X, in of went

amortizations will cause wind production tax in timing the of credits Also, recognized and deferred quarter-over-quarter are excess income fluctuations tax earnings.

favorable half year XXXX. through from in continue of first second of tax timing We of the earnings reverse half to and expect the variances then expense the the

from placed are tax primary the negative Slide tax our lower X rates from for estimate of a consolidated of the of projects additional reform our for modeling effective utilities provided to wind rates tax assist being group. to consolidated our customers. tax new The credits in taxes excess tax been rate and the and service you effective two deferred has the return XXXX. We federal XX% drivers in

neutral. The deferred decrease flow will production excess customers Thus, largely the and in earnings back resulting effective benefits to electric tax lower margins. tax rate tax in is the credits

using affordable through tax lower Our benefits continued Wisconsin, strategy base by are federal fuel the cost providing In reform to our and energy utility on holding offset flat investments. of costs XXXX and rates electric gas focus we includes to customers.

of rates proposed through XXXX. Earlier gas the this electric current month, Wisconsin and we an extension

we cost project pipeline tax and expansion. increased Kossuth requirements XXXX the includes which slide the in additional As XXX-megawatt are Wind associated the additions, summarized proposing offset fuel X, base gas benefits to Wisconsin with rate to revenue on use Western reductions and

expenses plan and the escrow duration flexibility mechanisms regulatory treatment COVID-XX since escrow the bad from demand. the to and on of adjust And the seeking and address impacts sales are to we possible for retirement liability impacts unclear, XXXX debt is

Finally, our rate ROE ROE common current authorized the our component sharing authorized capital structure our filing of requests of regulatory our XXXX XX.X% current of continuation and mechanism. equity XX%, and current

credits to of customer benefits tax Turning to bills with refunds. our related plan interim million Iowa, to $XX rate federal we electric reduce and reform

We back and tax to also a expansion increased customers Iowa electric generation cost result wind flow production credits to reductions low fuel prices. of as expect natural significant gas of XXXX, and further in

to charges XXXX Our as result legislation. Iowa due customers of expected also energy to see Iowa gas efficiency XXXX benefits lower are in a

and of future new As customers’ in PPA our this of will taken Iowa, to we both we termination for year, the reduce costs electric addition PPAs Duane saving our have further money XXXX. look action with customers of low-cost this the wind begin Arnold electric later to the the Iowa in

financing our Moving are on shown XXXX which plans, Slide to X.

solid we to already quarter, our debt steps two offerings. took first These the liquidity improve included During position.

our and utility. of our refinancing $XXX million a by was of loan the for million First XX-year non-regulated issuance term second was a debentures $XXX of businesses, Wisconsin

well were by interest to cost received favorable of deals average market overall debt. the rates lower with allowing debt Both us our

we In million. forward generating also in $XXX agreements the common our from addition, in issued of XXXX equity proceeds March, equity planned

our under our actions, our current increased including and facility billion and borrowing cash sale approximately program. credit these of capacity to accounts receivable With liquidity $X.X we

equity XXXX financings million future. material our up forward issuing planned Iowa no utility for for include have $XXX Our with long-term the we our issuances and the agreements, planned further debt remaining equity foreseeable of of recent by to execution

positioned portion financing large XXXX debt we to $XXX that from the next plan complete well years, we potential may only result of the million of to believe With any over cash pandemic. two in disruptions maturities and are flows already a respond our

reassessed. needs our We the financing may warrants, if financing conditions are adjust and plan market as external

four with included on Slide of have regulatory we our note developments so year. XX, notable this Lastly, initiatives far

energy Iowa First, and implement the new retail the renewable IPL rates received electric from in approval February. Board to rider Utilities final

construction the of Western granted in Public Service expansion March. Wisconsin authority us Commission Pipeline Second, Wisconsin the for

plan customers, we gas filed electric earlier. stabilization and outlined for Third, XXXX WPL’s rate which I

