Please stand by, we're about to begin. Thank you for holding, everyone, and welcome to Alliant Energy's Third Quarter 2024 Earnings Conference Call. At this time, all lines are in a listen-only mode. Later, you will have the opportunity to ask questions during the question and answer session. [Operator Instructions] Now, at this time, I'll turn things over to your host, Susan Gille, Investor Relations Manager at Alliant Energy. Please go ahead, ma'am.

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 Lisa Barton, President and CEO; and Robert Durian, Executive Vice President and CFO. Following prepared remarks by 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 third quarter and year-to-date financial results, narrowed our 2024 earnings guidance range, provided 2025 earnings and dividend guidance, and provided our updated capital expenditure plans through 2028. This release, as well as earnings presentation, 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 news 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 ongoing earnings per share, which is a non-GAAP financial measure. References to ongoing earnings exclude material charges or income that are not normally associated with ongoing operations. The reconciliation between ongoing and GAAP measures is provided in the earnings release, which is available on our website. At this point, I will turn the call over to Lisa.

Thank you, Susan. Good morning, everyone, and thank you for joining our third quarter earnings call. Today, we're pleased to share our Q3 results, another quarter where we delivered solid financial performance while advancing our key strategic priorities. We'll take you through the details of our performance, share our outlook for the remainder of the year, provide insights into our strategic initiatives, and discuss how we're positioned for continued success and growth over the longer term. We are narrowing our 2024 ongoing earnings guidance range based on our confidence in our ability to offset a majority of the negative impacts of temperatures, and we are reaffirming our long-term earnings growth target of 5% to 7%. Looking ahead, I'm pleased to share our 2025 earnings guidance and dividend targets. Our 2025 earnings guidance midpoint represents a 6% increase to our midpoint of our forecasted 2024 ongoing earnings, and our 2025 annual common stock dividend target is $2.03 per share, a 6% increase from this year's dividend. While we are sharing our Q3 2024 results today, our team is acutely focused on the future and building a strong pipeline of investment opportunities while concurrently solving for affordability. Our relentless focus on delivering consistent, predictable results with a steadfast commitment to customer centricity, affordability, reliability, and sustainability serves as the foundation of our strategy. In a rapidly evolving energy landscape, four key strengths set us apart and underpin our success in supporting growth of long-term shareholder returns. An economic development focus. We drive growth in the communities we serve, creating shared prosperity and building robust local economies. Use of a dynamic resource planning model. Our flexible approach to resource planning ensures our ability to scale generation quickly with a non-litigated resource plan to meet evolving customer and community needs. Forward thinking regulatory alignment.…

Thank you, Lisa. Good morning, everyone. Yesterday, we announced third quarter earnings of $1.15 per share compared to non-GAAP earnings of $1.05 per share in the third quarter of 2023. Our quarterly ongoing earnings change year-over-year was primarily due to higher revenue requirements from capital investments at our Wisconsin utility and the timing of income tax expense. These positive drivers were partially offset by higher depreciation and finance expense. The remaining earning drivers for the year largely relate to negative impacts of milder temperatures on electric and gas sales and our team's successful efforts to reduce O&M interest and tax expenses to offset a majority of our temperature impacts. Through September of this year, net temperature impacts on electric and gas margins have decreased Aliant Energy’s earnings by approximately $0.10 per share. In comparison, net temperatures decreased Aliant Energy’s earnings for the first three quarters of 2023 by $0.02 per share. While temperatures have had a material impact on earnings in 2024, margins from our temperature normalized electric sales have been close to plan. With higher than expected sales to residential and commercial customers, partially offset by lower sales to our low margin IPL industrial customers, primarily due to less customer owned generation maintenance in 2024. Turning to our full year 2024 earnings forecast, as a result of our solid earnings through September, our successful efforts to offset a majority of the losses due to mild temperature impacts and our projected fourth quarter results, we have narrowed our 2024 earnings guidance to a range of $2.99 per share to $3.06 per share. As Lisa mentioned, we also announced our projected 2025 earnings guidance range and dividend target yesterday. The 2025 earnings growth is driven by higher earnings from capital investments in both Iowa and Wisconsin, partially offset by higher depreciation…

