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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

______________________________________________________________________________________________

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 1-8644

IPALCO ENTERPRISES, INC.

(Exact name of registrant as specified in its charter)



Indiana			35-1575582
(State or other jurisdiction of incorporation or organization)			(I.R.S Employer Identification No.)

One Monument Circle
Indianapolis, Indiana			46204
(Address of principal executive offices)			(Zip code)
Registrant’s telephone number, including area code:			(317)-261-8261


Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
N/A	N/A	N/A

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒

(The registrant is a voluntary filer. The registrant has filed all applicable reports under Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12 months.)

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller Reporting company

Emerging growth company

☐

☒

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

At August 1, 2025, 108,907,318 shares of IPALCO Enterprises, Inc. common stock were outstanding, of which 89,685,177 shares were owned by AES U.S. Investments, Inc. and 19,222,141 shares were owned by CDP Infrastructures Fund L.P., a wholly-owned subsidiary of La Caisse de dépôt et placement du Québec.

IPALCO ENTERPRISES, INC.

QUARTERLY REPORT ON FORM 10-Q

For Quarter Ended June 30, 2025

TABLE OF CONTENTS


Item No.		Page No.
	GLOSSARY OF TERMS	4

	FORWARD-LOOKING STATEMENTS	5

	PART I - FINANCIAL INFORMATION
1.	Financial Statements (Unaudited)
	Condensed Consolidated Statements of Operations	7
	Condensed Consolidated Statements of Comprehensive Income	8
	Condensed Consolidated Balance Sheets	9
	Condensed Consolidated Statements of Cash Flows	10
	Condensed Consolidated Statements of Changes in Equity	11
	Notes to Condensed Consolidated Financial Statements	12
	Note 1 - Overview and Summary of Significant Accounting Policies	12
	Note 2 - Regulatory Matters	17
	Note 3 - Fair Value	18
	Note 4 - Derivative Instruments and Hedging Activities	20
	Note 5 - Debt	22
	Note 6 - Income Taxes	23
	Note 7 - Benefit Plans	23
	Note 8 - Equity	24
	Note 9 - Commitments and Contingencies	24
	Note 10 - Business Segments	25
	Note 11 - Revenue	27
	Note 12 - Leases	28
2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
	Executive Summary	30
	Results of Operations	31
	Key Trends and Uncertainties	37
	Capital Resources and Liquidity	45
	Critical Accounting Policies and Estimates	48
3.	Quantitative and Qualitative Disclosure About Market Risk	48
4.	Controls and Procedures	49

	PART II - OTHER INFORMATION
1.	Legal Proceedings	49
1A.	Risk Factors	49
2.	Unregistered Sales of Equity Securities and Use of Proceeds	49
3.	Defaults Upon Senior Securities	49
4.	Mine Safety Disclosures	50
5.	Other Information	50
6.	Exhibits	50

	SIGNATURES	51


GLOSSARY OF TERMS
The following is a list of frequently used terms, abbreviations or acronyms that are found in this Form 10-Q:

2024 Form 10-K			IPALCO’s Annual Report on Form 10-K for the year ended December 31, 2024, as amended
2024 Base Rate Order			The order issued in April 2024 by the IURC authorizing AES Indiana to, among other things, increase its basic rates and charges by $71 million annually
2030 IPALCO Notes			$475 million of 4.25% IPALCO Enterprises, Inc. Senior Secured Notes due May 1, 2030
2034 IPALCO Notes			$400 million of 5.75% IPALCO Enterprises, Inc. Senior Secured Notes due April 1, 2034
$400 million Term Loan Agreement			$400 million AES Indiana Term Loan Agreement, dated as of August 14, 2024
ACE			Affordable Clean Energy
AES			The AES Corporation
AES Indiana			Indianapolis Power & Light Company and its consolidated subsidiaries, which does business as AES Indiana
AES Indiana Credit Agreement			$500 million AES Indiana Amended and Restated Credit Agreement, dated as of March 25, 2025
AES U.S. Investments			AES U.S. Investments, Inc.
AFUDC			Allowance for Funds Used During Construction
AOCI			Accumulated Other Comprehensive Income
ARO			Asset Retirement Obligation
ASC			Accounting Standards Codification
ASU			Accounting Standards Update
BESS			Battery Energy Storage System
CAA			U.S. Clean Air Act
CCGT			Combined Cycle Gas Turbine
CCR			Coal Combustion Residuals
CDPQ			CDP Infrastructures Fund L.P., a wholly-owned subsidiary of La Caisse de dépôt et placement du Québec
CO2			Carbon Dioxide
CPCN			Certificate of Public Convenience and Necessity
CPP			Clean Power Plan
CWA			U.S. Clean Water Act
ECCRA			Environmental Compliance Cost Recovery Adjustment
EGUs			Electrical Generating Units
EPA			U.S. Environmental Protection Agency
FAC			Fuel Adjustment Clause
FASB			Financial Accounting Standards Board
FERC			Federal Energy Regulatory Commission
Financial Statements			Unaudited Condensed Consolidated Financial Statements of IPALCO in “Item 1. Financial Statements” included in Part I – Financial Information of this Form 10-Q
FTRs			Financial Transmission Rights
GAAP			Generally Accepted Accounting Principles in the United States
GHG			Greenhouse Gas
HLBV			Hypothetical Liquidation Book Value
IDEM			Indiana Department of Environmental Management
IPALCO			IPALCO Enterprises, Inc. and its consolidated subsidiaries
IPL			Indianapolis Power & Light Company and its consolidated subsidiaries, which does business as AES Indiana
IRA			Inflation Reduction Act of 2022
IRP			Integrated Resource Plan
ITC			Investment Tax Credit
IURC			Indiana Utility Regulatory Commission


kWh			Kilowatt hours
MATS			Mercury and Air Toxics Standards
MISO			Midcontinent Independent System Operator, Inc.
MW			Megawatts
MWh			Megawatt hours
NOx			Nitrogen Oxide
NPDES			National Pollutant Discharge Elimination System
NSPS			New Source Performance Standards
OUCC			Indiana Office of Utility Consumer Counselor
Pension Plans			Employees’ Retirement Plan of AES Indiana and Supplemental Retirement Plan of AES Indiana
PTC			Production Tax Credit
SEC			United States Securities and Exchange Commission
SIP			State Implementation Plan
SO2			Sulfur Dioxide
TDSIC			Transmission, Distribution, and Storage System Improvement Charge
U.S.			United States of America
VEBA			Voluntary Employees' Beneficiary Association
VIE			Variable Interest Entity

Throughout this document, the terms “IPALCO,” “the Company,” “we,” “us,” and “our” refer to IPALCO Enterprises, Inc. and its consolidated subsidiaries. The term “IPALCO Enterprises, Inc.” refers only to the parent holding company, IPALCO Enterprises, Inc, excluding its subsidiaries.

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 including, in particular, the statements about our plans, strategies and prospects under the heading “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part I – Financial Information of this Form 10-Q. Forward-looking statements express an expectation or belief and contain a projection, plan or assumption with regard to, among other things, our future revenue, income, expenses or capital structure. Such statements of future events or performance are not guarantees of future performance and involve estimates, assumptions and uncertainties. The words “could,” “may,” “predict,” “anticipate,” “would,” “believe,” “estimate,” “expect,” “forecast,” “project,” “objective,” “intend,” “continue,” “should,” “plan,” and similar expressions, or the negatives thereof, are intended to identify forward-looking statements unless the context requires otherwise.

Some important factors that could cause our actual results or outcomes to differ materially from those discussed in the forward-looking statements include, but are not limited to:

•impacts of weather on retail sales;

•growth in our service territory and changes in retail demand and demographic patterns;

•weather-related damage to our electrical system;

•commodity and other input costs;

•performance of our suppliers;

•transmission, distribution and generation system reliability and capacity, including natural gas pipeline system and supply constraints;

•regulatory actions and outcomes, including, but not limited to, the review and approval of our rates and charges by the IURC;

•federal and state legislation and regulations;

•changes in our credit ratings or the credit ratings of AES;

•fluctuations in the value of pension plan assets, fluctuations in pension plan expenses and our ability to fund defined benefit pension plans;

•changes in financial or regulatory accounting policies;

•environmental and climate change matters, including costs of compliance with, and liabilities related to, current and future environmental and climate change laws and requirements;

•interest rates and the use of interest rate hedges, inflation rates and other costs of capital;

•the availability of capital;

•the ability of subsidiaries to pay dividends or distributions to IPALCO Enterprises, Inc.;

•level of creditworthiness of counterparties to contracts and transactions;

•labor strikes or other workforce factors, including the ability to attract and retain key personnel;

•facility or equipment maintenance, repairs and capital expenditures;

•significant delays or unanticipated cost increases associated with construction or other projects;

•the availability and cost of funds to finance working capital and capital needs, particularly during periods when the time lag between incurring costs and recovery is long and the costs are material;

•local economic conditions;

•costs and effects of legal and administrative proceedings, audits, settlements, investigations and claims and the ultimate disposition of litigation;

•industry restructuring, deregulation and competition;

•issues related to our participation in MISO, including the cost associated with membership, our continued ability to recover costs incurred, and the risk of default of other MISO participants;

•changes in tax laws and the effects of our tax strategies;

•the use of derivative contracts;

•product development, technology changes, and changes in prices of products and technologies;

•cyber-attacks, information security breaches or information system failures;

•catastrophic events such as fires, explosions, terrorist acts, acts of war, pandemics, or the future outbreak of any other highly infectious or contagious disease, or natural disasters such as floods, earthquakes, tornadoes, severe winds, ice or snowstorms, droughts, or other similar occurrences, including as a result of climate change; and

•the risks and other factors discussed in this report and other IPALCO filings with the SEC.

Forward-looking statements speak only as of the date of the document in which they are made. We disclaim any obligation or undertaking to provide any updates or revisions to any forward-looking statement to reflect any change in our expectations or any change in events, conditions or circumstances on which the forward-looking statement is based. If we do update one or more forward-looking statements, no inference should be made that we will make additional updates with respect to those or other forward-looking statements.

All of the above factors are difficult to predict, contain uncertainties that may materially affect actual results, and many are beyond our control. See “Item 1A. Risk Factors” in IPALCO’s 2024 Annual Report on Form 10-K and the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section in IPALCO’s 2024 Annual Report on Form 10-K and in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 and this Quarterly Report on Form 10-Q for a more detailed discussion of the foregoing and certain other factors that could cause actual results to differ materially from those reflected in any forward-looking statements. These risks may also be specifically described in our other Quarterly Reports on Form 10-Q in “Part II - Item 1A. Risk Factors”, Current Reports on Form 8-K and other documents that we may file from time to time with the SEC.

SOURCES OF OTHER INFORMATION

We encourage investors, the media, our customers and others interested in the Company to review the information we post at www.aesindiana.com. None of the information on our website is incorporated into, or deemed to be a part of, this Quarterly Report on Form 10-Q or in any other report or document we file with the SEC, and any reference to our website is intended to be an inactive textual reference only.

Our SEC filings are available to the public from the SEC’s website at www.sec.gov.

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS


IPALCO ENTERPRISES, INC. and SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited)
	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2025		2024		2025		2024
	(In Thousands)
REVENUE	$	438,684	$	397,594	$	916,384	$	805,395

OPERATING COSTS AND EXPENSES:
Fuel	99,973		77,639		206,482		180,558
Power purchased	31,239		44,103		66,769		82,736
Operation and maintenance	142,308		109,092		284,916		224,460
Depreciation and amortization	92,469		82,920		178,074		163,353
Taxes other than income taxes	4,231		6,547		13,303		14,442
Other, net	(159)		14		(164)		1,537
Total operating costs and expenses	370,061		320,315		749,380		667,086

OPERATING INCOME	68,623		77,279		167,004		138,309

OTHER (EXPENSE) / INCOME, NET:
Allowance for equity funds used during construction	732		1,269		1,401		2,100
Interest expense	(46,592)		(43,835)		(90,583)		(87,483)

Other expense, net	(365)		(1,056)		(936)		(750)
Total other expense, net	(46,225)		(43,622)		(90,118)		(86,133)

INCOME BEFORE INCOME TAX	22,398		33,657		76,886		52,176

Income tax expense	6,635		12,610		42,575		16,519
NET INCOME	15,763		21,047		34,311		35,657


Net loss attributable to noncontrolling interests	(12,986)		(20,747)		(95,581)		(23,299)

NET INCOME ATTRIBUTABLE TO COMMON STOCK	$	28,749	$	41,794	$	129,892	$	58,956

See Notes to Condensed Consolidated Financial Statements.


IPALCO ENTERPRISES, INC. and SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Income
(Unaudited)
	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2025		2024		2025		2024
	(In Thousands)
NET INCOME	$	15,763	$	21,047	$	34,311	$	35,657

Derivative activity:
Change in derivative fair value, net of income tax effect of $0, $0, $0 and $(2,193), for each respective period	—		—		—		6,626
Reclassification to earnings, net of income tax effect of $144, $144, $288 and $(108), for each respective period	(434)		(434)		(868)		326
Net change in fair value of derivatives	(434)		(434)		(868)		6,952

Other comprehensive (loss) / income	(434)		(434)		(868)		6,952

Comprehensive income	15,329		20,613		33,443		42,609


Less: comprehensive loss attributable to noncontrolling interests	(12,986)		(20,747)		(95,581)		(23,299)

COMPREHENSIVE INCOME ATTRIBUTABLE TO COMMON STOCK	$	28,315	$	41,360	$	129,024	$	65,908

See Notes to Condensed Consolidated Financial Statements.


IPALCO ENTERPRISES, INC. and SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
	June 30,		December 31,
	2025		2024
	(In Thousands)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	70,614	$	26,647

Accounts receivable, net of allowance for credit losses of $23,057 and $29,798, respectively	317,288		313,078
Inventories	91,297		99,935
Regulatory assets, current	146,665		134,328
Taxes receivable	12,485		9,401
Derivative assets, current	4,304		1,526
Investment tax credit transfer receivable (see Note 1)	45,223		—
Prepayments and other current assets	34,898		24,561
Total current assets	722,774		609,476
NON-CURRENT ASSETS:




Property, plant and equipment, net of accumulated depreciation of $3,191,414 and $3,071,167, respectively	5,630,695		5,461,243
Intangible assets - net	288,100		232,210
Regulatory assets, non-current	614,043		619,029
Pension plan assets	24,545		24,941

Other non-current assets	210,470		192,126
Total other non-current assets	6,767,853		6,529,549
TOTAL ASSETS	$	7,490,627	$	7,139,025
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Short-term debt and current portion of long-term debt (see Notes 5 and 12)	$	429,735	$	539,841
Accounts payable	292,061		271,235
Accrued taxes	25,935		26,253
Accrued interest	41,510		43,388
Customer deposits	12,095		11,892
Regulatory liabilities, current	10,616		11,915

Asset retirement obligations, current	58,064		32,161
Investment tax credit transfer payable (see Note 1)	45,223		—
Accrued and other current liabilities	26,098		26,231
Total current liabilities	941,337		962,916
NON-CURRENT LIABILITIES:
Long-term debt (see Notes 5 and 12)	3,567,071		3,642,587
Deferred income tax liabilities	416,861		380,758

Regulatory liabilities, non-current	389,539		404,021
Accrued other postretirement benefits	2,950		2,834
Asset retirement obligations, non-current	308,882		346,299

Other non-current liabilities	7,921		8,499
Total non-current liabilities	4,693,224		4,784,998
Total liabilities	5,634,561		5,747,914
COMMITMENTS AND CONTINGENCIES (see Note 9)
REDEEMABLE STOCK OF SUBSIDIARIES	—		38,145
EQUITY:
Common shareholders’ equity
Common stock (no par value, 290,000,000 shares authorized; 108,907,318 shares issued and outstanding at June 30, 2025 and December 31, 2024)	—		—
Paid in capital	1,657,145		1,247,090
Accumulated other comprehensive income	34,510		35,378
Retained earnings	5,830		2,067
Total common shareholders’ equity	1,697,485		1,284,535

Noncontrolling interests	158,581		68,431
Total equity	1,856,066		1,352,966
TOTAL LIABILITIES, REDEEMABLE STOCK OF SUBSIDIARIES AND EQUITY	$	7,490,627	$	7,139,025

See Notes to Condensed Consolidated Financial Statements.


