Tag Archives: investment

Reaves Utility Income Fund: Coming Dilution Will Likely Drive Down NAV And Market Price

Summary Management has recently filed for a rights offering with SEC. The rights offering is an offer to sell more shares, which will lead to further dilution of NAV and the market price of UTG. The current downward spiral of NAV along with rights offering suggests investors would be better served by avoiding UTG. ( click to enl arge) I wrote about Reaves Utility Income Fund (NYSEMKT: UTG ) back in July, suggesting that it offers a relatively safe 6% yield paid monthly. In that article, there was a table that showed that UTG had outperformed both the S&P Utilities Index and the Dow Jones Utility Average over a 5-year period ending 4/30/2015. However the fund has not been performing as well this past year. On that same chart, total return was a -0.17% for six months, whereas the S&P Utilities index returned -1.10% and the Dow Jones Utility Average returned 3.78%. A copy of the table is shown below: (click to enlarge) Source: UTG Semi-annual Report Reuben Gregg Brewer wrote 2 articles on UTG over the past several months that indicate things are not going well at this CEF. You can read these articles here and here on Seeking Alpha. In the first article, he reports that NAV is down 11.5% for the year and that market price is down 13%. He shows some concern in the article that UTG will have to do a ROC (Return of Capital) to maintain the dividend if things don’t turn around soon. UTG has been able to avoid making ROC dividend payments over the past few years. He maintains a positive attitude toward the CEF in this article in spite of the bad news while at the same time predicting a lower price. His last 2 statements in the first article are: ” That said, if you are looking for a bargain, I don’t think UTG is there just yet. But with market volatility kicking up, keep a close eye on UTG, because fickle investors may just give you the opportunity to buy in on the ‘cheap’.” The second article chronicles the rights offering that UTG is about issue to stockholders. On 10/6/2015 UTG announced that it filed with the SEC to offer additional common shares of the fund pursuant to a rights offering. One right per share will be given to each shareholder and 1 share of UTG can be purchased for every 3 rights held. UTG also has the option to issue up to 25% additional shares based on the common shares issued in the rights subscription. Reuben Brewer offered the opinion that this offering would work out for shareholders in the long run. He wrote: “If you are a Reaves shareholder this is probably a good deal for you. Will it be a good deal in the next six months? Maybe, maybe not. But longer term the CEF appears to be of the opinion that now is a good time to put money to work. And that should work out for you if you plan to stick around for some time.” Levis Kochin violently disagreed with Brewer in the comments section by stating that the rights offering is a reach for more management fees by Reaves Asset Management. He asserted further that this offering is stealing NAV from current shareholders by offering shares below NAV. Kochin is correct in that the rights offering is a further dilution of NAV and is not in the best interests of stockholders. To see the rights offering as a positive requires one to have a great deal of faith in the managers of the fund. Mr. Brewer believes management will use these additional funds to purchase shares of beaten down dividend companies and that it will eventually work out to the best interests of shareholders. He believes that history will repeat itself when it worked out well for shareholders the last time UTG did this in 2012. Operations this year has NAV dropping at about 1% a month. The Market price of UTG has dropped faster than NAV. As of 9/30/15 NAV has dropped 9.85% and the market price has dropped 10.93%. The performance table from UTG is shown below: (click to enlarge) Source: Reaves Utility Income Fund Website (performance) Conclusion: I am currently negative on UTG because of the impending dilution coming with the rights offering and the increasing number of available shares. The distribution of more shares will likely cause an imbalance of shares offered to sell as opposed to offers to buy. Both the NAV and market price of UTG will likely be soft for the next 6 to 12 months. Therefore I would definitely not be a buyer at the present time. But if you already own UTG, you may wish to hold on to keep collecting the monthly dividend and to wait out management hoping it will invest the new money wisely. In the accounts of retired folks, I let the investment ride to collect UTG’s monthly dividend. For folks that are not retired, I sold the issue and moved the money to other investments that appear more positive over the next few months.