Thank you, Robert. It's an exciting time to be in the utility industry, and more importantly, it's an exciting time to be at Alliant Energy. In closing, I want to reiterate the elements that set Alliant Energy apart. It's our ability to continually solve the Rubik's Cube of balancing reliability, sustainability, affordability, and long-term growth. Our unwavering commitment to building stronger communities and advancing economic development is the driving force behind our long-term growth opportunities. Our ability to grow in tandem with our customers and communities is underpinned by our flexible, timely, and adaptable resource planning process, which enables us to identify and advance the generation resources needed to support growth. Having access to near-term generation resources allows us to meet our customers' desired timelines. While our investments in future generation positions ensures we are well positioned to adapt and grow at the pace of our customers and communities. As we all know, location matters. We are in a strong RTO, operating as a vertically integrated company with the right and obligation to build, own, and operate generations to serve our customers in states with regulatory frameworks that align with our ability to support continued growth. As we move forward, we remain focused on aligning and adapting to meeting the evolving energy needs of those we serve and those we have the privilege to serve. We remain confident in our team's ability to execute on our strategic and operational priorities to drive sustainable growth. Thank you for your continued support. We look forward to speaking with many of you at the EEI Financial Conference and plan to post updated materials on our website next week. At this time, I'll turn the call back over to the operator to facilitate the question and answer section.

Thank you, Ms. Barton. At this time, the company will open up the call to questions from members of the investment community. [Operator Instructions] We'll go first this morning to Nicholas Campanella of Barclays.

Hey, everybody. It's actually Nathan Richardson on for Nick.

Hi, Nathan.

Hi. Happy Friday. Just a couple of questions for you. So should you shift into the high case for load growth? How could that affect where you end up in the 5% to 7% long-term EPS growth guidance?

So the way of really looking at that long-term growth is think of it as upside potential. What we're really doing is extending our 5% to 7% growth opportunities. We anticipate that Phase 2 growth would likely be in those later years.

Got it. Okay. That makes sense. Thank you. And then one more on the equity. You're currently guiding to roughly 10% funding of overall CapEx, but only $25 million of issuance of $25. How can we think about contributions in ‘26 and beyond? Would that be practical, and would that be covered under the ATM?

Yes, great question, Nathan. This is Robert. As we updated our capital expenditure plan and looked at the additional roughly $2 billion of investment, we do see a need for roughly about a $1 billion of new common equity through 2028 to be able to maintain the strong balance sheet that we have and the equity ratio is at the parent company of around 40%. And so when you look at our capital expenditure plan over the four years, it is more heavily weighted towards the back half of the plan. So ‘26, ‘27, and ‘28 have higher levels of growth in CapEx. And so consider that's the appropriate timing when we're going to need that equity. As far as kind of the volume of it, I do think it's probably going to be fairly ratably over that ‘26 to ‘28-time period. And so with those levels roughly around $300 million to $350 million a year in that time frame, there is an opportunity for us to use ATMs at that level. So we'll continue to evaluate that. There could be opportunities for us to reconsider that in the future, but that's what our current plan looks like.

Awesome. Thank you so much. Have a great day, everybody.

Thank you. We'll go next now to Julian Dumoulin-Smith at Jefferies.

Hey, good morning, team. Thank you guys very much. Nicely done here, I must say. A quick clarification, if I can, on the last one here. You talk about Phase 2. Obviously it's through 28 here on Phase 1. To what extent is there still kind of a tailwind here as you think about rolling forward into ‘29 and ‘30? I mean, whether it's the Phase 2 contribution or whether there's just a much further true up on some of the CapEx making its way into earnings and rate base as you think about like run rate ‘29, if you want to think about it that way again. I don't want to try to get too far ahead of your current plan here, but just try to think about some of the residual benefits here as you think over the subsequent two years.

Thanks, Julian, and great question. So as we mentioned, we are acutely focused on economic development. What we're always trying to do is make sure that with respect to the information we're giving investors, we are giving you information where we have a clear line of sight and confidence in the numbers and so forth. So we're going to continue to evaluate that. And once we have a better line of sight with respect to the timing and certainty of that load growth, we'll be providing updates on that.

