Susan Gille - IR Pat Kampling - Chairman, President and CEO Robert Durian - Vice President, CFO and Treasurer.

Nicholas Campanella - Bank of America Merrill Lynch.

Thank you for holding, ladies and gentlemen, and welcome to Alliant Energy's First Quarter 2018 Earnings Conference Call. At this time, all lines are in a listen only mode. Today's conference is being recorded. I would now like to turn the call over to your host, Susan Gille, Manager of Investor Relations at Alliant Energy..

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

Following prepared remarks by Pat and Robert, we will have time to take questions from the investment community. We issued a news release last night announcing Alliant Energy's first quarter financial results and affirmed the consolidated 2018 earnings guidance issued in November 2017.

This release as well as supplemental slides that will be referenced during today's call are available on the Investor page of our website at www.alliantenergy.com. Before we begin, I need to remind you the remarks we make on this call and our answers to your questions include forward-looking statements.

These forward-looking statements are subject to risks that could cause actual results to be materially different. Those risks include, among others, matters discussed in Alliant Energy's press release issued last night and in our filings with the Securities and Exchange Commission. We disclaim any obligation to update these forward-looking statements.

In addition, this presentation contains references to non-GAAP financial measures. A reconciliation between non-GAAP and GAAP measures are provided in our quarterly report on Form 10-Q, which is available on our website at www.alliantenergy.com. At this point, I'll turn the call over to Pat..

an optional forward-looking test year to better align customer benefits with energy investments; statutory language providing for a transmission rider to promote regulatory efficiency; and an improved process for extending natural gas service to help grow Iowa's economy.

We will continue to work with policymakers and other stakeholders for the benefit of our customers. I'm excited about our achievement so far this year.

Our team will continue to focus on the following goals for our company for 2018; complete our large construction projects on time and at or below cost and in a very safe manner; continue our generation fuel transition, with traditional fossil plant retirements; advancing clear energy through the completion of the West Riverside Energy Center and our substantial investments in wind generation.

Deliver on 5% to 7% earnings growth guidance and a 60% to 70% common dividend payout target and we'll continue to manage the company to strike a balance between capital investment, operational and financial discipline and cost impact to customers. In closing, I invite you to participate in our first virtual only Annual Shareholders Meeting on May 17.

We look forward to extended participation from our shareowners, since you can now join a meeting from any location through your computer or telephone. I hope you all can participate. Now I will turn the call over to Robert..

Good morning, everyone. Yesterday, we announced first quarter 2018 earnings of $0.52 per share compared to $0.43 per share in the first quarter of 2017.

The key drivers for the $0.09 increase were higher electric and gas margins at our two utilities and increased customer demand caused by colder temperatures in our service territory compared to last winter. We provided additional details on our earnings variance drivers on Slides 3 and 4.

Excluding temperature impacts, we saw relatively flat retail sales in our service territories in the first quarter. Slightly higher temperature normalized sales at IPL were offset by slightly lower temperature normalized sales at WPL year-over-year.

The lower temperature normalized sales at WPL are primarily a result of two industrial customers experiencing unplanned outages in the first quarter, which we anticipate will be resolved by the third quarter of this year. In summary, first quarter 2018 earnings of $0.52 were consistent with our expectations.

As a result, our consolidated earnings guidance of $2.04 to $2.18 per share remains unchanged for 2018. Slide 5 has been provided to assist you in modeling this year's effective tax rates for IPL, WPL and AEC, including the impacts of tax reform and the tax benefit riders. We currently estimate a consolidated effective tax rate of 12% for 2018.

Also, note that our forecast for ATC earnings assumes an ROE of 10.2%, once the FERC's decision for the second MISO ROE complaint is issued, which is currently expected sometime during the second quarter of 2018. Turning to our financing plans.

Our 2018 financing plan remains unchanged, including up to $200 million in new common equity, an additional long-term debt at IPL and Alliant Energy Finance. Consistent with this plan, Alliant Energy Finance issued a two-year term loan of $300 million last month.

