Alliant Energy Corp (LNT) 2011 Q3 法說會逐字稿

Thank you for holding, ladies and gentlemen and welcome to the Alliant Energy third quarter 2011 earnings and 2012 guidance conference call. At this time, all lines are in a listen-only mode. Today's conference is being recorded. I would now like to turn the call over to your host, Susan Gille, Manager of Investor Relations at Alliant Energy.

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. With me here today are Bill Harvey, Chairman and Chief Executive Officer; Pat Kampling, President, Chief Operating Officer; and Tom Hanson, Chief Financial Officer; as well as other members of the senior management team. Following prepared remarks by Bill and Tom, we will have time to take questions from the investment community. We issued a news release this morning announcing Alliant Energy's third quarter 2011 earnings and 2012 earnings guidance and 5 year capital expenditure plan.

This release, as well as, supplemental slides that will be referenced during today's call are available on the Investor page of our website at www.alliantenergy.com. Before we begin, I need to remind you the remarks we make on this call and our answers to your questions include Forward-looking Statements. These Forward-looking Statements are subject to risks that could cause actual results to be materially different. Those risks include among others matters discussed in Alliant Energy's Press Release issued this morning and in our filings with the Securities and Exchange Commission. We disclaim any obligation to update these Forward-looking statements.

In addition, this presentation contains non-GAAP financial measures. The reconciliation between the non-GAAP and GAAP measures are provided in our supplemental slides which are available on our website at www.alliantenergy.com. At this point, I'll turn the call over to Bill.

Thank you, Sue and good morning, everyone. We want to be efficient with your time and so my comments will first focus briefly on our 2011 results thus far. And then I will provide details on the drivers behind the 2012 financial guidance and 5 year capital expenditure plan we announced this morning. Later in the call, Tom will discuss third-quarter results in more detail, as well as, important financial and regulatory matters. As noted in our press release, we posted supplemental slides on our website to assist in your 2012 guidance and third-quarter 2011 earnings analysis. You may want to have these slides available for reference during our remarks. Before addressing 2012 guidance, let me comment briefly on the quarter and year-to-date results.

But for the third quarter loss at RMT, those results are in line with our expectations. Our utilities continue to provide safe, reliable service to our customers and are delivering earnings in line with guidance issued earlier this year. At the parent and IP&L, the accounting for the tax benefit rider causes considerable quarter-over-quarter variation in earnings-per-share, which will even out by year's end. In the third quarter, $0.10 of the underperformance at the parent level is attributable to this necessary accounting variability. Tom will cover this in greater detail.

In our non-regulated businesses, transportation and non-regulated generation continue to produce solid financial results. The negative performance at RMT, driven largely by a subcontractor performance failure on a solar project in New Jersey, resulted in a $0.13 loss for the quarter. This loss exceeds the $0.09 estimate previously announced. We reduced our non-regulated and parent guidance for the year to reflect this circumstance. The New Jersey solar project will be completed this month and we will put this difficult experience behind us.

Let's move to 2012. The midpoint of our 2012 earnings guidance is $2.95 per share. A $0.15 increase over the midpoint of our revised 2011 guidance, shown on supplemental slide 2. Our 2012 utility guidance reflects stable economies and normal weather conditions, but flat weather-normalized electric sales in Iowa, Wisconsin and Minnesota for 2012, compared to 2011. Forecasted 2011 and 2012 weather-normalized sales, by customer class, may be found on supplemental slide 3.

Next year's projected utility earnings growth is primarily a result of lower operation and maintenance expenses from operating modifications and efficiencies gained throughout the business. 2012 earnings will also benefit from lower tax expense and higher AFUDC. These positive drivers are expected to be partially offset by increased capacity and depreciation expenses. The summary of the guidance walk, from 2011 to 2012, is available on supplemental slide 4.

The 2012 guidance for our non-regulated and parent businesses increased $0.15 from our updated 2011 guidance. Since the $0.13 solar project loss at RMT is not expected to repeat in 2012. 2012 guidance assumes RMT will contribute $0.04. Our targeted dividend payout ratio is 60% to 70% of utility earnings. Our current approved dividend is $1.70. The board will discuss the 2012 dividend at its December board meeting. Now let's discuss our 5 year capital expenditure plan. The financial guidance issued this morning projects 2011 through 2015 capital expenditures of $4.7 billion, compared to our 2010 10-K. The capital expenditure estimate has increased for 2012 and decreased for 2013, largely due to a revised timeline for the purchase of Riverside.