IPALCO ENTERPRISES, INC. and SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
	Six Months Ended
	June 30,
	2025		2024
	(In Thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	34,311	$	35,657
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	178,074		163,353
Amortization of deferred financing costs and debt discounts	1,897		1,884
Deferred income taxes and investment tax credit adjustments - net	34,410		5,984
Allowance for equity funds used during construction	(1,401)		(2,100)
Loss on asset disposal	—		1,537

Tax credit transfer proceeds allocated to noncontrolling interest	133,010		—
Change in certain assets and liabilities:
Accounts receivable	1,078		(56,359)
Inventories	3,483		6,263
Current regulatory assets and liabilities	(21,701)		(48,712)
Investment tax credit transfer receivable	(45,223)		—
Prepayments and other current assets	(10,099)		(10,471)
Accounts payable	176		(27,191)
Accrued and other current liabilities	1,233		(8,997)
Accrued taxes payable/receivable	(4,111)		15,043
Accrued interest	(1,878)		12,795
Pension and other postretirement benefit assets and liabilities	512		1,227
Non-current regulatory assets and liabilities	7,035		(52,709)

Other non-current liabilities	(10,791)		2,007
Other	(2,991)		(8,464)
Net cash provided by operating activities	297,024		30,747
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures	(296,824)		(537,870)
Project development costs	(3,676)		(1,178)
Acquisitions	(77,640)		(47,948)

Cost of removal payments	(17,137)		(17,259)


Net cash used in investing activities	(395,277)		(604,255)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under revolving credit facilities	390,000		475,000
Repayments under revolving credit facilities	(490,000)		(390,000)
Short-term borrowings	—		92,000

Repayments of short-term borrowings	(100,000)		(392,000)
Long-term borrowings	—		1,050,000
Retirement of long-term borrowings	—		(405,000)
Distributions to shareholders	(126,129)		(57,094)
Equity contributions from shareholders	410,000		150,000
Distributions to noncontrolling interests	(90,392)		(675)
Sales to noncontrolling interests	149,942		46,935
Payments for financing fees	(983)		(13,922)

Proceeds received from termination of interest rate swaps	—		23,114
Other	(218)		(21)
Net cash provided by financing activities	142,220		578,337
Net change in cash, cash equivalents and restricted cash	43,967		4,829
Cash, cash equivalents and restricted cash at beginning of period	26,652		28,584
Cash, cash equivalents and restricted cash at end of period	$	70,619	$	33,413

Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest (net of amount capitalized)	$	89,041	$	72,191
Income taxes	$	10,000	$	—
Non-cash investing activities:
Accruals for capital expenditures	$	173,256	$	122,492
Changes to right-of-use assets - finance leases	$	13,116	$	72,066
Non-cash financing activities:
Changes to financing lease liabilities	$	(12,893)	$	(69,114)
Noncash contributions from noncontrolling interests	$	133,010	$	—
Noncash distribution to noncontrolling interests	$	(45,223)	$	—

See Notes to Condensed Consolidated Financial Statements.


IPALCO ENTERPRISES, INC. and SUBSIDIARIES
Condensed Consolidated Statements of Changes in Equity
For the Three and Six Months Ended June 30, 2025 and 2024
(Unaudited)

	Common Shareholders’ Equity
	Common Stock
(in Thousands)	Outstanding Shares	Amount		Paid in Capital		Accumulated Other Comprehensive Income / (loss)		Retained Earnings		Total Common Shareholders’ Equity		Noncontrolling Interests		Redeemable Stock of Subsidiaries
2025
Beginning Balance	108,907	$	—	$	1,247,090	$	35,378	$	2,067	$	1,284,535	$	68,431	$	38,145
Net income / (loss)				—		—		101,143		101,143		(82,595)		—
Other comprehensive loss				—		(434)		—		(434)		—		—

Distributions to shareholders				—		—		(95,312)		(95,312)		—		—
Sales to noncontrolling interests				—		—		—		—		150,191		—
Distributions to noncontrolling interests				—		—		—		—		(326)		—
Reclassification of redeemable stock of subsidiaries to noncontrolling interests				—		—		—		—		38,145		(38,145)
Other				35		—		—		35		—		—
Balance at March 31, 2025	108,907	$	—	$	1,247,125	$	34,944	$	7,898	$	1,289,967	$	173,846	$	—
Net income / (loss)				—		—		28,749		28,749		(12,986)		—
Other comprehensive loss				—		(434)		—		(434)		—		—
Distributions to shareholders				—		—		(30,817)		(30,817)		—		—

Distributions to noncontrolling interests				—		—		—		—		(135,289)		—
Contributions from shareholders				410,000		—		—		410,000		—		—
Contributions from noncontrolling interests				—		—		—		—		133,010		—
Other				20		—		—		20		—		—
Balance at June 30, 2025	108,907	$	—	$	1,657,145	$	34,510	$	5,830	$	1,697,485	$	158,581	$	—









2024
Beginning Balance	108,907	$	—	$	1,021,992	$	29,294	$	25,182	$	1,076,468	$	53,254	$	—
Net income / (loss)				—		—		17,162		17,162		(2,552)		—
Other comprehensive income				—		7,386		—		7,386		—		—

Distributions to shareholders				—		—		(26,720)		(26,720)		—		—
Distributions to noncontrolling interests				—		—		—		—		(52)		—
Other				26		—		—		26		—		—
Balance at March 31, 2024	108,907	$	—	$	1,022,018	$	36,680	$	15,624	$	1,074,322	$	50,650	$	—
Net income / (loss)				—		—		41,794		41,794		(20,747)		—
Other comprehensive loss				—		(434)		—		(434)		—		—
Distributions to shareholders				—		—		(30,374)		(30,374)		—		—
Sales to noncontrolling interests				—		—		—		—		46,935		—
Distributions to noncontrolling interests				—		—		—		—		(623)		—
Contributions from shareholders				150,000		—		—		150,000		—		—
Other				29		—		—		29		—		—
Balance at June 30, 2024	108,907	$	—	$	1,172,047	$	36,246	$	27,044	$	1,235,337	$	76,215	$	—

See Notes to Condensed Consolidated Financial Statements.

IPALCO ENTERPRISES, INC. and SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

For the Three and Six Months Ended June 30, 2025 and 2024

(Unaudited)

1. OVERVIEW AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

IPALCO is a holding company incorporated under the laws of the state of Indiana. IPALCO is owned by AES U.S. Investments (82.35%) and CDPQ (17.65%). AES U.S. Investments is owned by AES U.S. Holdings, LLC (85%) and CDPQ (15%). IPALCO owns all of the outstanding common stock of IPL, which does business as AES Indiana. Substantially all of IPALCO’s business consists of generating, transmitting, distributing and selling of electric energy conducted through its principal subsidiary, AES Indiana. AES Indiana was incorporated under the laws of the state of Indiana in 1926. AES Indiana has approximately 531,000 retail customers in the city of Indianapolis and neighboring cities, towns and communities, and adjacent rural areas all within the state of Indiana. AES Indiana has an exclusive right to provide electric service to those customers.

AES Indiana owns and operates four generating stations, all within the state of Indiana. The first station, Petersburg, consists of two coal-fired units. AES Indiana plans to convert these two coal units to natural gas. The second station, Harding Street, consists of three natural gas-fired boilers and steam turbines and uses natural gas and fuel oil to power five combustion turbines. In addition, AES Indiana operates a 20 MW battery energy storage unit at this location, which provides frequency response. The third station, Eagle Valley, is a CCGT natural gas plant. The fourth station, Georgetown, is a peaking station that uses natural gas to power combustion turbines. As of June 30, 2025, AES Indiana’s net electric generation capacity at these generating stations for winter is 3,070 MW and net summer capacity is 2,925 MW.

AES Indiana also owns and operates three renewable energy projects, including a 195 MW solar project located in Clinton County, Indiana (the ”Hardy Hills Solar Project”), which achieved full commercial operations in May 2024, a 106 MW wind facility located in Benton County, Indiana (the ”Hoosier Wind Project”), which was acquired in February 2024 and a 200 MW (800 MWh) battery energy storage project located in Pike County, Indiana (the "Pike County BESS Project'), which construction was completed and commenced operations in March 2025. See Note 2, "Regulatory Matters - IRP Filings and Replacement Generation - Pike County BESS Project" and Note 2, "Regulatory Matters - IRP Filings and Replacement Generation" to IPALCO's 2024 Form 10-K for further information.

In August 2023, AES Indiana, through a wholly-owned subsidiary, completed the acquisition of Petersburg Energy Center, LLC, including the development of a 250 MW solar and 45 MW (180 MWh) energy storage facility (the ”Petersburg Energy Center Project”). The Petersburg Energy Center Project is expected to be placed in service during the fourth quarter of 2025.

On May 16, 2025, AES Indiana, through a wholly-owned subsidiary, completed the acquisition of Crossvine Solar 1, LLC, including the development of 85 MW of solar and 85 MW (340 MWh) of energy storage which is expected to be placed in service in mid-2027.

For further discussion about AES Indiana’s plans for wind, solar, and battery energy storage projects, please see Note 2, ”Regulatory Matters - IRP Filings and Replacement Generation” to IPALCO’s 2024 Form 10-K.

Consolidation

The accompanying Financial Statements include the accounts of IPALCO Enterprises, Inc., AES Indiana and Mid-America Capital Resources, Inc., a non-regulated wholly-owned subsidiary of IPALCO. Furthermore, VIEs in which the Company has an ownership interest and is the primary beneficiary, thus controlling the VIE, have been consolidated. All significant intercompany amounts have been eliminated in consolidation.

IPALCO consolidates the results of AES Indiana subsidiaries that qualify as VIEs. AES Indiana is the primary beneficiary and controls the most significant activities of these VIEs. At June 30, 2025 and December 31, 2024, the assets of these VIEs were approximately $1,391.3 million and $1,169.3 million, primarily consisting of property, plant and equipment, construction work in progress and other non-current assets. At June 30, 2025 and December 31, 2024, the liabilities of these VIEs were approximately $247.8 million and $180.5 million, primarily consisting of finance leases and accounts payable.

Interim Financial Presentation

The accompanying unaudited condensed consolidated financial statements and footnotes have been prepared in accordance with GAAP, as contained in the FASB ASC, for interim financial information and Article 10 of Regulation S-X issued by the SEC. Accordingly, they do not include all the information and footnotes required by GAAP for annual fiscal reporting periods. In the opinion of management, the interim financial information includes all adjustments of a normal recurring nature necessary for a fair presentation of the results of operations, financial position, comprehensive income, changes in equity, and cash flows. The results of operations for the three months ended June 30, 2025 are not necessarily indicative of expected results for the year ending December 31, 2025. The accompanying condensed consolidated financial statements are unaudited and should be read in conjunction with the 2024 audited consolidated financial statements and notes thereto, which are included in IPALCO’s 2024 Form 10-K.

Use of Management Estimates

The preparation of financial statements in conformity with GAAP requires that management make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The reported amounts of revenue and expenses during the reporting period may also be affected by the estimates and assumptions management is required to make. Actual results may differ from those estimates. Significant items subject to such estimates and assumptions include: recognition of revenue including unbilled revenue; the carrying value of property, plant and equipment; the valuation of insurance and claims liabilities; the valuation of allowances for credit losses and deferred income taxes; regulatory assets and liabilities; liabilities recorded for income tax exposures; litigation; contingencies; and assets and liabilities related to AROs and employee benefits.

Cash, Cash Equivalents and Restricted Cash

The following table provides a summary of cash, cash equivalents and restricted cash amounts reported within the Condensed Consolidated Balance Sheets that reconcile to the total of such amounts as shown on the Condensed Consolidated Statements of Cash Flows:


	June 30,		December 31,
	2025		2024
	(In Thousands)
Cash, cash equivalents and restricted cash
Cash and cash equivalents	$	70,614	$	26,647
Restricted cash (included in Prepayments and other current assets)	5		5
Total cash, cash equivalents and restricted cash	$	70,619	$	26,652

Accounts Receivable and Allowance for Credit Losses

The following table summarizes our accounts receivable balances at June 30, 2025 and December 31, 2024:


	June 30,		December 31,
	2025		2024
	(In Thousands)
Accounts receivable, net
Customer receivables	$	185,723	$	207,353
Unbilled revenue	97,094		90,731
Amounts due from related parties	9,430		6,461

Other	48,098		38,331
Allowance for credit losses	(23,057)		(29,798)
Total accounts receivable, net	$	317,288	$	313,078

The following table is a rollforward of our allowance for credit losses related to the accounts receivable balances for the periods indicated:


	Six Months Ended June 30,
$ in Thousands	2025		2024
Allowance for credit losses:
Beginning balance	$	29,798	$	2,283
Current period provision	16,648		3,987
Net write-offs charged against allowance	(23,711)		(320)
Recoveries and account write-ons	322		1,071
Ending Balance	$	23,057	$	7,021

The allowance for credit losses primarily relates to utility customer receivables, including unbilled amounts. Expected credit loss estimates are developed by disaggregating customers into those with similar credit risk characteristics and using historical credit loss experience. In addition, we also consider how current and future economic conditions are expected to impact the collectability, as applicable, of our receivables balance. Amounts are written off when reasonable collections efforts have been exhausted. Beginning in 2024 and continuing into 2025, the current period provision and allowance for credit losses has increased due to a temporary pause of customer disconnections and certain collection efforts and write-off processes after the implementation of AES Indiana's customer billing system upgrade in the fourth quarter of 2023. This has resulted in higher past due customer receivables as of June 30, 2025. AES Indiana reinstituted the customer disconnections process and collection efforts and write-off processes in March 2025.

