Thank you for holding, ladies and gentlemen. Welcome to Alliant Energy's Second Quarter 2012 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 conference over to your host, Susan Gille, Manager of Investor Relations at Alliant Energy. Please go ahead.

Good morning. I would like to thank all of you on the call and the webcast for joining us today. We appreciate your participation. With me here today are Pat Kampling, Chairman, President and Chief Executive Officer; and Tom Hanson, Vice President and CFO; as well as other members of the senior management team. Following prepared remarks by Pat and Tom, we will have time to take questions from the investment community. We issued a news release this morning announcing Alliant Energy's second quarter 2012 earnings. 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 this morning 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 non-GAAP financial measures. The reconciliations between non-GAAP and GAAP measures are provided in the supplemental slides, which are available on our website at www.alliantenergy.com. At this point, I'll now turn the call over to Pat.

Good morning and thank you for joining us today. This morning we issued a press release providing 2nd quarter results, new capital guidance for 2012 through 2016, and affirming our 2012 earnings guidance range of $2.75 to $3.05. It has been a hot and dry summer. In fact, IPL's service territory reached a new peak load last week. Our facilities and system have been operating well and I would like to take this opportunity to thank our employees for their dedication in meeting our customers' needs in very challenging working conditions. June's warm weather did help us to recover about half the negative earnings from the first quarter, when we experienced a warm winter. Including the expected results from the hot July, we now estimate that we are trending toward the top end of our 2012 earning guidance range. This guidance assumes that we have normal weather for August through December. Recently, Alliant Energy received our highest ranking ever in the J.D. Power electric utility Residential Customer Satisfaction survey. We took second place out of 16 electric companies in the Midwest large utility segment, I am so proud that the hard work and dedication from all of our employees has been recognized by our customers. It has been a busy week as we have been communicating our generation strategies for our utilities. Our plan provides an orderly transition of our fleet and gives us the flexibility to ensure that we can cost-effectively, safely, and reliably meet the energy needs of our customers while managing current and emerging environmental regulations. Our plan includes increasing the amount of gas-fired generation in our portfolio, retrofitting our Tier 1 coal plants, evaluating less expensive emissions controls or repowering to gas for our Tier 2 units, and retiring our smaller and less efficient units which…

Good morning, everyone. We released second quarter earnings this morning with our GAAP earnings from continuing operations of $0.60 per share. Adjusting for items we typically exclude from guidance, second quarter 2012 adjusted earnings were $0.58 per share. Second quarter 2012 earnings are up over the second quarter of 2011, primarily due to the impacts of warmer weather and the tax benefit rider. Additional drivers for the increased earnings are higher AFUDC, increased earnings of non-regulated transportation and continued cost controls across the organization. The 2012 non-GAAP adjustment relates to the $0.02 per share credit from the June WPL rate case decision. Comparisons between the second quarter 2012 and 2011 earnings per share are detailed on supplemental slides five, six and seven. As with many Midwest utilities, the warm weather in the second quarter positively impacted electric margins and negatively impacted gas margins. The second quarter 2012 weather variance resulted in positive earnings per share impact of $0.06. This impact, coupled with the positive weather for July will more than offset the first quarter negative weather impact. Assuming normal weather after July, we expect 2012 earnings to trend toward the top end of our consolidated earnings guidance range of $2.75 to $3.05 per share. For the quarter, weather normalized retail sales were up by approximately 0.5% at both, IPL and WP&L, driven primarily by the commercial customer class. As a reminder, our 2012 guidance was based on no sales growth between 2011 and 2012. These trends are illustrated on supplemental slide eight. The tax benefit rider resulted in quarter-over-quarter variation at IPL and the parent. The tax benefit rider resulted in $0.04 per share of higher earnings in the second quarter of 2012 and when compared to the second quarter of 2011. The actual and projected quarterly earnings impact of…

Thank you, Mr. Hanson. At this time, the company will open up the call to questions from members of the investment community. Alliant Energy's management will take as many questions as they can within the one-hour timeframe for this morning's call. (Operator Instructions). We'll take Andrew Weisel from Macquarie Capital.

