What changed in this filing

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Item 7. Management’s Discussion and Analysis

2022-02-18 compared with 2021-02-19 · 178 added, 204 removed, 406 unchanged (48% of the section changed)

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Strategy and Mission

Alliant Energy’s mission is to deliver affordable energy solutions and exceptional service that its customers and communities count on - safely, efficiently and responsibly.

Alliant Energy’s mission is to deliver affordable energy solutions and exceptional service that its customers and communities count on - safely, efficiently, reliably and responsibly.

The mission is supported by a strategy focused on meeting the evolving expectations of customers while providing an attractive return for investors, as well as serving its customers and building strong communities.

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Key Highlights -

• WPL maintaining flat base rates in 2020 and 2021 by utilizing Federal Tax Reform benefits and lower fuel costs to offset higher revenue requirements from rate base additions.

• IPL’s renewable energy rider became effective February 26, 2020, which allows for annual adjustments to electric rates charged to IPL’s retail electric customers for actual renewable energy costs incurred to fund IPL’s 1,000 MW of wind generating facilities placed in service in 2019 and 2020, and tax benefits.

• Alliant Energy’s Clean Energy Blueprints, also known as its cleaner energy strategy, is expected to result in cost savings for its utility customers through the planned transition away from coal-fired EGUs and incorporation of additional renewable energy, renewable tax credits for investments in renewable energy projects, and utilization of renewable project tax equity financing under the current tax regulations.

• WPL maintaining flat base rates in 2021 by utilizing Federal Tax Reform benefits and expected lower fuel costs to offset higher revenue requirements from rate base additions.

• IPL’s renewable energy rider became effective February 26, 2020, which allows for annual adjustments to electric rates charged to IPL’s retail electric customers for actual renewable energy costs incurred to fund IPL’s 1,000 MW of wind EGUs placed in service in 2019 and 2020, and related tax benefits, including production tax credits.

• Providing $35 million of billing credits to IPL’s retail electric customers beginning in the third quarter of 2020 through June 2021, largely driven by Federal Tax Reform benefits for customers.

• Providing $42 million of billing credits to IPL’s retail electric customers in the second quarter of 2020 through its transmission cost rider for amounts previously collected in rates.

• Significant fuel cost reductions achieved in 2020 and further reductions in fuel cost expected in 2021 as a result of expansion of renewable generation, operating highly efficient, low cost natural gas facilities and shortening the term of IPL’s DAEC PPA by 5 years.

• Changes in recovery amounts for energy efficiency costs through the energy efficiency rider resulted in lower costs for IPL’s retail electric and gas customers in 2020.

• Significant fuel cost reductions achieved in 2021 as a result of expansion of renewable generation and shortening the term of IPL’s DAEC PPA by 5 years.

• Issuance of new long-term debt in 2021 at historically low interest rates for IPL ($300 million of 3.1% senior debentures due 2051) and WPL ($300 million of 1.95% green bonds due 2031).

• Redemption of IPL’s 5.1% cumulative preferred stock in 2021.

• Levelized cost recovery mechanism for the remaining net book value of Edgewater Unit 5, which helps reduce customer costs in 2022 and 2023.

Making customer-focused investments - Alliant Energy’s strategic priorities include making significant customer-focused investments toward cleaner energy and sustainable customer solutions.

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Key Highlights (refer to “ Customer Investments ” for details) -

• IPL’s completion of more than 500 MW of new wind farms:

Whispering Willow North (201 MW in January 2020), Golden Plains (200 MW in March 2020) and Richland (131 MW in September 2020).

• WPL’s completion of the natural gas-fired West Riverside Energy Center (723 MW in May 2020), the Kossuth wind farm (152 MW in October 2020) and the expansion of its gas distribution system in Western Wisconsin in November 2020.

• Planned development and acquisition of additional renewable energy, including approximately 1,000 MW of solar generation at WPL by the end of 2023, approximately 400 MW of solar generation by the end of 2023 at IPL and approximately 100 MW of distributed energy resources, including community solar and energy storage systems beginning in 2021 at IPL.

In addition, WPL may also develop additional solar generation and distributed energy resources.

• Planned development and acquisition of additional renewable energy, including approximately 1,100 MW of solar generation at WPL with in-service dates in 2022 and 2023, approximately 400 MW of solar generation at IPL with in-service dates in 2023 and 2024 and approximately 75 MW of battery storage in 2024 at IPL.

In addition, IPL and WPL continue to evaluate additional opportunities to add more renewable generation, including repowering of existing wind farms and additional solar generation and distributed energy resources, including community solar and energy storage systems.

• IPL’s December 2021 completion of the fuel switch of the Burlington Generating Station (212 MW) from coal to natural gas.

Growing customer demand - Alliant Energy’s strategy supports expanding electric and gas usage in its service territories by promoting electrification initiatives and economic development in the communities it serves.

Key Highlights -

• WPL entered into a wholesale power supply agreement with Consolidated Water Power Company, which was effective January 1, 2021 and is expected to bring approximately 60 MW of load to WPL’s electric system.

Table of Cont ents

• WPL entered into a new wholesale power supply agreement, which was effective January 1, 2021 and brought approximately 55 MW of load to WPL’s electric system in 2021.

• Alliant Energy has various development-ready sites throughout Iowa and Wisconsin, including the 1,300-acre Big Cedar Industrial Center Mega-site in Cedar Rapids, Iowa, and the 730-acre Prairie View Industrial Center Super Park in Ames, Iowa, which are rail-served ready-to-build manufacturing and industrial sites in close proximity to the regional airport and interstate freeways and access IPL’s electric services.

The Big Cedar Industrial Center Mega-site also accesses Travero’s rail and warehousing services.

The Big Cedar Industrial Center Mega-site also accesses Travero’s rail-served warehouse in Iowa.

In addition, the Beaver Dam Commerce Park is a 520-acre ready-to-build manufacturing and industrial site in Beaver Dam, Wisconsin, with access to commercial and freight airports, interstate freeways and WPL’s electric services.

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however, the degree to which the COVID-19 pandemic may impact such items in the future is currently unknown and will depend on future developments of the pandemic as well as possible additional actions by government and regulatory authorities.

Alliant Energy has mitigated the impact of sales declines from COVID-19 by accelerating planned cost transformation activities.

Alliant Energy has mitigated the impact of any sales declines from COVID-19 by accelerating planned cost transformation activities.

Actual and potential impacts from COVID-19 include, but are not limited to, the following:

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While Alliant Energy has not experienced any significant issues to-date, it continues to monitor potential disruptions or constraints in materials and supplies from key suppliers.

Alliant Energy’s construction projects are currently progressing as planned with added safety protocols, and while it continues to monitor its supply chain, there have been no immediate disruptions.

Alliant Energy’s wind farms under construction during the pandemic were placed in service as previously planned to meet the timing requirements to qualify for the maximum renewable tax credits.

Alliant Energy’s construction projects are currently progressing as planned with added safety protocols, and while it continues to monitor its supply chain, Alliant Energy has experienced supply constraints and commodity inflation in the solar market.

Alliant Energy’s wind farms under construction during the pandemic were placed in service in 2020 as previously planned to meet the timing requirements to qualify for the maximum renewable tax credits.

In addition, Alliant Energy does not currently expect any material changes to its construction and acquisition expenditures plans disclosed in “ Liquidity and Capital Resources ” resulting from COVID-19.

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Alliant Energy currently expects to incur incremental direct expenses related to certain of these operational and supply chain impacts but does not expect them to have a material impact on its results of operations.

Customer Impacts - COVID-19 has resulted in various travel restrictions and closures of commercial spaces and industrial facilities in Alliant Energy’s service territories.

While the total expected impact of COVID-19 on future sales is currently unknown, Alliant Energy has experienced higher electric residential sales and lower electric commercial and industrial sales since the outset of the pandemic, and expects these sales trends by customer class to continue into 2021 but at lower impacts than in 2020.

In 2020 compared to 2019, Alliant Energy’s retail electric residential temperature-normalized sales increased 3%, and its retail electric commercial and industrial temperature-normalized sales decreased 4% in aggregate.

In addition, Alliant Energy has not experienced a material increase in customer bankruptcies in 2020.

Liquidity and Capital Resources Impacts - In response to the uncertainty of the impacts of COVID-19, Alliant Energy enhanced its liquidity position in the first quarter of 2020 by settling $222 million under the equity forward sale agreements and AEF accelerating the refinancing of its $300 million term-loan credit agreement that would have been due in April 2020.