South Jersey Industries’ (SJI) CEO Mike Renna on Q3 2015 Results – Earnings Call Transcript

South Jersey Industries Incorporated (NYSE: SJI ) Q3 2015 Earnings Conference Call November 05, 2015 11:00 AM ET Executives Ann Anthony – Treasurer Mike Renna – President and CEO Steve Clark – SVP and CFO Jeff DuBois – EVP and President, South Jersey Gas Marissa Travaline – Director, IR Operator Good day, ladies and gentlemen, and welcome to the Quarter Three 2015 South Jersey Industries Earnings Conference Call. My name is Christie and I will be your operator for today. At this time, all participants are in listen-only mode. We will conduct a question-and-answer session towards the end of this conference. [Operator Instructions] As a reminder, this call is being recorded for replay purposes. I would now like to turn the call over to Ms. Ann Anthony, Treasurer for SJI. Please proceed ma’am. Ann Anthony [Indiscernible] SJI’s third quarter 2015 results and provide an update on our business. Joining me on our call today are Mike Renna, President and CEO of SJI; along with Steve Clark, our CFO; and Jeff DuBois, President of South Jersey Gas; as well as Marissa Travaline, our Director of Investor Relations. We also have several additional members of our senior management team available to help address questions following our prepared comments. Our third quarter earnings release was issued to the media this morning and is also available on our Web site at www.sjindustries.com. This release and the associated 10-Q provide an in-depth review of earnings on both a GAAP and non-GAAP basis using our non-GAAP measure of Economic Earnings. Reconciliations of Economic Earnings to the comparable GAAP measures are available in both documents. Let me remind you that throughout today’s call, we will be making references to future expectations, plans and opportunities for South Jersey Industries. Actual results may differ materially from those indicated by these statements as a result of various important factors, including those discussed in the company’s Form 10-K on file with the SEC. Also, as was the case in last quarter’s results, our 2014 per share numbers have been adjusted to reflect the impact of the stock split that occurred in May of this year. With that said, I’ll now turn the call over to our CFO, Steve Clark to review our year-to-date and third quarter results. Steve Clark Thanks, Ann. Good morning everyone. Thanks for joining us. Kicking off our discussion, year-to-date Economic Earnings totaled $55.8 million as compared with $72.8 million for the first nine months of 2014. As you would expect, the majority of the variance year-over-year is the result of a write-down of our investment in and the lack of operational contribution from the energy facility at Revel, which is responsible for approximately $11 million of this $17 million variance. Other significant contributors to the variance are an increase in reserves and write-offs of uncollectable accounts in our utility; increases in post retirement benefit costs and lower contributions from investment tax credits. The benefits realized in our commodity marketing business from the polar vortex that occurred in early 2014 also drove some of this variance. For the third quarter, Economic Earnings reflects a loss of $5 million in 2015 as compared with a loss of $3.4 million in the prior year period. Economic Earnings per share through September 30, 2015 were $0.81 as compared with $1.10 for the first nine months of 2014. For the quarter, Economic EPS reflected a loss of $0.07 as compared with a loss of $0.05 in the prior year period. Beyond the issues I just discussed, we still saw many positive contributors, including strong utility customer growth and much improved year-over-year contributions in our wholesale business and I’ll review that as I detail the results for the specific areas of our business. Starting with utility, South Jersey Gas’ net income through September 30, 2015 was up 4.6% at $44.4 million as compared with $42.4 million through September 30, 2014. For the quarter, utility net income reflected a loss of $3.4 million as compared with a net income contribution of $1 million in the third quarter of 2014. As I mentioned previously, these results were produced largely by the increased write-off of uncollectible accounts. The extreme conditions experienced in the last two winters produced significantly higher customer bills, higher than many customers were there for. As noted last quarter, this resulted in increased receivables, increased aging at those receivables and ultimately increased reserves and write-offs for those receivables. Compared to the prior year periods reserves and write-offs negatively impacted year-to-date and quarterly net income by $3 million and $1.8 million respectively. We continue to educate customers on ways to reduce usage through access programs for assistance and to take advantage of different bill repayment options we offer. Additionally, the quarter saw $700,000 impact to net income from increased cost associated with post-retirement benefits and a $1.1 million impact from higher depreciation and amortization. Infrastructure investments under our accelerated programs totaled $48.8 million year-to-date and added an incremental $1.3 million to net income for the first half of 2015. The planned investments are on target to reach roughly $70 million for 2015. Our AIRP and SHARP programs are expected to add $2.5 million in incremental income for 2015 while continuing to reinforce our system for the replacement of bare steel and cast iron gas main and a replacement of low pressure gas main with high pressure main along the barrier islands. Another major infrastructure reinforcement — infrastructure system reinforcement pending is the pipeline to provide natural