Redeemable Stock of Subsidiaries

12 Months Ended

Dec. 31, 2021

REDEEMABLE STOCK OF SUBSIDIARIES

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


December 31,	2021		2020
Balance at the beginning of the period	$	872	$	888

Contributions from holders of redeemable stock of subsidiaries	579		—
Net income (loss) attributable to redeemable stock of subsidiaries	(6)		8
Fair value adjustment	4		4
Other comprehensive loss attributable to redeemable stock of subsidiaries	19		(28)
Acquisition and reclassification of stock of subsidiaries	(211)		—
Balance at the end of the period	$	1,257	$	872

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


December 31,	2021		2020
IPALCO common stock	$	700	$	618
AES Clean Energy Development common stock	497		—
AES Indiana preferred stock	60		60
Colon quotas (1)	—		194

Total redeemable stock of subsidiaries	$	1,257	$	872

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

IPALCO — On December 13, 2021, CDPQ made equity capital contributions of $34 million to AES U.S. Investments, subsequently contributed to IPALCO by AES U.S. Investments, and $48 million to IPALCO as part of a capital call to raise proceeds for AES Indiana's TDSIC and replacement generation projects. The Company and CDPQ made capital contributions on a proportional share basis; therefore, the capital call did not change CDPQ or AES' ownership interests in IPALCO.

Colon — On September 13, 2021, the Company acquired the remaining 49.9% minority ownership interest in Colon, reducing the value of the Colon temporary equity to zero. See Note 17—Equity for further information.

AES Clean Energy Development — On February 1, 2021, the Company substantially completed the merger of the sPower and AES Renewable Holdings development platforms to form AES Clean Energy Development, which will serve as the development vehicle for all future renewable projects in the U.S. As part of the transaction, AlMCo, our existing partner in the sPower equity method investment, received a 25% minority ownership interest in the newly formed entity along with certain partnership rights, though not currently in effect, that would enable AIMCo to exit in the future. As a result, the minority ownership interest is considered temporary equity. AIMCo made capital contributions of $240 million during the year ended December 31, 2021.

During the second quarter of 2021, the Company recorded measurement period adjustments to the estimated fair values of the sPower and AES Renewable Holdings development platforms and the value of the partnership rights initially recorded in the first quarter of 2021, which resulted in an $81 million increase in the value of the temporary equity. These measurement period adjustments primarily relate to higher expected developer profits and a higher growth rate, reflective of additional information that became available regarding market participants’ views of the value of early-stage renewable development projects as of the date of acquisition. The temporary equity will be adjusted for earnings or losses allocated to the noncontrolling interest under ASC 810. Any subsequent changes in the redemption value of the exit rights will be recognized against permanent equity in accordance with ASC 480-10-S99, as it is probable that the shares will become redeemable. See Note 25—Acquisitions for further information.

AES Indiana — AES Indiana had $60 million of cumulative preferred stock outstanding at December 31, 2021 and 2020, which represents five series of preferred stock. The total annual dividend requirements were approximately $3 million at December 31, 2021 and 2020. 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 AES Indiana's board of directors if AES Indiana has not paid dividends to its preferred stockholders for four consecutive quarters. 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 is considered temporary equity.