Good morning, and welcome to Alliant Energy's Conference Call for Second Quarter 2023 Results. This call is being recorded for rebroadcast. [Operator Instructions] I would now like to turn the call over to your host, Susan Gille, Investor Relations Manager at Alliant Energy. Please go ahead.

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. Joining me on this call are John Larsen, Board Chair and CEO; Lisa Barton, President and COO; and Robert Durian, Executive Vice President and CFO. Following prepared remarks by John, Lisa and Robert, we will have time to take questions from the investment community. We issued a news release last night announcing Alliant Energy's second quarter 2023 financial results. This release as well as an earnings presentation 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. Those 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. At this point, I'll turn the call over to John.

Thank you, Susan. Hello, everyone, and thank you for joining us. Our second quarter results were on track with expectations, and we have made solid progress towards achieving the consistent full year growth that our share owners have come to expect from our company. As we continue our long-standing track record of consistent execution, we have several areas of progress to highlight that will also serve to reinforce our strong investment thesis. Our focus on 2023 began well before the start of the year. As we shared last quarter, we took actions in the latter half of 2022 to advance our resource plans and added additional focus on cost management and resilience. We are pleased with the positive results from those efforts. The results are clearly shown through the advancement of key regulatory filings, great progress we've made on our major capital projects, and our expectation to reduce 2023 O&M compared to 2022. And we continued our focus to derisk 2023 in the early part of this year by successfully mitigating rising interest rates through our convertible debt offering and interest rate hedging. In addition, we have seen strong core operations year-to-date. I am incredibly proud of the great progress our team has made in the first half of this year. We have seen remarkable advancements across all fronts including our focused efforts on operating a safe and resilient energy grid, our commitment to advancing clean energy and our unwavering dedication to delivering exceptional service to our customers and communities. In a moment, I will turn the call over to Lisa Barton, our President and Chief Operating Officer, to share more details on our investment and operating progress. And Robert will close the call with more updates relating to our financials and regulatory progress. But before I do that, I'll…

Thank you, John. One of the areas that drew me to Alliant Energy revolves around our unwavering commitment to delivering value in a holistic and sustainable manner and our dedication to ESG principles. We are resolute in our long-term commitment to consistent growth in ensuring a successful clean energy transition for our customers and communities, making a positive difference in the lives of our customers and communities is a core value and guides us as we navigate the evolving energy landscape. We recently released our 2023 corporate responsibility report, showcasing our commitment to environmental stewardship, meeting the social needs of our communities and corporate governance. With a diverse portfolio of generating facilities, we consistently provide reliable energy to our valued customers while continuing to broaden their access to zero fuel cost and carbon-free energy resources. As we advance our clean energy initiatives, we prioritize competitive rates, reliability, system resiliency, sustainability and innovation. We partner and invest in organizations which proactively advance our industry's knowledge and collaborate on best practices. Now let's review our great environmental progress from 2022. First off, 40% of the energy we supply to our retail customers in 2022 was from renewable sources. Second, we reduced our annual carbon dioxide emissions from fossil fuel generation by 39% from our 2005 levels, evidence that we are well on our way to achieving our goal of a 50% CO2 reduction by 2030. We reduced our water usage by 50% from our 2005 levels, demonstrating our progress towards our 75% reduction goal by 2030. Looking forward, we have updated our clean energy goals to reflect our company's progress and strategic plans to support the transition to a low-carbon economy. On Slide 3, we highlighted examples of our sustainability efforts. Over the years, we have made significant strides in reducing our…

