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 2022 Form 10-K. Unless otherwise noted, all “per share” references in MDA refer to earnings per diluted share.

2023 HIGHLIGHTS

Key highlights since the filing of the 2022 Form 10-K include the following:

Customer Investments:

• In March 2023, the IUB issued a certificate of public convenience, use and necessity (GCU Certificate) granting IPL approval to construct, own and operate up to 50 MW of solar generation and up to 25 MW of battery storage in Union County, Iowa.

• In April 2023, the IUB issued a GCU Certificate granting IPL approval to construct, own and operate up to 150 MW of solar generation and up to 75 MW of battery storage in Lee County, Iowa.

• In 2021, IPL filed for advance rate-making principles with the IUB for up to 400 MW of solar generation and 75 MW of battery storage. On April 27, 2023, the IUB approved advance rate-making principles for up to 200 MW of solar generation. The IUB’s order included a cost target of $1,575/kilowatt, including AFUDC and transmission upgrade costs among other costs. Any reasonable and prudent costs incurred in excess of the cost target, as well as the related return on common equity, would need to be addressed in future IPL retail electric rate review filings. IPL has 20 days from the date of the IUB’s order to ask for reconsideration of the advance rate-making principles, and 30 days from the date of the IUB’s order to accept the approved advance rate-making principles.

Rate Matters:

• In April 2023, WPL filed a retail electric and gas rate review with the PSCW for the 2024/2025 forward-looking Test Period. The key drivers for the filing include revenue requirement impacts of increasing electric and gas rate base, including investments in solar generation and battery storage. The filing requested approval for WPL to implement increases in annual rates for its retail electric and gas customers of $111 million and $17 million in 2024, respectively, with any granted rate changes expected to be effective on January 1, 2024. WPL’s filing also requested approval to implement an additional $71 million increase in annual rates for its retail electric customers in 2025, with any granted rate changes expected to be effective on January 1, 2025. WPL also requested to maintain its current authorized return on common equity of 10% and implement an approximate 56% common equity component of its regulatory capital structure, as well as receive continued recovery of and a return on the remaining net book value of Edgewater Unit 5, which is currently expected to be retired by June 1, 2025. A decision from the PSCW is expected by the end of 2023.

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

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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 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):

			2023												2022
			Income (Loss)						EPS						Income						EPS
Utilities and Corporate Services			$163						$0.65						$183						$0.73
ATC Holdings			9						0.04						8						0.03
Non-utility and Parent			(9)						(0.04)						1						0.01
Alliant Energy Consolidated			$163						$0.65						$192						$0.77

Alliant Energy’s Utilities and Corporate Services net income decreased by $20 million for the three-month period, primarily due to lower retail electric and gas sales due to impacts of warmer than normal temperatures on customer demand in the first quarter of 2023, compared to an increase in sales in the first quarter of 2022 due to impacts of colder than normal temperatures on customer demand, higher interest expense and timing of income tax expense. These items were partially offset by higher electric revenues resulting from higher revenue requirements and AFUDC from WPL’s capital investments.

Alliant Energy’s Non-utility and Parent net income decreased by $10 million for the three-month period, primarily due to higher interest expense.

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			2023						2022						2023						2022						2023						2022
Operating income			$222						$248						$96						$110						$121						$131
Electric utility revenues			$768						$773						$388						$400						$380						$373
Electric production fuel and purchased power expenses			(157)						(168)						(47)						(67)						(109)						(101)
Electric transmission service expense			(146)						(138)						(104)						(97)						(42)						(41)
Utility Electric Margin (non-GAAP)			465						467						237						236						229						231
Gas utility revenues			276						262						150						139						126						123
Cost of gas sold			(181)						(168)						(95)						(85)						(86)						(83)
Utility Gas Margin (non-GAAP)			95						94						55						54						40						40
Other utility revenues			11						11						11						11						—						—
Non-utility revenues			22						22						—						—						—						—
Other operation and maintenance expenses			(174)						(153)						(95)						(83)						(66)						(58)
Depreciation and amortization expenses			(166)						(166)						(96)						(94)						(68)						(70)
Taxes other than income tax expense			(31)						(27)						(16)						(14)						(14)						(12)
Operating income			$222						$248						$96						$110						$121						$131

Operating Income Variances - Variances between periods in operating income for the three months ended March 31, 2023 compared to the same period in 2022 were as follows (in millions):