Inventories

The following table summarizes our inventory balances at June 30, 2025 and December 31, 2024:


	June 30,		December 31,
	2025		2024
	(In Thousands)
Inventories
Fuel	$	40,607	$	50,842
Materials and supplies, net	50,690		49,093
Total inventories	$	91,297	$	99,935

ARO

AES Indiana’s ARO liabilities relate primarily to environmental issues involving asbestos-containing materials, ash ponds, landfills and miscellaneous contaminants associated with its generating plants, transmission system and distribution system. The following is a roll forward of the ARO legal liabilities for the six months ended June 30, 2025 and 2024, respectively:


	Six Months Ended June 30,
	2025		2024
	(In Thousands)
Balance as of January 1	$	378,460	$	249,930
Liabilities incurred	875		8,507
Liabilities settled	(10,478)		(1,802)
Revisions to cash flow and timing estimates	(10,575)		80,221
Accretion expense	8,664		5,684
Balance as of June 30	$	366,946	$	342,540
Less: ARO liabilities, current	58,064		—
ARO liabilities, non-current	$	308,882	$	342,540

ARO liabilities incurred primarily relate to decommissioning costs for AES Indiana’s renewable projects, including liabilities incurred through acquisition of the Hoosier Wind Project. AES Indiana recorded revisions to its ARO liabilities during these two periods primarily to reflect revisions to cash flow estimates due to increases / (decreases) in closure costs and groundwater treatment measures for ash ponds and landfills. As of June 30, 2025 and December 31, 2024, AES Indiana did not have any assets that are legally restricted for settling its ARO liabilities. For further information, see Note 4, “ARO” to IPALCO’s 2024 Form 10-K.

AFUDC

AES Indiana capitalizes an allowance for the net cost of funds (interest on borrowed funds and a reasonable rate of return on equity funds) used for construction purposes during the period of construction with a corresponding credit to income. AFUDC equity and AFUDC debt were as follows for the periods indicated:


$ in thousands	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
AFUDC equity	$	732	$	1,269	$	1,401	$	2,100
AFUDC debt	$	6,600	$	6,411	$	16,416	$	11,687

Intangible Assets

Finite-lived intangible assets primarily include capitalized software and project development intangible assets amortized over their useful lives. The following table presents information related to the Company’s intangible assets, including the gross amount capitalized and related amortization:


	June 30,		December 31,
$ in thousands	2025		2024
Capitalized software	$	286,261	$	280,020
Project development intangible assets	146,661		83,149
Other	797		797
Less: Accumulated amortization	(145,619)		(131,756)
Intangible assets - net	$	288,100	$	232,210

	Three Months Ended June 30,
	2025		2024
Amortization expense	$	6,231	$	6,788

	Six Months Ended June 30,
	2025		2024
Amortization expense	$	13,901	$	13,728

Accumulated Other Comprehensive Income

The amounts reclassified out of AOCI by component during the three and six months ended June 30, 2025 and 2024 are as follows (in Thousands):


Details about AOCI components	Affected line item in the Condensed Consolidated Statements of Operations	Three Months Ended June 30,				Six Months Ended June 30,
		2025		2024		2025		2024
Net (gains) / losses on cash flow hedges	Interest expense	$	(578)	$	(578)	$	(1,156)	$	434
	Income tax effect	144		144		288		(108)
Total reclassifications for the period, net of income taxes		$	(434)	$	(434)	$	(868)	$	326

See Note 4, “Derivative Instruments and Hedging Activities - Cash Flow Hedges” for further information on the changes in the components of AOCI.

Tax Credit Transferability

The U.S Inflation Reduction Act of 2022 (the “IRA”) allows the owners of renewable energy projects to directly transfer ITCs to unrelated tax credit buyers. During the six months ended June 30, 2025, Pike County Energy Storage JV, LLC executed an agreement to transfer ITCs directly to a third party for $133.0 million. This amount was allocated to noncontrolling interest and treated as a capital contribution from the noncontrolling interest holder with no income tax benefit recorded by the Company. The Pike County BESS Project received and distributed to the noncontrolling interest holder, cash proceeds from these tax credit transfers of $87.8 million during the six months ended June 30, 2025, and recorded a receivable on the Condensed Consolidated Balance Sheets for the remaining $45.2 million, which is expected to be received in September 2025. The Company is contractually obligated to distribute the remaining $45.2 million in proceeds to the noncontrolling interest holder, and therefore recorded a corresponding payable on the Condensed Consolidated Balance Sheets.The receipt of cash from the transfer of tax credits is treated as an operating cash inflow on the Condensed Consolidated Statements of Cash Flows.

New Accounting Pronouncements Adopted in 2025

The Company assessed accounting pronouncements adopted in 2025 and determined that they were not applicable or did not have a material impact on the Company's Financial Statements.

New Accounting Pronouncements Issued But Not Yet Effective

The following table provides a brief description of recent accounting pronouncements that could have a material impact on the Company’s Financial Statements once adopted. Accounting pronouncements not listed below were assessed and determined to be either not applicable or are expected to have no material impact on the Company’s Financial Statements.


ASU Number and Name	Description	Date of Adoption	Effect on the Financial Statements upon adoption
2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures	The amendments in this Update require that public business entities on an annual basis (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold. Furthermore, companies are required to disclose a disaggregated amount of income taxes paid at a federal, state, and foreign level as well as a breakdown of income taxes paid in a jurisdiction that comprises 5% of a company's total income taxes paid. Lastly, this ASU requires that companies disclose income (loss) from continuing operations before income tax at a domestic and foreign level and that companies disclose income tax expense from continuing operations on a federal, state, and foreign level.	The amendments in this Update are effective for fiscal years beginning after December 15, 2024.	We are currently evaluating the impact of adopting the standard on our consolidated financial statements. This ASU only affects annual disclosures, which will be provided when the amendment becomes effective.
2024-03: Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40)	The amendments in this Update require disclosure, in the notes to financial statements, of specified information about certain costs and expenses. The amendments require that at each interim and annual reporting period an entity: 1. Disclose the amounts of (a) purchases of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, and (e) depreciation, depletion, and amortization recognized as part of oil- and gas-producing activities (DD&A) (or other amounts of depletion expense) included in each relevant expense caption. A relevant expense caption is an expense caption presented on the face of the income statement within continuing operations that contains any of the expense categories listed in (a)–(e). 2. Include certain amounts that are already required to be disclosed under current generally accepted accounting principles (GAAP) in the same disclosure as the other disaggregation requirements. 3. Disclose a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively. 4. Disclose the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses.	The date for each amendment in this Update is effective for fiscal years beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted.	We are currently evaluating the impact of adopting the standard on our consolidated financial statements. This ASU only affects disclosures, which will be provided when the amendment becomes effective.

2. REGULATORY MATTERS

Regulatory Rate Review

On April 17, 2024, the IURC issued an order (the “2024 Base Rate Order”) approving the Stipulation and Settlement Agreement that AES Indiana entered into on November 22, 2023, with the OUCC and the other intervening parties in AES Indiana’s base rate case filing. Among other matters and consistent with the Stipulation and Settlement Agreement, the 2024 Base Rate Order approves an increase in AES Indiana's total annual operating revenue of $71 million for AES Indiana’s electric service and provides a return on common equity of 9.9% and cost of long-term debt of 4.90% on a rate base of approximately $3.5 billion. Updated customer rates and charges became effective on May 9, 2024.

On June 3, 2025, AES Indiana filed a petition with the IURC for authority to increase its basic rates and charges to cover the rising operational costs and needs associated with continuing to serve its customers safely and reliably. The factors leading to AES Indiana's base rate increase request include inflationary impacts on operations and maintenance expenses and continued investments in generation, transmission and distribution assets. AES Indiana is also seeking recovery of increased costs to support its vegetation management plan, storm restoration costs and technology to enhance resiliency and reliability. If approved, AES Indiana's proposed revenue increase will be implemented in two phases: $85.4 million or 4.5% in 2026 and $107.5 million or 5.6% in 2027. A hearing on this

petition will be held in November 2025. We expect to receive an order from the IURC and place new rates into effect by the end of the second quarter of 2026.

DSM

AES Indiana filed a petition with the IURC on May 31, 2024 asking for approval of a two-year DSM plan for the 2025-2026 program years. On January 8, 2025, the IURC approved a two-year DSM plan for AES Indiana through 2026. The approval included cost recovery of programs as well as financial incentives, depending on the level of success of the programs. The order also approved recovery of lost revenue, consistent with the provisions of the settlement agreement.

IRP Filings and Replacement Generation

2025 IRP

Pike County BESS Project

In June 2023, AES Indiana, through a wholly-owned subsidiary, executed an agreement for the construction of the 200 MW (800 MWh) Pike County BESS Project to be developed at the AES Indiana Petersburg Plant site in Pike County, Indiana. On July 19, 2023, AES Indiana filed a petition and case-in-chief with the IURC seeking approval for a Clean Energy Project and associated timely cost recovery under Indiana Code for this project. A hearing for this case was held in October 2023, and IURC approval was received on January 17, 2024. In March 2025, the Pike County BESS Project was placed in service. Upon the project being placed in service, the Company recognized $80.7 million of earnings from tax attributes using the HLBV method.

Crossvine Project

On August 1, 2024, AES Indiana executed an agreement for the acquisition of a development stage solar and BESS project to be developed in Dubois County, Indiana. AES Indiana plans to build 85 MW of solar and 85 MW (340 MWh) of energy storage which is expected to be placed in service in mid-2027. AES Indiana filed a petition and case-in-chief with the IURC in August 2024, seeking a CPCN for this project, and IURC approval was received on April 9, 2025. On May 16, 2025, AES Indiana closed on the agreement for the acquisition of Crossvine Solar 1, LLC. This transaction was accounted for as an asset acquisition of a variable interest entity that did not meet the definition of a business; therefore, the identifiable assets and liabilities were recorded at their fair values. Total net assets of $77.6 million were recorded on the accompanying Condensed Consolidated Balance Sheets associated with the transaction, primarily consisting of a project development intangible asset valued at $63.5 million and construction work in progress (see Note 1, "Overview and Summary of Significant Accounting Policies - Intangible Assets" for further information).

3. FAIR VALUE

The fair value of current financial assets and liabilities approximate their reported carrying amounts. The estimated fair values of the Company’s assets and liabilities have been determined using available market information. Because these amounts are estimates and based on hypothetical transactions to sell assets or transfer liabilities, the use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. For further information on our valuation techniques and policies, see Note 5, “Fair Value” to IPALCO’s 2024 Form 10-K.

Financial Assets

VEBA Assets

IPALCO has VEBA investments that are to be used to fund certain employee postretirement health care benefit plans. These assets are primarily comprised of open-ended mutual funds, which are valued using the net assets value per unit. These investments are recorded at fair value within “Other non-current assets” on the accompanying Condensed Consolidated Balance Sheets and classified as equity securities. All changes to fair value on the VEBA investments are included in income in the period that the changes occur. These changes to fair value were not material for the periods covered by this report. Any unrealized gains or losses are recorded in “Other (expense) / income, net” on the accompanying Condensed Consolidated Statements of Operations.

FTRs

In connection with AES Indiana’s participation in MISO, in the second quarter of each year AES Indiana is granted financial instruments that can be converted into cash or FTRs based on AES Indiana’s forecasted peak load for the period. FTRs are used in the MISO market to hedge AES Indiana’s exposure to congestion charges, which result from constraints on the transmission system. AES Indiana’s FTRs are valued at the cleared auction prices for FTRs in MISO’s annual auction. Because of the infrequent nature of this valuation, the fair value assigned to the FTRs is considered a Level 3 input under the fair value hierarchy required by ASC 820. An offsetting regulatory liability has been recorded as these revenue or costs will be flowed through to customers through the FAC. As such, there is no impact on our Condensed Consolidated Statements of Operations.

Recurring Fair Value Measurements

The fair value of assets and liabilities at June 30, 2025 and December 31, 2024 measured on a recurring basis and the respective category within the fair value hierarchy for IPALCO was determined as follows:


	Fair Value as of June 30, 2025								Fair Value as of December 31, 2024
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
	(In Thousands)
Financial assets:
VEBA investments:
Money market funds	$	102	$	—	$	—	$	102	$	86	$	—	$	—	$	86
Mutual funds	3,929		—		—		3,929		3,947		—		—		3,947
Total VEBA investments	4,031		—		—		4,031		4,033		—		—		4,033
FTRs	—		—		4,304		4,304		—		—		1,526		1,526

Total financial assets measured at fair value	$	4,031	$	—	$	4,304	$	8,335	$	4,033	$	—	$	1,526	$	5,559

The following table presents a roll forward of financial instruments, measured at fair value on a recurring basis, classified as Level 3 in the fair value hierarchy (note, amounts in this table indicate carrying values, which approximate fair values):


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
	(In Thousands)
Beginning Balance	$	398	$	393	$	1,526	$	1,388
Issuances	4,718		3,811		4,718		3,811
Settlements	(812)		(236)		(1,940)		(1,231)
Ending Balance	$	4,304	$	3,968	$	4,304	$	3,968

Financial Instruments not Measured at Fair Value in the Condensed Consolidated Balance Sheets

Debt

The fair value of our outstanding fixed-rate debt has been determined on the basis of the quoted market prices of the specific securities issued and outstanding. In certain circumstances, the market for such securities was inactive and therefore the valuation was adjusted to consider changes in market spreads for similar securities. Accordingly, the purpose of this disclosure is not to approximate the value on the basis of how the debt might be refinanced.

The following table shows the face value and the fair value of fixed-rate and variable-rate indebtedness (Level 2) for the periods ending:


	June 30, 2025				December 31, 2024
	Face Value		Fair Value		Face Value		Fair Value
	(In Thousands)
Fixed-rate	$	3,638,800	$	3,464,554	$	3,638,800	$	3,404,473
Variable-rate	300,000		300,000		500,000		500,000
Total indebtedness	$	3,938,800	$	3,764,554	$	4,138,800	$	3,904,473

The difference between the face value and the carrying value of this indebtedness consists of the following:

•unamortized deferred financing costs of $34.3 million and $34.7 million at June 30, 2025 and December 31, 2024, respectively; and

•unamortized discounts of $9.2 million and $9.4 million at June 30, 2025 and December 31, 2024, respectively.

4. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

For further information on the Company’s derivative and hedge accounting policies, see Note 1, “Overview and Summary of Significant Accounting Policies - Financial Derivatives” and Note 6, “Derivative Instruments and Hedging Activities” to IPALCO’s 2024 Form 10-K.

At June 30, 2025, AES Indiana’s outstanding derivative instruments were as follows:

Commodity

Accounting Treatment

Unit

Notional
(in thousands)

Sales
(in thousands)

Net Notional
(in thousands)

FTRs

Not Designated

MWh

8,067

—

8,067

Cash Flow Hedges

As part of our risk management processes, we identify the relationships between hedging instruments and hedged items, as well as the risk management objective and strategy for undertaking various hedge transactions. The fair values of cash flow hedges are determined by current public market prices. The change in the fair value of a hedging instrument is recorded in AOCI and amounts deferred are reclassified to earnings in the same income statement line as the hedged item in the period in which it settles.

IPALCO’s three forward-starting interest rate swaps with a combined notional value of $400.0 million were terminated for total cash proceeds of $23.1 million in conjunction with the issuance of the 2034 IPALCO Notes in March 2024. AOCI of $95.4 million associated with the interest rate swaps through the date of the termination is currently being amortized into interest expense over the 10-year life of the 2034 IPALCO Notes. IPALCO previously de-designated three forward-starting interest rate swaps used to hedge the interest risk associated with refinancing the IPALCO 2020 maturities. AOCL of $72.3 million was frozen at the date of de-designation, which is currently being amortized into interest expense over the remaining life of the 2030 IPALCO Notes.