Later this month, WPL plans to file an application with the Public Service Commission of Wisconsin for the purchase of Riverside in the fourth quarter of 2012. Riverside is an existing 600-megawatt combined-cycle, natural gas-fired plant located in Beloit, Wisconsin. WPL currently has a purchase power agreement with Calpine for 490 megawatt's from this facility and holds an option to purchase the entire plant. Through this purchase, WPL would increase its gas-fired capacity by approximately 110 megawatt's, which should assist us in addressing WPL's future capacity needs. WPL also currently has a purchase power agreement with Dominion Resources for capacity and energy from the Kewaunee nuclear facility that is set to expire in the end of 2013. We are in ongoing negotiations with Dominion regarding a new agreement.

IPL also currently has a purchase power agreement with NextEra Energy for capacity and energy from the Duane Arnold Nuclear Facility that is set to expire in February 2014. We believe it is unlikely that we will renew this purchase power agreement with NextEra Energy. A schedule of the various capacity payments expected to be made to Calpine, Dominion and NextEra, which exhibits a considerable decrease in capacity payments in 2014, is shown on supplemental slide 5. The decline in these capacity payments plays an important role in how we plan to manage customer rates in the face of the rate-based editions driven by our capital expenditure plan. At WPL, we are replacing capacity payments with operation and maintenance expenses and a return of and on the proposed Riverside purchase. So, we do not see a material impact on Wisconsin customer rates as a result of this acquisition.

At IPL, we are continuing the due diligence and planning related to construction of a new 600-megawatt natural gas, combined-cycle generating facility. The capital expenditure plan presented today anticipates expenditures related to that facility to begin in 2014. The current estimated cost of the project is between $650 million and $750 million. By constructing this plant, we would be replacing capacity payments with operation and maintenance expenses and a return of and on an owned asset again, resulting in a minimal rate impact to Iowa customers. Regulatory approvals will be required to construct the proposed plant and we expect those filings to be made in mid-2012. If the project moves forward, our plans indicate an anticipated in service date no earlier than 2016.

In addition, to the purchase and construction of gas generation, our capital expenditure plan calls for installing emission control equipment to ensure compliance with the stricter environmental rules. We plan to equip our larger plants, which we call Tier 1 units, with a full array of emission control equipment. We have provided a summary of our Tier 1 projects in supplemental slide 6. As you can see from the slide, we plan on investing approximately $850 million, in our Tier 1 plants, between 2011 and 2015. The installation of structural steel and foundations for the SCR is underway at WPL's Edgewater Unit 5. The SCR is expected to be in service in 2013. The remainder of WPL's current Tier 1 environmental compliance plan includes installation of a scrubber and baghouse at both units of the Columbia generating station and at Edgewater 5. The Columbia project has received approval from the Wisconsin Public Service Commission and is expected to be in service in 2014. An engineering firm has been selected and engineering and design work is well underway. The Edgewater 5 scrubber and baghouse will require approval from the Public Service Commission of Wisconsin. This project is in the preliminary planning phrase and is currently expected to be placed in service in 2017.

IPL's Tier 1 emissions control projects also continue to move forward. Engineering firms are engaged in the initial design and specification phase for the scrubber and baghouse at the Ottumwa generating facility. The Ottumwa project is expected to be placed in service in 2014. Engineering has also begun for the scrubber project at IPL's Lansing unit 4, which is expected to be in service in 2015. In addition, installation of a baghouse, SNCR, and scrubber at Neal Units 3 and 4 will start this year. With estimated in-service dates for those controls expected in 2013 and 2014. IPL co-owns plants-- these plants, which are operated by MidAmerican.

Let's move on to our Tier 2 plants. Our current capital expenditure projections for 2011 through 2015, include a total estimate of only $100 million for environmental controls at these plants. We have defined Tier 2 as plants which will not be fully retrofit with emission control equipment and for which we are exploring lower-cost emission options. The future of these plants is dependent on the evolving environmental compliance rules, as well as, operational factors. Before handing off to Tom, I have a closing observation concerning RMT. We've said before that RMT is not core to our business, but that we value its robust participation in the renewable space, since we expect renewable to be a part of the US energy landscape for decades to come.