Alliant Energy also enhanced its liquidity position by accelerating and/or increasing the size of new debt offerings in 2020, including WPL's issuance of $350 million of debentures due 2050 in April 2020, IPL's issuance of $400 million of senior debentures due 2030 in June 2020 and AEF's issuance of $200 million of senior notes due 2026 in November 2020.

Alliant Energy maintains a single credit facility, which allows borrowing capacity to shift among Alliant Energy (at the parent company level), IPL and WPL, as needed.

During March and April 2020, Alliant Energy and WPL borrowed under the single credit facility for a portion of their temporary cash needs to obtain more favorable interest rates than available in the commercial paper market at that time.

Customer Impacts - COVID-19 has resulted in various travel restrictions and closures of commercial spaces and industrial facilities in Alliant Energy’s service territories, especially early on in the pandemic.

While the total expected impact of COVID-19 on future sales is currently unknown, Alliant Energy experienced higher electric residential sales and lower electric commercial and industrial sales in 2020, and lower electric residential sales and higher electric commercial and industrial sales in 2021.

In addition, Alliant Energy has not experienced a material increase in customer bankruptcies in 2020 or 2021.

Liquidity and Capital Resources Impacts - Alliant Energy maintains a single credit facility, which allows borrowing capacity to shift among Alliant Energy (at the parent company level), IPL and WPL, as needed.

In addition, IPL maintains a sales of accounts receivable program as an alternative financing source;

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In addition, Alliant Energy currently expects to have adequate liquidity to fulfill its contractual obligations, access to capital markets and continue with its planned quarterly dividend payments.

Table of Cont ents

Credit Risk Impacts - Alliant Energy’s temporary suspension of service disconnects and waivers of late payment fees for its customers, as well as broad economic factors, may negatively impact its customers’ willingness and ability to pay, which could increase customer arrears and bad debts, and negatively impact Alliant Energy’s cash flows from operations.

Credit Risk Impacts - Alliant Energy has not experienced any material negative impacts related to customer arrears and bad debts as a result of the pandemic;

however, if government funds are no longer available for customers to help pay their utility bills, it may negatively impact Alliant Energy’s customers’ willingness and ability to pay, which could negatively impact Alliant Energy’s cash flows from operations.

Currently, Alliant Energy does not anticipate any material credit risk related to its commodity transactions.

Regulatory Impacts - In March 2020, WPL received authorization from the PSCW to defer certain incremental costs incurred resulting from COVID-19, including bad debt expenses and foregone revenues from late payment fees.

In August 2020, IPL received authorization from the IUB for utilization of a regulatory asset account to track increased expenses and other financial impacts incurred after March 1, 2020 resulting from COVID-19.

The recovery of any authorized deferrals will be addressed in future regulatory proceedings.

In 2020, such amounts were not material.

Legislative Impacts - In March 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted.

The most significant provision of the CARES Act for Alliant Energy relates to an acceleration of refunds of existing alternative minimum tax credits to increase liquidity.

In July 2020, Alliant Energy received $11 million of credits that otherwise would have been received in 2021 and 2022.

In addition, Alliant Energy has deferred certain 2020 payroll taxes to 2021 and 2022.

The CARES Act also provides additional funding to the Low Income Home Energy Assistance Program, which assists certain of Alliant Energy’s customers with managing their energy costs, as well as financial support for certain of Alliant Energy’s residential, small business and non-profit customers.

In December 2020, the Coronavirus Response and Relief Supplemental Appropriations Act of 2021 (CRRSA) was enacted.

The most significant provision of the CRRSA Act for Alliant Energy relates to the extension of certain renewable tax credits, and as a result, Alliant Energy will evaluate additional opportunities for repowering of its existing wind farms and additional solar projects beyond 2023.

The CRRSA Act also provides additional funding to the Low Income Home Energy Assistance Program, as well as financial support for certain of Alliant Energy’s residential, small business and non-profit customers.

Derecho Windstorm

In August 2020, a derecho windstorm caused considerable damage to IPL’s electric distribution system in its service territory, and over 250,000 of its customers lost power.

IPL completed its initial restoration efforts in August 2020 and permanent repairs to the system will continue into 2021.

Refer to Note 2 for further discussion, including IPL’s current estimate and requested regulatory treatment of certain incremental costs and benefits incurred resulting from the windstorm.

Legislative Impacts - Refer to “ Le gislative Matters ” for discussion of legislation that was enacted in 2020 related to impacts from COVID-19.

RESULTS OF OPERATIONS

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Alliant Energy Consolidated $659 $2.63 $614 $2.47

Table of Cont ents

Alliant Energy’s Utilities and Corporate Services income increased $46 million in 2021 compared to 2020.

The increase was primarily due to higher earnings resulting from IPL’s and WPL’s increasing rate base.

This item was partially offset by higher depreciation expense, lower AFUDC and higher WPL electric fuel-related costs, net of recoveries.

The increase was primarily due to higher earnings resulting from IPL’s and WPL’s increasing rate base, as well as higher sales due in part to the derecho windstorm in Iowa and COVID-19 sales impacts in 2020.

These items were partially offset by higher depreciation expense and lower AFUDC.

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):

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Alliant Energy IPL WPL

Total higher (lower) utility electric margin variance (Refer to details below) $13 $39 ($26)

Total lower utility gas margin variance (Refer to details below) (42) (35) (7)

Total lower other operation and maintenance expenses variance (Refer to details below) 42 29 7

Higher depreciation and amortization expense primarily due to additional plant in service in 2019 and 2020, including IPL’s new wind generation and WPL’s West Riverside Energy Center (48) (29) (18)

Other (3) 3 3

Total higher utility electric margin variance (Refer to details below) $83 $45 $38

Total higher utility gas margin variance (Refer to details below) 7 7 —

Total (higher) lower other operation and maintenance expenses variance (Refer to details below) (6) 13 (14)

Higher depreciation and amortization expense primarily due to additional plant in service in 2020 and 2021, including IPL’s new wind generation, and WPL’s West Riverside Energy Center and Kossuth wind farm

(42) (19) (22)

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$1,329 $1,225 15,183 13,303 $191 $165 81,739 86,547

Table of Cont ents

Sales Trends and Temperatures - Alliant Energy’s retail electric and gas sales volumes decreased 2% and 13% in 2020 compared to 2019, respectively, primarily due to the impacts from COVID-19, the derecho windstorm, and changes in temperatures in Alliant Energy’s service territories, partially offset by an extra day of sales in 2020 due to leap year.

In 2020, COVID-19 impacts on sales volumes resulted in increases for retail electric residential sales volumes and decreases for retail electric commercial and industrial sales volumes.

Sales Trends and Temperatures - Alliant Energy’s retail electric sales volumes increased 4% in 2021 compared to 2020, primarily due to changes in temperatures, COVID-19 impacts in Alliant Energy’s service territories and impacts from the derecho windstorm in IPL’s service territory in August 2020, partially offset by the impact on sales of the additional day due to leap year in 2020.

Alliant Energy’s retail gas sales volumes decreased 1% in 2021 compared to 2020, primarily due to changes in temperatures and the impact on sales of the additional day due to leap year in 2020, partially offset by COVID-19 impacts in Alliant Energy’s service territories.

In 2021, changes in COVID-19 impacts resulted in decreases for retail electric residential sales volumes and increases for retail electric commercial and industrial sales.

Estimated increases (decreases) to electric and gas margins from the impacts of temperatures were as follows (in millions):

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Total Alliant Energy $19 $4 ($3) ($1)

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 2021 compared to 2020 (in millions):

Alliant Energy IPL WPL

Impact of IPL’s retail electric final and interim rate increases effective February 2020 and April 2019, respectively (a) $63 $63 $—

Higher revenues at IPL due to credits on customers’ bills in 2019 related to production tax credits through the fuel-related cost recovery mechanism (offset by changes in income tax) 16 16 —

Lower purchased electric capacity expense at WPL 8 — 8

Higher revenues at IPL due to changes in electric tax benefit rider credits on customers’ bills (offset by changes in income tax expense) 6 6 —

Higher WPL electric fuel-related costs, net of recoveries (18) — (18)

Lower revenues at IPL due to credits on customers’ bills in 2020 related to excess deferred amortization through the tax benefit rider (offset by changes in income tax) (15) (15) —

Changes in timing of collection of electric transmission service costs at WPL (10) — (10)

Higher revenue requirements due to increasing rate base (a) (b) $43 $29 $14

Estimated changes in sales volumes caused by temperatures 15 11 4

Lower revenues at IPL related to changes in recovery amounts for energy efficiency costs through the energy efficiency rider (offset by changes in energy efficiency expense) (8) (8) —

Other (includes lower temperature-normalized sales primarily due to the derecho windstorm and COVID-19 impacts) (19) (14) (5)

$13 $39 ($26)

(a) IPL’s interim retail electric base rate increase was effective April 1, 2019 and final retail electric base rate increase was effective February 26, 2020.

