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. In June 2022, a presidential executive order postponed through 2024 any additional tariffs on solar project materials and equipment while the U.S. Department of Commerce completes its investigation. Alliant Energy, IPL and WPL are currently unable to predict with certainty the future outcome or impact of these matters, including from any related legal challenges; 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 June 2022, the PSCW issued an order approving WPL’s second certificate of authority 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).

			26

Table of Contents

• In June 2022, IPL filed for a revised fixed cost cap of $1,934/kilowatt with the IUB related to IPL’s November 2021 advance rate-making principles filing for up to 400 MW of solar generation with in-service dates in 2023 and 2024 and approximately 75 MW of battery storage in 2024, which reflects higher materials, labor and shipping costs. The revised fixed cost cap includes allowance for funds used during construction and transmission upgrade costs among other costs, and excludes estimated tax equity partner contributions. IPL currently expects a decision from the IUB on its filing by the end of 2022.

• Refer to Note 3 for discussion of revised expected timing for the retirements of various IPL and WPL coal-fired EGUs.

• Refer to Notes 1(b) and 6 for discussion of contributions to the joint venture associated with certain WPL solar generation projects made in the second quarter of 2022 by WPL and the tax equity partner.

Rate Matters:

• In June 2022, WPL filed a limited reopener request with the PSCW to increase annual retail gas rates for the 2023 forward-looking Test Period by approximately $10 million, which reflects changes in weighted average cost of capital, updated depreciation rates and modifications to certain regulatory asset and regulatory liability amortizations. In July 2022, WPL filed a request with the PSCW to decrease annual retail electric rates by approximately $37 million effective January 1, 2023, which reflects a change in expected fuel-related costs in 2023. WPL currently expects decisions from the PSCW on its requests by the end of 2022.

Legislative Matters:

• Refer to Note 9 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.

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 (loss) and EPS attributable to Alliant Energy common shareowners for the three months ended June 30 were as follows (dollars in millions, except per share amounts):

			2022												2021
			Income (Loss)						EPS						Income						EPS
Utilities and Corporate Services			$154						$0.61						$128						$0.51
ATC Holdings			8						0.03						8						0.03
Non-utility and Parent			(3)						(0.01)						8						0.03
Alliant Energy Consolidated			$159						$0.63						$144						$0.57

Alliant Energy’s Utilities and Corporate Services net income increased by $26 million for the three-month period, primarily due to higher AFUDC, timing of income tax expense and higher temperature-normalized sales. These items were partially offset by higher interest expense.

Alliant Energy’s Non-utility and Parent net income decreased by $11 million for the three-month period primarily due to the timing of income taxes.

			27

Table of Contents

For the three and six months ended June 30, 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			$212						$176						$109						$111						$95						$55
Electric utility revenues			$812						$717						$442						$402						$370						$315
Electric production fuel and purchased power expenses			(191)						(138)						(83)						(55)						(108)						(84)
Electric transmission service expense			(133)						(121)						(91)						(79)						(41)						(42)
Utility Electric Margin (non-GAAP)			488						458						268						268						221						189
Gas utility revenues			94						69						52						43						42						26
Cost of gas sold			(48)						(31)						(27)						(22)						(21)						(9)
Utility Gas Margin (non-GAAP)			46						38						25						21						21						17
Other utility revenues			13						10						12						10						1						—
Non-utility revenues			24						21						—						—						—						—
Other operation and maintenance expenses			(166)						(160)						(87)						(81)						(67)						(69)
Depreciation and amortization expenses			(166)						(165)						(95)						(93)						(69)						(70)
Taxes other than income tax expense			(27)						(26)						(14)						(14)						(12)						(12)
Operating income			$212						$176						$109						$111						$95						$55

			Alliant Energy												IPL												WPL
Six Months			2022						2021						2022						2021						2022						2021
Operating income			$460						$374						$218						$214						$227						$145
Electric utility revenues			$1,586						$1,418						$843						$788						$743						$630
Electric production fuel and purchased power expenses			(359)						(271)						(150)						(114)						(209)						(158)
Electric transmission service expense			(271)						(255)						(188)						(171)						(83)						(84)
Utility Electric Margin (non-GAAP)			956						892						505						503						451						388
Gas utility revenues			356						239						191						134						165						105
Cost of gas sold			(216)						(131)						(112)						(72)						(104)						(59)
Utility Gas Margin (non-GAAP)			140						108						79						62						61						46
Other utility revenues			23						23						22						22						1						1
Non-utility revenues			47						38						—						—						—						—
Other operation and maintenance expenses			(320)						(306)						(171)						(158)						(123)						(128)
Depreciation and amortization expenses			(332)						(329)						(189)						(187)						(139)						(139)
Taxes other than income tax expense			(54)						(52)						(28)						(28)						(24)						(23)
Operating income			$460						$374						$218						$214						$227						$145

Operating Income Variances - Variances between periods in operating income for the three and six months ended June 30, 2022 compared to the same periods in 2021 were as follows (in millions):