And regulatory finally, both and overall orders operational and deferral initiatives XXXX. related COVID-XX components goals important have incremental are commissions costs. financial accounting state approved XXXX for our of These

We with company over appreciate in forward our your interest the look coming connecting and continued virtually you many to months.

this over to question call At the the and the back to turn I answer will time, session. operator facilitate

Operator

Instructions] Our [Operator Julien from question today Dumoulin-Smith America. of Bank comes first of

Alex Morgan

Hi, good you Morgan so on taking calling question for morning. the Alex Thank my congratulations This in Julien. is much results. and for

John Larsen

Thanks, Good morning. Al.

Alex Morgan

problem. No

But balance cut going on prepared little to O&M. in remarks, want about be under you year-over-year expenses were much. a in able how and then, you specifically that in originally XXXX to to talk impacts. some in I if are I so now? could Thank about O&M know maybe the the check wondering specifically bit factoring and really So, mentioned COVID I you the you was to that, you that expectation

John Larsen

Alex. Great, Sure.

had items XXX that we of or number Riverside. So, megawatts wind of a bringing

coming increases offsets some we into well. had O&M we had in and some So as XXXX

to expecting cost to planning COVID the here relatively have of work – we it coming into So we we on for the is, year. know, news internally lot reduce with good we the flat be were a reduction. had further Certainly, impacts,

downturns. our So first we see during had economic this acceleration some for isn’t react Certainly we we that of company plans the to will time had.

look, So a a we there take to number that have reduce we are of costs. levers will

addressing couple maybe for I’ll a see details, year here would few a if of Robert we – So that to this and more see add points. wants

Robert Durian

you to costs that but give in fact in going to year, O&M, in the favorable our slight John benefit expected Maybe are pension sense, of just because the a XXXX, so indicated, Alex. saw as coming we returns to largely we Yes, maybe some into decrease we lower the are from be XXXX. expected

contractors to been And the spending. time, as travel going related elimination pursue. are as of remainder a of and that employee as in as indicated, John expenses suspended the largely no point we was we at incur to discretionary of that for decrease longer cost well some that Think have

where some that of processes across John of then, part also planned going transformation as we and automate And and acceleration are some indicated, the of our efficiencies through is some that reevaluating activities plants. organization gained in the

feel declines. those we execute to be well So, positioned to able on and offset sales these

Alex Morgan

around fuel Thank rate that, to more question some you I those was especially increase. balance is, the commentary filings able could you to one a you. okay wondering being understand if provide with filing your use largely interveners expectations Wisconsin expect off of And maybe the and on more savings to from to the me. with little be base

results? that. about in see you expectation be final me. so am that’s much might And And any we interested to then, when able definitely for timing, Thank again. around hearing I potentially it

John Larsen

certainly be we the out about start interveners with not had conversations filing, may on clean are Yes, that we but only thinking We’ve great and thinking work important our that about. also stabilization productive doing regulators ready getting blueprint. great. energy our And for

So had a very going work and always and a collaborative would of say that I lot transparent process. in we’ve

forward, now offsets forward, time these is namely customer of think put as project West number of a our And those number able would that we introducing keep projects, our of to could have well a rates about couple is be of Riverside. the are flat. these levers as as one that put there a Kossuth and So, right then to important

that I discussions, right we think to making far information the But productive regulators timing, subject and filing. feel to And that. that for as felt have of the comfortable that’s we well, went it’s – obviously and the and We questions lot with a Alex, third I the all had think roughly do customers. we have. quarter sure would maybe appreciate we’ve are to we as thing respond at timing So looking

Alex Morgan

much. Thank great you day. Have very a

Operator

Weisel Andrew Scotiabank. next comes Our from of question

Andrew Weisel

everyone. morning good Hi,

Robert Durian

Andrew. morning, Good

Andrew Weisel

Can address the filing a First impacts that's WPL in in you more there into slide and about a XXXX regulatory you little deeper mechanisms the COVID estimated the question on on is Can believe little in to comment give of specific, using dig weather, that? not a adjusting would COVID that just just how you sales? I terms quantify for right? filing. specifically,