First, question about some of the capacity things on slide two here. Congrats on the board approving the plans for a new gas plant at IPL. Definitely good to taking other step forward there. My question now is, if you are extending the contract at Duane Arnold. It's, I understand, from a megawatt basis that you are going to be retiring some of these old gas plays in some of the early 50s, but as you say yourself, it's only 4% of energy needs last year. Given how oversupplied MISO is, how confident are you that there will be a need for the energy coming from a new plant as opposed to buying some from other plants?

Yes. That's a very good question. Now we're very confident that by when this plant goes online in 2017, it will definitely be needed, Andrew, also at that point. Again, as a lot of these other older coal plants retire in the MISO region.

Okay, so it's more a call on the market itself over the next five years or so?

Yes, both. Yes. Our strategy is then to rely less on the markets and rely more on own generation.

Okay. Sounds good. Related to those retirements, definitely appreciate the updated CapEx outlook, but there is no update on the future rate base. Is there going to be any kind of step back from these plans? As far as I know, we're not fully depreciated before you have the pick-up from the new capacity?

No. We don't anticipate that.

Our next question comes from Brian Russo from Ladenburg Thalmann.

Are you still comfortable with the 5% to 7% long-term CAGAR that's been previously conveyed?

Yes. We are, Brian.

Okay. Can you remind us over what time period that CAGAR is for, and what year we should be using a base now?

We're still sticking with the 2010 as the base share, plus 2010 to 2016 weather normalized.

Okay. I believe that weather normalized is 262 in '10?

Yes. That's correct.

Okay. What is the book value on the plants that you planned to retire at IPL?

At IPL, boy, it's not material at all. It's like $15 million.

Okay. A follow-up on the last question. We're not going to see any real step down when these plants are retired prior Duane.

Yes. Let me correct myself. Duane is all the way through 2017. It's about $50 million.

Okay.

50.

Okay. Can you also maybe just talk about devaluation process or the criteria that the IUB will use when evaluating the need and what's in the best interest for customers in terms of the CCGT development?

There's a several different methods. Of course, I've been look at our cost to customers. We'll also be looking at the impact of the state of Iowa as well, and reliability is the key issue, especially with all the transmission being built in Iowa as well, so there's multiple facets. Cost being one, but there's a lot of other issues, and Iowa does prefer owned generation as opposed to leased generation.

Lastly, the strategy or how should we think about the upcoming IPL electric rate case for 2014? I think you mentioned earlier that you are going to submit a tariff filing to adjust the PPA. The new PPA you signed relative to the PPA that's rolling off? I am just trying to get a feel for, will we see rate step down assuming this new PPA is at a much lower price than the one currently in rates?

Yes. Our plan is to list with the additional capital that we are putting in place in Iowa, that will make up the capacity payment that we're paying now, and the new PPA will be flowing right through the energy clause, so our strategy has not changed.

Okay. Can you remind us, how much new capital you will file for recovery of, or you will be adding to the rate base in '14?

We're looking at which are the best method.

Right. It's going to be all of the emissions projects, so it will be the Ottumwa, Neal 3, Neal 4 as well as Lansing environmental projects and they are identified in our CapEx forecast, so those will be the primary incremental in-service additions over this period of time.

Okay. Just to be clear, will you file the case, or will you just let the PPA roll off. I am trying to understand kind of the procedure of it.

Yes. We are still discussing that one, Brian.

Okay. Understood. Thank you very much.

Our next question comes from Jay Dobson from Wunderlich Securities.

Maybe just take me through the Duane Arnold, and I asked the question largely because Neal build it and I am pretty sure you did. We are pretty clear you are saying, well we're not going to re-contract with Duane Arnold and then here we are, which since it's not going through the capacity charge, sounds like you got a pretty good. Sort of just talk us through how that developed and we got to where we are today.

Sure. That's the beginning of the year when we issued the RFP. We look at alternatives for Iowa customers. We had many, many good quality bids coming, and we've discussed that with you. The bid that we got it from NextEra on the Duane Arnold Energy was very attractive price.