Thanks, Lisa. Good morning, everyone. Yesterday, we announced second quarter 2023 GAAP earnings of $0.64 per share. The primary drivers of the quarter-over-quarter EPS variances were higher earnings resulting from capital investments, including our solar expansion program; and lower WPL electric fuel-related costs, net of recoveries compared to the second quarter of 2022. These positive drivers were partially offset by lower estimated temperature impacts on retail electric and gas sales when compared to second quarter of 2022 and higher interest expense due to additional financings to fund capital investments. For the full year, we are reaffirming our earnings guidance of $2.82 to $2.96 per share. The midpoint of that range is a 6% increase over 2022 adjusted earnings per share. Details on our second quarter earnings drivers and 2023 full year earnings guidance can be found on Slide 6. To assist you in modeling our quarterly earnings this year, I wanted to quantify and provide some additional context to the timing of income tax expense. Income tax expenses recorded each quarter based on an estimated annual effective tax rate and the proportion of full year earnings generated each quarter. This causes fluctuations in the amount of tax expenses quarter-over-quarter, but it will not have an impact on full year earnings. As we continue to increase our renewable portfolio and generate higher levels of renewable tax benefits, these quarter-over-quarter variances have increased. We have provided our quarterly EPS estimates related to the tax benefit recognition timing for 2023 and 2022 on Slide 7. We have already executed a substantial portion of our 2023 financing plan to fund our investments in renewable projects, to mitigate rising interest rates, and to support retiring a $400 million debt maturity, which occurred in June. In addition to several successful debt issuances in the first quarter,…

[Operator Instructions] Your first question will come from Julien Dumoulin-Smith at Bank of America.

This is Dariusz on for Julien. Maybe just starting off in Iowa. I took a look at the proposed settlements -- partial settlement that you filed in your advanced ratemaking process earlier in the week. I was just wondering if you could maybe discuss some of the puts and takes that went into formulating that settlement with -- I believe it was a 10.75% ROE, but then not including the proposed battery storage. Also, any takeaways from the hearing that took place earlier in the week? And also importantly, where you see the process moving from here and over what time frame?

Great. Dariusz, this is John. So we're very pleased with the progress on this docket and the hearing went as expected. I think as you're aware, we also reached settlement with the Office of Consumer Advocate. So we are going to be awaiting the IUB's decision. But maybe I'll ask Robert to share a few of those items a little more color on the puts and takes as you noted, Dariusz.

Dariusz, yes, I'd say it was a very balanced settlement between shareowner interest and customer interest as you kind of explained some of the details there. We do think it warrants to have a premium ROE at 10.75% to incentivize us to put renewables in the state, and that's the nature of the law that we have in Iowa. We also appreciated the willingness to agree on a cost target that was reasonable in light of what we've seen as far as cost for similar solar projects in our area. I'd say the one thing on the customer side that the intervening parties were interested in is a consumer protection plan, which is something newer for us. But we are confident in our ability to execute and operate the facilities to be able to achieve that. So all in all, I think it was a pretty balanced set of agreements of principles and I look forward to the Iowa Utility Board make a decision on this docket. It will probably be, I would guess, some time within maybe the next couple of months, we might see a decision.

Great. If I could ask one more and this is more on the quarter/trends that you're seeing year-to-date. Certainly noted that it was maybe a bit of a softer quarter from a weather temperature standpoint. Can you just comment on the growth that you're seeing on a normalized basis across the 3 main customer classes?

Yes. Dariusz, it's John again. Similar to last year, we've seen some really solid temperature normalized retail sales in the first half. So we had a pretty solid 2022. And very much on par with that this year. We also see some strong growth in the first half of '23. We've seen about 85 megawatts of new announced growth. So some nice strength there. I think I've mentioned before, we like to see a long-term trend before we call it a trend, but it continues to have some nice economic development and weather-normalized sales growth. Robert or Lisa, if you want to add anything. But I appreciate the question, Dariusz.

Yes. Maybe the only thing I’d add is, as John indicated, it was slightly better than expected as far as the temperature normalized growth. It was really on our residential side where we saw most of that really good meter growth for both electric and gas this quarter. So that was the primary driver.

Your next question will come from Alex Mortimer at Mizuho Securities.

As you've examined your cost management throughout this year and planned out your own cuts for the later half of the year, have you discovered any savings you may be able to continue into the future? Maybe phrase another way, what portion should we think of as more onetime in nature versus ongoing run rate?