The following table provides information on gains or losses recognized in AOCI for the cash flow hedges for the periods indicated:


	Interest Rate Hedges for the Three Months Ended June 30,				Interest Rate Hedges for the Six Months Ended June 30,
$ in thousands (net of tax)	2025		2024		2025		2024
Beginning accumulated derivative gain	$	34,944	$	36,680	$	35,378	$	29,294
Net gains associated with current period hedging transactions	—		—		—		6,626
Net (gains) / losses reclassified to interest expense, net of tax	(434)		(434)		(868)		326
Ending accumulated derivative gain in AOCI	$	34,510	$	36,246	$	34,510	$	36,246

Net gain expected to be reclassified to earnings in the next twelve months	1,737

Derivatives Not Designated as Hedge

AES Indiana’s FTRs do not qualify for hedge accounting or the normal purchases and sales exceptions under ASC 815. Accordingly, FTRs are recorded at fair value using the income approach when acquired and subsequently amortized over the annual period as they are used. When applicable, IPALCO has elected not to offset derivative assets and liabilities and not to offset net derivative positions against the right to reclaim cash collateral pledged (an asset) or the obligation to return cash collateral received (a liability) under derivative agreements. As of June 30, 2025 and December 31, 2024, IPALCO did not have any offsetting positions.

The following table summarizes the fair value, balance sheet classification and hedging designation of IPALCO’s derivative instruments (in thousands):

Commodity

Hedging Designation

Balance sheet classification

June 30, 2025

December 31, 2024

FTRs

Not a Cash Flow Hedge

Derivative assets, current

4,304

1,526

5. DEBT

Long-Term Debt

The following table presents our long-term debt:


		June 30,		December 31,
Series	Due	2025		2024
		(In Thousands)
AES Indiana first mortgage bonds:

0.65% (1)	August 2025	$	40,000	$	40,000
0.75% (2)	April 2026	30,000		30,000
0.95% (2)	April 2026	60,000		60,000
1.40% (1)	August 2029	55,000		55,000
5.65%	December 2032	350,000		350,000
6.60%	January 2034	100,000		100,000
6.05%	October 2036	158,800		158,800
6.60%	June 2037	165,000		165,000
4.875%	November 2041	140,000		140,000
4.65%	June 2043	170,000		170,000
4.50%	June 2044	130,000		130,000
4.70%	September 2045	260,000		260,000
4.05%	May 2046	350,000		350,000
4.875%	November 2048	105,000		105,000
5.70%	April 2054	650,000		650,000
Unamortized discount – net		(7,953)		(8,093)
Deferred financing costs		(24,816)		(25,469)
Total AES Indiana first mortgage bonds		2,731,031		2,730,238
Total long-term debt – AES Indiana		2,731,031		2,730,238
Long-term debt – IPALCO:

4.25% Senior Secured Notes	May 2030	475,000		475,000
5.75% Senior Secured Notes	April 2034	400,000		400,000
Unamortized discount – net		(1,290)		(1,331)
Deferred financing costs		(7,863)		(8,279)
Total long-term debt – IPALCO		865,847		865,390
Total consolidated IPALCO long-term debt		3,596,878		3,595,628
Less: current portion of long-term debt		129,791		39,910
Net consolidated IPALCO long-term debt (3)		$	3,467,087	$	3,555,718

(1)First mortgage bonds issued to the Indiana Finance Authority, to secure the loan of proceeds from tax-exempt bonds issued by the Indiana Finance Authority.

(2)First mortgage bonds issued to the Indiana Finance Authority, to secure the loan of proceeds from tax-exempt bonds issued by the Indiana Finance Authority. The notes have a final maturity date of December 31, 2038, but are subject to a mandatory put in April 2026.

(3)Excludes $0.0 million and $0.2 million (current) and $100.0 million and $86.9 million (non-current) finance lease liabilities included in the respective short and long-term debt line items on the Condensed Consolidated Balance Sheets as of June 30, 2025 and December 31, 2024, respectively. See Note 12, "Leases" for further information.

Line of Credit

AES Indiana entered into a third amendment and restatement of its $500 million revolving Credit Agreement on March 25, 2025 with a syndicate of bank lenders. The AES Indiana Credit Agreement is an unsecured committed line of credit to be used: (i) to finance capital expenditures; (ii) to refinance certain existing indebtedness, (iii) to support working capital; and (iv) for general corporate purposes. This agreement matures on March 25, 2030, and bears interest at variable rates as described in the agreement. It includes an uncommitted $200 million accordion feature to provide AES Indiana with an option to request an increase in the size of the facility at any time prior to March 25, 2029, subject to approval by the lenders. The AES Indiana Credit Agreement also includes two one-year extension options, allowing AES Indiana to extend the maturity date subject to approval by the lenders. As of

June 30, 2025 and December 31, 2024, AES Indiana had $0.0 million and $100.0 million in outstanding borrowings on the committed AES Indiana Credit Agreement, respectively.

AES Indiana Term Loan

In August 2024, AES Indiana entered into an unsecured $400 million 364-day term loan agreement, which was drawn in two tranches. AES Indiana drew $300 million at closing and drew the remaining $100 million in October 2024, with the proceeds being used for general corporate purposes. On June 24, 2025, AES Indiana redeemed $100 million of the $400 million Term Loan Agreement. This agreement was originally set to mature on August 13, 2025, but was amended on July 30, 2025, to extend the maturity date until October 13, 2025, and bears interest at variable rates as described in the $400 million Term Loan Agreement. The $400 million Term Loan Agreement contains customary representations, warranties and covenants, including a leverage covenant consistent with the leverage covenant contained in AES Indiana's Credit Agreement. AES Indiana has classified the $400 million Term Loan Agreement as short-term indebtedness as it matures in October 2025. Management plans to repay the remaining $300 million of the $400 million Term Loan Agreement with proceeds from a long-term debt financing and cash from operations.

6. INCOME TAXES

IPALCO’s provision for income taxes is based on the estimated annual effective tax rate, plus discrete items. The effective combined state and federal income tax rates were as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Effective tax rate	29.6	%	37.5	%	55.4	%	31.7	%

The year-to-date rate is different from the combined federal and state statutory rate of 24.9% primarily due to the impact of taxes on noncontrolling interest in subsidiaries and the net tax expense related to the amortization of allowance for equity funds used during construction, which is partially offset by the flowthrough of the net tax benefit related to the reversal of excess deferred taxes and investment tax credits of AES Indiana.

IPALCO’s income tax expense for the six months ended June 30, 2025, was calculated using the estimated annual effective income tax rate for 2025 of 29.3% on ordinary income. Management estimates the annual effective tax rate based on its forecast of annual pre-tax income or loss.

AES files federal and state income tax returns which consolidate IPALCO and its subsidiaries. Under a tax sharing agreement with AES, IPALCO is responsible for the income taxes associated with its own taxable income and records the provision for income taxes using a separate return method.

7. BENEFIT PLANS

The following table presents the net periodic benefit cost of the Pension Plans combined:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2025		2024		2025		2024
	(In Thousands)
Components of net periodic benefit cost:
Service cost	$	1,065	$	1,253	$	2,130	$	2,506
Interest cost	6,891		6,739		13,782		13,478
Expected return on plan assets	(7,758)		(7,443)		(15,516)		(14,886)
Amortization of prior service cost	585		475		1,170		950
Amortization of actuarial loss	1,257		1,207		2,514		2,414
Net periodic benefit cost	$	2,040	$	2,231	$	4,080	$	4,462

The components of net periodic benefit cost other than service cost are included in “Other (expense) / income, net” in the Condensed Consolidated Statements of Operations.

In addition, AES Indiana provides postretirement health care benefits to certain active or retired employees and the spouses of certain active or retired employees. These postretirement health care benefits and the related unfunded obligation were not material to the Financial Statements in the periods covered by this report.

8. EQUITY

Paid In Capital

During 2025, AES U.S. Investments received equity capital contributions totaling $337.6 million, of which $287.0 million was contributed by AES U.S. Holdings, LLC and $50.6 million was contributed by CDPQ. IPALCO then received equity capital contributions totaling $410.0 million, of which $337.6 million was contributed by AES U.S. Investments and $72.4 million was contributed by CDPQ. IPALCO then made the same investments in AES Indiana. The proceeds from the equity contributions are intended primarily for funding needs related to AES Indiana’s capital expenditure program. The capital contributions were made on a proportional share basis and, therefore, did not change CDPQ’s or AES’ ownership interests in IPALCO or AES U.S. Investments.

During 2024, AES U.S. Investments received equity capital contributions totaling $123.5 million, of which $105 million was contributed by AES U.S. Holdings, LLC and $18.5 million was contributed by CDPQ. IPALCO then received equity capital contributions totaling $150.0 million, of which $123.5 million was contributed by AES U.S. Investments and $26.5 million was contributed by CDPQ. IPALCO then made the same investments in AES Indiana. The proceeds from the equity contribution are intended primarily for funding needs related to AES Indiana’s capital expenditure program. The capital contributions were made on a proportional share basis and, therefore, did not change CDPQ’s or AES’ ownership interests in IPALCO or AES U.S. Investments.

Equity Transactions with Noncontrolling Interests

On December 6, 2024, AES Indiana, through a wholly-owned subsidiary, sold a noncontrolling interest in the Pike County BESS Project to a tax equity investor. Through June 30, 2025, the tax equity investor has made total contributions of $188.3 million under the agreement, including $150.2 million contributed in March 2025. The redemption feature of the tax equity partnership agreement was contingent upon the underlying assets being placed in service by a guaranteed date. In March 2025, the Pike County BESS Project was placed in service, resulting in the expiration of the redemption feature. As a result, noncontrolling interest of $38.1 million was reclassified from Redeemable stock of subsidiaries to Noncontrolling interests on the Condensed Consolidated Balance Sheets.

9. COMMITMENTS AND CONTINGENCIES

Contingencies

Subsidiary Guarantees

In connection with AES Indiana's renewable projects financed with a tax equity structure, AES Indiana has expressly undertaken limited obligations and commitments on behalf of certain of the Company's subsidiaries, which will only be effective upon the occurrence of future events, such as IRS recapture of tax credits, which is not expected to occur, and will be terminated upon the occurrence of future events. As of June 30, 2025, the maximum undiscounted potential exposure to tax equity financing related guarantees was $314.6 million.

Legal Matters

IPALCO and AES Indiana are involved in litigation arising in the normal course of business. We accrue for litigation and claims when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. While the ultimate outcome of outstanding litigation cannot be predicted with certainty, management believes that final outcomes will not have a material adverse effect on IPALCO’s results of operations, financial condition and cash flows. Accruals for legal loss contingencies were not material as of June 30, 2025 and December 31, 2024, respectively.

Environmental Matters

We are subject to various federal, state, regional and local environmental protection and health and safety laws and regulations governing, among other things, the generation, storage, handling, use, disposal and transportation of regulated materials, including CCR; the use and discharge of water used in generation boilers and for cooling purposes; the emission and discharge of hazardous and other materials, including GHGs, into the environment; climate change; and the health and safety of our employees. These laws and regulations often require a lengthy and complex process of obtaining and renewing permits and other governmental authorizations from federal, state and local agencies. Violation of these laws, regulations or permits can result in substantial fines, other sanctions, permit revocation and/or facility shutdowns. We cannot assure that we have been or will be at all times in full compliance with such laws, regulations and permits. Accruals for environmental contingencies were not material as of June 30, 2025 and December 31, 2024, respectively.

On March 23, 2021, the U.S. District Court for the Southern District of Indiana approved and entered a judicial consent decree among AES Indiana, the United States on behalf of the EPA, and the IDEM. The decree resolved allegations by EPA and IDEM that AES Indiana had violated the federal CAA at its Petersburg Station, which AES denies. Under the decree, AES Indiana agreed to certain emission limits and annual caps on NOx, SO2 and PM emissions at the four Units at the station; paid a civil penalty of $1.525 million; retired Units 1 and 2, spent $0.325 million on an environmentally beneficial project to preserve local, ecologically-significant lands (notice of completion of which was provided May 8, 2025); and will spend a total of $5 million on a further environmental mitigation project to build and operate a new, non-emitting source of generation at the site.

10. BUSINESS SEGMENTS

IPALCO manages its business through one reportable operating segment, the Utility segment, led by our Chief Executive Officer and Chief Financial Officer, who, collectively, are the Chief Operating Decision Maker. The primary segment performance measures are income / (loss) before income tax and net income / (loss) as management has concluded that these measures best reflect the underlying business performance of IPALCO and are the most relevant measures considered in IPALCO's internal evaluation of the financial performance of its segment. The Utility segment is comprised of AES Indiana, a vertically integrated electric utility, with all other nonutility business activities aggregated separately. See Note 1, "Overview and Summary of Significant Accounting Policies" for further information on AES Indiana. The “Other” nonutility category primarily includes the 2030 IPALCO Notes, 2034 IPALCO Notes and related interest expense, cash and other immaterial balances. The accounting policies of the identified segment are consistent with those policies and procedures described in the summary of significant accounting policies. See Note 1, "Overview and Summary of Significant Accounting Policies" to IPALCO’s 2024 Form 10-K for further information.

The following table provides information about IPALCO’s business segments (in thousands):


	Three Months Ended						Three Months Ended
	June 30, 2025						June 30, 2024
	Utility		Other		Total		Utility		Other		Total
Revenue	$	438,684	$	—	$	438,684	$	397,594	$	—	$	397,594

Fuel	99,973		—		99,973		77,639		—		77,639
Power purchased	31,239		—		31,239		44,103		—		44,103
Operation and maintenance	142,212		96		142,308		108,981		111		109,092
Depreciation and amortization	92,469		—		92,469		82,920		—		82,920
Taxes other than income taxes	4,231		—		4,231		6,547		—		6,547
Allowance for equity funds used during construction	(732)		—		(732)		(1,269)		—		(1,269)
Interest expense	36,145		10,447		46,592		32,885		10,950		43,835
Other segment items (a)	245		(39)		206		1,811		(741)		1,070
Income / (loss) before income tax	32,902		(10,504)		22,398		43,977		(10,320)		33,657
Income tax expense / (benefit)	10,594		(3,959)		6,635		14,740		(2,130)		12,610
Net income / (loss)	$	22,308	$	(6,545)	$	15,763	$	29,237	$	(8,190)	$	21,047

Capital expenditures	$	149,708	$	—	$	149,708	$	278,746	$	—	$	278,746

	Six Months Ended						Six Months Ended
	June 30, 2025						June 30, 2024
	Utility		Other		Total		Utility		Other		Total
Revenue	$	916,384	$	—	$	916,384	$	805,395	$	—	$	805,395

Fuel	206,482		—		206,482		180,558		—		180,558
Power purchased	66,769		—		66,769		82,736		—		82,736
Operation and maintenance	284,698		218		284,916		224,227		233		224,460
Depreciation and amortization	178,074		—		178,074		163,353		—		163,353
Taxes other than income taxes	13,303		—		13,303		14,442		—		14,442
Allowance for equity funds used during construction	(1,401)		—		(1,401)		(2,100)		—		(2,100)
Interest expense	69,688		20,895		90,583		65,262		22,221		87,483
Other segment items (a)	792		(20)		772		3,968		(1,681)		2,287
Income / (loss) before income tax	97,979		(21,093)		76,886		72,949		(20,773)		52,176
Income tax expense / (benefit)	46,786		(4,211)		42,575		20,427		(3,908)		16,519
Net income / (loss)	$	51,193	$	(16,882)	$	34,311	$	52,522	$	(16,865)	35,657

Capital expenditures	$	296,824	$	—	$	296,824	$	537,870	$	—	$	537,870

	As of June 30, 2025						As of December 31, 2024
	Utility		Other		Total		Utility		Other		Total
Total assets	$	7,485,203	$	5,424	$	7,490,627	$	7,123,241	$	15,784	$	7,139,025

(a) Other segment items primarily includes other miscellaneous gains and losses in Other (expense) income, net.

