Alliant Energy 10-Q 2022-03-31

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Name of Registrant, State of Incorporation, Address of Principal Executive Offices, Telephone Number, Commission File Number, IRS Employer Identification Number

ALLIANT ENERGY CORPORATION

(a Wisconsin Corporation)

4902 N. Biltmore Lane

Madison, Wisconsin 53718

Telephone (608) 458-3311

Commission File Number - 1-9894

IRS Employer Identification Number - 39-1380265

INTERSTATE POWER & LIGHT COMPANY

(an Iowa corporation)

Alliant Energy Tower

Cedar Rapids, Iowa 52401

Telephone (319) 786-4411

Commission File Number - 1-4117

IRS Employer Identification Number - 42-0331370

WISCONSIN POWER & LIGHT COMPANY

(a Wisconsin corporation)

4902 N. Biltmore Lane

Madison, Wisconsin 53718

Telephone (608) 458-3311

Commission File Number - 0-337

IRS Employer Identification Number - 39-0714890

This combined Form 10-Q is separately filed by Alliant Energy Corporation, Interstate Power and Light Company and Wisconsin Power and Light Company. Information contained in the Form 10-Q relating to Interstate Power and Light Company and Wisconsin Power and Light Company is filed by each such registrant on its own behalf. Each of Interstate Power and Light Company and Wisconsin Power and Light Company makes no representation as to information relating to registrants other than itself.

Securities registered pursuant to Section 12(b) of the Act:

Alliant Energy Corporation, Common Stock, $0.01 Par Value, Trading Symbol LNT, Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Alliant Energy Corporation - Yes ☒ No ☐

Interstate Power and Light Company - Yes ☒ No ☐

Wisconsin Power and Light Company - Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Alliant Energy Corporation - Yes ☒ No ☐

Interstate Power and Light Company - Yes ☒ No ☐

Wisconsin Power and Light Company - Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Alliant Energy Corporation - Large Accelerated Filer ☒ Accelerated Filer ☐ Non-accelerated Filer ☐ Smaller Reporting Company ☐ Emerging Growth Company ☐

Interstate Power and Light Company - Large Accelerated Filer ☐ Accelerated Filer ☐ Non-accelerated Filer ☒ Smaller Reporting Company ☐ Emerging Growth Company ☐

Wisconsin Power and Light Company - Large Accelerated Filer ☐ Accelerated Filer ☐ Non-accelerated Filer ☒ Smaller Reporting Company ☐ Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Alliant Energy Corporation ☐

Interstate Power and Light Company ☐

Wisconsin Power and Light Company ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Alliant Energy Corporation - Yes ☐ No ☒

Interstate Power and Light Company - Yes ☐ No ☒

Wisconsin Power and Light Company - Yes ☐ No ☒

Number of shares outstanding of each class of common stock as of March 31, 2022:

Alliant Energy Corporation, Common Stock, $0.01 par value, 250,813,728 shares outstanding

Interstate Power and Light Company, Common Stock, $2.50 par value, 13,370,788 shares outstanding (all outstanding shares are owned beneficially and of record by Alliant Energy Corporation)

Wisconsin Power and Light Company, Common Stock, $5 par value, 13,236,601 shares outstanding (all outstanding shares are owned beneficially and of record by Alliant Energy Corporation)

TABLE OF CONTENTS

			Page
Definitions			1
Forward-looking Statements			1
Part I. Financial Information			3
Item 1. Condensed Consolidated Financial Statements (Unaudited)			3
Alliant Energy Corporation			3
Interstate Power and Light Company			6
Wisconsin Power and Light Company			9
Combined Notes to Condensed Consolidated Financial Statements			12
1. Summary of Significant Accounting Policies			12
2. Regulatory Matters			12
3. Receivables			13
4. Investments			13
5. Common Equity			13
6. Debt			15
7. Revenues			15
8. Income Taxes			15
9. Benefit Plans			16
10. Derivative Instruments			17
11. Fair Value Measurements			18
12. Commitments and Contingencies			19
13. Segments of Business			21
14. Related Parties			21
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			22
Item 3. Quantitative and Qualitative Disclosures About Market Risk			27
Item 4. Controls and Procedures			27
Part II. Other Information			27
Item 1. Legal Proceedings			27
Item 1A. Risk Factors			27
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			27
Item 6. Exhibits			28
Signatures			28