Over the last year, we've re-engineered the business to narrow its focus and enhance its profitability and the business has new leadership. While we believe the business has re-engineered, it's poised to succeed. The setback experienced this quarter at the solar projects in New Jersey will rightfully cause us to reassess our expectations of this business. We very much appreciate your continued support of our Company and look forward to meeting with many of you at the EEI conference next week. At this time, I will turn the call over to Tom.

Thanks, Bill and good morning to everyone. Let's start with a recap of third quarter results. We realized earnings this morning with our GAAP earnings from continuing operations of $1.10 per share. However, adjusting for items we typically exclude from the guidance, third quarter 2011 adjusted or non-GAAP earnings were $1.10 -- excuse me, $1.12 per share. The third quarter 2011 adjustment relates to charges for a small portion of IPL's forward emission allowance contracts. Comparisons between the third quarter 2011 and 2010 earnings-per-share are detailed on supplemental slides 7, 8 and 9. The utilities generated GAAP earnings of $1.35 per share in the third quarter of 2011, compared to $1.32 per share in the third quarter of 2010.

The biggest drivers of the increase in utility results include higher earnings due to IPL's tax benefit rider, a retail-based rate increase at WPL, warmer weather and lower capacity payments due to Kewaunee's PPA. These positive EPS drivers were offset by income tax benefits from the completion of tax audit in the third quarter of 2010, higher depreciation operating expenses for the Bent Tree wind project, under recovery of WPL retail fuel expense and lower residential weather-normalized electric sales. The non-regulated and parent businesses generated GAAP loses from continuing operations of $0.25 per share in the third quarter 2011, compared to income of $0.05 per share in the third quarter 2010. Biggest drivers of the decrease in non-regulated and parent results; include losses related to the solar subcontractor issue at RMT, and the impact of the IPL tax benefit rider at the parent.

As we discussed in the second quarter earnings call, the accounting for IPL's tax benefit rider has given rise to considerable quarter-over-quarter variation in earnings-per-share at both IPL and the parent for 2011. But, is not expected to have any impact on total year's earnings. On supplemental slide 10, we have provided an estimate of the earnings impact for both IPL and the parent for each quarter of 2011. The tax benefit rider provides a credit to customers at a rate per kilowatt hour used. However, due to accounting rules, the tax credit is recognized each quarter based upon the quarterly profile of estimated annual income. IPL earns a greater portion of its income in the third quarter, due to summer rates and air conditioning load a much larger portion of the annual tax credit for IPL is recognized in the third quarter.

On the consolidated financials, the tax credit for each quarter is based on the estimated annual consolidated income, which has a different profile than IPL. The parent's EPS impact of the tax benefit rider is the difference between the quarterly tax credit reflected on IPL's financials and the quarterly tax credit reflected on consolidated financials. IPL's net impact of the tax benefit rider for the third quarter was income of $0.12 per share and the parent EPS impact was a loss of $0.10 per share. The key take away from the schedule is that both of these amounts are a result of timing and at year end the tax benefit rider will not have an impact on earnings.

Moving to the economy in our service territory. The 2011 weather-normalized sales to our industrial customers are increasing modestly while, like utilities in our region, residential sales are decreasing when comparing 2011 to 2010 weather-normalized sales. These trends are illustrated on supplemental slide 3.

As noted in the earnings release issued this morning and on supplemental slide 2, we have adjusted Alliant Energy's 2011 earnings guidance with the midpoint estimate at $2.80 per share, comprised of the utilities midpoint of $2.75 per share and the non-regulated and parent at $0.05 per share. The guidance assumes normal weather for the last quarter 2011. Our 2011 earnings guidance of $0.05 for non-regulated and parent is comprised of the following key items; our transportation business is on track to contribute $0.12 and the non-regulated generation is expected to contribute $0.06. These items are offset by a loss of $0.12 from RMT, due to the subcontractor issue Bill described earlier. Our current liquidity position is strong, totaling approximately $690 million, comprised of over $40 million of cash and marketable securities, and approximately $640 million of available capacity under a credit facilities in sales of receivables program.

We currently have no commercial paper outstanding at IPL or WPL and less than $25 million of commercial paper outstanding at the parent. We plan to finance our future capital expenditure plan with cash flows from operations, short and long-term debt and equity. Cash flows from operations are expected to be strong in the next few years. Since we do not expect to make any material federal income tax payments through 2014 due to our tax initiatives and the extension of the federal tax benefits. But, these cash flows benefits will be partially offset with the credits to customers' bills resulting from IPL's tax benefit rider. We forecast the credits to customers' bills will be approximately $60 million and $80 million in 2011 and 2012 respectively.