Higher wholesale margins at WPL partially due to a new wholesale customer in 2021 8 — 8

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) (14) (14) —

Other (includes higher temperature-normalized sales primarily due to the derecho windstorm in 2020 and COVID-19 impacts) 31 19 12

(a) IPL’s final retail electric base rate increase was effective February 26, 2020.

Effective with final rates, the recovery of, and return on, IPL’s new wind generation placed in service in 2019 and 2020 is provided through the renewable energy rider.

Both interim and final rate increases include a reduction for anticipated production tax credits for IPL’s new wind generation.

The final rate increase includes a reduction for anticipated production tax credits for IPL’s new wind generation.

This reduction is expected to be offset by a reduction in income tax expense resulting from production tax credits recognized from this new wind generation.

In September 2020, IPL made a buyout payment of $110 million in exchange for shortening the terms of its DAEC PPA by 5 years.

The higher revenue requirements from the buyout payment, including a return on such costs, is being recovered from IPL’s retail customers from 2021 through the end of 2025.

Refer to Note 2 for further discussion.

(b) In December 2020, the PSCW issued an order authorizing WPL to maintain its current retail electric base rates through the end of 2021.

WPL utilized anticipated fuel-related cost savings and excess deferred income tax benefits in 2021 to offset the revenue requirement impacts of increasing electric rate base, including the Kossuth wind farm, which was placed in service in October 2020.

The lower fuel expense benefits are recognized in electric margin and the additional amount of excess deferred income tax benefits is recognized as a reduction in income tax expense.

Utility Gas Margin Variances - The following items contributed to increased (decreased) utility gas margins for 2021 compared to 2020 (in millions):

Alliant Energy IPL WPL

Lower revenues at IPL related to changes in recovery amounts for energy efficiency costs through the energy efficiency rider (offset by changes in energy efficiency expense) ($34) ($34) $—

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) $7 $7 $—

Estimated changes in sales volumes caused by temperatures (2) (1) (1)

Impact of IPL’s retail gas rate increase effective January 2020 11 11 —

Other (includes lower temperature-normalized sales primarily due to COVID-19 impacts) (10) (7) (3)

($42) ($35) ($7)

Table of Cont ents

Other Operation and Maintenance Expenses Variances - The following items contributed to (increased) decreased other operation and maintenance expenses for 2021 compared to 2020 (in millions):

Alliant Energy IPL WPL

Lower energy efficiency expense at IPL (primarily offset by lower electric and gas revenues) $39 $39 $—

Lower incentive compensation expense 9 6 3

Credit loss adjustments related to guarantees for an affiliate of Whiting Petroleum (Refer to Note 17(d) )

Higher generation operation and maintenance expenses (primarily related to new generation, including wind at IPL and WPL and West Riverside at WPL) (8) (4) (4)

Higher generation operation and maintenance expenses ($17) ($12) ($5)

Credit loss adjustments in 2020 related to guarantees for an affiliate of Whiting Petroleum (Refer to Note 17(d) )

Lower bad debt expense at IPL 13 13 —

Lower energy efficiency expense at IPL (primarily offset by changes in electric and gas revenues) 7 7 —

Other (2) 5 (9)

($6) $13 ($14)

Other Income and Deductions Variances - The following items contributed to (increased) decreased other income and deductions for 2021 compared to 2020 (in millions):

Alliant Energy IPL WPL

Higher interest expense primarily due to higher average outstanding long-term debt balances, partially offset by lower interest rates on short-term debt outstanding at Alliant Energy and WPL ($2) ($12) ($2)

Lower AFUDC primarily due to changes in CWIP balances related to IPL’s new wind generation and WPL’s West Riverside Energy Center and new wind generation (38) (26) (12)

Other (Refer to Note 6 for details of increased income from unconsolidated equity investments)

Lower AFUDC primarily due to changes in CWIP balances related to IPL’s new wind generation, and WPL’s West Riverside Energy Center and Kossuth wind farm, placed in service in 2020 ($30) ($15) ($15)

($22) ($8) ($15)

Income Taxes - Refer to Note 12 for details of effective income tax rates.

Preferred Dividend Requirements of IPL - Refer to Note 8 for details of the redemption of IPL’s 5.1% cumulative preferred stock in December 2021, including a $5 million non-cash charge recorded in 2021 related to this transaction.

Other Future Considerations - In addition to items discussed in this report, the following key items could impact Alliant Energy’s, IPL’s and WPL’s future financial condition or results of operations:

• Financing Plans - WPL currently expects to issue up to $300 million of long-term debt in 2021.

Alliant Energy currently expects to issue up to $25 million of common stock in 2021 through its Shareowner Direct Plan.

• Financing Plans - WPL and AEF currently expect to issue up to $600 million and $800 million of long-term debt, respectively, in 2022.

WPL, AEF and Corporate Services have $250 million, $300 million and $75 million of long-term debt maturing in 2022, respectively.

Alliant Energy currently expects to issue approximately $25 million of common stock in 2022 through its Shareowner Direct Plan.

• Common Stock Dividends - Alliant Energy announced a 6% increase in its targeted 2022 annual common stock dividend to $1.71 per share, which is equivalent to a quarterly rate of $0.4275 per share, beginning with the February 2022 dividend payment.

The timing and amount of future dividends is subject to an approved dividend declaration from Alliant Energy’s Board of Directors, and is dependent upon earnings expectations, capital requirements, and general financial business conditions, among other factors.

• Higher Earnings on Increasing Rate Base - Alliant Energy, IPL and WPL currently expect an increase in earnings in 2021 compared to 2020 due to impacts from increasing revenue requirements related to investments in the utility business, including IPL’s and WPL’s wind investments, WPL’s Western Wisconsin gas distribution system expansion, and the impacts of IPL’s DAEC PPA amendment buyout payment.

• Extreme Temperatures - In February 2021, portions of the central and southern U.S., including Alliant Energy’s service territories, experienced a prolonged period of very cold temperatures and a series of winter storms.

This resulted in significant volatility and increases in commodity prices caused by higher demand for electricity and natural gas and disruptions in commodity supply.

As a result, Alliant Energy currently expects to incur higher electric production fuel and cost of gas sold expenses in 2021 compared to 2020 related to the extreme temperatures and winter storms.

Any changes in electric production fuel and cost of gas sold is expected to be recovered through IPL’s and WPL’s cost recovery mechanisms resulting in impacts to customer bills in 2021.

As a result of these impacts to customers during a pandemic, Alliant Energy plans to work with the respective commissions to evaluate the recovery of any higher costs over a longer period of time.

• Depreciation and Amortization Expenses - Alliant Energy, IPL and WPL currently expect an increase in depreciation and amortization expenses in 2021 compared to 2020 due to property additions, including IPL’s and WPL’s expansion of wind generation and WPL’s natural gas-fired West Riverside Energy Center.

• Allowance for Funds Used During Construction - Alliant Energy currently expects AFUDC to decrease in 2021 compared to 2020 primarily due to decreased CWIP balances related to IPL’s and WPL’s wind generation and WPL’s West Riverside Energy Center, which were placed in service in 2020.

Table of Cont ents

• Higher Earnings on Increasing Rate Base - Alliant Energy and WPL currently expect an increase in earnings in 2022 compared to 2021 due to impacts from increasing revenue requirements related to investments in the utility business, including WPL’s solar investments.

WPL’s increased revenue requirements are expected to be offset by higher income tax expense as a result of lower tax benefits.

• Depreciation and Amortization Expenses - Alliant Energy, IPL and WPL currently expect an increase in depreciation and amortization expenses in 2022 compared to 2021 due to property additions, including WPL’s expansion of solar generation.

• Interest Expense - Alliant Energy, IPL and WPL currently expect an increase in interest expense in 2022 compared to 2021 due to financings completed in 2021 and planned in 2022 as discussed above.

• Allowance for Funds Used During Construction - Alliant Energy and WPL currently expect AFUDC to increase in 2022 compared to 2021 primarily due to increased CWIP balances related to WPL’s solar generation.