DEFINITIONS

The following abbreviations or acronyms used in this report are defined below:

Abbreviation or Acronym			Definition			Abbreviation or Acronym			Definition
2021 Form 10-K			Combined Annual Report on Form 10-K filed by Alliant Energy, IPL and WPL for the year ended Dec. 31, 2021			IPL			Interstate Power and Light Company
AEF			Alliant Energy Finance, LLC			IUB			Iowa Utilities Board
AFUDC			Allowance for funds used during construction			MDA			Management’s Discussion and Analysis of Financial Condition and Results of Operations
Alliant Energy			Alliant Energy Corporation			MISO			Midcontinent Independent System Operator, Inc.
ATC			American Transmission Company LLC			MW			Megawatt
ATC Holdings			Interest in American Transmission Company LLC and ATC Holdco LLC			MWh			Megawatt-hour
Corporate Services			Alliant Energy Corporate Services, Inc.			N/A			Not applicable
DAEC			Duane Arnold Energy Center			Note(s)			Combined Notes to Condensed Consolidated Financial Statements
Dth			Dekatherm			OPEB			Other postretirement benefits
EGU			Electric generating unit			PPA			Purchased power agreement
EPA			U.S. Environmental Protection Agency			PSCW			Public Service Commission of Wisconsin
EPS			Earnings per weighted average common share			SEC			Securities and Exchange Commission
FERC			Federal Energy Regulatory Commission			U.S.			United States of America
Financial Statements			Condensed Consolidated Financial Statements			West Riverside			West Riverside Energy Center
FTR			Financial transmission right			Whiting Petroleum			Whiting Petroleum Corporation
GAAP			U.S. generally accepted accounting principles			WPL			Wisconsin Power and Light Company

FORWARD-LOOKING STATEMENTS

Statements contained in this report that are not of historical fact are forward-looking statements intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified as such because the statements include words such as “may,” “believe,” “expect,” “anticipate,” “plan,” “project,” “will,” “projections,” “estimate,” or other words of similar import. Similarly, statements that describe future financial performance or plans or strategies are forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, such statements. Some, but not all, of the risks and uncertainties of Alliant Energy, IPL and WPL that could materially affect actual results include:

• the impact of penalties or third-party claims related to, or in connection with, a failure to maintain the security of personally identifiable information, including associated costs to notify affected persons and to mitigate their information security concerns;

• the direct or indirect effects resulting from terrorist incidents, including physical attacks and cyber attacks, or responses to such incidents;

• the impact of customer- and third party-owned generation, including alternative electric suppliers, in IPL’s and WPL’s service territories on system reliability, operating expenses and customers’ demand for electricity;

• the impact of energy efficiency, franchise retention and customer disconnects on sales volumes and margins;

• the impact that price changes may have on IPL’s and WPL’s customers’ demand for electric, gas and steam services and their ability to pay their bills;

• IPL’s and WPL’s ability to obtain adequate and timely rate relief to allow for, among other things, the recovery of and/or the return on costs, including fuel costs, operating costs, transmission costs, deferred expenditures, deferred tax assets, tax expense, capital expenditures, and remaining costs related to EGUs that may be permanently closed and certain other retired assets, decreases in sales volumes, earning their authorized rates of return, and the payments to their parent of expected levels of dividends;

• federal and state regulatory or governmental actions, including the impact of legislation, and regulatory agency orders;

• the ability to utilize tax credits and net operating losses generated to date, and those that may be generated in the future, before they expire;

• the impacts of changes in the tax code, including tax rates, minimum tax rates, and adjustments made to deferred tax assets and liabilities;

• the ability to complete construction of renewable generation and storage projects by planned in-service dates and within the cost targets set by regulators due to cost increases of and access to materials, equipment and commodities including due to tariffs, duties or other assessments, such as any additional tariffs resulting from U.S. Department of Commerce investigations into the sourcing of solar project materials and equipment from certain countries, labor issues or supply shortages, the ability to successfully resolve warranty issues or contract disputes, the ability to achieve the expected level of tax benefits based on tax guidelines and project costs, and the ability to efficiently utilize the renewable generation and storage project tax benefits for the benefit of customers;