Okay. Got you, so it really all just came down to price, and obviously the sort of earlier discussions you had with them changed a lot I imagine.

Yes. The combination of extending that PPA, plus the gas plant, we believe is in the best interest of our customers and the lowest cost option.

Okay. Fair enough. Maybe then I think, what I am still trying to struggle with is, we are sort of replacing the Duane Arnold capacity with the Iowa plant, or pushing out the Iowa plant, does it make sort of the Tier 2 plants' hold less likely to do they have a higher hurdle to meet? Since we've been by slide two, you'll be in a longer generation once we are out in that 2017 timeframe? Yes. I think the difference in the announcements, we did announce plus what we discussed in the past is the evaluation of the older gas units as well as and (Inaudible) , so that's really what's new to the capacity equation today as opposed to the Tier 2s?

No. I absolutely appreciate that, but I am just saying, certainly it would appear to give you more flexibility around the Tier 2.

Absolutely. Yes. This plan gives us a lot of flexibility around those units now.

Okay. Fair enough. Have you identified which gas plans will actually be retired. I appreciate the sensitivity of employees and alike, but I don't know if you publicly announce which will be retired.

No. We have not.

Tom, I heard you equity sort of no need though 2013, which if recall was consistent with what you said previously, yet we are seeing CapEx come down in '14, up in '15, so maybe you are just buying yourself some flexibility for '14, but what makes you not clear that you wouldn't need it in '14.

As we finalize our plans for 2013, as we issue guidance later this year, we'll certainly convey all of that that's part of our package, but as you said as we continue to look at CapEx and to the extent that we are able to delay some of that by virtue of the new plan for the IPL gas plant, there should be some impact to our future equity needs.

Meaning pushing out?

Considerably, yes.

The next question comes from Ashar Khan from Visium.

Just wanted to check back. What are you saying on rate base? Are you going to provide us with some rate base slides, or how should we look at this reduction in CapEx on to the rate base for '14, I guess the main ratio is here.

If we take a look at WPL, certainly that's pretty well fixed in terms of the addition of Riverside, the Edgewater SCR and the Columbia unit, and as I mentioned it's part of the rate quarter here in Wisconsin, will be increasing rate base by about $400 million in 2013 and $150 million in 2014. In Iowa, as we said, we've got the environmental projects going in service, the gas plant will not be going in service until 2017. Again, as part of our 2013 guidance, we'll be giving rate base forecast at that time.

Okay. What should we take from today's, this CapEx slide? Should we assume that the rate base is going to be lower in '14 versus what was previously given out?

No. I don't think there will be any major changes, because the in-service additions for Ottumwa and Lansing and Neal 3 and Neal 4 had not changed. In fact, if you go to slide four, that highlights the in-service addition, and on the right side, the actual dates themselves that we expect those to go in service. There's really no change of significance at IPL from what our previous CapEx forecast is in terms of the emission projects.

Understand, but the gas plant has been moved out one year, right? Am I right or wrong?

Yes, but keep in mind it would not into rate base unit it was in service, so it's really not change those '14 rate base.

So, it's not changing the '14 as such. Okay. Then the only impact it would have been AFUDC earnings. Is that fair? That's the only kind of impact from '14 from last time to this time?

That is correct.

Okay. Thank you so much.

Our next question comes from Andrew Bischof from Morningstar Financial Services.

Thanks so much for all the clarification regarding your resource strategy. A little bit of clarification on the potential of fuel switch at Edgewater station unit 4. If you decide not to repower and retire, would you then have new builds out there $330 megawatts?

We will have to evaluate the new traditional resources at that point. We have no conclusions at this point, but you are right. We'll have valuate that.

Then I guess if you could just maybe highlight some of the level of interest you are getting for RMT?

As we stated, we continue to expect they will complete the deal by 2012, and so management believes that we'll be able to complete that.

Your next question comes from Paul Patterson from Glenrock Associates.

