Alliant Energy 2026 Q2 Earnings Call

Good morning. Thank you for joining Alliant Energy's second quarter 2026 financial results conference call. Joining me today are Lisa Barton, President and Chief Executive Officer, and Robert Durian, Executive Vice President and Chief Financial Officer. Following their prepared remarks, we will have time to take questions from the investment community. Last night, we issued a news release announcing our second quarter 2026 results and reaffirmed 2026 full-year earnings guidance. That release, along with our earnings presentation, will be referenced during today's call and is available on the investor section of our website at alliantenergy.com. Before we begin, please note that today's remarks and responses will include forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially. Those risks are described in last night's earnings release 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. Reconciliations to GAAP results are provided in the earnings release available on our website. At this point, I'll turn the call over to Lisa.

Thank you, Sue. Good morning, everyone. We delivered strong second quarter results and continue to execute well across our business. Despite milder weather during the first six months of the year, we are currently trending in the upper half of our 2026 earnings guidance range while advancing the investments and customer solutions that support our long-term growth strategy. Our strategy is anchored in the Alliant Energy advantage, the ability to align customer growth, constructive regulation, flexible resource planning, and disciplined execution in a way that benefits customers, communities, and share owners. As previously announced, our efforts to date have resulted in an expectation of driving a 60% increase in our demand by 2031 through five executed electric service agreements with large load customers. Three of these large loads are already under active construction with commission-approved contracts. In Cedar Rapids, Iowa, Google has energized their transmission service.

They are anticipating ramping in accordance with a contracted load schedule. Also in Cedar Rapids, QTS continues to make substantial progress on construction of its seven-building data center campus, with initial energization of 300 megawatts anticipated later this year. In Beaver Dam, Wisconsin, Meta has entered the vertical construction phase, with work actively progressing on data center facilities and supporting infrastructure. We are also encouraged by continued progress on future large load opportunities. QTS remains active in development of its second Iowa project in Clinton. We plan to file the ICR for this 900-megawatt project later this year. Our recently signed 370-megawatt data center agreement in Iowa, announced on our Q1 call, marks continued progress on our customer pipeline that currently represents between two and four gigawatts of potential future load.

As always, each of these loads are responsible for their cost of service while helping ensure existing customers benefit from growth opportunities without subsidizing new development. These opportunities are transformational for rural communities, expanding the local tax base, strengthening schools and essential services, enhancing infrastructure, and creating lasting economic growth and prosperity for generations to come. We are prioritizing local collaboration and readiness so our communities are well-positioned to compete for and capture those benefits. A recent study by The Brattle Group reinforces this approach, finding that large new electricity users, such as data centers, can improve affordability for existing customers. That is what our approach is designed to do, ensure large load customers pay their own way while creating opportunities to further reduce costs for existing customers.

It remains a cornerstone of our regulatory filings and demonstrates how disciplined growth can support reliability and long-term value for all customers. Building on the customer benefits generated through last year's fiber conduit lease agreement with Meta, this quarter, we amended our agreement with QTS Cedar Rapids to support accelerated load growth, allowing them to accelerate their load ramp with firm and non-firm transmission. We also remain focused on disciplined financing and have been awarded approximately $50 million of Department of Energy grants for our Columbia Energy Center and Energy Dome projects. These are just a few of the strong examples of the Alliant Energy advantage in action, working collaboratively with customers to support their growth objectives while creating broader benefits for all customers. Across our portfolio, we consistently transform strategic intent into measurable outcomes.

Our team continues to execute exceptionally well across our customer investments while advancing the next generation of investments needed to serve customers and support economic development. In Iowa, we are refreshing our resource plan to support future regulatory filings and ensure our long-term resource plan remains aligned with evolving customer needs. This approach supports base rate stability and predictability for existing IPL retail electric customers through the end of the decade. During the quarter, we made meaningful progress across our generation portfolio, from placing additional generation resources into service to breaking ground on our new gas and wind investments, as well as advancing regulatory approvals. We are building momentum that positions us well for future growth. Robert will provide more detail on these developments in a moment.