• Preferred Dividend Requirements of IPL - Alliant Energy and IPL currently expect a decrease in preferred dividend requirements in 2022 compared to 2021 due to the redemption of IPL’s 5.1% cumulative preferred stock in December 2021.

CUSTOMER INVESTMENTS

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Environmental Stewardship

Alliant Energy’s environmental stewardship is focused on meeting its customers’ energy needs in an economical, efficient and sustainable manner.

Alliant Energy’s environmental stewardship is focused on meeting its customers’ energy needs in an economical, efficient, reliable and sustainable manner.

Alliant Energy proactively considers future environmental compliance requirements and proposed regulations in its planning, decision-making, construction and ongoing operations activities.

Alliant Energy is focused on executing a long-term strategy to deliver reliable and affordable energy with lower emissions independent of changing policies and political landscape.

To achieve these long-term goals, Alliant Energy will transition away from coal-fired EGUs and incorporate more renewable energy, distributed energy resources, energy efficiency, demand response, highly-efficient natural gas-fired EGUs and other emerging technologies such as energy storage.

To achieve these long-term goals, Alliant Energy will transition away from coal-fired EGUs by

incorporating renewable energy, distributed energy resources, energy efficiency, demand response, highly-efficient natural gas-fired EGUs and other emerging technologies such as energy storage.

Alliant Energy’s voluntary environmental-related goals and achievements include the following:

• Reduced air emissions for sulfur dioxide by 90%, nitrogen oxide by 80% and mercury by 90% from 2005 levels, which it achieved in 2019.

• By 2030, reduce CO2 emissions by 50% and water supply by 75% from 2005 levels from its owned fossil-fueled generation, as well as transition 100% of its light-duty fleet vehicles to be electric.

• Exceeded its 2020 targets by reducing air emissions for sulfur dioxide by over 90%, nitrogen oxide by over 80% and mercury by over 90% from 2005 levels.

• By 2030, reduce CO2 emissions by 50% from its owned fossil-fueled EGUs and reduce electric utility water supply by 75% from 2005 levels, and transition 100% of its owned light-duty fleet vehicles to be electric, as well as partner to plant more than 1 million trees by the end of 2030.

• By 2040, eliminate all coal-fired EGUs from its generating fleet.

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Renewable Generation

Alliant Energy’s cleaner energy strategy, or Clean Energy Blueprint, includes the planned development and acquisition of additional renewable energy, including approximately 1,000 MW of solar generation at WPL by the end of 2023, approximately 400 MW of solar generation by the end of 2023 at IPL and approximately 100 MW of distributed energy resources, including community solar and energy storage systems beginning in 2021 at IPL.

Alliant Energy, IPL and WPL continue to evaluate additional opportunities to add more renewable generation, including repowering of existing wind farms and additional solar generation and distributed energy resources.

Estimated capital expenditures for these planned projects for 2021 through 2024 are included in the “Renewable projects” line in the construction and acquisition table in “ Liquidity and Capital Resources .” IPL and WPL currently assume that a portion of the construction costs for the new solar generation will be financed by a tax equity partner, which is discussed in “IPL and WPL Solar Project Tax Equity Credits” in “ Liquidity and Capital Resources .” In addition, Alliant Energy completed the construction and acquisition of approximately 1,200 MW of wind generation in aggregate (approximately 1,000 MW at IPL and approximately 200 MW at WPL) from 2018 through 2020.

WPL’s Solar Generation - In May 2020, WPL filed a CA with the PSCW for approval to acquire, construct, own, and operate 675 MW of new solar generation in the following Wisconsin counties:

Grant (200 MW in 2023), Sheboygan (150 MW in 2022), Wood (150 MW in 2022), Jefferson (75 MW in 2022), Richland (50 MW in 2022) and Rock (50 MW in 2023).

The 675 MW of new solar generation would replace energy and capacity being eliminated with the planned retirement of the coal-fired Edgewater Generating Station (414 MW) by the end of 2022, and Columbia Unit 1 by the end of 2023 and Columbia Unit 2 by the end of 2024 (595 MW in aggregate).

In addition, WPL currently expects to file a second CA with the PSCW in the first half of 2021 for approximately 325 MW of new solar generation.

As a result of WPL’s neighboring utilities anticipated exercise of their options to purchase a partial ownership interest in West Riverside, WPL anticipates additional capacity needs by 2024.

IPL’s Solar Generation and Distributed Energy Resources - IPL’s plans include development and acquisition of up to 400 MW of solar generation by the end of 2023 and up to 100 MW of distributed energy resources, including community solar and energy storage systems beginning in 2021.

IPL currently plans to file for advance rate-making principles for up to 400 MW of solar generation in the first half of 2021.

The 400 MW of new solar generation would help replace a portion of the energy and capacity expected to be eliminated with the planned retirement of the coal-fired Lansing Generating Station (275 MW) by the end of 2022 and the expected reduction of energy and capacity resulting from the planned fuel switch of the Burlington Generating Station (212 MW) from coal to natural gas by the end of 2021.

IPL’s Expansion of Wind Generation - In 2016 and 2018, IPL received approvals from the IUB for advance rate-making principles for 1,000 MW of new wind generation .

IPL completed the construction of various wind farms as follows:

Wind Site Nameplate Capacity In-service Date Location

Upland Prairie 299 MW March 2019 Clay and Dickinson Counties, Iowa

English Farms 172 MW March 2019 Poweshiek County, Iowa

Whispering Willow North 201 MW January 2020 Franklin County, Iowa

Golden Plains 200 MW March 2020 Winnebago and Kossuth Counties, Iowa

Richland 131 MW September 2020 Sac County, Iowa

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WPL’s Expansion of Wind Generation - In October 2020, WPL completed the construction of the Kossuth wind farm (152 MW) in Kossuth County, Iowa, pursuant to approvals from the PSCW.

In addition, WPL acquired a partial ownership interest in the assets of the Forward Wind Energy Center located in Wisconsin (59 MW) in 2018, pursuant to approvals from the PSCW and FERC.

Alliant Energy has developed Clean Energy Blueprints, or its cleaner energy strategy, as a guide to meet customer demand for affordable, reliable and cleaner energy in Iowa and Wisconsin.

This strategy includes the planned development and acquisition of additional renewable energy, including approximately 1,100 MW of solar generation at WPL with in-service dates in 2022 and 2023, approximately 400 MW of solar generation at IPL with in-service dates in 2023 and 2024 and approximately 75 MW of battery storage in 2024 at IPL.

In addition, WPL’s plans include up to 300 MW of additional capacity.

Alliant Energy, IPL and WPL continue to evaluate additional opportunities to add more renewable generation, repowering of existing wind farms, and distributed energy resources, including community solar and energy storage systems.

Estimated capital expenditures for these planned projects for 2022 through 2025 are included in the “Renewable projects” line in the construction and acquisition table in “ Liquidity and Capital Resources .” These estimates include current expectations for higher costs for various projects, as supply constraints and commodity inflation continue to be prevalent in the solar market.

IPL and WPL currently assume that a portion of the construction costs for the new solar generation will be financed by a tax equity partner, which is discussed in “IPL and WPL Solar Project Tax Equity Financing” in “ Liquidity and Capital Resources .” In addition, Alliant Energy completed the construction and acquisition of approximately 1,200 MW of wind generation in aggregate (approximately 1,000 MW at IPL and approximately 200 MW at WPL) from 2018 through 2020.

WPL’s Solar Generation and Distributed Energy Resources - In June 2021, WPL received an order from the PSCW for its first CA authorizing WPL to acquire, own, and operate 675 MW of new solar generation in the following Wisconsin counties:

Grant (200 MW), Sheboygan (150 MW), Wood (150 MW), Jefferson (75 MW), Richland (50 MW) and Rock (50 MW).

In July 2021, WPL notified the PSCW that it currently expects estimated construction costs and related rate base additions associated with its 675 MW of new solar generation will exceed amounts approved by the PSCW in June 2021 by approximately 7-10%.

In September 2021 and January 2022, WPL filed revised estimated construction costs and related rate base additions for its second CA with the PSCW for approval 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).

These projects in the first and second CAs are expected to be placed in service in 2022 and 2023.

The 1,089 MW of new solar generation would replace energy and capacity being eliminated with the planned retirement of the coal-fired Edgewater Generating Station (414 MW) by early 2023, and Columbia Unit 1 by the end of 2023 and Columbia Unit 2 by the end of 2024 (595 MW in aggregate), which are the last coal-fired EGUs at WPL.