			Alliant Energy						IPL						WPL
Total higher (lower) utility electric margin variance (Refer to details below)			($2)						$1						($2)
Total higher utility gas margin variance (Refer to details below)			1						1						—
Total higher other operation and maintenance expenses variance (Refer to details below)			(21)						(12)						(8)
Total (higher) lower depreciation and amortization expense			—						(2)						2
Other			(4)						(2)						(2)
			($26)						($14)						($10)

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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
			2023						2022						2023						2022						2023						2022						2023						2022
Retail			$686						$692						6,201						6,388						$262						$248						22,310						26,095
Sales for resale:
Wholesale			46						47						698						721						N/A						N/A						N/A						N/A
Bulk power and other			23						21						1,243						1,224						N/A						N/A						N/A						N/A
Transportation/Other			13						13						15						17						14						14						32,614						29,877
			$768						$773						8,157						8,350						$276						$262						54,924						55,972

IPL			Electric																								Gas
			Revenues												MWhs Sold												Revenues												Dths Sold
			2023						2022						2023						2022						2023						2022						2023						2022
Retail			$362						$379						3,544						3,651						$141						$130						11,459						13,601
Sales for resale:
Wholesale			12						15						187						194						N/A						N/A						N/A						N/A
Bulk power and other			7						(2)						496						403						N/A						N/A						N/A						N/A
Transportation/Other			7						8						8						8						9						9						12,035						12,020
			$388						$400						4,235						4,256						$150						$139						23,494						25,621

WPL			Electric																								Gas
			Revenues												MWhs Sold												Revenues												Dths Sold
			2023						2022						2023						2022						2023						2022						2023						2022
Retail			$324						$313						2,657						2,737						$121						$118						10,851						12,494
Sales for resale:
Wholesale			34						32						511						527						N/A						N/A						N/A						N/A
Bulk power and other			16						23						747						821						N/A						N/A						N/A						N/A
Transportation/Other			6						5						7						9						5						5						20,579						17,857
			$380						$373						3,922						4,094						$126						$123						31,430						30,351

Sales Trends and Temperatures - Alliant Energy’s retail electric and gas sales volumes decreased 3% and 15%, respectively, for the three months ended March 31, 2023 compared to the same period in 2022, primarily due to changes in temperatures.

Estimated increases (decreases) 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
			2023						2022						Change																								2023						2022						Change
IPL			($4)						$5						($9)																								($3)						$3						($6)
WPL			(5)						2						(7)																								(3)						1						(4)
Total Alliant Energy			($9)						$7						($16)																								($6)						$4						($10)

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.

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Utility Electric Margin Variances - The following items contributed to increased (decreased) utility electric margins for the three months ended March 31, 2023 compared to the same period in 2022 as follows (in millions):

			Alliant Energy						IPL						WPL
Estimated changes in sales volumes caused by temperatures			($16)						($9)						($7)
Higher revenues at IPL due to changes in the renewable energy rider (mostly offset by changes in income taxes)			7						7						—
Other			7						3						5
			($2)						$1						($2)

Utility Gas Margin Variances - The following items contributed to increased (decreased) utility gas margins for the three months ended March 31, 2023 compared to the same period in 2022 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)			$6						$6						$—
Higher revenue requirements at WPL (a)			4						—						4
Estimated changes in sales volumes caused by temperatures			(10)						(6)						(4)
Other			1						1						—
			$1						$1						$—

(a)In December 2022, the PSCW issued an order authorizing an annual base rate increase of $9 million for WPL’s retail gas customers, covering the 2023 forward-looking Test Period, which reflects changes in weighted average cost of capital, updated depreciation rates and modifications to certain regulatory asset and regulatory liability amortizations. These retail gas rate changes were effective on January 1, 2023 and extend through the end of 2023.

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, 2023 compared to the same period in 2022 as follows (in millions):

			Alliant Energy						IPL						WPL
Higher energy efficiency expense at IPL (mostly offset by higher revenues)			($6)						($6)						$—
Higher generation operation and maintenance expenses			(5)						2						(7)
Other			(10)						(8)						(1)
			($21)						($12)						($8)

Other Income and Deductions Variances - The following items contributed to (increased) decreased other income and deductions for the three months ended March 31, 2023 compared to the same period in 2022 as follows (in millions):

			Alliant Energy						IPL						WPL
Higher interest expense primarily due to financings completed in 2023 and 2022, and higher interest rates			($20)						$—						($9)
Higher AFUDC primarily due to changes in construction work in progress balances related to WPL’s solar generation			8						—						7
Other			(1)						(1)						(1)
			($13)						($1)						($3)

Income Taxes - Refer to Note 9 for details of effective income tax rates.