11. REVENUE

Revenue is primarily earned from retail and wholesale electricity sales and electricity transmission and distribution delivery services. Revenue is recognized upon transfer of control of promised goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. Revenue is recorded net of any taxes assessed on and collected from customers, which are remitted to the governmental authorities. Please see Note 14, “Revenue” to IPALCO’s 2024 Form 10-K for further discussion of our retail, wholesale and miscellaneous revenue.

AES Indiana’s revenue from contracts with customers was as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Revenue from contracts with customers	$	431,952	$	390,717	$	903,246	$	791,934

The following table presents our revenue from contracts with customers and other revenue (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Retail Revenue
Retail revenue from contracts with customers:
Residential	$	163,268	$	158,899	$	382,983	$	339,868
Small commercial and industrial	63,218		61,031		137,470		123,745
Large commercial and industrial	167,066		156,008		320,980		293,528
Public lighting	2,614		2,197		5,291		5,023
Other (1)	2,462		2,812		5,912		4,991
Total retail revenue from contracts with customers	398,628		380,947		852,636		767,155
Alternative revenue programs	5,827		6,269		11,353		11,975
Wholesale Revenue
Wholesale revenue from contracts with customers:	30,332		6,698		45,515		19,320
Miscellaneous Revenue
Capacity revenue	581		—		845		—
Transmission and other revenue	2,411		3,072		4,250		5,459
Total miscellaneous revenue from contracts with customers	2,992		3,072		5,095		5,459
Other miscellaneous revenue (2)	905		608		1,785		1,486
Total Revenue	$	438,684	$	397,594	$	916,384	$	805,395

(1)Other retail revenue from contracts with customers includes miscellaneous charges to customers, including reconnection and late fee charges.

(2)Other miscellaneous revenue includes lease and other miscellaneous revenue not accounted for under ASC 606.

The balances of receivables from contracts with customers were as follows (in thousands):


	June 30, 2025		December 31, 2024
Receivables from contracts with customers	$	287,796	$	298,984

Payment terms for all receivables from contracts with customers typically do not extend beyond 30 days, unless a customer qualifies for payment extension. AES Indiana temporarily paused customer disconnections and certain collection efforts and write-off processes to support the implementation of AES Indiana's customer billing system upgrade in the fourth quarter of 2023. In the third quarter of 2024, AES Indiana began offering extended payment

plans for customers who may need assistance in paying their past due bills. See Note 1, “Overview and Summary of Significant Accounting Policies – Accounts Receivable and Allowance for Credit Losses” for further information on AES Indiana’s receivable balances.

12. LEASES

LESSEE

The Company is the lessee under financing leases primarily for land. Right-of-use assets are long-term by nature. The following table summarizes the amounts recognized on the Condensed Consolidated Balance Sheets related to lease asset and liability balances as of the periods indicated (in thousands):


	Consolidated Balance Sheet Classification	June 30, 2025		December 31, 2024
Assets
Right-of-use assets — finance leases	Other non-current assets	$	98,565	$	86,707
Liabilities
Finance lease liabilities (current)	Short-term debt and current portion of long-term debt	$	—	$	217
Finance lease liabilities (non-current)	Long-term debt	99,985		86,869
Total finance lease liabilities		$	99,985	$	87,086

The following table summarizes supplemental balance sheet information related to leases as of the periods indicated:

Lease Term and Discount Rate

June 30, 2025

December 31, 2024

Weighted-average remaining lease term — finance leases

35 years

36 years

Weighted-average discount rate — finance leases

5.74

5.67

Operating cash outflows from finance leases were $4.0 million and $2.9 million for the six months ended June 30, 2025 and 2024, respectively.

The following table shows the future lease payments under finance leases together with the present value of the net lease payments as of June 30, 2025 for 2025 through 2029 and thereafter (in thousands):


	Finance Leases
2025	$	612
2026	4,855
2027	5,205
2028	5,498
2029	5,608
Thereafter	241,135
Total	$	262,913
Less: Imputed interest	(162,928)
Present value of lease payments	$	99,985

LESSOR

The Company is the lessor under operating leases for land, office space and operating equipment. Lease receipts from such contracts are recognized as operating lease revenue on a straight-line basis over the lease term whereas contingent rentals are recognized when earned.

The following table presents lease revenue from operating leases in which the Company is the lessor for the periods indicated (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Total lease revenue	$	270	$	263	$	832	$	798

The following table presents the underlying gross assets and accumulated depreciation of operating leases included in Property, plant and equipment, net for the periods indicated (in thousands):


Property, Plant and Equipment, Net	June 30, 2025		December 31, 2024
Gross assets	$	8,612	$	4,387
Less: Accumulated depreciation	(3,512)		(1,426)
Net assets	$	5,100	$	2,961

The option to extend or terminate a lease is based on customary early termination provisions in the contract.

The following table shows the future lease receipts as of June 30, 2025 for the remainder of 2025 through 2029 and thereafter (in thousands):


	Operating Leases
2025	$	308
2026	680
2027	683
2028	486
2029	449
Thereafter	679
Total	$	3,285

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with the Financial Statements and the notes thereto included in “Item 1. Financial Statements” included in Part I – Financial Information of this Form 10-Q.

FORWARD-LOOKING INFORMATION

The following discussion may contain forward-looking statements regarding us, our business, prospects and our results of operations that are subject to certain risks and uncertainties posed by many factors and events that could cause our actual business, prospects and results of operations to differ materially from those that may be anticipated by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those described in “Item 1A. Risk Factors” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in IPALCO’s 2024 Form 10-K and subsequent filings with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date of this report. We undertake no obligation to revise any forward-looking statements in order to reflect events or circumstances that may subsequently arise. If we do update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements. Readers are urged to carefully review and consider the various disclosures made by us in this report and in our other reports filed with the SEC that advise of the risks and uncertainties that may affect our business.

OVERVIEW OF OUR BUSINESS

IPALCO is a holding company incorporated under the laws of the state of Indiana. Our principal subsidiary is AES Indiana, a regulated electric utility operating in the state of Indiana. Substantially all of our business consists of the generation, transmission, distribution and sale of electric energy conducted through AES Indiana. Our business segments are “utility” and “other.” For additional information regarding our business, see “Item 1. Business” of IPALCO’s 2024 Form 10-K.

EXECUTIVE SUMMARY

Compared with the same periods in the prior year, the results for the three months ended June 30, 2025 reflect lower income before income tax of $11.3 million, or 33.5%, as well as a decrease in net income of $5.3 million, or 25.1%, and the results for the six months ended June 30, 2025 reflect higher income before income tax of $24.7 million, or 47.4%, as well as a decrease in net income of $1.3 million, or 3.8%, primarily due to factors including, but not limited to:


	Three Months Ended		Six Months Ended
	June 30,		June 30,
$ in millions	2025 vs. 2024		2025 vs. 2024
Increase in retail margin due to higher prices (primarily driven by the 2024 Base Rate Order, including the impact of certain riders now included in base rates)	$	16.5	$	55.8
Increase in ECCRA rider revenue due to recovery of certain renewable project investments	11.4		19.3
(Decrease) / Increase in retail margin due to (lower) / higher volumes (primarily driven by weather)	(4.8)		9.4
Increase in contracted services expenses and higher materials and supplies inventory consumption, primarily due to higher planned generation maintenance and outage costs	(14.1)		(19.4)
Decrease due to lower TDSIC rider revenue (primarily driven by certain projects now being included in base rate retail margin after the 2024 Base Rate Order)	(5.8)		(18.2)
Decrease due to higher expected credit losses	(7.2)		(12.7)
Decrease due to higher depreciation expense from additional assets placed in service; partially offset by lower regulatory asset amortization following the 2024 Base Rate Order.	(3.7)		(5.9)
Other	(3.6)		(3.6)
Net change in income before income tax	(11.3)		24.7
Net change in income tax expense due to lower/higher pre-tax income, a decrease in the net tax benefit related to the reversal of excess deferred taxes of AES Indiana resulting from the 2024 Base Rate Order, and the tax effects associated with HLBV in the current period	6.0		(26.0)
Net change in net income	$	(5.3)	$	(1.3)

See “Results of Operations” below for further discussion.

RESULTS OF OPERATIONS

The electric utility business is affected by seasonal weather patterns throughout the year and, therefore, operating revenue and associated expenses are not generated evenly by month during the year.

Statements of Operations Highlights


	Three Months Ended								Six Months Ended
	June 30,								June 30,
$ in Thousands	2025		2024		$ Change		% Change		2025		2024		$ Change		% Change

REVENUE	$	438,684	$	397,594	$	41,090	10.3	%	$	916,384	$	805,395	$	110,989	13.8	%

OPERATING COSTS AND EXPENSES:
Fuel	99,973		77,639		22,334		28.8	%	206,482		180,558		25,924		14.4	%
Power purchased	31,239		44,103		(12,864)		(29.2)	%	66,769		82,736		(15,967)		(19.3)	%
Operation and maintenance	142,308		109,092		33,216		30.4	%	284,916		224,460		60,456		26.9	%
Depreciation and amortization	92,469		82,920		9,549		11.5	%	178,074		163,353		14,721		9.0	%
Taxes other than income taxes	4,231		6,547		(2,316)		(35.4)	%	13,303		14,442		(1,139)		(7.9)	%
Other, net	(159)		14		(173)		(1,235.7)	%	(164)		1,537		(1,701)		(110.7)	%
Total operating costs and expenses	370,061		320,315		49,746		15.5	%	749,380		667,086		82,294		12.3	%

OPERATING INCOME	68,623		77,279		(8,656)		(11.2)	%	167,004		138,309		28,695		20.7	%

OTHER (EXPENSE) / INCOME, NET:
Allowance for equity funds used during construction	732		1,269		(537)		(42.3)	%	1,401		2,100		(699)		(33.3)	%
Interest expense	(46,592)		(43,835)		(2,757)		6.3	%	(90,583)		(87,483)		(3,100)		3.5	%

Other expense, net	(365)		(1,056)		691		(65.4)	%	(936)		(750)		(186)		24.8	%
Total other expense, net	(46,225)		(43,622)		(2,603)		6.0	%	(90,118)		(86,133)		(3,985)		4.6	%

INCOME BEFORE INCOME TAX	22,398		33,657		(11,259)		(33.5)	%	76,886		52,176		24,710		47.4	%

Income tax expense	6,635		12,610		(5,975)		(47.4)	%	42,575		16,519		26,056		157.7	%
NET INCOME	15,763		21,047		(5,284)		(25.1)	%	34,311		35,657		(1,346)		(3.8)	%


Net loss attributable to noncontrolling interests	(12,986)		(20,747)		7,761		(37.4)	%	(95,581)		(23,299)		(72,282)		310.2	%

NET INCOME ATTRIBUTABLE TO COMMON STOCK	$	28,749	$	41,794	$	(13,045)	(31.2)	%	$	129,892	$	58,956	$	70,936	120.3	%

Revenue

Revenue during the three and six months ended June 30, 2025 increased $41.1 million and $111.0 million, respectively, compared to the same periods in 2024, which resulted from the following changes (dollars in thousands):


	Three Months Ended							Six Months Ended
	June 30,							June 30,
	2025		2024		$ Change		% Change	2025		2024		$ Change		% Change
Revenue:
Retail revenue	$	404,455	$	387,216	$	17,239	4.5%	$	863,989	$	779,130	$	84,859	10.9%
Wholesale revenue	30,332		6,698		23,634		352.9%	45,515		19,320		26,195		135.6%
Miscellaneous revenue	3,897		3,680		217		5.9%	6,880		6,945		(65)		(0.9)%
Total revenue	$	438,684	$	397,594	$	41,090	10.3%	$	916,384	$	805,395	$	110,989	13.8%

Heating degree days:
Actual	443		327		116		35.5%	3,167		2,656		511		19.2%
30-year average	485		488					3,198		3,201

Cooling degree days:
Actual	363		465		(102)		(21.9)%	368		465		(97)		(20.9)%
30-year average	352		349					355		352

The following table presents additional data on kWh sold:


	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2025	2024	kWh Change	% Change		2025	2024	kWh Change	% Change
kWh Sales (In Millions):
Residential	1,073	1,109	(36)	(3.2)	%	2,664	2,540	124	4.9	%
Small commercial and industrial	405	424	(19)	(4.5)	%	903	895	8	0.9	%
Large commercial and industrial	1,514	1,512	2	0.1	%	2,936	2,911	25	0.9	%
Public lighting	8	16	(8)	(50.0)	%	18	21	(3)	(14.3)	%
Sales – retail customers	3,000	3,061	(61)	(2.0)	%	6,521	6,367	154	2.4	%
Wholesale	518	118	400	339.0	%	770	478	292	61.1	%
Total kWh sold	3,518	3,179	339	10.7	%	7,291	6,845	446	6.5	%

The following graph shows the percentage changes in weather-normalized and actual retail electric kWh sales volumes by customer class for the three months ended June 30, 2025 as compared to the same period in the prior year:

The following graph shows the percentage changes in weather-normalized and actual retail electric kWh sales volumes by customer class for the six months ended June 30, 2025 as compared to the same period in the prior year:

During the three months ended June 30, 2025, revenue increased $41.1 million compared to the same period of the prior year, and during the six months ended June 30, 2025, revenue increased $111.0 million compared to the same period of the prior year. These changes were primarily due to the following:


$ in millions		Three Months Ended June 30, 2025 vs. 2024		Six Months Ended June 30, 2025 vs. 2024
Retail revenue:

	Volume:
	Net (decrease) / increase in the volume of kWh sold primarily due to weather and demand in our service territory versus the comparable period.	$	(7.8)	$	17.0
	Price:
	Net increase in the weighted average price of retail kWh sold primarily due to the 2024 Base Rate Order, partially offset by lower FAC revenue	25.0		66.4

	Other:
	Primarily due to increase in miscellaneous charges to customers (including reconnection and late fee charges)	—		1.5

	Net change in retail revenue	17.2		84.9

Wholesale revenue:

	Volume:
	Net increase in the volume of wholesale kWh sold. The amount of electricity available for wholesale sales is impacted by our retail load requirements, generation capacity and unit availability.	22.7		11.8
	Price:
	Net increase in the weighted average price of wholesale kWh sold. Our ability to be dispatched in the MISO market is primarily driven by the locational marginal price of electricity and variable generation costs.	1.0		14.4

	Net change in wholesale revenue	23.7		26.2

Miscellaneous revenue		0.2		(0.1)

Net change in revenue		$	41.1	$	111.0

Operating Costs and Expenses

The following table illustrates our changes in Operating costs and expenses during the three and six months ended June 30, 2025 compared to the same periods in 2024 (in thousands):


	Three Months Ended								Six Months Ended
	June 30,								June 30,
	2025		2024		$ Change		% Change		2025		2024		$ Change		% Change
Operating costs and expenses:
Fuel	$	99,973	$	77,639	$	22,334	28.8	%	$	206,482	$	180,558	$	25,924	14.4	%
Power purchased	31,239		44,103		(12,864)		(29.2)	%	66,769		82,736		(15,967)		(19.3)	%
Operation and maintenance	142,308		109,092		33,216		30.4	%	284,916		224,460		60,456		26.9	%
Depreciation and amortization	92,469		82,920		9,549		11.5	%	178,074		163,353		14,721		9.0	%
Taxes other than income taxes	4,231		6,547		(2,316)		(35.4)	%	13,303		14,442		(1,139)		(7.9)	%
Other, net	(159)		14		(173)		(1,235.7)	%	(164)		1,537		(1,701)		(110.7)	%
Total operating costs and expenses	$	370,061	$	320,315	$	49,746	15.5	%	$	749,380	$	667,086	$	82,294	12.3	%

Fuel

The increases in fuel costs of $22.3 million and $25.9 million during the three and six months ended June 30, 2025, respectively, compared to the same periods of the prior year were primarily due to the following:


$ in millions		Three Months Ended June 30, 2025 vs. 2024		Six Months Ended June 30, 2025 vs. 2024
Volume:
	Coal	$	19.1	$	37.7
	Natural gas	2.2		(17.3)
	Oil	—		(0.5)
	Net change in volume	21.3		19.9
Price:
	Coal	(14.2)		(28.4)
	Natural gas	14.7		30.8

	Deferred fuel	0.5		3.6
	Net change in price	1.0		6.0

Net change in fuel expense		$	22.3	$	25.9

The changes in the price of fuel are reflective of market prices for coal and natural gas. We are generally permitted to recover underestimated fuel and purchased power costs to serve our retail customers in future rates through quarterly FAC proceedings. These variances are deferred when incurred and amortized into expense in the same period that our rates are adjusted to reflect these variances. Additionally, fuel and purchased power costs incurred for wholesale energy sales are considered in the Off-System Sales Margin rider.