Excellent. Okay, fair enough. I know it's a -- yes, no, indeed, I think that's the way we'll view it. And then related here, I know you mentioned a few different times in your remarks about this, you know, the ICR and just working on the appropriate tariff structure. And then in tandem here, obviously, there's very sharing bands, et cetera. How would you interpret what we're seeing here today on the midpoint or the midrange case against where you're targeting in terms of earned return scenarios here? Again, I get that there's a few different permutations, but how would you think about level setting here, especially in the back end of that plan, given the ICR tariff and the contributions from these new data centers?

Yes, that's another great question, Julian. Yes, as we think about the timeframe when we see this data center load ramping up starting in 2027, 2028 and beyond, the higher the level of load growth, it will likely push us into some of those earning sharing mechanisms. But think of that as much later in our plan, kind of the back half in that 2028 and 2029 time periods. As we continue to grow the business and, as Lisa indicated, as we think about future phases beyond this initial phase that we see at the Big Cedar industrial site, that's when you would likely see that triggering those earning sharing mechanisms.

Right, so ‘28 really is kind of the first big year that we would anticipate that kicking in, really?

Yes, most likely. There could be opportunities. We continue to talk to several different other interested parties, data centers across our service territory. Big Cedar is just one of the industrial sites where we have these opportunities to scale transmission and mirror that up or combine that up with the resource capacities that we're bringing online for generations to be able to meet these data center loads. As we see other opportunities across the service territory and other industrial sites, the pace of that is largely going to be contingent upon kind of the ability for us to get these other agreements locked up with data centers. And so right now we see visibility to that happening in that 2028-2029-time frame, but it could actually be a little bit quicker than that if we're successful in getting some of these other data center contracts completed more timely.

Excellent. It's not just load growth upside, it's also sharing band upside, depending on how soon you can get this done. Excellent. Thank you, guys.

Thank you. We go next now to Andrew Wessel at Scotiabank.

Hi, thanks. Good morning, everybody. First, just a quick one on the ‘24 guidance reduction. Was it just that you were unable to fully offset the weather headwinds from earlier this year, or are there other challenges since then?

Yes, I think of it largely related to the temperature impact. So what we've seen through the first nine months of the year is about $0.10 of negative temperature impacts. We've also had a fairly warm October to start the fourth quarter, but we feel like we have a good line of sight to be able to offset about 75% of all the negative temperature impacts. Thanks to the successful efforts by the team. Focused on reducing O&M interest expense, financing expense, and so with that confidence, we are going to stay within our range. It's about a $0.03 decrease from the midpoint that we started the year, but like I said, we've been able to offset at least about 75% of the temperature impacts, so that's how we factored into what we used for the updated guidance for 2024.

Okay, very good. Then on the CapEx side, I think you said the update includes Phase 1 spending. Do you also have assumptions around other economic development deals, or are you conservatively excluding anything else until you get contracts signed? And same thing with the 3% to 5% load growth. Trying to see if there's an upside should additional customers show up.

Yes, as we think about future economic development activities more broadly, including data centers, that would all be upside to our plan, so that would increase not only the capital expenditure plan that we put in front of the investor group here today, but also sales, which obviously is a key contributor to helping us with customer affordability, so the more of these data centers that will be successful landing into our service territory beyond this initial phase that we feel confident with, think of that as all upside to our plan.

Okay, then my last question. I want to push you a little bit more and go back to one of the earlier questions here. Longer term, particularly the latter half of your plan here, I want to talk about upside here. You talked about accelerating load growth based on what you've already got. You've got a 20% pickup in the peak load, 20% increase in the CapEx plan, potential for additional customers, and I know the limiting factor is always affordability, but you just talked about how these new customers help with that affordability side, and you've got the ICR and other customer protections. You talked about earnings sharing in the ‘27, ‘28, and beyond. Help me understand here, why are we still talking about 6% and not something faster? What's limiting the potential to not at least stay the high end of the 5% to 7% range, and what are some factors keeping us from getting 7% growth or maybe even better than that in the outer years? Or is it just conservatism?