gas to the former BL England electric generating station. Having received the certificate of filing from the Pinelands Commission’s staff in August, we now await final approval from the New Jersey Board of Public Utilities and acceptance of the BPUs determination by the Pineland Commission. We remain optimistic that we’ll obtain final approval of this project before year-end and that construction will commence in mid to late 2016 pending any appeals to the decision that may arise. Customer growth continues to be significant with our customers total up by nearly 6,900 or 1.9% for the 12-month period ending September 30, 2015. During the same time period, customer growth added $1.9 million incremental net income as compared with the prior year period. We continue to achieve this type of growth as a result of low natural gas prices and targeted marketing efforts that maximize the reach of our infrastructure to capitalize on customers additions from those on or near existing main. Shifting gears to the non-utility; our non-utility operations contributed a total of $11.5 million in Economic Earnings year-to-date through September 30, as compared with $30.4 million in the prior year period. In the third quarter of 2015, this segment produced a loss of $1.5 million as compared with a loss of $4.4 million in the third quarter of 2014. Our non-utility business is comprised of South Jersey Energy Services and South Jersey Energy Group. Within the South Jersey Energy Services, year-to-date results really reflect the impact of the write-down at Revel, with Economic Earnings of $5.4 million for the first nine months of 2015 as compared with $21.5 million for the same period in 2014. The Revel related impact was the largest contributor to the overall variance within this business line along with a reduction in the amount contributed by investment tax credits year-to-date. However, on a quarterly basis, Economic Earnings for Q3, 2015 match those of Q3 2014 at $800,000. These levels reflect the fact that neither the third quarter of 2014 nor the third quarter of 2015 saw noteworthy contributions from the Revel facility and both quarters also featured fairly moderate summer temperatures that requires less production from our portfolio of energy production facilities. With that in mind, our CHP portfolio reflected a loss of $8.6 million for the first nine months of 2015 as compared with Economic Earnings of $2.7 million for the first nine months of 2014. For the quarter, contributions from CHP reflect a loss of under $100,000 in 2015 as compared to a loss of $2.2 million in the third quarter of 2014. Moving over to our solar activities, net income was $16.6 million for the first nine months of 2015 as compared with $21.1 million for the first nine months of 2014. For the third quarter, solar contributed 1.5 million in 2015 as compared with 3.5 million in the third quarter of 2014. Lower levels of investment tax credits produce the variance. Although that variance is largely timing, as we expect to match 2014 solar investments by year-end based on the robust queue of solar projects we have in construction. We also remain on track for full year SREC production of 140,000 SRECs which will continue driving improved operating performance. To that end, the quarter reflected positive performance of approximately $200,000, a result that just not reflect the full value of our solar production in the second and third quarters of 2015 due to the timing of the certification of renewable energy certificates in Massachusetts which can take up to six months. We don’t recognize income from those SRECs until after the certification process is completed. We estimated that our 2015 Economic Earnings would have benefited by approximately $1 million, had all SRECs produced been certified as of 9/30. These earnings will be recognized over the next two quarters. For the first nine months of 2015. Our landfills produced a loss totaling $3.2 million as compared with a loss of $2.7 million in the prior year period. For the third quarter, these projects lost $800,000 in 2015 as compared with $400,000 in the same period in 2014. While we are just starting to see a slight uptick in performance from the sites, we are focused on improving. We also experienced some unrelated maintenance costs in the quarter. Addressing this issue is a high priority within SJI. Turning to South Jersey Energy Group, we remain very optimistic about the future of this business. Year-to-date, this area has added $6.1 million as compared to $8.8 million through September 30, of 2014. What’s important to note is that the current year’s performance was achieved without the benefit but the extreme volatility the region experienced throughout the first quarter of 2014. Volatility that drove the $18 million of Economic Earnings we experienced for the first quarter of 2014. In the current quarter, this area improved by nearly $3 million as compared with the third quarter of 2014 reducing its quarterly loss from $5.1 million to $2.3 million. This improvement was driven by the commencement of one fuel management contract in 2015 as well as improved performance of our marketing contracts. I also want to reaffirm our expectation that this business will exceed the $30 million of Economic Earnings that produced in 2014 or 2015. Finally, taking a look at the balance sheet, our equity-to-cap ratio was 41% at the end of the third quarter as compared to 43% in the third quarter of 2014. We’ve used our dividend reinvestment plan to issue equity totaling $9.7 million through September and we expect to further employ this resource during the fourth quarter of the year in support of our capital programs. We also maintain accumulated deferred tax benefits totaling $300 million related to our investments that we expect to realize