LIQUIDITY AND CAPITAL RESOURCES

The liquidity and capital resources summary included in the 2022 Form 10-K has not changed materially, except as described below.

Liquidity Position - At March 31, 2023, Alliant Energy had $157 million of cash and cash equivalents, $940 million ($450 million at the parent company, $250 million at IPL and $240 million at WPL) of available capacity under the single revolving credit facility and $21 million of available capacity at IPL under its sales of accounts receivable program.

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Capital Structure - Capital structures at March 31, 2023 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
			2023						2022						2023						2022						2023						2022
Cash, cash equivalents and restricted cash, January 1			$24						$40						$15						$34						$5						$2
Cash flows from (used for):
Operating activities			188						251						24						89						185						167
Investing activities			(263)						(223)						70						18						(295)						(217)
Financing activities			212						3						(74)						(79)						191						52
Net increase			137						31						20						28						81						2
Cash, cash equivalents and restricted cash, March 31			$161						$71						$35						$62						$86						$4

Operating Activities - The following items contributed to increased (decreased) operating activity cash flows for the three months ended March 31, 2023 compared to the same period in 2022 (in millions):

			Alliant Energy						IPL						WPL
Changes in interest payments			($31)						$—						($17)
Decreased collections from IPL’s and WPL’s retail customers caused by temperature impacts on electric and gas sales			(26)						(15)						(11)
Changes in the sales of accounts receivable at IPL			(13)						(13)						—
Timing of intercompany payments and receipts			—						(5)						14
Other (primarily due to other changes in working capital)			7						(32)						32
			($63)						($65)						$18

Investing Activities - The following items contributed to increased (decreased) investing activity cash flows for the three months ended March 31, 2023 compared to the same period in 2022 (in millions):

			Alliant Energy						IPL						WPL
Higher utility construction and acquisition expenditures (a)			($110)						($5)						($104)
Changes in the amount of cash receipts on sold receivables			58						58						—
Proceeds from sale of partial ownership interest in West Riverside			25						—						25
Other			(13)						(1)						1
			($40)						$52						($78)

(a)Largely due to higher expenditures for WPL’s solar generation.

Construction and Acquisition Expenditures - In March 2023, WPL notified the PSCW that it currently expects estimated construction costs and related rate base additions associated with its 414 MW of new solar generation will exceed amounts approved by the PSCW in June 2022 by approximately 10-14% due to higher commodity, labor and other site-specific costs. A significant portion of these higher estimated construction costs are included in the anticipated construction and acquisition expenditures included in “Liquidity and Capital Resources” in the 2022 Form 10-K.

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Financing Activities - The following items contributed to increased (decreased) financing activity cash flows for the three months ended March 31, 2023 compared to the same period in 2022 (in millions):

			Alliant Energy						IPL						WPL
Lower payments to retire long-term debt			$300						$—						$—
Higher net proceeds from issuance of long-term debt			212						—						297
Net changes in the amount of commercial paper and other short-term borrowings outstanding			(293)						—						(151)
Other			(10)						5						(7)
			$209						$5						$139

State Regulatory Financing Authorization - In March 2023, WPL received authorization from the PSCW to have up to $500 million of short-term borrowings and/or letters of credit outstanding at any time through the expiration date of WPL’s credit facility agreement.

Common Stock Issuances - Refer to Note 6 for discussion of common stock issuances by Alliant Energy in 2023.

Short-term Debt - Refer to Note 7(a) for discussion of Alliant Energy’s, IPL’s and WPL’s single credit facility agreement that was amended and extended in March 2023, which includes a revised cross-default provision related to prepayment of material debt prior to the stated maturity and certain other confirming changes, as well as details for proceeds from AEF’s December 2022 term loan credit agreement.

Long-term Debt - Refer to Note 7(b) for discussion of Alliant Energy’s and WPL’s issuance of long-term debt in 2023.

Interest Rate Risk - As of March 31, 2023, Alliant Energy’s exposure to risk resulting from changes in interest rates associated with variable-rate borrowings was mitigated primarily due to its issuance of convertible senior notes and an interest rate swap on a portion of its variable-rate term loan borrowings, as well as WPL’s issuance of green bonds, all of which were executed in the first quarter of 2023. Assuming the impact of a hypothetical 100 basis point increase in interest rates on variable-rate borrowings and cash amounts outstanding under IPL’s sales of accounts receivable program at March 31, 2023, Alliant Energy’s annual pre-tax expense would increase by approximately $3 million.

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 2022 Form 10-K and has not changed materially from the items reported in the 2022 Form 10-K, except for the items described in Notes 4, 7 and 13.