Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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.