between now and 2021 to help de-lever the balance sheet. At this time, I’ll turn the call over to Mike. Mike Renna Thanks, Steve. Good morning, everyone. With three quarters already under our belt, 2015 has so far presented our business with a few challenges. Certainly the write-down of our energy asset at the former Revel property had a significant impact on the current year. Now however, our focus is on moving SJI forward with a strategy that will create exceptional growth, improve the quality of our earnings and strengthen our balance sheet. From customer growth and infrastructure investment in our utility to a marked improvement in our commodity marketing and fuel management business lines to our investment in the pipeline to supply a repowered B.L. England generating facility and our stake in the vital PennEast pipeline, we are well positioned to deliver on our goal of achieving Economic Earnings of $150 million by 2020. Looking forward, steady contributions from recurring customer growth that far exceeds the industry average is expected to add nearly 12 million in Economic Earnings over the next five years as strong conversion effort continue to get a boost from access to an inexpensive and abundant supply of low cost natural gas. Infrastructure programs that support accelerated replacement of bare steel and cast iron mains as well as low pressure services also remain a key contributor year-over-year, driving incremental net income growth that is expected to top 18 million by 2020. In our non-utility businesses, our wholesale and retail commodity business lines are firmly positioned to drive low risk repeatable to income streams that are expected to contribute roughly 10% to 15% of Economic Earnings through 2020. Fuel supply management contract as additional plants come online will ultimately represent between 5% and 10% of our projected 150 million in 2020. And as we expand our organization to include a stake in PennEast, our 20% equity investment in this 105 million — 105 mile interstate transmission pipeline will be a boost to earnings as well as a significant benefit to our customers, as some of the nation’s lowest cost natural gas is delivered into our system. We also look forward to the possibility of constructing a new headquarters in Atlantic City to support organizational growth that has pushed us over 700 employees. We expect Atlantic City to remain a vital engine for economic development in Southern New Jersey and we look forward to being a central part of its resurgence. The agility and versatility of our business combined with the talent commitment of our workforce has enabled SJI to identify many opportunities that make up our strategic path forward. As a result, we expect to finish 2015 with earnings per share that meet our targeted range of $1.49 to $1.54. More importantly, we are confident in our ability to achieve our key strategic objectives, Economic Earnings of at least 150 million by 2020; strengthening our balance sheet; maintaining a low to moderate risk profile and perhaps most importantly, improving earnings quality to ensure that the foundation of our business is built on regulated, repeatable and reliable income streams. Now, I’ll turn the call back to the operator for Q&A. Question-and-Answer Session Operator Mike Renna Thank you. Before we conclude, as always, please feel free to contact Marissa Travaline, our Director overseeing Investor Relations or Ann Anthony, our Treasurer for any follow-up on the items we discussed today. Marissa can be reached at 609-561-9000 extension 4227 or by email at mtravaline@sjindustries.com. Ann can be reached at extension 4143 or by email at aanthony@sjindustries.com. Again thank you for joining us today. Operator Thank you for joining today’s conference, this concludes the presentation. You may now disconnect. Good day. Q – A – Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited. THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY’S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY’S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY’S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS. If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com . Thank you!

Alliant Energy’s (LNT) CEO Pat Kampling on Q3 2015 Results – Earnings Call Transcript

Alliant Energy Corporation (NYSE: LNT ) Q3 2015 Earnings Conference Call November 06, 2015 10:00 AM ET Executives Susan Gille – Manager, IR Pat Kampling – Chairman, President & CEO Tom Hanson – SVP & CFO Robert Durian – Vice President, Chief Accounting Officer and Controller Analysts Andrew Weisel – Macquarie Capital Brian Russo – Ladenburg Development Operator Thank you for holding, ladies and gentlemen, and welcome to Alliant Energy’s Third Quarter 2015 Earnings Conference Call. At this time, all lines are in a listen-only mode. And 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. Susan Gille Good morning. I would like to thank you of — 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; Tom Hanson, Senior Vice President and CFO; and Robert Durian, Vice President, Chief Accounting Officer and Controller; 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 last night announcing Alliant Energy’s third quarter 2015 earnings narrowing 2015 earnings guidance. I’m providing 2015 through 2020 forward capital expenditure guidance. We also issued earnings guidance and the common stock dividend target for 2016. Press 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 non-GAAP financial measures. The reconciliation 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 turn the call over to Pat. Pat Kampling Good morning and thank you for joining us today. The Veterans Day is just a few days away. I would like to take a moment and pay tribute to the approximately 400 proud veterans that work here at