• employee workforce factors, including changes in key executives, ability to hire and retain employees with specialized skills, ability to create desired corporate culture, collective bargaining agreements and negotiations, work stoppages or restructurings;

• any material post-closing payments related to any past asset divestitures, including the sale of Whiting Petroleum, which could result from, among other things, indemnification agreements, warranties, guarantees or litigation;

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• weather effects on results of utility operations;

• the direct or indirect effects resulting from the ongoing novel coronavirus (COVID-19) pandemic and the spread of variant strains, including any vaccine mandates and testing requirements, on sales volumes, margins, operations, employees, labor markets, contractors, vendors, the ability to complete construction projects, supply chains, customers’ inability to pay bills, suspension of disconnects, the market value of the assets that fund pension plans and the potential for additional funding requirements, the ability of counterparties to meet their obligations, compliance with regulatory requirements, the ability to implement regulatory plans, economic conditions and access to capital markets;

• issues associated with environmental remediation and environmental compliance, including compliance with all environmental and emissions permits, the Coal Combustion Residuals Rule, future changes in environmental laws and regulations, including federal, state or local regulations for carbon dioxide emissions reductions from new and existing fossil-fueled EGUs, and litigation associated with environmental requirements;

• increased pressure from customers, investors and other stakeholders to more rapidly reduce carbon dioxide emissions;

• the ability to defend against environmental claims brought by state and federal agencies, such as the EPA, state natural resources agencies or third parties, such as the Sierra Club, and the impact on operating expenses of defending and resolving such claims;

• continued access to the capital markets on competitive terms and rates, and the actions of credit rating agencies;

• inflation and interest rates;

• disruptions to the supply of materials, equipment and commodities needed to construct solar generation and storage projects and maintain ongoing operations, including due to geopolitical issues, shortages, labor issues or transportation issues, which may, among other potential impacts, affect the ability to meet capacity requirements and result in increased capacity expense;

• possible changes to MISO’s methodology establishing capacity planning reserve margin and capacity accreditation requirements that may impact how and when new generating facilities such as IPL’s and WPL’s additional solar generation may be accredited with energy capacity and may require IPL and WPL to adjust their current resource plans, the need to add resources to comply with MISO’s proposal, or procure capacity in the market whereby such costs might not be recovered in rates;

• changes in the price of delivered natural gas, transmission, purchased electricity and coal, and any resulting changes to counterparty credit risk, due to shifts in supply and demand caused by market conditions, regulations and MISO’s annual resource adequacy process;

• disruptions in the supply and delivery of natural gas, purchased electricity and coal;

• the direct or indirect effects resulting from breakdown or failure of equipment in the operation of electric and gas distribution systems, such as mechanical problems and explosions or fires, and compliance with electric and gas transmission and distribution safety regulations, including regulations promulgated by the Pipeline and Hazardous Materials Safety Administration;

• issues related to the availability and operations of EGUs, including start-up risks, breakdown or failure of equipment, availability of warranty coverage for equipment breakdowns or failures, performance below expected or contracted levels of output or efficiency, operator error, employee safety, transmission constraints, compliance with mandatory reliability standards and risks related to recovery of resulting incremental costs through rates;

• impacts that excessive heat, excessive cold, storms or natural disasters may have on Alliant Energy’s, IPL’s and WPL’s operations and recovery of costs associated with restoration activities or on the operations of Alliant Energy’s investments;

• Alliant Energy’s ability to sustain its dividend payout ratio goal;

• changes to costs of providing benefits and related funding requirements of pension and OPEB plans due to the market value of the assets that fund the plans, economic conditions, financial market performance, interest rates, timing and form of benefits payments, life expectancies and demographics;

• material changes in employee-related benefit and compensation costs;

• risks associated with operation and ownership of non-utility holdings;

• changes in technology that alter the channels through which customers buy or utilize Alliant Energy’s, IPL’s or WPL’s products and services;

