Equity

12 Months Ended

Dec. 31, 2021

EQUITY

Paid In Capital

On December 13, 2021, IPALCO received equity capital contributions of $226.5 million from AES U.S. Investments and $48.5 million from CDPQ. IPALCO then made the same investments in AES Indiana. The proceeds are intended primarily for funding needs related to AES Indiana’s TDSIC and replacement generation projects. The capital contributions were made on a proportional share basis and, therefore, did not change CDPQ’s or AES’ ownership interests in IPALCO.

Dividend Restrictions

AES Indiana’s mortgage and deed of trust and its amended articles of incorporation contain restrictions on AES Indiana’s ability to issue certain securities or pay cash dividends. So long as any of the several series of bonds of AES Indiana issued under its mortgage remains outstanding, and subject to certain exceptions, AES Indiana is restricted in the declaration and payment of dividends, or other distribution on shares of its capital stock of any class, or in the purchase or redemption of such shares, to the aggregate of its net income, as defined in the mortgage, after December 31, 1939. In addition, pursuant to AES Indiana’s articles, no dividends may be paid or accrued, and no other distribution may be made on AES Indiana’s common stock unless dividends on all outstanding shares of AES Indiana preferred stock have been paid or declared and set apart for payment. As of December 31, 2021, and as of the filing of this report, AES Indiana was in compliance with these restrictions.

AES Indiana is also restricted in its ability to pay dividends if it is in default under the terms of its Credit Agreement, which could happen if AES Indiana fails to comply with certain covenants. These covenants, among other things, require AES Indiana to maintain a ratio of total debt to total capitalization not in excess of 0.67 to 1. As of December 31, 2021, and as of the filing of this report, AES Indiana was in compliance with all covenants and no event of default existed.

IPALCO’s Third Amended and Restated Articles of Incorporation contain provisions which state that IPALCO may not make a distribution to its shareholders or make a loan to any of its affiliates (other than its subsidiaries), unless: (a) there exists no event of default (as defined in the articles) and no such event of default would result from the making of the distribution or loan; and either (b)(i) at the time of, and/or as a result of, the distribution or loan, IPALCO’s leverage ratio does not exceed 0.67 to 1 and IPALCO’s interest coverage ratio is not less than 2.50 to 1 or, (b)(ii) if such ratios are not within the parameters, IPALCO’s senior long-term debt rating from one of the three major credit rating agencies is at least investment grade. As of December 31, 2021, and as of the filing of this report, IPALCO was in compliance with all covenants and no event of default existed.

During the years ended December 31, 2021, 2020 and 2019, IPALCO declared and paid distributions to its shareholders totaling $131.5 million, $108.7 million and $136.4 million, respectively.

Cumulative Preferred Stock

AES Indiana has five separate series of cumulative preferred stock. Holders of preferred stock are entitled to receive dividends at rates per annum ranging from 4.0% to 5.65%. During each year ended December 31, 2021, 2020 and 2019, total preferred stock dividends declared were $3.2 million. Holders of preferred stock are entitled to two votes per share for AES Indiana matters, and if four full quarterly dividends are in default on all shares of the preferred stock then outstanding, they are entitled to elect the smallest number of AES Indiana directors to constitute a majority of AES Indiana’s Board of Directors. Based on the preferred stockholders’ ability to elect a majority of AES Indiana’s Board of Directors in this circumstance, the redemption of the preferred shares is considered to be not solely within the control of the issuer and the preferred stock was considered temporary equity and presented in the mezzanine level of the audited consolidated balance sheets in accordance with the relevant accounting guidance for non-controlling interests and redeemable securities. AES Indiana has issued and outstanding 500,000 shares of 5.65% preferred stock, which are redeemable at par value, subject to certain restrictions, in whole or in part. Additionally, AES Indiana has 91,353 shares of preferred stock which are redeemable at the option of AES Indiana and can be redeemed in whole or in part at any time at specific call prices.

At December 31, 2021, 2020 and 2019, preferred stock consisted of the following:


	December 31, 2021			December 31,
	Shares Outstanding	Call Price		2021		2020		2019
				Par Value, plus premium, if applicable
				(In Thousands)
Cumulative $100 par value,
authorized 2,000,000 shares
4% Series	47,611	$	118.00	$	5,410	$	5,410	$	5,410
4.2% Series	19,331	$	103.00	1,933		1,933		1,933
4.6% Series	2,481	$	103.00	248		248		248
4.8% Series	21,930	$	101.00	2,193		2,193		2,193
5.65% Series	500,000	$	100.00	50,000		50,000		50,000
Total cumulative preferred stock	591,353			$	59,784	$	59,784	$	59,784

Indianapolis Power And Light Company

Entity Information [Line Items]

Equity

EQUITY

Paid in Capital and Capital Stock

On December 13, 2021, AES Indiana received an equity capital contribution of $275.0 million from IPALCO. The proceeds are intended primarily for funding needs related to AES Indiana’s TDSIC and replacement generation projects.

All of the outstanding common stock of AES Indiana is owned by IPALCO. AES Indiana’s common stock is pledged under the 2024 IPALCO Notes and 2030 IPALCO Notes. There have been no changes in the capital stock of AES Indiana during the three years ended December 31, 2021.

Dividend Restrictions

During the years ended December 31, 2021, 2020 and 2019, AES Indiana declared dividends to its shareholder totaling $155.7 million, $140.6 million, and $159.0 million, respectively.

Cumulative Preferred Stock

At December 31, 2021, 2020 and 2019, preferred stock consisted of the following:


	December 31, 2021			December 31,
	Shares Outstanding	Call Price		2021		2020		2019
				Par Value, plus premium, if applicable
				(In Thousands)
Cumulative $100 par value,
authorized 2,000,000 shares
4% Series	47,611	$	118.00	$	5,410	$	5,410	$	5,410
4.2% Series	19,331	$	103.00	1,933		1,933		1,933
4.6% Series	2,481	$	103.00	248		248		248
4.8% Series	21,930	$	101.00	2,193		2,193		2,193
5.65% Series	500,000	$	100.00	50,000		50,000		50,000
Total cumulative preferred stock	591,353			$	59,784	$	59,784	$	59,784