Alliant Energy and to those veterans are on the call with us today. We thank you for your service to our country and for protecting our freedoms. Enjoy your special day. Yesterday we issued press releases which included third quarter and year-to-date financial results our revised 2015 earnings guidance range. And for 2016, our earnings guidance and targeted common stock dividend. That release also provided updated detailed annual capital expenditure plans through 2019 and our capital expenditure total for 2020 to 2024. Tom will later provide details of the quarter, but I am pleased to report that we delivered another solid quarter. And since temperature was close to normal with the third quarter, at first we had no impact on our year-to-date earnings. So with the summer behind us, we are now in our 2015 earnings guidance but we are now including an adjustment to our ATC earnings to reflect the anticipated lower ROE. ATCs current authorized ROE is 12.2% we are reserving $0.03 per share for the year reflecting an anticipated ROE of 11.5%. Therefore we are changing the midpoint of this year’s earnings guidance range from $3.60 per share to $3.57 per share. Now looking at next year, the midpoint of our guidance for 2016 is $3.75 per share a 5% increase from our projected 2015 guidance as detailed on Slide number 2. This increase reflects a forecast with customer sales increase of 1% and earning on capital additions. Our long-term earnings growth objective continues to be 5% to 7% supported by our robust capital expenditure plan modest sales growth and constructive regulatory outcomes. The ability to earn our authorized returns on rate base additions of book utilities was incorporated in both retail electric base rate settlements. Those settlements have unique treatment that will allow you to reach earn on an increasing rate base while keeping customer base rates flat. The IPL settlement utilized the historic DAEC capacity payments that are included in base rates to more than offset rate-based growth and other changes in revenue requirements. This allows us to refund the difference to customers included $25 million refund in 2015 and a $10 million refund in 2016. The WPL settlement utilized previously recovered energy efficiency revenues it also increases in revenue requirements including the return on rate base additions. A balance of approximately $32 million will be amortized in 2016 and the amortization for this year is expected to be $80 million. To summarize, both creative retail rate case settlements allow us to earn on our increasing rate base or keeping retail electric base rates stable through 2016, which is last year of the settlement. Yesterday we also announced a 7% increase in a targeted 2016 common dividend level to $2.35 per share from our current annual dividend of $2.20 per share. By 2016, dividend target payout ratio is 62.5% which is consistent with our long-term targeted dividend payout ratio of 60% to 70% of consolidated earnings. We issued an updated capital expenditure plan for 2015 to 2019, totaling $5.8 billion, as shown on Slide 3. In addition, we have provided a walk from the previous 2015 to 2018 capital expenditure plan to our current plan shown on Slide number 4. As you can see the change in our forecasted 2015 to 2018 capital expenditure plan are driven primarily by additional investments on our electric and gas distribution systems and a $50 million reduction for the proposed Riverside Energy Center expansion in Wisconsin. The lower cost estimate of $680 million to $720 million excluding AFUDC and transmission was filed in supplemental test [indiscernible] with the PSCW yesterday. On Slide 5, we have provided a 10-year view of our forecasted capital expenditures. As you can see our planning additional new generation needs beyond 2019 which we anticipate will include gas, wind and other renewable resources. The additional renewables in our plan with economical for our customer energy needs as we continue to retire all the generating facilities. While reviewing Slide 5, it is also important to note that approximately 45% of the 10-year capital plan will be spent to enhance our electric and gas distribution systems to meet customers changing and growing needs. Investments in our gas distribution system are becoming more significant as evidenced by our recently completed $15 million [indiscernible] Wisconsin and we are supposed to cross $65 million [indiscernible] project in Iowa. Also for your convenience, we have already posted on our website the EEI Investor presentation that details the separated WPL and IPL updated capital expenditures through 2019 as well as updated rate-based estimates for 2014 through 2018. Now, let me brief you on our current construction activities. As year-end approaches, this has certainly been one of our busiest construction years. I must thank the employees and approximately 800 contract workers on our properties for working safely and for their assistance on these important projects. I’m extremely proud of the achievements we have made and continue to make and transitioning the environmental profile of our fossil generation fleet. We plan to reduce NOx emissions by approximately 80% and SO2 mercury emissions by approximately 90% by 2020 and we will continue to plan for a reduced carbon future. In Wisconsin, the installation of the scrubber and baghouse at Edgewater Unit 5 is approximately 75% complete and is expected to be in service in the second quarter of 2016. We are anticipating this project will come in approximately 10% below budget. We have recently a signed a contract with a joint-venture between Graycor industrial contractors and Sargent & Lundy to fund the engineering procurement and construction of the Columbia unit 2 SCR. The construction is scheduled to start in the second