			Three Months																		Six Months
			Alliant Energy						IPL						WPL						Alliant Energy						IPL						WPL
Total higher utility electric margin variance (Refer to details below)			$30						$—						$32						$64						$2						$63
Total higher utility gas margin variance (Refer to details below)			8						4						4						32						17						15
Total (higher) lower other operation and maintenance expenses variance (Refer to details below)			(6)						(6)						2						(14)						(13)						5
Other			4						—						2						4						(2)						(1)
			$36						($2)						$40						$86						$4						$82

			28

Table of Contents

Electric and Gas Revenues and Sales Summary - Electric and gas revenues (in millions), and MWh and Dth sales (in thousands), for the three and six months ended June 30 were as follows:

Alliant Energy			Electric																								Gas
			Revenues												MWhs Sold												Revenues												Dths Sold
			2022						2021						2022						2021						2022						2021						2022						2021
Three Months
Retail			$729						$643						6,127						5,959						$81						$61						7,605						6,604
Sales for resale			69						58						1,456						1,487						N/A						N/A						N/A						N/A
Transportation/Other			14						16						15						16						13						8						22,382						23,056
			$812						$717						7,598						7,462						$94						$69						29,987						29,660
Six Months
Retail			$1,420						$1,279						12,516						12,231						$330						$218						33,701						30,035
Sales for resale			137						103						3,402						2,558						N/A						N/A						N/A						N/A
Transportation/Other			29						36						31						35						26						21						52,260						47,746
			$1,586						$1,418						15,949						14,824						$356						$239						85,961						77,781

IPL			Electric																								Gas
			Revenues												MWhs Sold												Revenues												Dths Sold
			2022						2021						2022						2021						2022						2021						2022						2021
Three Months
Retail			$421						$373						3,434						3,314						$44						$38						3,778						3,428
Sales for resale			13						17						422						386						N/A						N/A						N/A						N/A
Transportation/Other			8						12						8						7						8						5						10,154						9,241
			$442						$402						3,864						3,707						$52						$43						13,932						12,669
Six Months
Retail			$800						$734						7,085						6,896						$174						$120						17,380						15,566
Sales for resale			26						28						1,019						673						N/A						N/A						N/A						N/A
Transportation/Other			17						26						16						17						17						14						22,174						20,419
			$843						$788						8,120						7,586						$191						$134						39,554						35,985

WPL			Electric																								Gas
			Revenues												MWhs Sold												Revenues												Dths Sold
			2022						2021						2022						2021						2022						2021						2022						2021
Three Months
Retail			$308						$270						2,693						2,645						$37						$23						3,827						3,176
Sales for resale			56						41						1,034						1,101						N/A						N/A						N/A						N/A
Transportation/Other			6						4						7						9						5						3						12,228						13,815
			$370						$315						3,734						3,755						$42						$26						16,055						16,991
Six Months
Retail			$620						$545						5,431						5,335						$156						$98						16,321						14,469
Sales for resale			111						75						2,383						1,885						N/A						N/A						N/A						N/A
Transportation/Other			12						10						15						18						9						7						30,086						27,327
			$743						$630						7,829						7,238						$165						$105						46,407						41,796

Sales Trends and Temperatures - Alliant Energy’s retail electric and gas sales volumes increased 3% and 15%, respectively, for the three months ended June 30, 2022 compared to the same period in 2021, primarily due to COVID-19 impacts in 2021 and increases in the number of retail customers. Alliant Energy’s retail electric and gas sales volumes increased 2% and 12%, respectively, for the six months ended June 30, 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 retail customers.

Estimated increases (decreases) to electric and gas margins from the impacts of temperatures for the three and six months ended June 30 were as follows (in millions):

			Electric Margins																																				Gas Margins
			Three Months																		Six Months																		Three Months																		Six Months
			2022						2021						Change						2022						2021						Change						2022						2021						Change						2022						2021						Change
IPL			$7						$9						($2)						$11						$11						$—						$2						$—						$2						$4						$2						$2
WPL			8						8						—						10						9						1						—						—						—						2						—						2
Total Alliant Energy			$15						$17						($2)						$21						$20						$1						$2						$—						$2						$6						$2						$4

			29

Table of Contents

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 and six months ended June 30, 2022 compared to the same periods in 2021 as follows (in millions):

			Three Months																		Six Months
			Alliant Energy						IPL						WPL						Alliant Energy						IPL						WPL
Higher revenue requirements at WPL due to increasing rate base (a)			$26						$—						$26						$53						$—						$53
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)			5						5						—						11						11						—
Lower revenues at IPL due to changes in the renewable energy rider (mostly offset by changes in income tax)			(6)						(6)						—						(18)						(18)						—
Other (includes higher temperature-normalized sales in 2022)			5						1						6						18						9						10
			$30						$—						$32						$64						$2						$63

(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.