The retirement of these coal-fired EGUs supports Alliant Energy’s strategy, which is focused on meeting its customers’ energy needs in an economical, efficient, reliable and sustainable manner.

As a result of WPL’s neighboring utilities’ anticipated purchase of a partial ownership interest in West Riverside and any requirements resulting from MISO’s resource adequacy proposal that was issued in 2021, WPL anticipates additional capacity needs by 2024, which is expected to result in additional renewable energy resources and energy storage systems.

WPL currently expects to request approval from the PSCW in 2022 for up to 300 MW of additional capacity.

IPL’s Solar Generation and Distributed Energy Resources - In November 2021, IPL filed for advance rate-making principles with the IUB 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.

The advance rate-making principles filing included requests for a fixed cost cap of $1,575/kilowatt, including AFUDC and transmission upgrade costs among other costs, and a return on common equity of 11.40%, and proposes that a portion of the construction be financed by tax equity partners.

In addition, the filing included a request that any costs incurred in excess of the cost cap be incorporated into rates if determined to be reasonable and prudent.

The 400 MW of new solar generation and 75 MW of battery storage would help replace a portion of the energy and capacity expected to be eliminated with the planned retirement of the coal-fired Lansing Generating Station (275 MW) by the end of 2022 and the expected reduction of energy and capacity resulting from the December 2021 fuel switch of the Burlington Generating Station (212 MW) from coal to natural gas.

In addition, IPL’s plans include additional renewables and distributed energy resources, including community solar and energy storage systems, to add energy and capacity.

Complementary Generation Investments

WPL’s Construction of West Riverside Natural Gas-fired Generating Station - In 2016, WPL received an order from the PSCW authorizing WPL to construct a natural gas-fired combined-cycle EGU in Beloit, Wisconsin, referred to as West Riverside.

WPL’s construction of West Riverside began in 2016 and the 723 MW EGU was placed in service in May 2020.

West Riverside replaces energy and capacity being eliminated with the retirements of various EGUs.

WPL’s West Riverside Natural Gas-fired Generating Station - In 2020, WPL completed the construction of West Riverside, a 723 MW natural gas-fired combined-cycle EGU in Beloit, Wisconsin.

WPL entered into agreements with neighboring utilities and electric cooperatives that provide each of them options to purchase a partial ownership interest in West Riverside.

The purchase price for such options is based on the ownership interest acquired and the net book value of West Riverside on the date of the purchase.

The exercise of the WPSC and MGE options is subject to PSCW approval, and the timing and ownership amounts of the options are as follows:

purchase price for such options is based on the ownership interest acquired and the net book value of West Riverside on the date of the purchase.

The exercise of the WPSC and MGE options is subject to PSCW approval, which is currently expected by early 2023, and the timing and ownership amounts of the options are as follows:

Counterparty Option Amount and Timing

Wisconsin Public Service Corporation (WPSC) Up to 200 MW may be exercised through May 2024 (no more than 100 MW to be acquired prior to May 2022) (a)

Madison Gas and Electric Company (MGE) Up to 50 MW may be exercised through May 2025 (no more than 25 MW to be acquired prior to May 2022)

Electric cooperatives Approximately 60 MW were exercised January 2018

(a) If WPSC exercises its options, WPL may exercise reciprocal options, subject to approval by the PSCW, to purchase up to 200 MW of any natural-gas combined-cycle EGU that either WPSC or its affiliated utility, Wisconsin Electric Power Company, places in service within 10 years of the date West Riverside is placed in service.

Wisconsin Public Service Corporation (WPSC) 100 MW were exercised January 2022;

additionally, up to 100 MW may be exercised between May 15, 2022 and May 15, 2024 (a)

Madison Gas and Electric Company (MGE) 25 MW were exercised January 2022;

additionally, up to 25 MW may be exercised between May 15, 2022 and May 15, 2025

Electric cooperatives Approximately 60 MW were acquired January 2018

(a) Upon WPSC’s exercise of its options, WPL may exercise reciprocal options, subject to approval by the PSCW, to purchase up to 200 MW of any natural-gas combined-cycle EGU that either WPSC or its affiliated utility, Wisconsin Electric Power Company, places in service prior to May 2030.

Plant Retirements and Fuel Switching - The current strategy includes the retirement, or fuel switch from coal to natural gas, of various EGUs in the next several years.

IPL currently expects to retire the coal-fired Lansing Generating Station (275 MW) by the end of 2022 and fuel switch the Burlington Generating Station (212 MW) from coal to natural gas by the end of 2021.

WPL currently expects to retire the coal-fired Edgewater Generating Station (414 MW) by the end of 2022, Columbia Unit 1 by the end of 2023 and Columbia Unit 2 by the end of 2024.

In December 2021, completed the fuel switch of the Burlington Generating Station (212 MW) from coal to natural gas.

IPL currently expects to retire the coal-fired Lansing Generating Station (275 MW) by the end of 2022.

WPL currently expects to retire the coal-fired Edgewater Generating Station (414 MW) by early 2023, Columbia Unit 1 by the end of 2023 and Columbia Unit 2 by the end of 2024.

Alliant Energy, IPL and WPL are working with MISO, state regulatory commissions and other regulatory agencies, as required, to determine the timing of these actions, which are subject to change depending on operational, regulatory, market and other factors.

Refer to Note 3 for additional details on these EGUs, as well as Note 17(e) for discussion of IPL’s requirements to fuel switch or retire certain EGUs under a Consent Decree.

Refer to Note 3 for additional details on these EGUs.

Other Customer-focused Investments

Electric and Gas Distribution Systems - Customer-focused investments include replacing, modernizing and upgrading infrastructure in the electric and gas distribution systems.

Electric system investments will focus on areas such as improving resiliency with more underground electric distribution and enabling distributed energy solutions with higher capacity lines.

Electric system investments will focus on areas such as improving reliability and resiliency with more underground electric distribution and enabling distributed energy solutions with higher capacity lines.

Gas system investments will focus on pipeline replacement to ensure safety and pipeline expansion to support reliability and economic development.

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Gas Pipeline Expansion - IPL and WPL currently expect to make investments to extend various gas distribution systems to provide natural gas to unserved or underserved areas in their service territories.

In April 2020, WPL received authorization from the PSCW to expand its gas distribution system in Western Wisconsin, which was completed in November 2020.

Gas Pipeline Safety - In October 2019, the Pipeline and Hazardous Materials Safety Administration published a final rule that updates safety requirements for gas transmission pipelines, and various updated procedures were implemented in July 2020.

Plans to address certain requirements for specific pipelines must be developed by July 2021, and remediation efforts must be completed by July 2035.

Gas Pipeline Safety - In 2019, the Pipeline and Hazardous Materials Safety Administration published a final rule that updates safety requirements for gas transmission pipelines, and various updated procedures were implemented in 2020.

Plans to address certain requirements for specific pipelines were developed and implemented, and remediation efforts must be completed by July 2035.

In anticipation of these rule changes, Alliant Energy, IPL and WPL have been proactively replacing certain of IPL’s transmission pipelines and making modifications to certain of WPL’s transmission pipelines.

Alliant Energy, IPL, and WPL also continue to evaluate the impact of this final rule and resulting remediation plans on their financial condition and results of operations.

Technology - Alliant Energy, IPL and WPL currently plan to make investments in technology to enhance productivity and efficiency through automation, customer self-service and telework.

Estimated capital expenditures for expected and current technology projects for 2022 through 2025 are included in the “Other” line in the construction and acquisition expenditures table in “ Liquidity and Capital Resources .”

Non-utility business - Alliant Energy continues to explore growth of its Travero businesses and other limited scope opportunities outside of, but complimentary to, Alliant Energy’s core utility business.

This non-utility strategy continues to evolve through exploration of modest strategic opportunities that are accretive to earnings and cash flows within and outside of Alliant Energy’s service territories.

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This non-utility strategy continues to evolve through exploration of modest strategic opportunities that are accretive to earnings and cash flows.

Retail Base Rate Filings - Base rate changes reflect both returns on additions to infrastructure and recovery of changes in costs incurred or expected to be incurred.

Given that a portion of the rate changes will offset changes in costs, revenues from rate changes should not be expected to result in an equal change in net income for either IPL or WPL.

WPL’s Retail Electric and Gas Rate Reviews (2022/2023 Forward-looking Test Period) - 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 intervenor groups.