quarter of 2016 and WPL share the expenditure for this project of approximately $50 million. We do have an excellent track record of executing well on our these large construction projects, I am very pleased on power magazine name two of our power generating stations as our top plants for 2015. The recognition of IPLs [thermal] generating station and WPLs Columbia’s Energy Center which were excellent execution of this major investments and a dedication to a cleaner and more efficient operations. Construction of IPLs 650 megawatt combined cycle natural gas fired Marshalltown generating station is progressing well. The project is approximately 65% complete and is expected to be in service in the second quarter of 2017. KBR is the engineering, procurement, and construction contractor for this project which includes Siemens’ combustion turbine technology. In 2013, WPL announced that it would retire several older coal facilities and natural gas peakers. This retirements begin next month at Nelson Dewey and as well as in Unit 3. When WPLs prime retirements are completed the forecasted accredited capacity loss will be nearly 700 megawatts. As a consequence, WPL evaluated a wide range of alternatives to meet long-term energy and capacity needs for its customers. In 2014, WPL issued an RFP for market-based options. After evaluating all of our options, we concluded that Riverside Energy Center expansion with a new approximately 650 megawatt highly efficient natural gas generating facility was in the best long-term interest of our customers. This past April WPL applied for a certificate of public convenience and necessity or CPCN with the Public Service Commission of Wisconsin. The CPCN is progressing and in accordance with its procedure schedule on September 22 we filed that direct testimony and yesterday filed supplemental testimony through [indiscernible] updated cost projections. Intervener and Staff testimony will be filed by November 13, a public care will be conducted on November 17 in [indiscernible] and technical hearings are scheduled for December 21. We anticipate the commission issue decision on Riverside Expansion by May 2016. The proposed riverside expansion includes an approximate 2 megawatt solar installation on the property. Adjacent to riverside, on our Rock River landfill Hanwha Q Cells is currently constructing the largest solar plant at Wisconsin at 2.25 megawatts and we will purchase the power from them over the next 10 years. At our Madison general office installation of above 1000 solar panels from multiple manufacturers with 11 different types of solar modules is well underway. For this project we have partnered with the Electric Power Research Institute or EPRI to collect data and make it available to others. We also have several other solar projects under development from which we anticipate gaining valuable experience and how to best integrate solar in a cost-effective manner in our electro systems. Solar projects is in the developmental stage include owning and operating the solar panels at the Indian Creek Nature Center in Cedar Rapids Iowa and our recently issued RFP was placed in [indiscernible] solar project between 1 and 10 megawatts within our Iowa service territory. The projects resulting from the RFP will increase our system wise solar generation by 50%. Last month the EPA published its final rules through those carbon emissions from electric generating stations. We understand this is just one more step what will be a long process that includes legal challenges and the development of compliance plans. As we develop strategies, we will continue to take the approach of doing what’s best for our customers and the environment. We are fortunate that we operate in a state that has a long history of energy efficiency programs, environmental stewardship and support for renewable energy. There’s a some sort of excitement as you work to transform into the company our customers need as to be not only now, but well into the future. A major improvement to our customer experience is happening as we went live with our new customer care and billing systems for Wisconsin customers several weeks ago. And planned to go live with Iowa customers in early 2016. A $110 million investment replaces vintage mainframe systems from the 1980s. They will make communications with our customers more convenient and timely. We have already accomplished a great deal as a company as we transition to a cleaner more modern energy system. I want to thank a lot of employees for their creativity and finding cost-effective solutions in serving our customers well. Let me summarize the key message for today. We had a solid first three quarters of the year and are well positioned to deliver on this year financial and operating objectives. Our plan continues to provide for [audio gap] 5% to 7% earnings growth and 60 to 70% common dividend payout target. Our target 2016 dividend increased by 7% over the 2015 target dividend. Successful execution on our major construction projects includes completing projects on time and at a below budget in a safe manner. Work with our regulators consumer advocates, environmental groups and customers in a collaborative manner. We shape our organization to be lean and faster while keeping our focus on serving our customers and being good partners in the community. We will continue to manage the company to strike a balance between capital investment, operational and financial discipline, and cost impacted customers. Thank you for your interest in Alliant Energy and I will now turn the call over to Tom. Tom Hanson Good morning everyone. We have released third quarter earnings last evening with our non-GAAP earnings from continuing operations of a $1.63 per share and our GAAP earnings from continuing operations to a $1.59 per share. The non-GAAP to GAAP difference is due to a $0.04 per share charge resulting from approximately of 2% employees accepting voluntary separation packages as we continue focusing on effectively managing cost for our customers. 