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Fair Value
 3 Months Ended
Mar. 31, 2026
Fair Value Disclosures [Abstract]  
Fair Value Measurements FAIR VALUE
The fair value of current financial assets and liabilities approximate their reported carrying amounts. The estimated fair value 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 2025 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 March 31, 2026 and December 31, 2025 measured on a recurring basis and the respective category within the fair value hierarchy for IPALCO was determined as follows:
Fair Value as of March 31, 2026
Fair Value as of December 31, 2025
Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
(In Thousands)
Financial assets:
VEBA investments:
     Money market funds$129 $— $— $129 $104 $— $— $104 
     Mutual funds4,446 — — 4,446 4,324 — — 4,324 
          Total VEBA investments4,575 — — 4,575 4,428 — — 4,428 
FTRs— — 551 551 — — 1,584 1,584 
Total financial assets measured at fair value$4,575 $— $551 $5,126 $4,428 $— $1,584 $6,012 

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 March 31,
20262025
(In Thousands)
Beginning Balance$1,584 $1,526 
Settlements(1,033)(1,128)
Ending Balance$551 $398 
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:  
 March 31, 2026December 31, 2025
 Face ValueFair ValueFace ValueFair Value
 (In Thousands)
Fixed-rate$3,948,800 $3,826,993 $3,948,800 $3,812,563 
Variable-rate30,000 30,129 — — 
Total indebtedness$3,978,800 $3,857,122 $3,948,800 $3,812,563 
 
The difference between the face value and the carrying value of this indebtedness consists of the following:

•unamortized deferred financing costs of $35.8 million and $36.5 million at March 31, 2026 and December 31, 2025, respectively; and

•unamortized discounts of $10.1 million and $10.3 million at March 31, 2026 and December 31, 2025, respectively.