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 and revenue requirement impacts of increasing electric and gas rate base, including investments in solar generation.

In addition, the PSCW authorized WPL to receive a recovery of and a return on the remaining net book value of Edgewater Unit 5 through 2023.

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.

WPL expects to file a limited reopener by August 2022 to adjust retail gas rates for the 2023 forward-looking Test Period, which will be limited to changes in weighted average cost of capital, updated depreciation rates and modifications to certain regulatory asset and regulatory liability amortizations.

WPL’s settlement extends, with certain modifications, an earnings sharing mechanism through 2023.

Under the earnings sharing mechanism, WPL will defer a portion of its earnings if its annual regulatory return on common equity exceeds 10.25% during the 2022/2023 Test Period.

WPL must defer 50% of its excess earnings between 10.25% and 10.75%, and 100% of any excess earnings above 10.75%.

Through 2023, any such deferral is required to be offset against the remaining net book value of Edgewater Unit 5, which is currently expected to be retired by early 2023.

IPL’s Retail Electric and Gas Rate Reviews (2020 Forward-looking Test Period) - In 2019, IPL filed retail electric and gas rate review requests with the IUB covering the 2020 forward-looking Test Period.

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Final retail gas rates were effective January 10, 2020.

In 2021, the IUB issued orders for IPL’s 2020 forward-looking Test Period electric and gas subsequent proceedings, which compared actual revenues and costs to those initially forecasted by IPL, and authorized IPL to main its current retail electric and gas rates.

Refer to Note 2 for details.

IPL currently expects to file a subsequent proceeding with the IUB in the second quarter of 2021 for its 2020 Forward-looking Test Period retail electric and gas rate reviews, which will compare actual revenues and costs to those initially forecasted by IPL.

IPL currently does not expect any rate adjustments from the subsequent proceeding.

WPL’s Retail Electric and Gas Rate Review (2021 Forward-looking Test Period) - In December 2020, the PSCW issued an order authorizing WPL to maintain its current retail electric and gas base rates, authorized return on common equity, regulatory capital structure and earnings sharing mechanism through the end of 2021.

WPL will utilize anticipated fuel-related cost savings and excess deferred income tax benefits in 2021 to offset the revenue requirement impacts of increasing electric and gas rate base, including the Kossuth wind farm, which was placed in service in October 2020, and the expansion of its gas distribution system in Western Wisconsin, which was placed in service in November 2020.

Planned Rate Review - WPL currently expects to file a retail electric and gas rate review with the PSCW in the second quarter of 2021 for either a single or multiple year forward-looking test period.

The key drivers for the anticipated filing include lower excess deferred income tax benefits in 2022 and revenue requirement impacts of increasing electric and gas rate base, including investments in solar generation.

Any rate changes granted from this request are expected to be effective on January 1, 2022.

WPL currently expects a decision from the PSCW regarding this rate filing by the end of 2021.

Rate Review Details - Details related to IPL’s and WPL’s key jurisdictions were as follows:

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The PSCW provides a return on selected CWIP and a cash working capital allowance by adjusting the percentage return on rate base.

Other Rate Matters

Federal Tax Reform - Federal Tax Reform resulted in future benefits to customers as a result of remeasurement of accumulated deferred income taxes (approximately $350 million for IPL and $460 million for WPL of retail revenue requirement).

The majority of these benefits are subject to tax normalization rules (protected benefits), which limit the rate at which they can be passed on to their electric and gas customers.

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For those benefits that were not limited by tax normalization rules (the non-protected benefits), IPL began providing retail electric billing credits that will continue through June 2021, which include $27 million of excess deferred tax benefits.

After returning these benefits to customers, IPL is not expected to have any significant remaining non-protected benefits as a result of the original Federal Tax Reform impacts.

WPL provided non-protected benefits back to its retail electric and gas customers in 2019 and 2020.

In 2020, WPL utilized approximately $72 million to help maintain base rates at current levels and will utilize approximately $113 million to help maintain base rates at current levels through 2021.

The remaining non-protected benefits of approximately $5 million will be addressed in WPL’s future retail electric and gas rate reviews.

LEGISLATIVE MATTERS

In March 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted.

The most significant provision of the CARES Act for Alliant Energy relates to an acceleration of refunds of existing alternative minimum tax credits to increase liquidity.

In 2020, Alliant Energy received $11 million of credits that otherwise would have been received in 2021 and 2022.

In addition, Alliant Energy deferred certain 2020 payroll taxes to 2021 and 2022.

In December 2020, the Coronavirus Response and Relief Supplemental Appropriations Act of 2021 (CRRSA) was enacted.

In March 2021, the American Rescue Plan Act of 2021 (Act) was enacted.

The most significant provision of the Act for Alliant Energy is reduced minimum pension plan funding requirements, which Alliant Energy adopted in August 2021.

The Act also provides additional funding to the Low Income Home Energy Assistance Program, which assists certain of Alliant Energy’s customers with managing their energy costs, as well as provides financial support for certain of Alliant Energy’s residential, small business and non-profit customers.

In April 2021, legislation was enacted in Iowa prohibiting counties and cities from regulating the sale of natural gas and propane, which supports IPL’s ability to provide gas utility service to a diversified base of retail customers and industries.

In November 2021, the Infrastructure Investment and Jobs Act (IIJA Act) was enacted.

The most significant provisions of the IIJA Act for Alliant Energy relate to a variety of infrastructure-related priorities, including transportation, environmental, energy and broadband infrastructure.

In addition, the IIJA Act is intended to accelerate research, development, demonstration and deployment of carbon-free technologies, including hydrogen and carbon capture and storage.

LIQUIDITY AND CAPITAL RESOURCES

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As summarized below, Alliant Energy, IPL and WPL believe they have the ability to generate and obtain adequate amounts of cash to meet their requirements and plans for cash in the next 12 months and beyond.

COVID-19 and Derecho Windstorm Considerations - Refer to “ Overview ” in MDA for discussion of COVID-19 and the derecho windstorm and the impacts on Alliant Energy’s, IPL’s and WPL’s liquidity and capital resources.

COVID-19 Considerations - Refer to “ Overview ” in MDA for discussion of COVID-19 and the impacts on Alliant Energy’s, IPL’s and WPL’s liquidity and capital resources.

Liquidity Position - At December 31, 2021, Alliant Energy had $39 million of cash and cash equivalents, $485 million ($171 million at the parent company, $250 million at IPL and $64 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.

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Capital structures as of December 31, 2021 were as follows (Common Equity (CE);

IPL’s Preferred Stock (PS);

Long-term Debt (including current maturities) (LD);

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Alliant Energy, IPL and WPL intend to manage their capital structures and liquidity positions in such a way that facilitates their ability to raise funds reliably and on reasonable terms and conditions, while maintaining capital structures consistent with those approved by regulators.

In addition to capital structures, other important factors used to determine the characteristics of future financings include financial coverage ratios, capital spending plans and solar construction that is expected to be financed by tax equity partners, regulatory orders and rate-making considerations, levels of debt imputed by rating agencies, market conditions, the impact of tax initiatives and legislation, and any potential proceeds from asset sales.

The PSCW factors certain imputed debt adjustments in establishing a regulatory capital structure as part of WPL’s retail rate reviews.

In addition to capital structures, other important factors used to determine the characteristics of future financings include financial coverage ratios, capital spending plans and solar construction that is expected to be partially financed by tax equity partners, regulatory orders and rate-making considerations, levels of debt imputed by rating agencies, market conditions, the impact of tax initiatives and legislation, and any potential proceeds from asset sales.

The PSCW factors certain imputed debt adjustments, including certain lease obligations, in establishing a regulatory capital structure as part of WPL’s retail rate reviews.

The IUB does not make any explicit adjustments for imputed debt in establishing capital ratios used in determining customer rates, although such adjustments are considered by IPL in recommending an appropriate capital structure.

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Capital needed to retire debt and fund capital expenditures related to large strategic projects is expected to be met primarily through external financings.