• impacts on equity income from unconsolidated investments from valuations and potential changes to ATC’s authorized return on equity;

• impacts of IPL’s future tax benefits from Iowa rate-making practices, including deductions for repairs expenditures, allocation of mixed service costs and state depreciation, and recoverability of the associated regulatory assets from customers, when the differences reverse in future periods;

• changes to the creditworthiness of counterparties with which Alliant Energy, IPL and WPL have contractual arrangements, including participants in the energy markets and fuel suppliers and transporters;

• current or future litigation, regulatory investigations, proceedings or inquiries;

• reputational damage from negative publicity, protests, fines, penalties and other negative consequences resulting in regulatory and/or legal actions;

• the effect of accounting standards issued periodically by standard-setting bodies;

• the ability to successfully complete tax audits and changes in tax accounting methods with no material impact on earnings and cash flows; and

• other factors listed in MDA and Risk Factors in Item 1A in the 2021 Form 10-K.

Alliant Energy, IPL and WPL each assume no obligation, and disclaim any duty, to update the forward-looking statements in this report, except as required by law.

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PART I. FINANCIAL INFORMATION

ALLIANT ENERGY CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

			For the Three Months
			Ended March 31,
			2022						2021
			(in millions, except per share amounts)
Revenues:
Electric utility			$773						$701
Gas utility			262						170
Other utility			11						13
Non-utility			22						17
Total revenues			1,068						901
Operating expenses:
Electric production fuel and purchased power			168						133
Electric transmission service			138						134
Cost of gas sold			168						100
Other operation and maintenance			153						146
Depreciation and amortization			166						164
Taxes other than income taxes			27						26
Total operating expenses			820						703
Operating income			248						198
Other (income) and deductions:
Interest expense			74						69
Equity income from unconsolidated investments, net			(15)						(15)
Allowance for funds used during construction			(11)						(4)
Other			—						2
Total other (income) and deductions			48						52
Income before income taxes			200						146
Income tax expense (benefit)			8						(28)
Net income			192						174
Preferred dividend requirements of Interstate Power and Light Company			—						3
Net income attributable to Alliant Energy common shareowners			$192						$171
Weighted average number of common shares outstanding:
Basic			250.6						250.0
Diluted			250.9						250.4
Earnings per weighted average common share attributable to Alliant Energy common shareowners (basic and diluted)			$0.77						$0.68

Refer to accompanying Combined Notes to Condensed Consolidated Financial Statements.

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ALLIANT ENERGY CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

			March 31, 2022						December 31, 2021
			(in millions, except per share and share amounts)
ASSETS
Current assets:
Cash and cash equivalents			$67						$39
Accounts receivable, less allowance for expected credit losses			481						440
Production fuel, at weighted average cost			39						51
Gas stored underground, at weighted average cost			27						82
Materials and supplies, at weighted average cost			119						113
Regulatory assets			88						104
Other			271						240
Total current assets			1,092						1,069
Property, plant and equipment, net			15,192						14,987
Investments:
ATC Holdings			346						338
Other			187						179
Total investments			533						517
Other assets:
Regulatory assets			1,831						1,836
Deferred charges and other			191						144
Total other assets			2,022						1,980
Total assets			$18,839						$18,553

LIABILITIES AND EQUITY
Current liabilities:

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This MDA includes information relating to Alliant Energy, and IPL and WPL (collectively, the Utilities), as well as ATC Holdings, AEF and Corporate Services. Where appropriate, information relating to a specific entity has been segregated and labeled as such. The following discussion and analysis should be read in conjunction with the Financial Statements and the Notes included in this report, as well as the financial statements, notes and MDA included in the 2021 Form 10-K. Unless otherwise noted, all “per share” references in MDA refer to earnings per diluted share.

2022 HIGHLIGHTS

Key highlights since the filing of the 2021 Form 10-K include the following:

Customer Investments:

• In response to a petition from a U.S.-based solar panel assembler, in March 2022, the U.S. Department of Commerce initiated an investigation into whether the sourcing of solar project materials and equipment from certain Southeast Asian countries circumvent tariffs and duties imposed on such materials and equipment imported from China. Alliant Energy, IPL and WPL are currently unable to predict with certainty the future outcome or impact of these matters; however, this could result in delays and/or higher costs for IPL’s and WPL’s planned development and acquisition of additional renewable energy, and impact Alliant Energy’s, IPL’s and WPL’s anticipated future construction and acquisition expenditures.