2015 third quarter non-GAAP earnings are $0.23 higher than the third quarter 2014 primarily due lower retail electric customer billing credits at IPL, higher electric sales and lower energy efficiency cost recovery amortization to WPL. Higher quarter-over-quarter EPS was partially offset by higher electric transmission service expense at WPL and the delusion impact of shares issued in 2015. Comparisons between third quarter of 2015 and 2014 earnings per share are detailed on slides 6, 7 and 8. For the first six months of this year we experienced virtually no temperature normalized retail sales growth. We are pleased that the third quarter brought an estimated $0.06 per share increase in earnings resulting from higher temperature normalized sales. Some of the growth experience in the third quarter of 2015 for residential and commercial is due to an earlier fall grain harvest in 2015 when compared to 2014. Of the retail sectors industrial continues to be the largest sales growth driver year-over-year. Quarter-over-quarter we have recognize in earnings increased of $0.05 per share from higher sales due to temperatures since the third quarter of 2014 had approximately 20% fewer cooling degree days compared to normal. However, the first three quarters 2015 temperatures were close to normal. Year to date non-GAAP earnings are tracking in line with the 2015 earnings guidance range comparing non-GAAP earnings from continuing operations for the first nine months of 2015 versus 2014, earnings are up 8% year-over-year. Drivers of the differences between the statutory tax rates for IPL, WP&L and AEC and the actual forecasting effect the tax rates for 2015 and 2014 is profiled on slide 9. Now let’s review our 2016 guidance. Last evening we issued our consolidated 2016 guidance range of $3.60 to $3.90 earnings per share. A walk on the mid points of 2015 to 2016 estimated guidance range is shown on slide 10. The key drivers for the 5% growth in earnings relate to infrastructure investments including higher AFUDC related to the construction of the Marshalltown generating station. The 2016 guidance range assumes normal weather and modest retail sales increases of approximately 1% for IPL and WP&L when compared to 2015. Also the earnings guidance is based upon the impact of IPLs and WP&Ls previously announced retail electric base rate settlements. The IPL settlement reflected rate based growth primarily from placing the Lansing scrubber in service in 2015 and the Ottumwa baghouse scrubber and performance improvement in service in 2014. The increase in revenue requirements related to rate base editions is offset by the elimination of DAEC purchase power capacity payments. In 2016 IPL expects to credit customer bills by approximately $10 million. By comparison the billing credits in 2015 are expected to be approximately $25 million. During 2016 IPL expects to provide tax benefit billing credits to electric and gas customers with approximately $62 million when compared to $72 million in 2015. As in prior years the tax benefit riders have a quarterly timing impact, but are not anticipated to impact full year 2015 and 2016 results. The WP&L settlement reflected electric rate base growth for the Edgewater unit 5 baghouse projected to be placed in service in 2016. The increase in revenue requirements in 2016 for these and other rate base additions were completely offset by lower energy efficiency cost recovery amortizations. Also included in WP&L’s rate settlement was an increase in transmission costs primarily related to the anticipated allocation of SSR costs. As a result of a third quarter issued after the settlement the amount of the transmission cost billed to WP&L in 2016 will be lower than what was reflected in the settlement. Since the PSCW approved escrow accounting treatment for the transmission cost. The difference between the actual cost billed to WP&L and those reflected in settlement will accumulate in a regulatory liability. We estimate that this regulatory liability will have a balance of approximately $35 million by the end of 2016. We view this regulatory liability as another mechanism we can use to minimize future rate increases for Wisconsin retail electric customers. Retirement plan expense is currently expected to be approximately $0.03 per share higher in 2016 largely due to lower than expected asset returns forecasted for 2015. These amounts will be updated at year end 2015 when determining the actual 2016 plan expense. Given the changes expected in income tax expense in 2016 slide 11 has been provided to assist you in modeling the forecasted 2016 effective tax rates for IPL, WP&L and AEC. Turning to our financing plans cash flows from operation are expected to be strong given the earnings generated by the business. We also will benefit given we do not expect to make any material federal income tax payments in 2016. These strong cash flows will be partially reduced by credits to customer bills in accordance with IPL’s tax benefit riders and IPL’s customer billing credit resulting from the settlement. We believe that with our strong cash flows and financing plans we will maintain our target liquidity and capitalization ratios as well as high quality credit ratings. Our 2016 financing plan assumes will be issuing approximately $25 million of new common equity through our shareowner direct plan. The 2016 financing plan also anticipates issuing long-term debt including up to $300 million at IPL and up to $310 million at the [parent] and Alliant Energy Resources. The $310 million of proceeds at the parent and Alliant