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

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DAEC PPA amendment buyout payment in 2020 (Refer to Note 2 )

($110) ($110) $—

Amounts issued to IPL’s retail electric customers in 2020 through its transmission cost rider for amounts previously collected in rates (Refer to Note 2 )

Credits issued to IPL’s retail electric customers in 2020 through its transmission cost rider for amounts previously collected in rates (Refer to Note 2 )

Increased collections from IPL’s and WPL’s retail customers caused by temperature impacts on electric and gas sales 13 10 3

Changes in levels of production fuel 4 21 (17)

Changes in the sales of accounts receivable at IPL (70) (70) —

Timing of WPL’s fuel-related cost recoveries from customers (27) — (27)

Decreased collections from IPL’s gas customers for energy efficiency amounts through the energy efficiency rider (34) (34) —

Changes in cash collateral and deposit balances at Corporate Services (24) — —

Decreased collections from IPL’s and WPL’s retail customers caused by temperature impacts on electric and gas sales (19) (14) (5)

Refunds received in 2020 related to the MISO transmission owner return on equity complaint FERC orders (20) (15) (5)

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 (14) (14) —

Changes in income taxes paid/refunded (8) 65 (51)

Credits issued to IPL’s retail electric customers in 2020 through its tax benefit rider related to excess deferred income taxes amortization (15) (15) —

Changes in interest payments (6) (19) 1

Higher collections from IPL’s retail electric and gas base rate increases 74 74 —

Changes in levels of production fuel 28 1 27

Refunds received in 2020 related to the MISO transmission owner return on equity complaint FERC orders (Refer to Note 1 7 ( g ) )

Other (primarily due to other changes in working capital) 51 10 2

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Income Tax Payments and Refunds - Income tax (payments) refunds, including refunds of alternative minimum tax credits, were as follows (in millions):

IPL $47 ($18)

Other subsidiaries (12) 10

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Refer to Note 12 for discussion of the carryforward positions.

Pension Plan Contributions - Alliant Energy, IPL and WPL currently expect to make $39 million, $17 million and $18 million of pension plan contributions in 2021, respectively, based on the funded status and assumed return on assets for each plan as of the December 31, 2020 measurement date.

Refer to Note 13(a) for discussion of the current funded levels of pension plans.

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Pension Plan Contributions - Alliant Energy, IPL and WPL currently expect to make $2 million, $0 and $0 of pension plan contributions in 2022, respectively, based on the funded status and assumed return on assets for each plan as of the December 31, 2021 measurement date.

Refer to Note 13(a) for discussion of pension plan contributions in 2021 and the current funded levels of pension plans.

Investing Activities - The following items contributed to increased (decreased) investing activity cash flows for 2021 compared to 2020 (in millions):

Alliant Energy IPL WPL

Lower (higher) utility construction and acquisition expenditures (a) $246 $333 ($87)

(Higher) lower utility construction and acquisition expenditures (a) $223 $303 ($80)

Changes in the amount of cash receipts on sold receivables 44 44 —

Refund from ATC in 2020 for construction deposits WPL previously provided to ATC for transmission network upgrades for West Riverside (42) — (42)

Expenditures for new acquisitions at AEF in 2019 13 — —

Other (2) 45 19

$223 $392 ($103)

(a) Largely due to lower expenditures for IPL’s expansion of wind generation, WPL’s West Riverside Energy Center and IPL’s advanced metering infrastructure, partially offset by higher expenditures for IPL’s and WPL’s electric and gas distribution systems (which include the derecho windstorm) and WPL’s expansion of wind generation.

(a) Largely due to lower expenditures for IPL’s and WPL’s expansion of wind generation, IPL’s and WPL’s electric and gas distribution systems and WPL’s West Riverside Energy Center, partially offset by higher expenditures for WPL’s solar generation.

Construction and Acquisition Expenditures - Construction and acquisition expenditures and financing plans are reviewed, approved and updated as part of the strategic planning process.

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As a result, they have some discretion with regard to the level and timing of these expenditures.

The table below summarizes anticipated construction and acquisition expenditures (in millions).

The table below summarizes anticipated construction and acquisition expenditures (in millions), which are focused on the transition to cleaner energy and strengthening the resiliency of Alliant Energy’s, IPL’s and WPL’s electric grid.

Cost estimates represent Alliant Energy’s, IPL’s and WPL’s portion of construction expenditures and exclude AFUDC and capitalized interest, if applicable.

Such estimates do not reflect the assumption that a portion of the construction is expected to be financed by tax equity partners, which is described in more detail below in “IPL and WPL Solar Project Tax Equity Credits.” Refer to “ Customer Investments ” for further discussion of certain key projects impacting construction and acquisition plans related to the utility business.

Such estimates do not reflect the assumption that a portion of the construction is expected to be financed by tax equity partners, which is described in more detail below in “IPL and WPL Solar Project Tax Equity Financing.” Refer to “ Customer Investments ” for further discussion of certain key projects impacting construction and acquisition plans related to the utility business.

Alliant Energy IPL WPL

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$1,640 $1,925 $2,085 $1,755 $405 $565 $950 $905 $1,105 $1,220 $1,015 $730

Alliant Energy’s and IPL’s construction and acquisition expenditures for renewable projects in 2022 through 2024 include approximately $300 million in aggregate, a portion of which is expected to be reflected as “Other” cash flows used for investing activities in Alliant Energy’s and IPL’s cash flows.

West Riverside Options - WPL entered into agreements with neighboring utilities that provide them options to purchase a partial ownership interest in West Riverside.

If such options are exercised, WPL will receive proceeds from the sale.

Refer to “ Customer Investments ” for additional information, including the timing for the potential exercise of options.

Upon exercise of such options, WPL will receive proceeds from the sale.

Refer to “ Customer Investments ” for additional information, including timing for the actual and potential exercise of options.

Financing Activities - The following items contributed to increased (decreased) financing activity cash flows for 2021 compared to 2020 (in millions):

Alliant Energy IPL WPL

Lower (higher) payments to retire long-term debt ($401) ($200) $100

Lower net proceeds from issuance of long-term debt ($650) ($100) ($50)

Lower net proceeds from common stock issuances (219) — —

Payments to redeem cumulative preferred stock of IPL in 2021 (200) (200) —

Higher common stock dividends (26) (164) (8)

Higher (lower) net proceeds from issuance of long-term debt 300 (200) —

Lower payments to retire long-term debt 649 200 150

Net changes in the amount of commercial paper outstanding 74 — (110)

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($358) ($608) $198

IPL and WPL Solar Project Tax Equity Credits - IPL and WPL each propose to own and operate their planned solar projects, which are currently expected to qualify for 30% investment tax credits, through a tax equity partnership, with approximately 35% to 45% of the construction costs financed with capital from the tax equity partner.

IPL and WPL Solar Project Tax Equity Financing - IPL and WPL each propose to own and operate their planned solar projects, discussed in “ Cust omer Investments ,” which are currently expected to qualify for 26% to 30% investment tax credits, through a tax equity partnership, with approximately 25% to 45% of the construction costs financed with capital from the tax equity partner.

This would allow IPL’s and WPL’s customers to share the costs of the solar projects with an investment partner for 10 years or less, while ensuring their customers receive energy, capacity, and renewable energy credit benefits from the projects.

IPL and WPL would expect to purchase the tax equity partner’s interest in the solar projects within 10 years of operation, and then convert to a traditional

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ownership structure for the remainder of the useful life of the projects.

Assuming a portion of the construction costs are financed by the tax equity partner, IPL would receive approximately $205 million from the tax equity partner in 2023, and WPL would receive approximately $210 million in 2022 and $275 million in 2023.

IPL and WPL would expect to purchase the tax equity partner’s interest in the solar projects within 10 years of operation, and then convert to a traditional ownership structure for the remainder of the useful life of the projects.

Assuming a portion of the construction costs are financed by the tax equity partner, IPL would receive approximately $25 million in 2023, $200 million in 2024 and $60 million in 2025 from the tax equity partner, and WPL would receive approximately $165 million in 2022, $420 million in 2023, $230 million in 2024 and $190 million in 2025 from the tax equity partner.

Changes to proposed solar project tax equity financing may result from a number of reasons, including changing legislation.

IPL and WPL would expect to include their portion of capital expenditures, less the amounts financed by the tax equity partner, in their respective rate base.

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In 2021, IPL received authorization from FERC to issue securities in 2022 and 2023 as follows (in millions):

Initial Authorization Remaining Capacity as of December 31, 2020

Long-term debt securities issuances in aggregate $700

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State Regulatory Financing Authorizations - In 2017, WPL received authorization from the PSCW to have up to $400 million of short-term borrowings and/or letters of credit outstanding at any time through the earlier of the expiration date of WPL’s credit facility agreement (including extensions) or December 2024.

In September 2020, WPL received authorization from the PSCW to issue up to $1 billion of long-term debt securities in aggregate through December 2023.