Just wanted to get a better feel for what the, and I am sorry if I missed this, demand growth that you have on slide two. What is the annualized normal weather growth that you are expecting here through 2017? I saw the 50 megawatts. I just wanted to figure out what that meant in terms of lower growth anyway.

We are estimating between three quarters of a percent, 1% a year.

In terms of the rate impact it's too early to say what that would be with this plan? Is that right? Or do we have an idea?

I would say it's too early, but we will as we file our filings with the IUB, it would be fully embedded in that proceeding.

Then you do mention some operational pollution benefits and stuff like that. I mean it clearly looks like it's essentially sort of replacing older plants. Can you give us a flavor as to sort of what the operational benefits that we obviously it's more CapEx and more cost from customers from their perspective, but theoretically would be benefitting fuel emissions issue etcetera, so do you have any sort of flavor to sort of roughly speaking with what that might do or?

It's probably too early to give you that at this point, but again as we go through the process, all come out in the process, so make sure very clear at that point with you.

Next question comes from John Alley from Decade Capital.

Two questions for you. First of all, in terms of the earnings CAGAR, is it fair to assume that because CapEx is lowering your term that the earnings path will be below the 5% near-term and then pop up in that 16 to 17 range once all those big units come on?

No. We should continue to see that fairly consistent over that period of time. Again, we said from 2010, weather normalized through 2016, I mean the expectation is that we will look to achieve that 5% to 7% earnings growth.

What are the different functions between that 5% and 7%. Is that just the load assumption that is the variable there?

It's certainly a contributor. Yes.

Any other pieces.

John, I don't know if you heard the answer to the other question. A part of the reduction in the CapEx in '14, that plant wasn't going to be into service till '16, so the earnings from that was really going to be shown in '16, not '14. It's just the AFUDC.

Okay, so the CAGAR and ratable throughout the five-year period or.

Level.

There's not a linear relationship, but I would say that it's lumpy, but we still feel confident that we can continue to grow earnings in that 5% to 7% for that period of time.

Our next question comes from Eli Kraicer from Millennium.

It's actually Steve. Good morning. If I look at slide three, that's for the combined company, the CapEx right?

Yes.

It seems like the changes where we moved some CapEx from WP and actually moved up or accelerated into this and the CapEx for IP&L shifted a little bit. I just wanted to get a sense for king of what the changes to the IP&L is for the '12, '13 and '14. How I look at this whole additions dilutions versus the prior forecast in '12, '13 and '14. Could you provide those numbers for what IP&L will be standalone versus the prior forecast?

Yes. It will be in the 10-Q, which we are planning to file later today. As we typically do separate the two utilities by years, so I think we'll be able to give you from that, Steve,

Then just second question just wanted to understand on slide two. It seems like one of the new piece of information today aside from the decision to resigning the Duane Arnold. Resigned and all the contracts is the decision to retire some gas units megawatts of capacity, and I was wondering if you could talk about kind of the analysis or what some of the drivers were of the decision to retire old gas units to replace with the new gas unit, then just talk about kind of what we need to do in terms of getting an approval to make these retirements with the commission with some of the factors they will look at or consider and decide whether or not to approve the decision.

Yes. Again, these units that we are discussing right now are some of these older units. A lot of them are the peaking units. Again as we look at the reliability of the system, these units really not be necessary and again due to the age and the maintenance cost of them, we just made a decision to go ahead and retire the book value on those is not very high at all. As it relates to some of the right column, some of the units that we've repowered, some of the coal to gas repowering units, we've got to evaluate those also. Again, those are older units repowering them to gas is really just intermediate solution, so again we'll be working with our regulators to recover all the cost of any retired units. We've been very successful on both, jurisdictions of recovering our cost of retired units on any electric property, and we would anticipate that to continue.

Is there like cost benefit analysis or do you have to show these. Is there some burden that has to be met in terms of making the retirement's decision with the regulators or is it just kind of, you are the operator you own the assets due to your personal discussion?