Energy Resources are expected to be used to refinance maturity of term loans. We may adjust our plans as deemed prudent if market conditions warrant and as our debt and equity needs continue to be reassessed. As we look beyond 2016 our equity needs will be driven by the proposed riverside expansion project. Our forecast assumes that the capital expenditures for the riverside expansion in 2017 and 2018 will be financed primary by a combination of debt and equity. Our current financing forecast assumes no extension of bonus depreciation deduction. Under this assumption Alliant energy will be making modest federal tax payments starting in 2017 it will continue to use net operating losses for the next two years as offset to federal taxable income. We have several current and planned regulatory dockets of notes for the rest of 2015, 2016 and 2017 which we have summarized on 512. Later this year we anticipate a decision from PSCW on the 2016 fuel monitoring level. Next year we anticipate a decision on the Wisconsin riverside expansion proposal and on the Iowa natural gas pipeline. Also in 2016, we plan to file a emissions planned budget in Iowa and the Wisconsin retail electric and gas base case per rates in years 2017 and 2018. The next Iowa retail electric and gas base rate cases are expected to be filed in the second quarter of 2017. We very much appreciate your continued support of our company and look forward to meeting with you at EEI. The slides to be discussed at EEI are posted on our website as we do with all of our investor relations conference slides. At this time I will turn the call back over to the operator to facilitate the question-and-answer session. Question-and-Answer Session Operator Thank you, Mr. Hanson. [Operator Instructions] And we will take our first question from Andrew Weisel with Macquarie Capital. Andrew Weisel Good morning guys. First question is on the [four set] charged for voluntary employee separation. What does that impact on? How is that going to impact OEMs going forward? Tom Hanson That will be a reduction to ONM on going forward and that’s reflected in our forecast in terms of 2016 guidance. Andrew Weisel And what is the forecast for ONM next year? Tom Hanson We are assuming that it will be about a 2% increase now recognizing that this excludes the normal energy efficiency cost as well as any of the regulatory amortization that flow through ONM as well. Andrew Weisel Got it. Next a couple of questions on riverside, first in terms of the CapEx you laid out. I see that you lowered it for next year spending by that 95 million can you give little more detail on that. Is that assuming a little bit of a delay when the construction begins? Pat Kampling No not at all. Now that we are getting bids from the contractors, this is the timing of the bids, the cash flow that they are laying out while we changed the not only did we change the total number but we changed the timing of the payments. Andrew Weisel Okay. The total number if I heard you correctly was only down about 20 million is that right? Pat Kampling No, it’s down, if it goes from mid-point to mid-point it’s down 50 million, 50. Andrew Weisel Okay. Then next question I have is with the potential for PTA instead of riverside, if riverside were to be either delayed or canceled could you talk about how you might be able to back fill some of that spending in terms of what might go in and how soon you will be able to show those results? Pat Kampling Yes, Andrew it’s a little preliminary first to give a backup for capital for riverside right now. It would be honest to tell you though for 2016 it would be tough to fill the capital that we have laid out in 2016, but we’ll discuss as we get further down the year in 2016 what the back fill could possibly be. Andrew Weisel Okay. Thank you very much. I’ll let other people ask questions. Operator And we will take our next question from Brian Russo with Ladenburg Development. Brian Russo Good morning. Pat Kampling Good morning Brian. Brian Russo Just in terms of the 2016 guidance what kind of earned ROE are you seeing at IPL and WP&L maybe at the mid-point? Tom Hanson We are assuming that we would earn our authorized returns in both jurisdiction. Brian Russo Okay. So what gets you to the high end of the range? Pat Kampling The high end sales are higher than we expect. We currently expect 1% increase in sales but if they come in higher it would definitely bring us to the high end of the range. Brian Russo Okay and then as you we looked into 2017 Marshalltown will be added base rates and I believe correct me if I am wrong but that’s the allowed ROEs of 11.4%. So I would imagine that your earned ROE in 2017 will be enhanced relative to the earned ROE assumption in 2016. Is that the way to look at it? Pat Kampling Brian so the allowed ROE for Marshalltown is 11%, 11.0. Brian Russo Okay. Pat Kampling But as we go through internal and final rates you will see our earned returns increase at Iowa. Brian Russo Okay great. Thank you very much. Operator And Ms. Gill there are no further questions at this time. Susan Gille With no more questions this concludes our call. A replay will be available through November 13, 2015 at 888-203-1112 for U.S. 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 Investors 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 question. Operator And ladies and gentlemen that does conclude today’s conference. Thank you for your participation. Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited. THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY’S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY’S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY’S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS. If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com . Thank you!