Robert Durian

is That correct.

and fuel cost the the sharing into mechanisms potentially able dates some be part cost to so ability our including and of of demand reductions the any requested use on XXXX of sales impacts later ROE COVID-XX. to accumulated sharing to that back filing offset regulatory And we've mechanisms because liabilities potential through go

Because likely the year. probably point we into We next yet that don’t able later asked for we’ll to to know of just the back the exact year, again impacts ability later – them. into addressing tell from come the

Andrew Weisel

you. Got X% you are question in from are And Okay. year by then for it. I break Can customer reduction had I was class expecting up you a you you overall the said Thank us? expecting that COVID-XX. sales this next believe

Robert Durian

I look between the has Yes, residential you the think industrial sales. commercial sales increase and – slide there, put could it we and breakdown probably out in in the decrease the that the very at

is consistent. think that pretty profile So of

then So the X% some net commercial be identified. around we increase we do is are be opposite in and and to residential that industrial XX% likely commercial the and expect the that X% the a to to probably going industrial Residential to and the side positive XX% segment.

Andrew Weisel

it, the that it X% full just the down be then for of math suggest would Well, would year?

Robert Durian

a have slow quarter for Yes, remainder and the through of the recovery year. will that's the then just second

direction can on at the the you residential. look So

John Larsen

certainly QX. the we the Certainly, here. and slow QX as – minimal year. being balance as then impact of right having major see but Yes, for noted minimal we We a gradual, Andrew, now see trajectory the John in

linear. Certainly ups to there be recognize and some that's We going downs. be is not necessarily going know to

So then we've if comes to done think of what put planning it noted, of around number and Robert together quite plans overall a as an bit a that of of aggregate scenario X% decline. as

Andrew Weisel

Thank much. Okay. Got you it. very

John Larsen

welcome. You are

Operator

And our today Research. comes of from Sullivan Wolfe Michael last question

Michael Sullivan

all morning Hope you Hey. Yes. everyone. are Good well.

John Larsen

Yes, well. are you as Hope thanks, Michael.

Michael Sullivan

Thanks. Yes.

the confirm indicate Just wanted you you're were kind guidance, the I to side quarter, range post COVID on and able of if where on that's that Or whether think still a tracking you you last range are to to XXXX within guys upper the of end the the indicated seeing of just case? things? what

Robert Durian

Thanks, One thing guidance in Yes. We weather-normalized. Great question. keep mind. have Michael. to range our do and

But midpoint this mind. important guidance, a of to the we for So weather-normalized. is we thought in being and that about at certainly reaffirming have as keep target that

Michael Sullivan

Okay.

but weather-normal normalizing for So not COVID?

Robert Durian

Correct. COVID-XX impacts. on the do plan We offsetting

So midpoint range end non-GAAP at year our of EPS, the you we'll X.X. that be of the look the when current targeting temperature-normalized at guidance of

Michael Sullivan

assuming your the Riverside. on that you And the color just front? expectation just Have in and in mechanics is on kind the that? they West that any assuming options indication? of footnotes of that GE WEC , rate one here? just won't and curious guys given Or on that exercise filing are indicated, Or You the

John Larsen

more just stabilization. base than this on assumption. Yes, one the for is Michael, it Nothing timing a based timing year

Michael Sullivan

Okay. a me. That all lot. was for well. Be Thanks

John Larsen

Thank Right. you.

Susan Gille

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

of prepared available addition, call will of investor’s and archive made section on be the a In website of the the today. call the an later the on company’s script conference remarks

support contact Energy your for to follow-up free any of feel me you with thank Alliant We continued questions. and

Alliant Energy (LNT) 8 May 202020 Q1 Earnings call transcript