Utility Gas Margin Variances - The following items contributed to increased (decreased) utility gas margins for the three and six months ended June 30, 2022 compared to the same periods in 2021 as follows (in millions):

			Three Months																		Six Months
			Alliant Energy						IPL						WPL						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)			$2						$2						$—						$11						$11						$—
Higher revenue requirements at WPL due to increasing rate base (refer to (a) above)			2						—						2						9						—						9
Other (includes higher temperature-normalized sales in 2022)			4						2						2						12						6						6
			$8						$4						$4						$32						$17						$15

Other Operation and Maintenance Expenses Variances - The following items contributed to (increased) decreased other operation and maintenance expenses for the three and six months ended June 30, 2022 compared to the same periods in 2021 as follows (in millions):

			Three Months																		Six Months
			Alliant Energy						IPL						WPL						Alliant Energy						IPL						WPL
Higher energy efficiency expense at IPL (mostly offset by higher revenues)			$—						$—						$—						($8)						($8)						$—
Non-utility Travero (mostly offset by higher revenues)			(4)						—						—						(7)						—						—
Other			(2)						(6)						2						1						(5)						5
			($6)						($6)						$2						($14)						($13)						$5

			30

Table of Contents

Other Income and Deductions Variances - The following items contributed to (increased) decreased other income and deductions for the three and six months ended June 30, 2022 compared to the same periods in 2021 as follows (in millions):

			Three Months																		Six Months
			Alliant Energy						IPL						WPL						Alliant Energy						IPL						WPL
Higher interest expense primarily due to financings completed in 2022 and 2021 and higher interest rates			($9)						($3)						($2)						($14)						($5)						($3)
Higher AFUDC primarily due to changes in construction work in progress balances related to WPL’s solar generation			8						—						8						15						—						14
Other			(1)						2						—						1						3						1
			($2)						($1)						$6						$2						($2)						$12

Income Taxes - Refer to Note 9 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 and six months ended June 30, 2022 compared to the same periods in 2021 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 June 30, 2022, Alliant Energy had $19 million of cash and cash equivalents, $601 million ($273 million at the parent company, $250 million at IPL and $78 million at WPL) of available capacity under the single revolving credit facility and $95 million of available capacity at IPL under its sales of accounts receivable program.

Capital Structure - Capital structures at June 30, 2022 were as follows (Long-term Debt (including current maturities) (LD); Short-term Debt (SD); Common Equity (CE)):

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			300						207						83						18						198						200
Investing activities			(370)						(190)						60						98						(384)						(253)
Financing activities			50						(57)						(164)						(155)						188						53
Net increase (decrease)			(20)						(40)						(21)						(39)						2						—
Cash, cash equivalents and restricted cash, June 30			$20						$16						$13						$11						$4						$3

			31

Table of Contents

Operating Activities - The following items contributed to increased (decreased) operating activity cash flows for the six months ended June 30, 2022 compared to the same period in 2021 (in millions):

			Alliant Energy						IPL						WPL
Higher collections from WPL’s increasing base rate			$62						$—						$62
Lower contributions to qualified defined benefit pension plans			19						9						9
Natural gas cost payments from extreme temperatures in February 2021 resulting in under-recovered natural gas costs at IPL in 2021			14						14						—
Credits issued to IPL’s retail electric customers in 2021 through its transmission cost rider for refunds received in 2020 for MISO transmission owner return on equity complaints			12						12						—
Timing of WPL’s fuel-related cost recoveries from customers			(37)						—						(37)
Timing of intercompany payments and receipts			—						(1)						(10)
Other (primarily due to other changes in working capital)			23						31						(26)
			$93						$65						($2)

Investing Activities - The following items contributed to increased (decreased) investing activity cash flows for the six months ended June 30, 2022 compared to the same period in 2021 (in millions):

			Alliant Energy						IPL						WPL
(Higher) lower utility construction and acquisition expenditures (a)			($124)						$19						($143)
Changes in the amount of cash receipts on sold receivables			(62)						(62)						—
Other			6						5						12
			($180)						($38)						($131)

(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 and the pending U.S. Department of Commerce investigation 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. Refer to “2022 Highlights” for further discussion of the U.S. Department of Commerce investigation, as well as information on IPL’s revised fixed cost cap filing with the IUB in June 2022 for up to 400 MW of solar generation and approximately 75 MW of battery storage.

Financing Activities - The following items contributed to increased (decreased) financing activity cash flows for the six months ended June 30, 2022 compared to the same period in 2021 (in millions):

			Alliant Energy						IPL						WPL
Higher net proceeds from issuance of long-term debt			$650						$—						$—
Capital contributions from noncontrolling interest			29						—						29
Higher payments to retire long-term debt			(300)						—						—
Net changes in the amount of commercial paper outstanding			(262)						—						51
(Higher) lower common stock dividends			(12)						40						(4)
Higher (lower) capital contributions from IPL’s and WPL’s parent company, Alliant Energy			—						(50)						55
Other			2						1						4
			$107						($9)						$135

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 6 for discussion of common stock issuances by Alliant Energy in 2022.

Long-term Debt - Refer to Note 7(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.

Impact of Credit Ratings on Liquidity and Collateral Obligations -

Ratings Triggers - In June 2022, Standard & Poor’s Ratings Services changed WPL’s outlook from stable to negative. This outlook change is not expected to have a material impact on Alliant Energy and WPL’s liquidity or collateral obligations.

			32

Table of Contents

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 4, 7 and 13.