Power Purchased

The decreases in power purchased of $12.9 million and $16.0 million during the three and six months ended June 30, 2025, respectively, compared to the same periods of the prior year were primarily due to the following:


$ in millions		Three Months Ended June 30, 2025 vs. 2024		Six Months Ended June 30, 2025 vs. 2024
Volume:

	Net decrease in the volume of power purchased primarily due to AES Indiana's generation units running more frequently during the respective periods.	$	(15.7)	$	(6.7)
Price:
	Market prices	4.9		(0.7)
	Deferred power purchased	(0.7)		(3.1)
	Net change in price	4.2		(3.8)

Other, net (mostly due to changes in capacity purchases)		(1.4)		(5.5)

Net change in power purchased costs		$	(12.9)	$	(16.0)

The volume of power purchased each period is primarily influenced by retail demand, generating unit capacity and outages, and the relative cost of producing power versus purchasing power in the market. The market price of purchased power is influenced primarily by changes in the market price of delivered fuel (primarily natural gas), the supply of and demand for electricity, and the time of day during which power is purchased. We are generally permitted to recover underestimated fuel and power purchased costs to serve our retail customers in future rates through quarterly FAC proceedings.

Operation and Maintenance

The increases in Operation and maintenance of $33.2 million and $60.5 million during the three and six months ended June 30, 2025, respectively, compared to the same periods of the prior year were primarily due to the following:


$ in millions	Three Months Ended June 30, 2025 vs. 2024		Six Months Ended June 30, 2025 vs. 2024
Increase in contracted services expenses and higher materials and supplies inventory consumption, primarily due to higher planned generation maintenance and outage costs	$	14.1	$	19.4
Increase in DSM program costs (a)	9.1		19.7
Increase due to higher expected credit losses	7.2		12.7
Other, net	2.8		8.7
Net change in operation and maintenance costs	$	33.2	$	60.5

(a) There is corresponding offset in Revenue associated with these costs and minimal operating margin impact.

Depreciation and Amortization

The increases in Depreciation and amortization expense of $9.5 million and $14.7 million during the three and six months ended June 30, 2025, respectively, compared to the same periods of the prior year were mostly attributed to the impact of additional assets placed in service, including renewable projects, partially offset by lower regulatory asset amortization following the 2024 Base Rate Order.

Other (Expense) / Income, Net

The following table illustrates our changes in Other (expense) / income, net during the three and six months ended June 30, 2025, respectively, compared to the same periods in 2024 (in thousands):


	Three Months Ended								Six Months Ended
	June 30,								June 30,
	2025		2024		$ Change		% Change		2025		2024		$ Change		% Change
Other (expense) / income, net
Allowance for equity funds used during construction	$	732	$	1,269	$	(537)	(42.3)	%	$	1,401	$	2,100	$	(699)	(33.3)	%
Interest expense	(46,592)		(43,835)		(2,757)		6.3	%	(90,583)		(87,483)		(3,100)		3.5	%

Other expense, net	(365)		(1,056)		691		(65.4)	%	(936)		(750)		(186)		24.8	%
Total other expense, net	$	(46,225)	$	(43,622)	$	(2,603)	6.0	%	$	(90,118)	$	(86,133)	$	(3,985)	4.6	%

Income Tax Expense

The following table illustrates our changes in Income tax expense during the three and six months ended June 30, 2025, respectively, compared to the same periods of the prior year (in thousands):


	Three Months Ended								Six Months Ended
	June 30,								June 30,
	2025		2024		$ Change		% Change		2025		2024		$ Change		% Change
Income tax expense	$	6,635	$	12,610	$	(5,975)	(47.4)	%	$	42,575	$	16,519	$	26,056	157.7	%

The (decrease) / increase in Income tax expense of $(6.0) million and $26.1 million during the three and six months ended June 30, 2025, respectively, compared to the same periods of the prior year were primarily driven by lower/higher pre-tax income, a decrease in the net tax benefit related to the reversal of excess deferred taxes of AES Indiana resulting from the 2024 Base Rate Order, and the tax effects associated with HLBV increases compared to the prior periods.

Net Loss Attributable to Noncontrolling Interests

The following table illustrates changes in Net loss attributable to noncontrolling interests during the three and six months ended June 30, 2025, respectively, compared to the same periods of the prior year (in thousands):


	Three Months Ended								Six Months Ended
	June 30,								June 30,
	2025		2024		$ Change		% Change		2025		2024		$ Change		% Change
Net loss attributable to noncontrolling interests	$	(12,986)	$	(20,747)	$	7,761	(37.4)	%	$	(95,581)	$	(23,299)	$	(72,282)	310.2	%

The increase / (decrease) in Net loss attributable to noncontrolling interests of $7.8 million and $(72.3) million for the three and six months ended June 30, 2025, respectively, primarily relates to the allocation of losses to the tax equity investor of the Pike County BESS Project, as a result of the project being placed in service in March 2025; partially offset by the allocation of losses recognized upon the final stage of the Hardy Hills Solar Project being placed in service in May 2024. See Note 2, “Regulatory Matters - IRP Filings and Replacement Generation - Hardy Hills Solar Project ” to the Financial Statements included in this Form 10-Q for further discussion.

KEY TRENDS AND UNCERTAINTIES

During the remainder of 2025 and beyond, we expect that our financial results will be driven primarily by retail demand, weather and maintenance costs. In addition, our financial results will likely be driven by many other factors including, but not limited to:

•regulatory outcomes and impacts;

•the passage of new legislation, implementation of regulations or other changes in regulation; and

•timely recovery of capital expenditures and operation and maintenance costs.

If favorable outcomes related to these factors do not occur, or if the challenges described below and elsewhere in this Quarterly Report impact us more significantly than we currently anticipate, then these factors, or other factors unknown to us, may impact our operating margin, net income and cash flows. We continue to monitor our operations and address challenges as they arise. For a discussion of the risks related to our business, see “Item 1. Business” and “Item 1A. Risk Factors” as described in IPALCO’s 2024 Form 10-K.

Operational

Trade Restrictions and Supply Chain

In April 2022, the U.S. Department of Commerce (“Commerce”) initiated an investigation into whether imports into the U.S. of solar cells and panels from Cambodia, Malaysia, Thailand and Vietnam (“Southeast Asia”) were circumventing antidumping and countervailing duty (“AD/CVD”) orders on solar cells and panels from China. In August 2023, Commerce rendered final affirmative findings of circumvention with respect to all four countries, which resulted in the imposition of AD and CVD duties on certain imported cells and panels from Southeast Asia. Commerce's determination and related matters remain the subject of ongoing litigation before the U.S. Court of International Trade.

In 2024, Commerce and the U.S. International Trade Commission initiated new AD/CVD investigations on solar cells and panels imported from Southeast Asia. On April 18, 2025, Commerce rendered final affirmative determinations and AD/CVD rates with respect to all four countries. On June 13, 2025, the U.S. International Trade Commission issued its determination that imports from Malaysia and Vietnam have injured the U.S. industry and that imports from Cambodia and Thailand threaten injury ("U.S. International Trade Commission Decision"). Commerce then issued orders on June 24, 2025, implementing the AD/CVD rates, which will be subject to annual review by

Congress. We do not expect the U.S. International Trade Commission Decision to have a negative impact on our business.

Separately, the U.S. maintains a global safeguard tariff (currently 14% ad valorem) on solar cells and modules pursuant to the Section 201 Safeguard Action on crystalline silicon photovoltaic products, which became effective in February 2018. On June 21, 2024, President Biden issued Proclamation 10779, revoking the exclusion of bifacial panels from safeguard relief previously proclaimed in Proclamation 10339, and reinstating the tariff on bifacial panels under the Section 201 Safeguard Action, subject to certain qualifications. These global tariffs are expected to expire in February 2026.

The U.S. also maintains Section 301 tariffs on certain Chinese made lithium-ion batteries and related components utilized for energy storage systems, with such tariff currently set at 7.5% and increasing to 25% effective January 1, 2026. There is also an ongoing AD/CVD investigation with respect to exports by China of natural and synthetic graphite used to make lithium-ion battery anode material. Any determinations or orders arising from such investigation could result in price increases.

Additionally, the Uyghur Forced Labor Prevention Act (“UFLPA”) seeks to block the import of products made with forced labor in certain areas of China, at any point in the supply chain, and may lead to certain suppliers being blocked from importing solar cells and panels into the U.S. While this has impacted the U.S. market, we have managed this issue without significant impact to our projects. Further forced labor designations of entities under the UFLPA may impact our suppliers’ ability or willingness to meet their contractual agreements or to continue to supply cells or panels into the U.S. market on terms that we deem satisfactory.

The Trump Administration has threatened or imposed tariffs on a wide range of countries and products. On February 10, 2025, President Trump signed Executive Orders modifying existing Section 232 tariffs on steel and aluminum imports to expand their scope and impose 25% tariffs on both products. The President raised these rates to 50% effective June 4, 2025. At this time, we do not expect the modifications to tariffs on steel and aluminum to have a material impact on our business.

On February 1, 2025, President Trump issued an Executive Order declaring a national emergency under the International Emergency Economic Powers Act ("IEEPA") and imposing a 10% additional tariff on imports from China, effective February 4, 2025. Effective March 4, 2025, this tariff was increased to 20%.

On April 2, 2025, President Trump issued an Executive Order pursuant to IEEPA imposing an indefinite, baseline reciprocal 10% tariff on almost all goods imported into the U.S., effective April 5, 2025, and individualized higher IEEPA tariffs (11% to 50%) starting April 9, 2025 on goods originating from 57 countries with trade surpluses with the U.S.. On April 9, 2025, the U.S. government issued a further Executive Order increasing the IEEPA reciprocal tariff on China to 125% effective April 10, 2025. Concurrently, the U.S. government announced a temporary suspension of the country-specific reciprocal tariff measures targeting most U.S. trading partners for a 90-day period, or until July 9, 2025, which was later extended until August 1, 2025. Effective May 14, 2025, the IEEPA rates applicable to China were lowered to 30%.

During the reciprocal-tariff suspension, many countries have been seeking to reach bilateral trade agreements with the U.S. and the ultimate outcome of any reciprocal or other tariffs with these countries is uncertain.

We expect the tariffs on imports from China will increase overall costs for materials and parts that are imported to build and maintain renewable energy plants for the U.S. industry. However, we expect limited impact to projects scheduled to become operational in 2025 through 2027 due to the recently announced tariffs on China.

While we have executed agreements for AES Indiana’s existing solar and battery energy storage projects that mitigate these risks, potential future disruptions may impact our suppliers’ ability or willingness to meet their contractual agreements with respect to these projects on terms that we deem satisfactory and these and future disruptions may impact the availability or costs of future projects. The impact of new Commerce investigations or any adverse Commerce determinations or other tariff disputes or litigation, the impact of the UFLPA, potential future disruptions to the renewable energy supply chain and their effect on AES Indiana’s solar and battery energy storage project development and construction activities remain uncertain. AES Indiana will continue to monitor developments and take prudent steps towards managing our renewable projects.

Customer Information and Billing System Implementation

In the fourth quarter of 2023, we implemented our new customer information and billing system, SAP IS-U, a software solution that SAP developed for businesses operating in the utility industries. In connection with this implementation, a temporary pause of customer disconnections and certain collection efforts and write-off processes was instituted. This has resulted in higher past due customer receivables and a higher allowance for credit losses as of June 30, 2025. We reinstituted the customer disconnections process and collection efforts and write-off processes in March 2025.

Capital Projects

Our construction projects have experienced some indications of delays and price increases due to supply chain disruptions; however, they are currently proceeding without material delays. For further discussion of our capital requirements, see "Part I, Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations - Capital Resources and Liquidity" of this Form 10-Q.

Macroeconomic and Political

U.S. Utilities Load Growth and Large Load Customers

The expansion of data centers due to generative artificial intelligence has the potential to significantly accelerate the load growth of the U.S. utilities market. AES Indiana is working with several companies to provide possible solutions for electric service needs of data centers and we see these relationships deepening as utilization of generative artificial intelligence drives the expansion of data center use within our service territory. As part of this process, AES Indiana is evaluating cost-effective options to reliably serve large load customers. One option in Indiana includes House Enrolled Act 1007, which Governor Braun signed into law effective May 6, 2025. Among other things, the legislation contains a provision providing a regulatory tool for utilities and large load customers to submit an expedited generation resource proposal to the IURC. AES Indiana is analyzing any impacts the law may have on future generation resource plans.

U.S. Tax Law Reform and Renewable Energy Tax Credits

On July 4, 2025, the U.S. enacted H.R. 1 (the “2025 Act”). The legislation included amendments to, and extensions of, various U.S. corporate income tax provisions, which may impact our effective tax rate in future periods. However, the impact to the effective tax rate is not expected to be material. Our interpretation of the 2025 Act may change as the U.S. Treasury and the IRS issue additional guidance.

The IRA includes provisions that benefit the Company’s planned clean energy projects, including increases, extensions, direct transfers and/or new tax credits for wind, solar, and storage. For further discussion of our renewable projects, see Note 2, “Regulatory Matters - IRP Filings and Replacement Generation” to the Financial Statements of IPALCO’s 2024 Form 10-K.

We account for renewable projects according to GAAP, which, when partnering with tax-equity investors to monetize tax benefits, utilizes the HLBV method. This method recognizes the value of the tax-credit that benefits the tax equity investors at the time of its creation, which for projects utilizing the ITC, begins in the quarter the project is placed in service. For projects utilizing the PTC, this value is recognized over 10 years as the facility produces energy.