Andrew, just a great question. So, you know, this is all about timing. We really want to make sure that we have accurately forecasted in terms of, you know, when this load is coming online. That's something that you will continue to hear from us on a going-forward basis as any updates with respect to the timing of that load. Anything, Robert that you'd like to add?

Well, as long as we've known each other, you know we tend to be more conservative than most, and so we're not going to get out in front of our story, and so we'll be sure to share all the information once it's available, but we are going to stay conservative with data center loads until we have those locked up, and then we'll share more information. So expect future updates in the future as we finalize additional agreements.

Okay. Thank you very much. We'll see you soon.

Thank you. We'll go next now to Paul Fremont of Ladenburg.

Hey, thank you very much, and congrats on a great update. First question on Slide 5, just to clarify, you're already at the mid with the 1.1 gigawatts, right? So I'm not sure I'm understanding sort of the low-flat scenario?

Say the last part, Paul, of your question.

I'm assuming that you've already hit the mid-1 -- you know, roughly 1 gigawatt.

Yes, 1.1.

So that would rule out the low-flat scenario, right, just for clarification?

Yes, yes.

Okay. And then in terms of discussions or talks, where do you currently stand? Do you think you're close on any other potential announcements, or would you say that that weighs off?

Well, Paul, as we've indicated, we continue to talk to data centers. We continue to reiterate the fact that we're going to be conservative with respect to talking about prospects. We want to make sure that if they're on our land, we've got the land agreements executed, the transmission capacity agreements executed, as well as the energy service agreements executed. And even with that, what we're looking for is to have that very clean line of sight with respect to the timing of that load growth and the magnitude of that load growth. We certainly understand that these are very large customers, and we want to make sure we've got that timing right so you can reflect it accurately in your models.

And then when you file in Wisconsin next year, would you consider filing something similar in terms of regulatory plan as what you filed in Iowa?

You know, we'll continue to evaluate what we put together there in Wisconsin. You know, the Iowa solution is probably likely somewhat unique to Iowa. But, you know, what we're always going to do is look to our jurisdictions and figure out what's the best solution for existing customers, new customers, and shareholders. Remember, in Wisconsin, we have the ability to go in every two years. We didn't have that ability in Iowa, so that resulted in a need for a different construct there.

And then last question, in terms of equity, would you consider using junior subordinated debt issuances to achieve some of your equity contribution?

Great question, Paul. I would consider that as an option for us in the future. We're going to continue to evaluate all the different financing opportunities for us. Fortunately, we don't see a need for I'll say equity content financing instruments in 2025 given where we're positioned. But think of that maybe towards the latter half of next year we'll consider some different options for us and provide some more information to the investment community once we make that decision.

Okay, so what you're saying is that junior subordinated could constitute some of that billion of equity need that you've identified?

We'll evaluate that, like I said, when we get to the latter half of 2025 and we'll share some updated information at that time.

Great. Thank you so much.

Thanks, Paul.

Thank you. We go next now to Aditya Gandhi at Wolf Research.

Hi, good morning. Thank you for taking my questions. On your long-term EPS growth rate, could you clarify whether the base for that is now the revised ‘24 guidance midpoint or asked differently? Have you sort of rebased lower as it relates to your long-term earnings growth trajectory?

Yes, historically and we're going to continue with this method we use the current year information and so with the 2024 updated earnings guidance, the midpoint is roughly around $3.03 and so that's what you should use for your long-term base going forward.

Got it. Sorry, just to clarify there, should we think of that as the lower base implying lower longer term earnings or not? Is the point I'm getting to?

Yes, no, think of as we're still committed to the long-term a solid 6% growth rate. You will see 2024 was a lower year for us to start with but we do see higher levels of growth in our kind of range over the longer term.

Got it. Thank you for clarifying that and then just moving to your financing plan Robert, could you just give us some insights into the level of tax credits that you're baking into your plan and then what credit metrics you're targeting?