As a reminder, this is part of the total planned issue up to $1 billion of debt at Alliant Energy Finance this year. The remaining up to $700 million of debt will primarily be used to refinance $595 million of term loans that are coming due in the second half of the year.

Our future financing plans continue to be driven by the robust capital expenditure plans for our utilities as well as future regulatory decisions on tax reform benefits beyond 2018 and proposed changes to the capital structures at our two utilities to maintain strong balance sheet.

We currently expect to provide our 2019 financing plan as part of our second quarter earnings call in August. Lastly, we have included our regulatory dockets of note for 2018 on Slide 6. These recent regulatory decision and planned regulatory filings are important components of our 2018 operational and financial results.

Last week, both the Iowa Utilities Board and the Public Service Commission of Wisconsin issued their decisions on how utilities will provide the 2018 federal tax reform benefits to their customers.

For our Iowa retail customers, the annual savings due to lower federal taxes are expected be approximately $75 million for 2018, including tax-related savings from IPL's electric transmission providers.

Our Iowa Retail electric customers will begin receiving these credits earlier this week, and our Iowa Retail gas consumers will receive the impacts of tax reform benefits with interim rates that we implemented later this month.

Our Wisconsin retail customers are expected to receive approximately $45 million of credits on their bills for 2018, beginning in July. Both state commissions deferred the decision on the utilization of excess deferred taxes created by federal tax reform to future rate filings. Turning to our key regulatory filings for the remainder of 2018.

IPL filed a test year 2017 retail gas rate review in Iowa yesterday. This filing requests recovery of investments in IPL's gas distribution system over the last six years to ensure continued reliability and safety of our system and to support economic development in our communities.

A summary of the test year 2017 Iowa retail gas rate review filing and its proposed regulatory schedule may be found on Slide 7. In Wisconsin, we expect to file a 2019, 2020 test period electric and gas rate review later this quarter. This rate review will reflect recovery of new capital investments, including the West Riverside Generating Station.

Additionally, we plan to include in our filing a proposal to use excess deferred tax benefits created by the federal tax reform to help stabilize customer rates over the next two years. Lastly, WPL plans to file a construction authority request for new wind generation for its Wisconsin customers later this quarter.

We very much appreciate your continued support of our company and look forward to meeting with many of you over the next several months. At this time, I'll turn the call back over to the operator to facilitate the question-and-answer session..

[Operator Instructions] We'll take our first question from Nicholas Campanella with Bank of America Merrill Lynch..

So if you could discuss the legislation quickly and the implications to the forward plan. You guys have a very robust rate base growth CAGR, but there is still a wide delta between that and the 5% to 7% EPS CAGR. Obviously, some of that is driven from the equity issuance. And then as I understand it, the historic test year does drive lag at IPL.

If you were to apply for test year to IPL, where would that put you within your 5% to 7% range?.

Yes, Nick, and that's a good question. And a couple of other things that are included in that delta. Keep in mind, it's the AFUDC calculation as well. So we'll probably update that slide the next time we hit the road. But we still believe it will be in the 6% range.

This whole legislation was really to help with some regulatory efficiencies, and it really wasn't intended at all to increase our earnings projections at all. So really just stick to the middle of our guidance range. This is really just an regulatory efficiencies that we're going to get out of this legislation..

And then just given it's an optional test year, do you have any idea of how the commission is positioned here?.

No, that's some of the details we need to work out once the legislation is approved. So you know, the commission has been very proactive in the state as you're well aware. So we're fairly confident we'll get very solid rules on how to work with the forward-looking test year in the next few cases..

Thanks so much. Congrats again..

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

With no more questions, this concludes our call. A replay will be available through May 10, 2018 at 888-203-1112 for US and Canada or 719-457-0820 for international. Callers should reference conference ID 417-5543 and PIN 9578.

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