For their short term borrowing needs, IPL and WPL are seeking regulatory authorization in advance of renewing their credit facilities which expire in November of 2012. WPL filed a request with the PSC for authorization to issue up to $400 million of short-term borrowings. In addition, WPL also requested authorization from the PSC to issue up to $300 million for a breech facility to finance the acquisition of Riverside. Later today, the PSC will be meeting to discuss the draft, certificate of authority and order relating to these requests. IPL received the necessary FRIC authorization in October to issue short-term borrowings beyond 2011. We continue to evaluate the need to issue equity to finance our future capital expenditure plan. The primary factors in determining our equity needs and timing will be; the magnitude of our capital investment opportunities, ensuring we maintain reasonable capitalization ratios and credit metrics and prevailing market conditions. The anticipated bilious need to issue any material equity maybe in 2013 to replace the short-term financing for the acquisition of the Riverside facility.

One last note on our financing plans. Based on our expected valuation of our pension assets at the end of the year, we may make contributions to our pension plan in 2011 to mitigate any increases in 2012 pension costs. We have assumed no pension expense increase in our 2012 earnings guidance. We have several current and planned regulatory dockets of note. In Wisconsin, we filed a retail-only fuel case in May of 2011. The filing included a fuel plan for 2012, under Wisconsin's new fuel rules, which became effective on January 1st of this year. The new fuel rules allow for the recovery of emission controlled chemicals and allowances within the fuel recovery mechanism. We updated our filing in August after assessing the cross state air pollution rule impacts on expected 2012 emission compliance costs. Our current request with the PSC is to increase annual electric rates by $20 million. Earlier this week, intervener and staff testimony was filed. We are expecting the decision in December with new rates effective January 1, 2012.

Our 2012 earnings guidance assumes no under collection or over collection of fuel costs at WPL in 2012. We are currently valuing the need to file a Wisconsin retail based case in 2012 with a 2013 and '14 test year. The primary drivers of the 2013 and '14 test year would be a partial recovery of the construction work-in-progress balanced with the emission control projects at Edgewater 5 and Columbia units. As Bill noted earlier, the anticipated Riverside facility acquisition is not expected to have an impact on customer rates. Since the Edgewater 5 emission control projects are to be placed in service in 2013, and the Columbia emission control projects to be placed in 2014, there's a possibility that the rate case may be open in 2014 to adjust rates for those rate-based editions.

Finally, I would like to inform you of a few items which should assist you in modeling our future earnings. On slide 11, we have highlighted the drivers for the change in our respective tax rate in 2011. Also, we have provided our expected effective tax rate included in our 2012 earnings guidance. These 2012 effective tax rates reflect the impact of additional tax benefits from the tax benefit rider and increase production tax credits expected from the wind projects. In modeling the quarter-over-quarter impact of the tax benefit rider, we suggest you follow a similar profile and experience in 2011 and reflected on supplemental slide 10. At this time, I will turn the call back over to the operator to facilitate the question and answer period.

At this time the Company will open up the call to questions from members of the investment community. Alliant Energy's management will take as many questions as they can within the 1 hour time frame for this morning's call. Brian Russo with Ladenburg Thalmann

Hi, good morning.

Hey, Brian.

Good morning, Brian.

Just on the 2012 drivers, it looks like reduction in O&M expense of positive $0.15 is a fairly big driver. I know you guys have done a pretty good job in the last couple years of controlling O&M. Can you just provide a little more insight as to your confidence level in achieving that $0.15 of growth?

The confidence level is extraordinarily high. We will achieve it and there's no question in my mind that we will achieve it. A lot of it is just continuous improvement that occurs in the business. There's an awful lot going on in the industry today and certainly a lot going on in our Company, today as well. An illustration of the kinds of things that are creating those cost-saving opportunities relate to a Tier 2 plant in Dubuque, Iowa. It's already been converted from coal to natural gas and that substantially reduces the operating costs of the facility. While it seems like a big number, our confidence in realizing it is driven by inherent confidence in our ability throughout the organization. But in addition, there are quite noteworthy changes, like the one I just mentioned, that are affecting our O&M profile as well, Brian.

Okay. And also, does the midpoint of your '12 guidance assume zero impact for pension expense?

Yes.

Okay. So if there is some expense incurred, it is not going to move the midpoint of your guidance. That might just bring it to the lower end and/or the higher end, correct?

That's correct.