Before turning over to Robert, I would like to recognize our employees and especially our line workers following National Line Worker Appreciation Day earlier this month. Recent summer storms and summer heat has once again demonstrated the critical role our field and generation teams play in safely restoring service and supporting our customers when they need us most. Their commitment to safety, reliability, and operational excellence reflects the values that define Alliant Energy. I'll close with a recent milestone our team is proud of. In the recent J.D. Power study of Midwest large utility providers, we ranked number one in power reliability and safety. On behalf of the management team, we thank our employees who work tirelessly each day to provide the energy our customers and communities count on, fueling the economic engine of our communities. With that, I'll turn the call over to Robert.

Thank you, Lisa, and good morning, everyone. Yesterday, we reported strong second quarter 2026 GAAP earnings of $0.65 per share. As shown on slide five, the year-over-year change in ongoing earnings was primarily driven by higher revenue requirements associated with capital investments across our Iowa and Wisconsin utilities, along with increased equity earnings from corporate venture fund investments and higher temperature normalized retail electric and gas sales. These positive drivers were offset by higher operations and maintenance expenses related to the growth of our business, impacts of milder temperatures on electric and gas sales, timing of income tax expense, and higher financing and depreciation costs. Milder than normal temperatures reduced second quarter electric and gas margins by approximately $0.03 per share compared to a $0.02 benefit in the same period last year.

Excluding the impacts of temperatures, second quarter electric sales were approximately 3% higher year-over-year, reflecting continued strength from Wisconsin commercial and industrial customers, particularly within the food processing and manufacturing sectors. We are starting to see increases from the initial phase of the expected data center loads ramping in Iowa. Strong execution across our business gives us confidence with our 2026 earnings guidance range, despite impacts at our two utilities from milder temperatures in the first half of the year. In addition, corporate venture fund investments in our non-utility business are expected to provide incremental earnings this year. Accordingly, we are reaffirming our 2026 earnings guidance range and are currently trending in the upper half of the range. Key assumptions supporting our 2026 outlook are summarized on slide six. Our longer-term earnings outlook remains intact.

Based on our current plan, we expect compound annual earnings growth across 2027 through 2029 to be 7%+. We will continue to assess our long-term earnings growth potential as we execute our data center expansion and update our capital expenditure and financing plans on the third quarter earnings call. Turning to financing, slide seven outlines our remaining 2026 debt financing plans, which include up to $800 million of long-term issuances, consisting of up to $300 million at WPL and up to $500 million at IPL. As a reminder, our four-year capital investment plan is supported by a balanced financing strategy that includes cash generated from operations, proceeds from tax credit monetization, and new financings, including debt, hybrid instruments, and common equity. As shown on slide eight, we have made significant progress in the second quarter with proactively addressing our stated equity needs.

Of the approximately $2.4 billion of announced common equity needs through 2029, we have already raised approximately $1.8 billion through forward equity agreements. These actions effectively address our stated equity needs through 2028 and leave approximately $500 million of remaining equity to be raised through 2029, excluding equity expected to be raised under our share direct plan. Our financing plan, together with our proactive execution to date, provides meaningful flexibility to support the efficient implementation of our strategy. Turning to regulatory matters, our regulatory agenda remains closely aligned with our capital investment strategy and the growing needs of our customers. During the quarter, we made significant progress advancing projects that support both reliability and economic development across our service territories. Our recent regulatory advancements and active filings are shown on slide nine.

In Wisconsin, we recently received approval of our individual customer rate agreement, supporting Meta's data center development in Beaver Dam. In response to that order, we expect to file a broader large load tariff later this quarter. We also received written approval for the expansion of our Bent Tree Wind Farm, adding approximately 150 megawatts of renewable generation and have now advanced that project into construction. In Iowa, we continue to advance the energy resource investments included in our long-term capital plan. During the quarter, we filed generation certificates for the 720-megawatt Morgan Valley and the 1.2-gigawatt River Hawk simple-cycle natural gas projects, and a generation certificate for an energy storage project totaling approximately 125 megawatts. From a project execution perspective, our storage, wind repowering, and generation enhancement projects remain on schedule. We recently placed into service the final two generation enhancement projects at Neenah and Sheboygan.