Yes, Alex, I would say a majority of what we're seeing as far as the difference between 2022 levels and 2023 are primarily because of some additional spend that we incurred in the second half of 2022. We continue to focus on O&M controls and continue to make progress with different activities to try and reduce costs for our customers. A lot of some of the more exciting things that we're focused on right now is in the technology area, identifying different opportunities for us to use. Things to spend the capital dollars to reduce what I'll call longer-term O&M costs. Things like undergrounding, which has been very effective at us being able to reduce storm costs this year. We've also implemented quite a bit of fiber throughout our service territory, which is helping reduce telecommunication costs. And we've got a pretty exciting new system we're going to put in to help us with enterprise workforce and asset management that we think will gain some efficiencies with a lot of our field operations. So -- we also have what I'd call more of a step change with this recent quarter because we retired the Lansing facility, one of our coal plants, which you'll see a reduction on. As I look to the future, probably some exciting things in the artificial intelligence area, but we're still in what I characterize as the evaluation phase there. And so we'll continue to monitor that and provide updates for the investors once we see more progress in that area.

Alex, the one thing that I would add to what Robert talked about is the fact that we are focused on affordability. We understand that that's going to be a driver of growth in the future. So from a cultural standpoint, the entire organization is really focused on evaluating our processes, our cost structure to make sure that we're delivering as best we can for our customers and communities.

Okay. Understood. And then on more of a big picture level, we've seen a move to promote gas bands even in cold weather states like Massachusetts. How do you think about the long-term outlook for gas utilities and your gas infrastructure?

Yes. Alex, I think we're still at a point where it's going to be very important, particularly in the region and climate that we have for gas to play a major role, certainly understand there's going to be lot of discussion about the role of natural gas, where it plays on either producing for generation or for home heating. But for at least the immediate future and for a while past that, we see natural gas playing a very important role.

And the only thing I would add is our – the one thing I would add is our renewables portfolio really protects our customers from fuel cost volatility. The fact that 40% of our retail customers were served by renewable resources is a big differentiator, I think, for us.

[Operator Instructions] Your next question will come from James Kennedy at Guggenheim.

Just a quick one. I'm sorry if I missed this. But what will you be in a position to provide in terms of guidance with the next update if the Wisconsin case is still outstanding?

Yes, James, this is Robert. So if you think forward to the third quarter conference call in early November in the EEI Finance Conference that will be shortly after that. We will be providing updated capital expenditure and rate base projections for 2023 through 2027. And expect to have additional insights on expectations of our rate reviews in Iowa and Wisconsin to provide us more specifics on what we'll see for earnings guidance and financing plans in 2024.

Okay. But the formal guidance might have to wait?

To be determined. Like I said, we're expecting to make good progress with both of those proceedings in Wisconsin and Iowa and hopefully have more details or specifics regarding exactly what we'll show for earnings guidance in '24 and financing plans for '24. We're still very confident with the 5% to 7% long-term growth plan for EPS. So you shouldn't expect anything. But we'll just provide some more specifics hopefully, once we get further through these rate reviews.

Okay. Cool. And then on the settlement, the battery wasn't included. So I guess, just pathways forward there. Any color you can provide?

Yes. Maybe, James, I’ll just note that battery storage is very cost-effective solution and quite frankly, important part of our resource plan for our customers. So we fully expect to advance energy storage, but there are some options on kind of the regulatory, recovery and proceeding going forward. So a little more to be played out as the RPU proceeding advances. So I think we’ll have more updates as we get to the Q3 call or EEI on the energy storage.

As there are no other questions, I will turn the conference back to Susan Gille for any closing remarks.

This concludes Alliant Energy’s second quarter earnings call. Thank you for your continued support of Alliant Energy, and feel free to contact me with any follow-up questions.

Ladies and gentlemen, this does indeed conclude your conference call for this morning. We would like to thank you all for participating and ask you to please disconnect your lines.