Okay. And also on the Riverside acquisition it seems that it is being accelerated by about 6 months. We should expect a full year of earning and return on that in '13, versus a partial year now?

That is correct.

Okay. Great. What are the drivers of the revised load expectations in Iowa and Wisconsin for '12?

Well, the predominant change that we have seen is a modest decline in the level of residential sales that's occurring. It's not just IPL, it is WPL, as well. It's a little more pronounced at IPL. I think consistent with the experience being had by so many companies in this economy, we are beginning to see the economy impact the electric consumption habits of the residential customer. That is not a good thing for us or for anybody. I guess the happy side of the equation is that we continue to see growth on the industrial side, which we hope is a more of a leading versus a lagging indicator of what is going on in our economies. But, we've got soft residential sales. That is the single biggest variable by a wide margin, Brian.

And then just lastly, any progress on the Merchant Wind Farm?

It's underway. We've not had any setbacks at all, in terms of its development. So, we are optimistic that it will remain on schedule and get built or at or below what we estimated.

You are still looking to sign a PPA is that correct?

Yes we are, there's nothing to report on that front, although there is robust activity going on and we hope to have something to report on that, if not by the year-end then certainly by the time we issue year-end results.

Okay. Great. Thanks a lot.

Jay Dobson with Wunderlich Securities.

Good morning.

Hi, Jay.

Bill, I was hoping to revisit the last comment you had in your prepared remarks. You used the word reassess on RMT. Can you elaborate on what you're thinking there, I know you have always said it is non-core and you and I have had a number of conversations about this business? What exactly are you contemplating or at least, considering there?

As you would expect, a wide spectrum of possibilities. Number 1, we continue to own and operate the business and capitalize on the reengineering work, that has been accomplished in the business. And give the new leadership a chance to prove itself, which we are optimistic than it can do. Alternatively, we could look to partner with someone else in the business to get the business to a greater level of scale in the marketplace than it is today. That would have the effect of reducing the risk of having a single project, have a dramatic impact on the financial performance of the enterprise. And, of course, the third alternative is we could sell the business. So we are going to be looking at all of those options.

Got you. And similar to earlier question, your confidence level in the $0.04, understanding it has been a difficult environment for RMT's business over the last couple years. I feel like we have been talking about $0.04 for a number of years and haven't quite gotten there.

Our record is not very good in the last couple of years, is it? Our confidence is good if we execute efficiently on projects, we ought to be able to produce $0.04 of earnings in the business. That said, you never execute perfectly, but the book of business that is in place going into next year is good. It is all wind. There are no solar projects in the booked book of business. So far, for RMT next year although there are abundant opportunities for there to be solar projects, we have not booked any of them to date. Our confidence, I would call it good, but certainly shaken by the experience of the last couple of years.

Fair enough. What is causing the acceleration in the Riverside acquisition? I thought that was pretty well lined out in the call option you had. What is allowing you to call it earlier.

It is. Frankly, we would like to own the property sooner rather than later. We would like to be financing the acquisition of the property in the interest rate environment that seems to be prevailing in the world today. It is variables like that, that auger us to accelerate the acquisition of the asset. And those discussions with Calpine are ongoing. We are optimistic that we are going to be able to reach agreement with them to accelerate the purchase of the facility. We, of course, have to respect the needs of the Wisconsin Public Service Commission, in terms of reviewing our request to purchase the asset. We are hopeful that the Commission will find a way to deal with that request expeditiously. Those are nothing more intriguing than that driving the acceleration in the (multiple speakers) purchase.

Does the price change, Bill?

No. Does not.

And then on equity, Tom, you accelerated it. It was previously through-- no need through the end of 13 and now you're saying in '13. Would pension contribution, you are talking about for in this year- early next, impact that and how would that from a sensitivity perspective drive timing?

With the rebounding of the market here recently, and the anticipated pension contribution of 2011, will not have any impact on our future equity needs. With respect to the timing of the equity, what we want to do is tie it really to the larger projects, whether it be the likes of the Riverside or the Iowa gas plant, recognizing that's dependant on certain regulatory activities, so the schedule might slide a little bit. We thought it was better to try to target equity needs to those events, as opposed to maybe just an artificial date.

Perfect. Then again considering that you'd be adding those things rate-based, you ought to pretty quickly get recovery of equity.

That's correct.