• In April 2022, the IUB issued an order approving IPL’s request for an extension of the procedural schedule related to its November 2021 advance rate-making principles filing with the IUB for up to 400 MW of new solar generation and 75 MW of battery storage. IPL requested an extension in order to review the proposed fixed cost cap included in its November 2021 filing given the cost pressures prevalent in the solar generation and battery storage markets, as well as narrow the selection of certain solar generation projects included in the filing. IPL currently expects a decision on its advance rate-making principles filing by the end of 2022.

• In April 2022, WPL received an oral decision from the PSCW for its second certificate of authority authorizing WPL to acquire, construct, own, and operate up to 414 MW of new solar generation in the following Wisconsin counties: Dodge (150 MW), Waushara (99 MW), Rock (65 MW), Grant (50 MW) and Green (50 MW).

Legislative Matters:

• Refer to Note 8 for discussion of Iowa tax reform enacted in March 2022.

RESULTS OF OPERATIONS

Results of operations include financial information prepared in accordance with GAAP as well as utility electric margins and utility gas margins, which are not measures of financial performance under GAAP. Utility electric margins are defined as electric revenues less electric production fuel, purchased power and electric transmission service expenses. Utility gas margins are defined as gas revenues less cost of gas sold. Utility electric margins and utility gas margins are non-GAAP financial measures because they exclude other utility and non-utility revenues, other operation and maintenance expenses, depreciation and amortization expenses, and taxes other than income tax expense.

Management believes that utility electric and gas margins provide a meaningful basis for evaluating and managing utility operations since electric production fuel, purchased power and electric transmission service expenses and cost of gas sold are generally passed through to customers, and therefore, result in changes to electric and gas revenues that are comparable to changes in such expenses. The presentation of utility electric and gas margins herein is intended to provide supplemental information for investors regarding operating performance. These utility electric and gas margins may not be comparable to how other entities define utility electric and gas margin. Furthermore, these measures are not intended to replace operating income as determined in accordance with GAAP as an indicator of operating performance.

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Additionally, the table below includes EPS for Utilities and Corporate Services, ATC Holdings, and Non-utility and Parent, which are non-GAAP financial measures. Alliant Energy believes these non-GAAP financial measures are useful to investors because they facilitate an understanding of segment performance and trends, and provide additional information about Alliant Energy’s operations on a basis consistent with the measures that management uses to manage its operations and evaluate its performance.

Financial Results Overview - Alliant Energy’s net income and EPS attributable to Alliant Energy common shareowners for the three months ended March 31 were as follows (dollars in millions, except per share amounts):

			2022												2021
			Income						EPS						Income (Loss)						EPS
Utilities and Corporate Services			$183						$0.73						$166						$0.66
ATC Holdings			8						0.03						8						0.03
Non-utility and Parent			1						0.01						(3)						(0.01)
Alliant Energy Consolidated			$192						$0.77						$171						$0.68

Alliant Energy’s Utilities and Corporate Services net income increased by $17 million for the three-month period, primarily due to higher AFUDC, higher earnings resulting from WPL’s increasing rate base, higher sales due to favorable temperature impacts compared to 2021, as well as higher temperature-normalized sales.

For the three months ended March 31, operating income and a reconciliation of utility electric and gas margins to the most directly comparable GAAP measure, operating income, was as follows (in millions):