As of December 31, 2021, WPL also had authority to issue up to $700 million of long-term debt securities in aggregate through December 2023 pursuant to a September 2020 PSCW order.

Shelf Registrations - Alliant Energy, IPL and WPL have current shelf registration statements on file with the SEC for availability to issue unspecified amounts of securities through December 2023.

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Common Stock Issuances - Refer to Note 7 for discussion of common stock issuances by Alliant Energy in 2020 and 2021, and “ Results of Operations ” for discussion of expected issuances of common stock in 2022.

Short-term Debt - In 2017, Alliant Energy, IPL and WPL entered into a single revolving credit facility agreement, which expires in August 2023 and is discussed in Note 9(a) .

Short-term Debt - In December 2021, Alliant Energy, IPL and WPL entered into a single revolving credit facility agreement, which expires in December 2026 and is discussed in Note 9(a) .

There are currently 13 lenders that participate in the credit facility, with respective commitments ranging from $20 million to $130 million.

Subject to certain conditions, Alliant Energy, IPL and WPL may exercise one extension option, extending the maturity date by one year.

Subject to certain conditions, Alliant Energy, IPL and WPL may exercise two extension options, each extending the maturity date by one year.

The credit facility has a provision to expand the facility size up to an additional $300 million, for a potential total commitment of $1.3 billion, subject to lender approval for Alliant Energy and subject to lender and regulatory approvals for IPL and WPL.

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The debt component of the capital ratios includes, when applicable, long- and short-term debt (excluding non-recourse debt and hybrid securities to the extent the total carrying value of such hybrid securities does not exceed 15% of consolidated capital of the applicable borrower), finance lease obligations, certain letters of credit, guarantees of the foregoing and new synthetic leases.

Unfunded vested benefits under qualified pension plans and sales of accounts receivable are not included in

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the debt-to-capital ratios.

Unfunded vested benefits under qualified pension plans and sales of accounts receivable are not included in the debt-to-capital ratios.

The equity component of the capital ratios excludes accumulated other comprehensive income (loss).

Long-term Debt - Refer to Note 9(b) for discussion of issuances and retirements of long-term debt in 2021 and “ Results of Operations ” for discussion of expected issuances of long-term debt in 2022.

In 2019, IPL issued $300 million of 3.6% senior debentures (green bonds) due 2029 and $300 million of 3.5% senior debentures (green bonds) due 2049.

In 2019, WPL issued $350 million of 3% debentures due 2029, and a portion of the proceeds from the issuance was used by WPL to refinance its $250 million 5% debentures that matured in 2019.

In 2020, IPL issued $400 million of 2.3% senior debentures due 2030, and a portion of the proceeds from the issuance was used by IPL to retire its $200 million 3.65% senior debentures that matured in 2020.

In 2020, WPL issued $350 million of 3.65% debentures due 2050, and a portion of the proceeds from the issuance was used by WPL to reduce borrowings under the single revolving credit facility.

In 2020, AEF entered into a $300 million variable-rate term loan credit agreement and used the borrowings under this agreement to retire its $300 million variable-rate term loan credit agreement that expired in 2020.

In 2020, AEF issued $200 million of 1.4% senior notes due 2026, and a portion of the proceeds from the issuance was used to reduce Alliant Energy’s outstanding commercial paper.

Impact of Credit Ratings on Liquidity and Collateral Obligations -

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Senior unsecured long-term debt A- Baa1

Preferred stock BBB Baa3

Outlook Stable Stable

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The purchase commitment from the third party to which IPL sells its receivables expires in March 2023.

IPL currently expects to amend and extend the purchase commitment.

In 2021 and 2020, IPL evaluated the third party that purchases IPL’s receivable assets under the Receivables Agreement and believes that the third party is a VIE;

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Refer to Note 17(d) for additional information.

Table of Cont ents

Certain Financial Commitments -

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At December 31, 2021, Alliant Energy, IPL and WPL had no uncertain tax positions recorded as liabilities.

Refer to Note 13(a) for anticipated pension and OPEB funding amounts, which are not included in the above tables.

Refer to Note 13(a) for anticipated pension and OPEB funding amounts.

Refer to “Construction and Acquisition Expenditures” above for additional information on construction and acquisition programs.

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Refer to “ Critical Accounting Policies and Estimates ” for the impacts of changes in discount rates on retirement plan obligations and costs.

New Accounting Standards - Refer to Note 1(o) for discussion of new accounting standards impacting Alliant Energy, IPL and WPL.

Critical Accounting Policies and Estimates - Alliant Energy’s, IPL’s and WPL’s financial statements are prepared in conformity with GAAP, which requires management to apply accounting policies, judgments and assumptions, and make estimates that affect results of operations and the amounts of assets and liabilities reported in the financial statements.

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Regulatory assets and regulatory liabilities are recognized in accordance with the rulings of applicable federal and state regulators, and future regulatory rulings may impact the carrying value and accounting treatment of regulatory assets and regulatory liabilities.

Table of Cont ents

Assumptions and judgments are made each reporting period regarding whether regulatory assets are probable of future recovery and regulatory liabilities are probable future obligations by considering factors such as regulatory environment changes, rate orders issued by the applicable regulatory agencies, historical decisions by such regulatory agencies regarding similar regulatory assets and regulatory liabilities, and subsequent events of such regulatory agencies.

changes, rate orders issued by the applicable regulatory agencies, historical decisions by such regulatory agencies regarding similar regulatory assets and regulatory liabilities, and subsequent events of such regulatory agencies.

The decisions made by regulatory authorities have an impact on the recovery of costs, the rate of return on invested capital and the timing and amount of assets to be recovered by rates.

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Alliant Energy does not expect to utilize all of its federal net operating loss carryforwards until 2023, and therefore, currently does not expect to utilize 2002 vintage federal credit carryforwards prior to their expiration in 2022, resulting in valuation allowances that remain as of December 31, 2021.

Refer to Note 12 for discussion of expected utilization of 2003 vintage federal credit carryforwards prior to their expiration in 2023, which resulted in the reversal of previously recorded valuation allowances in 2020.

Federal credit carryforwards generated from 2003 through 2008, which amount to $12 million for Alliant Energy, are expected to be utilized within five years of expiration.

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If it is probable that regulators will not allow full recovery of and a full return on the remaining net book value of the abandoned EGU, an impairment charge is recognized equal to the difference between the remaining carrying value and the present value of the future revenues expected from the abandoned EGU.

Alliant Energy and IPL concluded that Lansing, and Alliant Energy and WPL concluded that Edgewater Unit 5, met the criteria to be considered probable of abandonment in 2020.

IPL and WPL are currently allowed a full recovery of and a full return on its respective EGU from both its retail and wholesale customers, and as a result, Alliant Energy, IPL and WPL concluded that no impairment was required as of December 31, 2020.

Alliant Energy and IPL concluded that Lansing, and Alliant Energy and WPL concluded that Edgewater Unit 5 and Columbia Units 1 and 2, met the criteria to be considered probable of abandonment as of December 31, 2021.

IPL and WPL are currently allowed a full recovery of and a full return on its respective EGUs from both its retail and wholesale customers, and as a result, Alliant Energy, IPL and WPL concluded that no impairment was required as of December 31, 2021.

Alliant Energy, IPL and WPL evaluated their other EGUs that are subject to early retirement and determined that no other EGUs met the criteria to be considered probable of abandonment as of December 31, 2021.

Note 3 provides additional details of these assets anticipated to be retired early.

Table of Cont ents

Unbilled Revenues - Unbilled revenues are primarily associated with utility operations.

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Factors considered include market and external data points, the creditworthiness of the other partners, Whiting Petroleum’s emergence from bankruptcy in the third quarter of 2020, and forecasted cash flow expenditures associated with the abandonment obligations based on information made available to Alliant Energy.

Note 1(o) provides discussion of the adoption of the new accounting standard for credit losses.

Note 17 provides further discussion of contingencies assessed at December 31, 2020 that may have a material impact on financial condition and results of operations, including impacts to Alliant Energy’s ATC Holdings equity earnings as a result of future changes in FERC’s evaluation of certain MISO return on equity complaints, various pending legal proceedings, guarantees and indemnifications.

Note 1( l ) provides discussion of the adoption of the new accounting standard for credit losses.

Note 17 provides further discussion of contingencies assessed at December 31, 2021 that may have a material impact on financial condition and results of operations, including various pending legal proceedings, guarantees and indemnifications.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis