Redeemable Stock of Subsidiaries

12 Months Ended

Dec. 31, 2018

REDEEMABLE STOCK OF SUBSIDIARIES

The following table is a reconciliation of changes in redeemable stock of subsidiaries (in millions):



December 31,	2018		2017
Balance at the beginning of the period	$	837	$	782
Contributions from holders of redeemable stock of subsidiaries	34		50
Net income (loss) attributable to redeemable stock of subsidiaries	2		(14		)
Fair value adjustment	4		25
Other comprehensive income (loss) attributable to redeemable stock of subsidiaries	2		(2		)
Acquisition and reclassification of stock of subsidiaries	—		(4		)
Balance at the end of the period	$	879	$	837

The following table summarizes the Company's redeemable stock of subsidiaries balances as of the periods indicated (in millions):



December 31,	2018		2017
IPALCO common stock	$	618	$	618
Colon quotas⁽¹⁾	201		159
IPL preferred stock	60		60
Total redeemable stock of subsidiaries	$	879	$	837

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⁽¹⁾	Characteristics of quotas are similar to common stock.

Colon — Our partner in Colon made capital contributions of $34 million and $50 million during the year ended December 31, 2018 and 2017, respectively. Any subsequent adjustments to allocate earnings and dividends to our partner, or measure the investment at fair value, will be classified as temporary equity each reporting period as it is probable that the shares will become redeemable.

IPL — IPL had $60 million of cumulative preferred stock outstanding at December 31, 2018 and 2017, which represent five series of preferred stock. The total annual dividend requirements were approximately $3 million at December 31, 2018 and 2017. Certain series of the preferred stock were redeemable solely at the option of the issuer at prices between $100 and $118 per share. Holders of the preferred stock are entitled to elect a majority of IPL's board of directors if IPL has not paid dividends to its preferred stockholders for four consecutive quarters. Based on the preferred stockholders' ability to elect a majority of IPL'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 is considered temporary equity.

IPALCO — As part of a purchase agreement executed in 2014, CDPQ had an option to invest $349 million in IPALCO through 2016 in exchange for a 17.65% equity stake. In March 2016, CDPQ exercised the remaining option by investing $134 million in IPALCO, which resulted in CDPQ's combined direct and indirect interest in IPALCO of 30%. The Company recognized an increase to additional paid-in-capital and a reduction to retained earnings of $84 million for the excess of the fair value of the shares over their book value. In June 2016, CDPQ contributed an additional $24 million to IPALCO, with no impact to the ownership structure of the investment. Any subsequent

adjustments to allocate earnings and dividends to CDPQ will be classified as NCI within permanent equity as it is not probable that the shares will become redeemable.