Yeah. It's definitely very reasonable ballet, but we would definitely share with our regulators our decision making. It's not the formula that we would show between reliability cost etcetera why we are making the decision to retire certain units.

Presumably you will be filing a docket, I guess is that part of the docket that gets filed just looking at the slide on the regulatory, which docket will that be. Is that one you are going to file on May 10th?

It will be the one that we'll be filing to approval of the gas plant should be in the fourth quarter of this year.

I am sorry. That will be the HF 577?

Right. The one that is probably next week is for the approval of a PPA.

Okay. All right. Great. Thanks a lot.

(Operator Instructions). We'll take a question from Neil Kalton from Wells Fargo Securities.

My questions have been answered. Thanks.

Okay. We'll take a follow-up question Jay Dobson.

Pat, I wanted to follow-up. I think it came up in an earlier question, but can you just review for us what at least the options are currently in sort of the upcoming Iowa rate case value deal with rather high-class problem of $150 million roughly of capacity charges going away.

Yes, and our goal is to make sure that customer rates are assumed during that period of time. We've been talking about that for a while. Some of the options are working with and we'll proposed. We just had a three-year period, so that we don't have rate increases, rate decreases, but nothing has changed. Again, with the PPA, the new PPA that we're proposing is energy only. That still gives us that whole capacity payment to help with the capital additions that we have going forward, so nothing has really changed, Jay. It will be a little more forthcoming on that as we go throughout the year and get the filings filed.

Right. In addition to keeping customer rates smooth, do you think I'm sure your desire would be, but does the commission have the flexibility to keep earnings smooth over that period, because obviously various states where these environmental projects come into service, so rate base is stepping into somewhat difficult word, but volatile pace and then you have this big 2017 COD, so just help me think through how your are thinking about earnings as well as keep the customer rates smooth.

Yes. I guess it both go hand in hand. When a PPA definitely expires, our earnings should be going up much more than customer rates just because we're substituting capital for the PPA payment, so we'll see earnings growth much higher than customer rate increases during that period of time..

You think the commission would allow, I mean that's a huge number if we just tax.

Yes.

$50 million.

Yes. We are preserving to plan to make sure it's smooth. As we've been telling people, we're not going to be greedy during this period of time. We'll present a plan that's reasonable.

Okay. Perfect. On just the Iowa rate base recognizing we've been in the rate freeze. I'm just target back to some of the revelations you disclosed a couple of months ago on the Wisconsin rate base. As I think about the impact of deferred taxes on the Iowa rate base, you are encouraging. I think, Tom, you were in an earlier question saying, sort of CapEx hasn't changed that much, so rate base shouldn't change, but I'm just thinking as we then layer in the deferred tax which at least in Wisconsin had grown a lot faster than perhaps we had expected. Do we see some tempering in the growth in rate base in Iowa as we come out the back end of this rate increase?

We will continue see bonus depreciation in '12 and to a much lesser degree in 2013, so that's certainly part of our analysis that we've been very mindful of, because we need to look at the entire rate base compliment, which is obviously in many cases influenced by bonus depreciation.

Okay. Prefect. That's great. Then lastly just on the commercial sales, sort of driving Pat your comment or Tom's comments, sorry, was that they are driving the sales growth, maybe just what we should read into that as far as economics going on in your service territory?

Well, we are encouraged they are increasing first of all. Again, we are very mindful that the recession is still part of the reality that we are dealing with Midwest, but we at least are encouraged by some customer improvement, so still we're in the game and what we've stated is that at least for 2012, our earnings projections were not assuming significant growth in electric sales.

Okay. Great. Thanks so much.

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

With no more questions, this concludes our call. A replay will be available through August 10, 2012 at 888-203-1112, for US and Canada, or 719-457-0820 for international. Callers should reference conference ID 8244179. In addition, an archive of the conference call and a script of the prepared remarks made on the call will be available on the investor's section of the company's website later today. We thank you for your continued support of Alliant Energy and feel free to contact me with any follow-up questions.

Once again, ladies and gentlemen, that concludes today's conference. We appreciate your patients today.