The 2025 Act amends the phase out of wind and solar ITC and PTC tax credits. Wind and solar renewable projects that begin construction within 12 months of the enactment of H.R. 1 remain eligible for 100% of the credit without the 2027 placed in service deadline. Renewable projects that begin construction after 12 months of the enactment must be placed in service no later than 2027. Renewable projects that began construction by the end of 2024 are not impacted by the 2025 Act. The 2025 Act does not impose tighter timelines for energy storage projects to qualify for the ITC and PTC, and it allows energy storage projects to receive the full ITC or PTC credit if they begin construction by 2033.

The 2025 Act also imposes a foreign entity of concern restriction for renewables projects, including storage, claiming the ITC or PTC credit that start construction after December 31, 2025. This restriction precludes credits for projects which receive material assistance from a prohibited foreign entity and it effectively limits the percentage of

total project costs that may be derived from products that are mined, produced or manufactured in China, with varying permissible percentages depending on the calendar year and applicable renewable technology for the project.

Further, President Trump issued an Executive Order on July 7, 2025 that directed the Secretary of the Treasury to take action (the “Treasury Action”) to enforce the provisions of the 2025 Act. The Treasury Action would include enforcing the termination of the ITC and PTC for wind and solar projects and issuing guidance with respect to the determination of the beginning of construction and taking actions to implement and enhance the Foreign Entity of Concern (“FEOC”) restrictions, in each case within 45 days of the enactment of the 2025 Act.

In 2023, we recognized $26.1 million of earnings from tax attributes using the HLBV method upon the first stage of the Hardy Hills Solar Project being placed in service. Upon the final stage of the project being placed in service in May 2024, the Company recognized $21.4 million of earnings from tax attributes using the HLBV method. In March 2025, upon the Pike County BESS Project being placed in service, we recognized $80.7 million of earnings from tax attributes using the HLBV method. Please see Note 2, "Regulatory Matters - IRP Filings and Replacement Generation - Pike County BESS Project" to the Financial Statements included in this Form 10-Q for further discussion. As we progress in our plan of integrating additional renewable energy projects under our 2022 IRP, as discussed further below, we anticipate additional earnings associated with the tax attributes of these projects.

The enactment of the 2025 Act requires that substantial guidance be published by the U.S. Department of Treasury and other government agencies. While we have taken measures to protect against the impact of changes under the 2025 Act to the IRA, the impacts of the 2025 Act, the Treasury Action, or future actions that have the effect of modifying or repealing the IRA may be material to our results of operations.

Tax

The macroeconomic and political environments in the U.S. have changed in recent years. This could result in significant impacts to future tax law. In the U.S., the IRA included a 15% corporate alternative minimum tax (CAMT) based on adjusted financial statement income. In June 2025, the IRS released interim guidance for CAMT and announced its intention to revise regulations that were proposed in September 2024. The impact to the Company in 2025 is not expected to be material. We will continue to monitor the issuance of CAMT revised guidance.

In April 2025, the 2025 Indiana General Assembly passed Senate Enrolled Act No. 1, which includes language that could impact AES Indiana's property tax expense. We are currently evaluating the impact of this legislation; however, the impact to AES Indiana in 2025 is not expected to be material.

Inflation

In the markets in which we operate, there have been higher rates of inflation recently. If inflation continues to increase in our markets, it may increase our expenses that we may not be able to pass through to customers. It may also increase the costs of some of our construction projects. AES Indiana may have the ability to recover operations and maintenance costs through the regulatory process, however, timing impacts on recovery may vary. In addition, we expect the cost of fuel, specifically coal and natural gas, to continue to be volatile during 2025. Our exposure to fluctuations in the price of fuel is limited because of our FAC. If we are unable to timely or fully recover our fuel and power purchased costs, however, it could have a material adverse effect on our results of operations, financial condition and cash flows.

Interest Rates

In the U.S. there has been a rise in interest rates since 2021, and interest rates are expected to remain volatile in the near term. Although all of our existing IPALCO and AES Indiana long-term debt is at fixed rates, an increase in interest rates can have several impacts on our business. For our existing short-term debt under floating rate structures and any future debt refinancings or future new money financings, rising interest rates will increase future financing costs. Our floating rate debt is currently limited to short-term borrowings under our AES Indiana Credit Agreement and $400 million Term Loan Agreement. For future IPALCO debt financings, IPALCO, at times, manages a hedging program and evaluates pre-issuance hedges to reduce uncertainty and exposure to future interest rates.

Executive Orders

On January 25, 2025, President Trump issued an Executive Order titled "Declaring a National Energy Emergency" directing Agencies to, among other tasks, identify and exercise any lawful emergency authorities available to them to facilitate the identification, leasing, siting, production, transportation, refining, and generation of domestic energy resources.

In April 2025, President Trump issued several Executive Orders with potential impacts to the energy industry and national energy policy, including: (i) “Reinvigorating America’s Beautiful Clean Coal Industry and Amending Executive Order 14241”, (ii) “Protecting American Energy from State Overreach”, and (iii) “Strengthening the Reliability and Security of the United States Electric Grid”. Indiana Governor Braun also issued Executive Orders with potential impacts to the energy industry, including: (i) “Ensuring Economic Opportunity and Indiana’s Energy Future by Supporting Life Extension for Coal Energy Generation and Assessing Natural Gas Supplies” in April 2025, and (ii) "Creating a State Energy Strategy to Meet Growing Demand and Support Reliability and Affordability" in June 2025. These Executive Orders direct federal and state agencies, as applicable, to review and take actions with respect to energy and economic development matters and it is too early to determine the impact, if any, of the Executive Orders on our business, but any resulting actions by such agencies could have a material impact on our business, financial condition or results of operations.

Regulatory

2025 IRP

In January 2025, AES Indiana initiated its 2025 IRP process with external stakeholders. Public advisory meetings took place on January 29, 2025 and July 24, 2025, respectively, and will continue through most of 2025, with AES Indiana anticipating it will submit its final 2025 IRP, shaped by stakeholder feedback, to the IURC in November 2025. Please see Note 2, "Regulatory Matters - IRP Filings and Replacement Generation - 2025 IRP" to the Financial Statements included in this Form 10-Q for further discussion.

2022 IRP

AES Indiana filed its 2022 IRP with the IURC in December 2022. The 2022 IRP short-term action plan includes converting the two remaining coal units at Petersburg to natural gas. Additionally, AES Indiana plans to add up to 1,300 MW of wind, solar, and battery energy storage by 2027. Please see Note 2, "Regulatory Matters" to the Financial Statements included in this Form 10-Q and Note 2, “Regulatory Matters” to the Financial Statements included in IPALCO’s 2024 Form 10-K for further discussion of these and other regulatory matters.

Environmental

We are subject to numerous environmental and climate change laws and regulations in the jurisdictions in which we operate. We face certain risks and uncertainties related to these environmental and climate change laws and regulations, including existing and potential GHG legislation or regulations, and actual or potential laws and regulations pertaining to water discharges, waste management (including disposal or beneficial reuse of CCR) and certain air emissions, such as SO2, NOx, particulate matter and mercury. Such risks and uncertainties could result in increased capital expenditures or other compliance costs which could have a material adverse effect on our consolidated results of operations. The following discussion of the impact of environmental laws and regulations on the Company updates the discussion provided in “Item 1. Business - Environmental Matters” in IPALCO’s 2024 Form 10-K.

Trump Administration Actions Affecting Environmental Regulations

On January 20, 2025, President Trump issued an Executive Order titled “Unleashing American Energy” directing Agencies to, among other tasks, review regulations issued under the prior Administration to determine whether they should be suspended, revised, or rescinded. The Trump Administration also issued a Memorandum titled “Regulatory Freeze Pending Review” directing Agencies to refrain from proposing or issuing any rules until the Trump Administration has reviewed and approved those rules. In accordance with these and other Trump Administration Executive Orders, on March 12, 2025, EPA released a list of environmental regulations that will be targeted for reconsideration and other deregulatory action. These and other actions, including other Executive

Orders and directives from the Trump Administration, may have an impact on regulations and permitting processes that may affect our business, financial condition, or results of operations.

MATS

In April 2012, the EPA’s rule to establish maximum achievable control technology standards for hazardous air pollutants regulated under the CAA emitted from coal and oil-fired electric utilities, known as “MATS”, became effective. AES Indiana management developed and implemented a plan, which was approved by the IURC, to comply with this rule and all Petersburg units subject to the rule have been and remain in material compliance with the MATS rule since applicable deadlines.

On May 7, 2024, EPA published a final rule to revise MATS for coal and oil-fired EGUs which lowers certain emissions limits and revises certain other aspects of MATS. The requirements of MATS would not apply to AES Indiana upon conversion of the remaining two coal-fired units at Petersburg to natural gas. The May 2024 rule to revise MATS is subject to legal challenges. On October 4, 2024, the U.S. Supreme Court denied emergency stay applications. On June 17, 2025, EPA published a proposed rule to repeal the majority of the May 7, 2024 final rule revising MATS.

Further rulemakings and/or proceedings are possible; however, in the meantime, MATS remains in effect. We currently cannot predict the outcome of the regulatory or judicial process, or its impact, if any, on our MATS compliance planning or ultimate costs.

Waste Management and CCR

The EPA has indicated that they will implement a phased approach to amending the CCR Rule, which is ongoing. On May 8, 2024, EPA published final revisions to the CCR Rule which expand the scope of CCR units regulated by the CCR Rule to include legacy surface impoundments, inactive surface impoundments, and CCR management units. The May 8, 2024 revisions to the CCR Rule are currently subject to legal challenges and on November 1, 2024, the D.C. Circuit Court denied a motion to stay these revisions to the CCR Rule. On November 5, 2024, an application for stay of the CCR Rule revisions was filed with the United States Supreme Court, which was denied by the Court on December 11, 2024.

On July 22, 2025, EPA published both a direct final rule and a proposed rule that, if finalized, would extend certain deadlines for coal combustion residual management units associated with its May 8, 2024 revisions to the CCR Rule. It is too early to determine any potential impact from these revisions to the CCR Rule. The CCR Rule, current or future amendments to, or EPA interpretations of, the CCR Rule, Indiana CCR regulations, the results of groundwater monitoring data or the outcome of CCR-related litigation could have a material impact on our business, financial condition and results of operations. We would seek recovery of any resulting expenditures; however, there is no guarantee we would be successful in this regard. See Note 3, "Property, Plant and Equipment", Note 4, "ARO" and Note 11, "Commitments and Contingencies - Contingencies - Legal Matters - Coal Ash Insurance Litigation" to the Financial Statements of IPALCO’s 2024 Form 10-K for further discussion.

Regional Haze Rule

EPA’s 1999 Regional Haze Rule established timelines for states to improve visibility in national parks and wilderness areas throughout the U.S. by establishing reasonable progress goals toward meeting a national goal of natural visibility conditions in Class I areas by the year 2064 through submittal of a series of state implementation plans (SIPs). Indiana’s SIP for the first planning period (through 2018) did not require any additional controls to be installed or operated on AES Indiana generating facilities. For all future SIP planning periods, states must evaluate whether additional emissions reduction measures may be needed to continue making reasonable progress toward natural visibility conditions. On December 29, 2021, IDEM submitted Indiana's Regional Haze SIP for the Second Implementation Period to EPA for review and approval. The SIP does not include additional requirements for AES Indiana EGUs or for other EGUs in Indiana. On June 18, 2025, EPA proposed to approve the Indiana SIP. However, we cannot predict the possible outcome or potential impacts of this matter at this time. We would seek recovery of capital expenditures; however, there is no guarantee we would be successful.

Climate Change Legislation and Regulation

In the past, the U.S. Congress has considered several different draft bills pertaining to GHG legislation, including comprehensive GHG legislation that would impact many industries and more limited legislation focusing only on the utility and electric generation industry. Although no legislation pertaining to GHG emissions has been passed to date by the U.S. Congress, similar legislation may be considered or passed by the U.S. Congress in the future. In addition, state or regional initiatives may be pursued in the future.

On May 9, 2024, EPA published the final NSPS requiring carbon capture and sequestration for new and reconstructed baseload stationary combustion turbines, among other requirements. EPA did not finalize revisions to the NSPS for newly constructed or reconstructed coal-fired electric utility steam generating units as proposed in

2018.

On July 8, 2019, the EPA published the final ACE Rule which would have established CO2 emission rules for existing coal-fired power plants under CAA Section 111(d) and would have replaced the EPA's 2015 CPP, which among other things, had called on states to mandate that power companies shift electricity generation to lower or zero carbon fuel sources. However, on January 19, 2021, the D.C. Circuit vacated and remanded to EPA the ACE Rule. Subsequently, on June 30, 2022, the U.S. Supreme Court reversed the judgment of the D.C. Circuit Court and remanded for further proceedings consistent with its opinion, holding that the “generation shifting” approach in the CPP exceeded the authority granted to EPA by Congress under Section 111(d) of the CAA. As a result of the June 30, 2022 U.S. Supreme Court decision, on October 27, 2022, the D.C. Circuit issued a partial mandate holding pending challenges to the ACE Rule in abeyance while EPA developed a replacement rule. On May 23, 2023, EPA published a proposed rule that would vacate the ACE Rule, establish emissions guidelines in the form of CO2 emissions limitations for certain existing EGUs and would require states to develop State Plans that establish standards of performance for such EGUs that are at least as stringent as EPA’s emissions guidelines. On May 9, 2024, EPA published the final rule regulating GHGs from existing EGUs pursuant to Section 111(d) of the Clean Air Act and effective on July 8, 2024. Existing EGUs are those that were constructed prior to January 8, 2014. Depending on various EGU-specific factors, the bases of emissions guidelines for natural gas-fired units include the use of uniform fuels and routine methods of operation and maintenance and the bases of emissions guidelines for coal-fired units include 40% natural gas co-firing or carbon capture and sequestration with 90% capture of CO2 depending on the date that coal operations cease. Specific standards for performance for EGUs will be established through a State Plan (or a Federal Plan if the state of Indiana were to not submit an approvable plan). The May 2024 rule is subject to legal challenges. On October 16, 2024, the U.S. Supreme Court denied emergency stay applications.

On June 17, 2025, EPA published a proposed rule to repeal the May 9, 2024 final rules for new and existing EGUs in addition to 2015 greenhouse gas new source performance standards for certain new EGUs. In this proposed rule, the EPA also offered an alternative proposal to repeal a narrower set of greenhouse gas requirements which would include the repeal of requirements for existing EGUs and requirements based on carbon capture and sequestration for new EGUs.

It is too early to determine any potential impact. GHG regulations, current or future amendments to, resulting state or federal plans, or pending or future litigation associated with such regulations or plans could have a material impact on our business, financial condition and results of operations. We would seek recovery of any resulting capital expenditures; however, there is no guarantee we would be successful in this regard.