			Alliant Energy												IPL												WPL
Three Months			2022						2021						2022						2021						2022						2021
Operating income			$248						$198						$110						$103						$131						$90
Electric utility revenues			$773						$701						$400						$386						$373						$315
Electric production fuel and purchased power expenses			(168)						(133)						(67)						(59)						(101)						(74)
Electric transmission service expense			(138)						(134)						(97)						(92)						(41)						(42)
Utility Electric Margin (non-GAAP)			467						434						236						235						231						199
Gas utility revenues			262						170						139						91						123						79
Cost of gas sold			(168)						(100)						(85)						(50)						(83)						(50)
Utility Gas Margin (non-GAAP)			94						70						54						41						40						29
Other utility revenues			11						13						11						12						—						1
Non-utility revenues			22						17						—						—						—						—
Other operation and maintenance expenses			(153)						(146)						(83)						(77)						(58)						(59)
Depreciation and amortization expenses			(166)						(164)						(94)						(94)						(70)						(69)
Taxes other than income tax expense			(27)						(26)						(14)						(14)						(12)						(11)
Operating income			$248						$198						$110						$103						$131						$90

Operating Income Variances - Variances between periods in operating income for the three months ended March 31, 2022 compared to the same period in 2021 were as follows (in millions):

			Alliant Energy						IPL						WPL
Total higher utility electric margin variance (Refer to details below)			$33						$1						$32
Total higher utility gas margin variance (Refer to details below)			24						13						11
Total (higher) lower other operation and maintenance expenses variance (Refer to details below)			(7)						(6)						1
Higher depreciation and amortization expense primarily due to additional plant in service in 2021 and 2022			(2)						—						(1)
Other			2						(1)						(2)
			$50						$7						$41

Electric and Gas Revenues and Sales Summary - Electric and gas revenues (in millions), and MWh and Dth sales (in thousands), for the three months ended March 31 were as follows:

Alliant Energy			Electric																								Gas
			Revenues												MWhs Sold												Revenues												Dths Sold
			2022						2021						2022						2021						2022						2021						2022						2021
Retail			$692						$636						6,388						6,272						$248						$157						26,095						23,431
Sales for resale			68						45						1,945						1,071						N/A						N/A						N/A						N/A
Transportation/Other			13						20						17						19						14						13						29,877						24,690
			$773						$701						8,350						7,362						$262						$170						55,972						48,121

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IPL			Electric																								Gas
			Revenues												MWhs Sold												Revenues												Dths Sold
			2022						2021						2022						2021						2022						2021						2022						2021
Retail			$379						$361						3,651						3,582						$130						$82						13,601						12,138
Sales for resale			13						11						597						287						N/A						N/A						N/A						N/A
Transportation/Other			8						14						8						10						9						9						12,020						11,178
			$400						$386						4,256						3,879						$139						$91						25,621						23,316

WPL			Electric																								Gas
			Revenues												MWhs Sold												Revenues												Dths Sold
			2022						2021						2022						2021						2022						2021						2022						2021
Retail			$313						$275						2,737						2,690						$118						$75						12,494						11,293
Sales for resale			55						34						1,348						784						N/A						N/A						N/A						N/A
Transportation/Other			5						6						9						9						5						4						17,857						13,512
			$373						$315						4,094						3,483						$123						$79						30,351						24,805

Sales Trends and Temperatures - Alliant Energy’s retail electric and gas sales volumes increased 2% and 11%, respectively, for the three months ended March 31, 2022 compared to the same period in 2021, primarily due to changes in temperatures, COVID-19 impacts in 2021 and increases in the number of customers.

Estimated increases to electric and gas margins from the impacts of temperatures for the three months ended March 31 were as follows (in millions):

			Electric Margins																		Gas Margins
			2022						2021						Change																								2022						2021						Change
IPL			$5						$2						$3																								$3						$2						$1
WPL			2						1						1																								1						—						1
Total Alliant Energy			$7						$3						$4																								$4						$2						$2

Electric Sales for Resale - Electric sales for resale volume changes were largely due to changes in sales in the wholesale energy markets operated by MISO. These changes are impacted by several factors, including the availability and dispatch of Alliant Energy’s EGUs and electricity demand within these wholesale energy markets. Changes in sales for resale revenues were largely offset by changes in fuel-related costs, and therefore, did not have a significant impact on electric margins.

Gas Transportation/Other - Gas transportation/other sales volume changes were largely due to changes in the gas volumes supplied to Alliant Energy’s natural gas-fired EGUs caused by the availability and dispatch of such EGUs. Changes in these transportation/other revenues did not have a significant impact on gas margins.