Yes, so when we look over the next four years through 2028, we did provide some information in one of the supplemental slides that indicates how we're going to finance the roughly $11 billion of capital expenditure plans. So like we talked about in my prepared remarks, majority of that’s going to come from cash flow from operations including tax credit monetization. We're targeting roughly about $1.6, $1.7 billion of tax credit monetization over that time period with the strong renewables that we have in place now and additions we're making with new renewables as well as energy storage. We are going to average probably somewhere in the neighborhood of $300 million, almost $400 million a year in tax credits and with the success that we've had with monetizing those to date we feel very confident we'll be able to do that in the future and so that'll roughly be, like I said, about $1.6 billion $1.7 billion over that five-year time period.

That's very helpful. Thank you. And one last quick question. As you're speaking to additional customers about future load growth opportunities, should we expect another sort of revision before Q3 of next year? Is that something you'd consider or is it just going to be this consistent cadence of Q3 CapEx updates?

We're going to be looking and aligning with some of these new data center loads so expect a revision possibly the first half of next year.

That's helpful. Thank you for taking my questions.

[Operator Instructions] We'll go next now to Bill Apicelli at UBS.

Hi, good morning. Just going back to the question on the ‘25 guidance, so I guess what is the full impact that -- year-to-date for weather on ‘24 as it was a more normal weather? Would you have been more at the 306 or at the midpoint of the original guidance?

Like I indicated in my previous remarks, Bill, the weather so far through the first three months is about a $0.10 drag on earnings in 2024. We do expect October to add to that given it's been pretty warm here in the upper Midwest and so in total it's probably closer to maybe $0.12 for the full year. We've been successful, like I indicated before, being able to offset a majority of that roughly about 75% of that through a series of what I would characterize as non-sustainable offsets, tax benefits, some portion of our O&M savings this year as well as we're going to benefit from the reversal of an ATCR we reserved as a result of the recent FERC decision and so looking at that offsetting is really kind of to position us to get back to that 303 that we've indicated as the midpoint of our guidance for 2024.

Okay. We should assume that that reverts back to normal next year, right? So in terms of the growth year over year, you're going to get the weather back presumably or that's what you're assuming normal weather and the guide for 2025, right? So are there any other factors in terms of timing on costs or other things that are impacting the growth year-over-year we should think about? You talked about higher financing costs and appreciation any other color there?

Yes. So think of like I indicated a majority of the offsets that we've incurred in 2024 to that temperature I would consider as non-sustainable so we will get back to normal weather in 2025 but we won't have some of those non-sustainable offsets in 2024 so it neutrals out and kind of gets us back to a position of having a normal run rate of 6% growth off of that $3.03 in 2025 with the earnings guidance.

Bill, one of the one things that I would add is that we are going to continue to focus on looking at ways and identifying ways of using technology and so forth to drive costs out of the business as well as we're going to continue our focus on economic development efforts and the more we can do with respect to economic development and bringing some of those loads on earlier are just an acute focus of ours.

Okay, great. What is the more near-term load growth assumption say for ‘25 or ‘26? I appreciate it's going to be ramping as the load develops and the economic initiatives take hold but when you think about the next year or two on the front end of that is it at the 3% or is it something a little bit below that? How should we think about the near-term load growth?

Yes, when you think about the load growth for us, the data centers that we're referring to including the initial phase of the data centers that are coming into our Big Cedar industrial site, think of those as starting up on a larger scale in the 2027-time frame. So in the next year or two we're expecting fairly consistent load growth to what we've seen historically. Think of that as maybe in that one half of 0.5% or 1% range.

Okay. Alright, great. Thank you.

And ladies and gentlemen, it appears we have no further questions this morning. Ms. Gille, I'd like to turn things back to you for any closing comments.

With no more questions, this concludes our call. A replay will be available on our investor website. Thank you for your continued support of Alliant Energy and feel free to contact me with any follow-up questions.

Thank you, Ms. Gill. Again, ladies and gentlemen, that will conclude the Alliant Energy's third quarter 2024 earnings call. Again, thanks so much for joining us, everyone, and we wish you all a great day. Goodbye.