Got it. Then last detail, Tom, the tax rate at 17% was maybe 200 Basis Points lower than I expected. But, you mentioned the PTC's, which I assume are associated with the commercial operation of Franklin County. Is that sort of the impact, 200ish Basis Points or maybe true us up? I know you set it back at 18% and I assumed that went higher in '12, and instead it is sunk lower.

We are going to have additional production tax credits in 2012, above what we anticipated in 2011. That is certainly one of the primary drivers.

And that's Franklin or that's existing assets plus Franklin are all going there.

No. This would be principally Bent Tree. Keep in mind, the Franklin project is going to be constructed in '12 and we do not anticipate that is going to be available until 2013.

Okay. Fair enough. Perfect. Thanks so much.

You're welcome.

Alex Kania from Bank of America.

Just a follow-up off of Jay's question on the Franklin County Wind. I think previously you had suggested you would be taking an ITC grant on that. Do you have any kind of gain on that in 2012 or do you expect that benefit to be in 2013?

Our plan is still to take the grant and the expectation is that will be recognized in 2013. And forward.

Great. When you are talking about equity and tying with new asset investments, can you talk a little bit about your thoughts on balance sheet. What any ratios you are targeting in particular, to get some sense of how big this would end up being?

When we look at each of the utilities, we certainly have a desire to maintain the equity levels consistent with what we have in rates currently. Recognizing in both jurisdictions we'll be adding a fair amount of CapEx and some of that be funded with debt. But, we need to recognize-- certainly the desire is to continue to keep those equity levels consistent with what we are experiencing now.

Got it. Thank you, thanks very much.

You're welcome.

We have a follow-up question from Brian Russo with Ladenburg Thalmann.

Sorry, if I missed this earlier. But in 2012, the $0.15 to $0.25, can you break that down between the transportation sub and RMT and then parent?

You bet, Brian. Transportation about $0.12; RMT, $0.04; Sheboygan Falls, the unregulated generation; assets, $0.06; Franklin County, $0.01; the parent cost us $0.02.

So, you are assuming $0.01 for the Franklin County Wind Farm contribution?

Yes, that would be the capitalized interest during the construction period that we are recognizing in 2012.

Okay. Understood. Thanks for that. Is there anything ongoing on the tax planning side or with bonus depreciation that might push out the potential need for equity in '13 or have you guys done everything you can?

We captured for the most part everything that is available to us.

Okay. Thanks a lot.

(Operator Instructions) John Alley with Decade Capital.

Quick question for you guys, could you explain why the tax rate was more than 2011 or the PTC's were greater than in 2011? I'm not sure I understood that.

We do have at Bent Tree some transmission limiting factors. We continue to see improvement in that situation. We would expect that there will be additional output in 2012. That will result in additional production tax credits that we will be able to capture in 2012.

Got you. Will these benefits be ongoing post-rate freeze or is this only a benefit to the shareholders for the next couple years?

No. That should be ongoing. Certainly, that is our expectation.

Okay. Presumably they would calculate that in the revenue requirement in the next rate case?

Yes.

Okay, I just wanted to make sure. Thank you. And that was it. Thank you.

Thank you.

Eric McCarthy with Praesidis Asset Management

Good morning. I apologize if I missed some of this. As a follow-up to Brian's question that he just asked, can you provide a breakdown of the non-regulated businesses in '11 similar to how you just gave it for how you are forecasting it for '12?

Sure, transportation business will earn about $0.12; RMT is going to lose $0.12; the Sheboygan Falls unregulated generating asset will earn $0.06; the parent will cost $0.01.

Okay. Again, I'm sorry if you went over this as well, the O&M cut you provided in the guidance for next year, what is the split of that between Wisconsin and Iowa?

Boy, I cannot answer that right now. Can we follow-up with you on that? I just don't have the answer here. Tom, do you have it? We don't have it, we don't have that answer here, but we will be sure to get it to you.

Okay. Great.

I apologize for that.

We have a follow-up question from Jay Dobson with Wunderlich Securities.

Hey, Tom, following up on that last question, the hold code costs at $0.01, I assume that excludes the holding company debt. So, that's a pure O&M or SG&A?

No. That includes it, Jay.

That includes it, thank you.

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

With no more questions, this concludes our call. A replay will be available through November 10, 2011 at (888)203-1112 for US and Canada or (719)457-0820 international. Callers should reference conference ID 824-4179. In addition, 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. Thank you for your continued support of Alliant Energy and feel free to contact me with any follow-up questions.

This concludes today's conference. Thank you for your participation.