Utility Electric Margin Variances - The following items contributed to increased (decreased) utility electric margins for the three months ended March 31, 2022 compared to the same period in 2021 as follows (in millions):

			Alliant Energy						IPL						WPL
Higher revenue requirements at WPL due to increasing rate base (a)			$26						$—						$26
Higher revenues at IPL due to changes in credits on customers’ bills related to excess deferred income tax benefits amortization through the tax benefit rider (offset by changes in income tax)			6						6						—
Estimated changes in sales volumes caused by temperatures			4						3						1
Lower revenues at IPL due to changes in the renewable energy rider (offset by changes in income tax)			(12)						(12)						—
Lower revenues at IPL related to changes in recovery amounts for energy efficiency costs through the energy efficiency rider (mostly offset by changes in energy efficiency expense)			(2)						(2)						—
Other (includes higher temperature-normalized sales in 2022)			11						6						5
			$33						$1						$32

(a)In December 2021, the PSCW issued an order authorizing annual base rate increases of $114 million and $15 million for WPL’s retail electric and gas customers, respectively, covering the 2022/2023 forward-looking Test Period, which was based on a stipulated agreement between WPL and certain stakeholders. The key drivers for the annual base rate increases include higher retail fuel-related costs in 2022, lower excess deferred income tax benefits in 2022 and 2023 compared to 2021, and revenue requirement impacts of increasing electric and gas rate base, including investments in solar generation. Retail electric rate changes were effective on January 1, 2022 and extend through the end of 2023. Retail gas rate changes were effective on January 1, 2022 and extend through the end of 2022. The higher fuel expense costs are recognized in electric margin and the lower amount of excess deferred income tax benefits is recognized as a reduction in income tax.

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Utility Gas Margin Variances - The following items contributed to increased utility gas margins for the three months ended March 31, 2022 compared to the same period in 2021 as follows (in millions):

			Alliant Energy						IPL						WPL
Higher revenues at IPL related to changes in recovery amounts for energy efficiency costs through the energy efficiency rider (mostly offset by changes in energy efficiency expense)			$9						$9						$—
Higher revenue requirements at WPL due to increasing rate base (refer to (a) above)			7						—						7
Estimated changes in sales volumes caused by temperatures			2						1						1
Other (includes higher temperature-normalized sales in 2022)			6						3						3
			$24						$13						$11

Other Operation and Maintenance Expenses Variances - The following items contributed to (increased) decreased other operation and maintenance expenses for the three months ended March 31, 2022 compared to the same period in 2021 as follows (in millions):

			Alliant Energy						IPL						WPL
Higher energy efficiency expense at IPL (primarily offset by higher revenues)			($9)						($9)						$—
Other			2						3						1
			($7)						($6)						$1

Other Income and Deductions Variances - The following items contributed to (increased) decreased other income and deductions for the three months ended March 31, 2022 compared to the same period in 2021 as follows (in millions):

			Alliant Energy						IPL						WPL
Higher interest expense primarily due to financings completed in 2021			($5)						($2)						($1)
Higher AFUDC primarily due to changes in construction work in progress balances related to WPL’s solar generation			7						1						7
Other			2						—						1
			$4						($1)						$7

Income Taxes - Refer to Note 8 for details of effective income tax rates.

Preferred Dividend Requirements of IPL - Alliant Energy’s and IPL’s preferred dividend requirements decreased for the three months ended March 31, 2022 compared to the same period in 2021 a due to the redemption of IPL’s 5.1% cumulative preferred stock in December 2021.

LIQUIDITY AND CAPITAL RESOURCES

The liquidity and capital resources summary included in the 2021 Form 10-K has not changed materially, except as described below.

Liquidity Position - At March 31, 2022, Alliant Energy had $67 million of cash and cash equivalents, $724 million ($331 million at the parent company, $250 million at IPL and $143 million at WPL) of available capacity under the single revolving credit facility and $109 million of available capacity at IPL under its sales of accounts receivable program.