On the international level, on December 12, 2015, 195 nations, including the U.S., finalized the text of an international climate change accord in Paris, France (the “Paris Agreement”), which agreement was signed and officially entered into on April 22, 2016. The Paris Agreement calls for countries to set their own GHG emissions targets, make these emissions targets more stringent over time and be transparent about the GHG emissions reporting and the measures each country will use to achieve its GHG emissions targets. A long-term goal of the Paris Agreement is to limit global temperature increase to well below two degrees Celsius from temperatures in the pre-industrial era. The U.S. withdrawal from the Paris Agreement became effective on November 4, 2020. On January 20, 2021, President Biden signed and submitted an instrument for the U.S. to rejoin the Paris Agreement, which became effective on February 19, 2021. On January 20, 2025, President Trump issued an Executive Order titled “Putting America First in International Environmental Agreements” directing the U.S. Ambassador to the United Nations to formally withdraw from the Paris Agreement. The international community has gathered and continues to gather annually for the Conference to the Parties on the United Nations Framework Convention on Climate Change (UNFCCC).

Based on the above, there is some uncertainty with respect to the impact of GHG rules on AES Indiana. The EPA, states and other utilities are still evaluating potential impacts of the GHG regulations in our industry. In light of these uncertainties, we cannot predict the impact of the EPA’s current and future GHG regulations, or resulting state or federal plans, on our consolidated results of operations, cash flows, and financial condition, but it could be material.

CWA - Environmental Wastewater Requirements and Regulation of Water Discharge

The concept of WOTUS defines the geographic reach and authority of the U.S. Army Corps of Engineers and EPA (together, the "Agencies") to regulate streams, wetlands, and other water bodies under the CWA. There have been multiple Supreme Court decisions and dueling regulatory definitions over the past several years concerning the appropriate standard for how to properly determine whether a wetland or stream that is not navigable is considered a WOTUS. On May 25, 2023, the U.S. Supreme Court rendered a decision (Decision) in the case of Sackett v. Environmental Protection Agency, addressing the definition of WOTUS with regards to the CWA. The Decision provides a standard that substantially restricts the Agencies' ability to regulate certain types of wetlands and streams. Specifically, under the Decision, wetlands that do not have a continuous surface connection with traditional interstate navigable water is not considered a WOTUS and therefore is not federally jurisdictional.

On September 8, 2023, the Agencies published final amendments to the “Revised Definition of ‘Waters of the United States’” rule. These final rule amendments conform the definition of WOTUS to the definition adopted in the

Decision. The Agencies have amended key aspects of the regulatory text to conform the rule to the Decision.

On March 12, 2025, the Agencies issued a joint guidance memorandum for implementing the “continuous surface connection” consistent with the Decision and related issues. The Federal Register notice was published on March 24, 2025 outlining a process to gather recommendations for implementation of WOTUS.

It is too early to determine whether any outcome of litigation or current or future revisions to rules interpreting federal jurisdiction over WOTUS might have a material adverse effect on our results of operations, financial condition and cash flows.

CWA - NPDES Permits

NPDES permits regulate specific industrial wastewater and storm water discharges to the waters of Indiana under Section 402 of the Federal Water Pollution Control Act. A number of CWA regulations described above are implemented through NPDES permits.

In 2017, IDEM issued to Eagle Valley a NPDES permit regulating water discharges associated with operation of its CCGT. As part of the normal course of business, AES Indiana submitted a timely application for renewal for the Eagle Valley NPDES permit, and on March 31, 2023, IDEM issued the renewed NPDES permit. On April 17, 2023, a third party filed an appeal of Eagle Valley’s renewed NPDES permit. On February 18, 2025, the Indiana Office of Administrative Law Proceedings (OALP) issued a final order which determined that the third-party appellant failed to prove it has associational standing to challenge the NPDES permit and that the third-party appellant failed to prove any of the alleged deficiencies in its petition for review as a matter of law. On March 20, 2025, the third-party appellant filed a Petition for Judicial Review with the Morgan County Circuit Court (Indiana Trial court), asking the court to set aside OALP's final order. AES Indiana contends that the renewed permit was validly issued, and the permit remains in effect. AES Indiana is unable to predict the outcome of the appeal, but depending on the results, it could have an adverse effect on the Company.

In 2017, IDEM also issued to Harding Street and Petersburg NPDES permits regulating water discharges associated with operation of their power plant operations. As part of the normal course of business, AES Indiana submitted timely applications for renewal for both Harding Street and Petersburg NPDES permits in March 2022. On May 7, 2025, IDEM issued the final Petersburg NPDES permit renewal. No parties appealed the permit. On November 29, 2023, IDEM issued the final NPDES permit renewal for Harding Street with an effective date of January 1, 2024. Among other new requirements, the permit includes new thermal limitations, that could result in the need for AES Indiana to take additional actions to ensure compliance with the final permit. On December 14, 2023, AES Indiana filed a petition for appeal of certain new requirements, including the new thermal limitations, in the final Harding Street NPDES permit. A stay of the appealed requirements was initially granted on January 4, 2024, and is in effect until November 6, 2025 (as extended from August 6, 2025), which could be further extended. Final or future permits could have a material impact on our business, financial condition and results of operations.

We would seek recovery of any resulting capital expenditures; however, there is no guarantee we would be successful in this regard.

CAPITAL RESOURCES AND LIQUIDITY

Overview

As of June 30, 2025, we had unrestricted cash and cash equivalents of $70.6 million and available borrowing capacity of $500 million under our unsecured revolving AES Indiana Credit Agreement. All of AES Indiana’s long-term borrowings must first be approved by the IURC and the aggregate amount of AES Indiana’s short-term indebtedness must be approved by the FERC. AES Indiana has approval from the FERC to borrow up to $750 million of short-term indebtedness outstanding at any time through July 29, 2026. In February 2024, AES Indiana received an order from the IURC granting authority through December 31, 2026 to, among other things, issue up to $1 billion in aggregate principal amount of long-term debt, of which $350 million remains available under the order as of June 30, 2025. This order also grants authority to have up to $750 million of amounts outstanding under long-term credit agreements and liquidity facilities, of which $450.0 million remains available under the order as of June 30, 2025. As an alternative to the sale of all or a portion of $65 million in principal of the long-term debt, AES Indiana has authority to issue up to $65 million of new preferred stock, all of which authority remains available under the order as of June 30, 2025. We also have restrictions on the amount of new debt that may be issued due to contractual obligations of AES and by financial covenant restrictions under our existing debt obligations. We do not believe such restrictions will be a limiting factor in our ability to issue debt in the ordinary course of prudent business operations.

Cash Flows

The following table provides a summary of our cash flows (in thousands):


	Six Months Ended June 30,
	2025		2024		$ Change
Net cash provided by operating activities	$	297,024	$	30,747	$	266,277
Net cash used in investing activities	(395,277)		(604,255)		208,978
Net cash provided by financing activities	142,220		578,337		(436,117)
Net change in cash, cash equivalents and restricted cash	43,967		4,829		39,138
Cash, cash equivalents and restricted cash at beginning of period	26,652		28,584		(1,932)
Cash, cash equivalents and restricted cash at end of period	$	70,619	$	33,413	$	37,206

Operating Activities

The following table summarizes the key components of our consolidated operating cash flows (in thousands):


	Six Months Ended June 30,
	2025		2024		$ Change
Net income	$	34,311	$	35,657	$	(1,346)
Depreciation and amortization	178,074		163,353		14,721
Deferred income taxes and investment tax credit adjustments - net	34,410		5,984		28,426
Tax credit transfer proceeds allocated to noncontrolling interest	133,010		—		133,010
Other adjustments to net income	496		1,321		(825)
Net income, adjusted for non-cash items	380,301		206,315		173,986
Net change in operating assets and liabilities(1)	(83,277)		(175,568)		92,291
Net cash provided by operating activities	$	297,024	$	30,747	$	266,277

(1) Refer to the table below for explanations of the variance in operating assets and liabilities.

The net change in operating assets and liabilities for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 was driven by changes in the following (in thousands):


Increase from current and non-current regulatory assets and liabilities primarily due to the settlement of pre-existing purchase power agreements in the prior year and higher collections of regulatory assets in the current year	86,755
Increase from lower net accounts receivable driven by the timing of collections, and billing delays and a temporary pause of customer disconnections and certain collection efforts and write-off processes primarily in the prior year period following AES Indiana's customer billing system upgrade in the fourth quarter of 2023	57,437
Decrease in investment tax credit transfer receivable driven by the receivable related with the tax credit transfer proceeds allocated to a noncontrolling interest	(45,223)
Other	(6,678)
Net change in operating assets and liabilities	$	92,291

Investing Activities

Net cash used in investing activities decreased $209.0 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024, which was primarily driven by (in thousands):


Lower cash outflows for capital expenditures related with renewable energy projects and growth related capital expenditures primarily from TDSIC investments	$	241,046
Larger payment for acquisitions made in 2025	(29,692)

Other	(2,376)
Net change in investing activities	$	208,978

Financing Activities

Net cash provided by financing activities decreased $436.1 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024, which was primarily driven by (in thousands):


Decrease due to net long-term debt issuances at IPALCO and AES Indiana in 2024	$	(645,000)
Decrease due to net revolver repayments on AES Indiana's revolving credit facility	(185,000)
Decrease due to higher distributions to noncontrolling interests	(89,717)
Decrease due to higher distributions to shareholders	(69,035)
Increase due to equity contributions from shareholders	260,000
Increase due to lower net repayment of short-term borrowings	200,000
Increase due to higher sales to noncontrolling interests	103,007
Other	(10,372)
Net change in financing activities	$	(436,117)

Liquidity

We expect our existing cash balances, cash generated from operating activities and borrowing capacity on our existing AES Indiana Credit Agreement will be adequate to meet our anticipated operating needs, including interest expense on our debt and dividends to our equity owners. Our business is capital intensive, requiring significant resources to fund operating expenses, construction expenditures, scheduled debt maturities and carrying costs, potential margin requirements related to interest rate and commodity hedges, taxes and dividend payments. In 2025 and subsequent years, we expect to satisfy these requirements with a combination of cash from operations, funds from debt financing, funds from tax equity contributions, and parent capital contributions as our internal liquidity needs and market conditions warrant. We also expect that the borrowing capacity under our existing AES Indiana Credit Agreement will continue to be available to manage working capital requirements during those periods. The absence of adequate liquidity could adversely affect our ability to operate our business and have a material adverse effect on our results of operations, financial condition and cash flows.

Indebtedness

For further discussion of our significant debt transactions, please see Note 7, “Debt” to IPALCO’s 2024 Form 10-K and Note 5, “Debt” to the Financial Statements of this Form 10-Q.

Line of Credit

AES Indiana entered into a third amendment and restatement of its $500 million revolving Credit Agreement on March 25, 2025 with a syndication of bank lenders, as discussed in Note 5, “Debt - Line of Credit” to the Financial Statements of this Quarterly Report on Form 10-Q.

We had the following amounts available under the revolving Credit Agreement:

$ in millions

Type

Maturity

Commitment

Amounts available at June 30, 2025

AES Indiana

Revolving

March 2030

500.0

Capital Requirements

Capital Expenditures

Our capital expenditure program, including development and permitting costs, for the three-year period from 2025 through 2027 (including amounts already expended in the first six months of 2025) is currently estimated to cost approximately $2.8 billion (excluding environmental compliance), and includes estimates as follows (amounts in millions):


							For the three-year period
	2025		2026		2027		from 2025 through 2027
Power generation related projects	$	584.7	$	577.6	$	345.2	$	1,507.5	(1)
Transmission and distribution related additions, improvements and extensions	231.7		198.6		347.2		777.5		(2)
TDSIC Plan investments	149.2		215.7		—		364.9		(3)
Other miscellaneous equipment	36.4		39.5		28.0		103.9
Total estimated costs of capital expenditure program	$	1,002.0	$	1,031.4	$	720.4	$	2,753.8

(1) Includes spending for AES Indiana’s power generation and renewable energy projects.
(2) Additions, improvements and extensions to AES Indiana’s transmission and distribution lines, substations, power factor and voltage regulating equipment, distribution transformers and street lighting facilities.
(3) Includes spending under AES Indiana’s TDSIC plan approved by the IURC on March 4, 2020 for eligible transmission, distribution and storage system improvements totaling $1.2 billion from 2020 through 2026. Total TDSIC costs expended from project inception through June 30, 2025 were $972.7 million.

The amounts described in the capital expenditure program above include estimated spending under AES Indiana’s 2022 IRP filed with the IURC in December 2022. See Note 2, "Regulatory Matters - IRP Filings and Replacement Generation - 2022 IRP" to the Financial Statements of IPALCO’s 2024 Form 10-K for further discussion.

Credit Ratings

Our ability to borrow money or to refinance existing indebtedness and the interest rates at which we can borrow money or refinance existing indebtedness are affected by our credit ratings. In addition, the applicable interest rates on the AES Indiana Credit Agreement (as well as the amount of certain other fees in the AES Indiana Credit Agreement) are dependent upon the credit ratings of AES Indiana. Downgrades in the credit ratings of AES could result in AES Indiana’s and/or IPALCO’s credit ratings being downgraded. Any reduction in our debt or credit ratings may adversely affect the trading price of our outstanding debt securities.

The following table presents the debt ratings and credit ratings (issuer/corporate rating) and outlook for IPALCO and AES Indiana.

Debt ratings

IPALCO

AES Indiana

Outlook

Fitch Ratings

BBB (a)

A (b)

Stable

Moody’s Investors Service

Baa3 (a)

A2 (b)

Negative

S&P Global Ratings

BBB- (a)

A- (b)

Stable

Credit ratings

IPALCO

AES Indiana

Outlook

Fitch Ratings

BBB-

BBB+

Stable

Moody’s Investors Service

—

Baa1

Negative

S&P Global Ratings

BBB

Stable

(a) Ratings relate to IPALCO’s Senior Secured Notes.

(b) Ratings relate to AES Indiana’s first mortgage bonds.

We cannot predict whether our current debt and credit ratings or the debt and credit ratings of AES Indiana will remain in effect for any given period of time or that one or more of these ratings will not be lowered or withdrawn entirely by a rating agency. A security rating is not a recommendation to buy, sell or hold securities. Such ratings may be subject to revision or withdrawal at any time by the assigning rating organization, and each rating should be evaluated independently of any other rating.

Dividend Distributions

All of IPALCO’s outstanding common stock is held by AES U.S. Investments and CDPQ. During the first six months of 2025 and 2024, IPALCO paid $126.1 million and $57.1 million, respectively, in distributions to its shareholders. Future distributions to our shareholders will be determined at the discretion of our Board of Directors and will depend primarily on dividends received from AES Indiana. Dividends from AES Indiana are affected by AES Indiana’s actual results of operations, financial condition, cash flows, capital requirements, regulatory and legal considerations, and such other factors as AES Indiana’s Board of Directors deems relevant.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The condensed consolidated financial statements of IPALCO are prepared in conformity with GAAP, which requires the use of estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the periods presented.

The Company’s significant accounting policies are described in Note 1, “Overview and Summary of Significant Accounting Policies” of this report and in IPALCO’s 2024 Form 10-K. The Company’s other critical accounting estimates are described in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in IPALCO’s 2024 Form 10-K. An accounting estimate is considered critical if the estimate requires management to make an assumption about matters that were highly uncertain at the time the estimate was made, different estimates reasonably could have been used, or if changes in the estimate that would have a material impact on the Company’s financial condition or results of operations are reasonably likely to occur from period to period. Management believes that the accounting estimates employed are appropriate and resulting balances are reasonable; however, actual results could differ from the original estimates, requiring adjustments to these balances in future periods. The Company has reviewed and determined that these remain as critical accounting policies as of and for the six months ended June 30, 2025.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

IPALCO ENTERPRISES, INC. 10-Q