Capital Structure - Capital structures at March 31, 2022 were as follows (Long-term Debt (including current maturities) (LD); Short-term Debt (SD); Common Equity (CE)):

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Cash Flows - Selected information from the cash flows statements was as follows (in millions):

			Alliant Energy												IPL												WPL
			2022						2021						2022						2021						2022						2021
Cash, cash equivalents and restricted cash, January 1			$40						$56						$34						$50						$2						$3
Cash flows from (used for):
Operating activities			251						145						89						(45)						167						148
Investing activities			(223)						(38)						18						98						(217)						(119)
Financing activities			3						(145)						(79)						(92)						52						(30)
Net increase (decrease)			31						(38)						28						(39)						2						(1)
Cash, cash equivalents and restricted cash, March 31			$71						$18						$62						$11						$4						$2

Operating Activities - The following items contributed to increased (decreased) operating activity cash flows for the three months ended March 31, 2022 compared to the same period in 2021 (in millions):

			Alliant Energy						IPL						WPL
Higher collections from WPL’s increasing base rate			$33						$—						$33
Natural gas cost payments from extreme temperatures in February 2021 resulting in under-recovered natural gas costs at IPL in 2021			20						20						—
Increased collections from IPL’s and WPL’s retail customers caused by temperature impacts on electric and gas sales			6						4						2
Changes in interest payments			(3)						—						(2)
Changes in income taxes paid/refunded			—						(7)						—
Timing of intercompany payments and receipts			—						60						16
Other (primarily due to other changes in working capital)			50						57						(30)
			$106						$134						$19

Investing Activities - The following items contributed to increased (decreased) investing activity cash flows for the three months ended March 31, 2022 compared to the same period in 2021 (in millions):

			Alliant Energy						IPL						WPL
Changes in the amount of cash receipts on sold receivables			($94)						($94)						$—
(Higher) lower utility construction and acquisition expenditures (a)			(93)						10						(104)
Other			2						4						6
			($185)						($80)						($98)

(a)Largely due to higher expenditures for WPL’s solar generation, partially offset by lower expenditures for IPL’s and WPL’s electric and gas distribution systems.

Construction and Acquisition Expenditures - Alliant Energy, IPL and WPL are currently evaluating potential impacts from cost pressures prevalent in the solar generation and battery storage markets, as well as the U.S. Department of Commerce investigation discussed in “2022 Highlights,” on the timing and estimated costs for IPL’s and WPL’s planned development and acquisition of additional renewable energy, which could impact their anticipated future construction and acquisition expenditures.

Financing Activities - The following items contributed to increased (decreased) financing activity cash flows for the three months ended March 31, 2022 compared to the same period in 2021 (in millions):

			Alliant Energy						IPL						WPL
Higher net proceeds from issuance of long-term debt			$650						$—						$—
Higher payments to retire long-term debt			(300)						—						—
Net changes in the amount of commercial paper outstanding			(186)						—						30
(Higher) lower common stock dividends			(5)						20						(2)
Higher capital contributions from WPL’s parent company, Alliant Energy			—						—						55
Other			(11)						(7)						(1)
			$148						$13						$82

IPL and WPL Solar Project Tax Equity Financing - Alliant Energy, IPL and WPL are currently evaluating potential impacts from cost pressures prevalent in the solar generation and battery storage markets, as well as the U.S. Department of Commerce investigation discussed in “2022 Highlights,” on the timing and estimated costs for IPL’s and WPL’s planned development and acquisition of additional renewable energy, which could result in changes to their proposed solar project tax equity financing.

Common Stock Issuances - Refer to Note 5 for discussion of common stock issuances by Alliant Energy in 2022.

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Long-term Debt - Refer to Note 6(b) for discussion of AEF’s issuance of long-term debt in 2022. AEF’s current term loan credit agreement that expires in March 2024 includes an option to increase the amount outstanding up to $400 million in aggregate with the same maturity, subject to bank approval, and includes substantially the same financial covenants that are included in Alliant Energy’s credit facility agreement.

Off-Balance Sheet Arrangements and Certain Financial Commitments - A summary of Alliant Energy’s and IPL’s off-balance sheet arrangements and Alliant Energy’s, IPL’s and WPL’s contractual obligations is included in the 2021 Form 10-K and has not changed materially from the items reported in the 2021 Form 10-K, except for the items described in Notes 3, 6 and 12.