Fair Value (Tables)

6 Months Ended

Jun. 30, 2024

Fair value hierarchy for recurring measurements table

The following table presents, by level within the fair value hierarchy, the Company’s financial assets and liabilities that were measured at fair value on a recurring basis as of the dates indicated (in millions). For the Company’s investments in marketable debt securities, the security classes presented were determined based on the nature and risk of the security and are consistent with how the Company manages, monitors, and measures its marketable securities:


	June 30, 2024								December 31, 2023
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets
DEBT SECURITIES:
Available-for-sale:

Certificates of deposit (1)	$	—	$	364	$	—	$	364	$	—	$	360	$	—	$	360
Government debt securities	—		4		—		4		—		—		—		—
Total debt securities	—		368		—		368		—		360		—		360
EQUITY SECURITIES:
Mutual funds	48		—		—		48		46		—		—		46
Common stock	5		—		—		5		—		—		—		—

Total equity securities	53		—		—		53		46		—		—		46
DERIVATIVES:
Interest rate derivatives	—		322		—		322		—		182		2		184
Cross-currency derivatives	—		12		—		12		—		—		—		—
Foreign currency derivatives	—		51		60		111		—		15		59		74
Commodity derivatives	—		291		4		295		—		127		1		128
Total derivatives — assets (2)	—		676		64		740		—		324		62		386
TOTAL ASSETS	$	53	$	1,044	$	64	$	1,161	$	46	$	684	$	62	$	792
Liabilities
Contingent consideration	$	—	$	—	$	162	$	162	$	—	$	—	$	165	$	165
DERIVATIVES:
Interest rate derivatives	—		16		2		18		—		102		6		108
Cross-currency derivatives	—		12		—		12		—		63		—		63
Foreign currency derivatives	—		27		—		27		—		19		—		19
Commodity derivatives	—		242		75		317		—		145		111		256
Total derivatives — liabilities (2)	—		297		77		374		—		329		117		446
TOTAL LIABILITIES	$	—	$	297	$	239	$	536	$	—	$	329	$	282	$	611

_____________________________

(1)Includes $360 million reported in Current held-for-sale assets on the Condensed Consolidated Balance Sheets related to AES Brasil as of June 30, 2024.

(2)Includes $111 million of derivative assets reported in Current held-for-sale assets and $116 million of derivative liabilities reported in Current held-for-sale liabilities on the Condensed Consolidated Balance Sheets related to AES Brasil as of June 30, 2024.

Marketable Securities [Table Text Block]

The following table presents gross proceeds from the sale of available-for-sale securities during the periods indicated (in millions):


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Gross proceeds from sale of available-for-sale securities	$	375	$	370	$	494	$	739

Fair Value, Net Derivative Assets (Liabilities) measured on a recurring basis, Unobservable Input Reconciliation Table

The following tables present a reconciliation of assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and six months ended June 30, 2024 and 2023 (derivative balances are presented net), in millions. Transfers between Level 3 and Level 2 principally result from changes in the significance of unobservable inputs used to calculate the credit valuation adjustment.


	Derivative Assets and Liabilities
Three Months Ended June 30, 2024	Interest Rate		Foreign Currency		Commodity		Contingent Consideration		Total
Balance at April 1, 2024	$	(2)	$	64	$	(79)	$	(158)	$	(175)
Total realized and unrealized gains (losses):
Included in earnings	—		4		—		(1)		3
Included in other comprehensive income (loss) — derivative activity	—		2		4		—		6
Included in other comprehensive income (loss) — foreign currency translation activity	—		—		—		1		1
Included in regulatory (assets) liabilities	—		—		5		—		5
Acquisitions	—		—		—		(5)		(5)
Settlements	—		(10)		(1)		1		(10)


Balance at June 30, 2024	$	(2)	$	60	$	(71)	$	(162)	$	(175)
Total losses for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities held at the end of the period	$	—	$	(3)	$	—	$	(1)	$	(4)

	Derivative Assets and Liabilities
Three Months Ended June 30, 2023	Interest Rate		Foreign Currency		Commodity		Contingent Consideration		Total
Balance at April 1, 2023	$	(5)	$	62	$	(69)	$	(55)	$	(67)
Total realized and unrealized gains (losses):
Included in earnings	—		7		(1)		(1)		5
Included in other comprehensive income (loss) — derivative activity	16		3		(10)		—		9

Included in regulatory (assets) liabilities	—		—		3		—		3
Acquisitions	—		—		—		(218)		(218)
Settlements	(2)		(9)		(2)		—		(13)

Transfers of assets, net out of Level 3	(10)		—		1		—		(9)
Balance at June 30, 2023	$	(1)	$	63	$	(78)	$	(274)	$	(290)
Total losses for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities held at the end of the period	$	—	$	—	$	(2)	$	(1)	$	(3)

Fair value schedule of Significant Unobservable Input Recurring

The following table summarizes the significant unobservable inputs used for Level 3 derivative assets (liabilities) as of June 30, 2024 (in millions, except range amounts):

Type of Derivative

Fair Value

Unobservable Input

Amount or Range (Average)

Interest rate

(2)

Subsidiary credit spread

0.8% to 3.1% (2.2%)

Foreign currency:

Argentine peso

Argentine peso to U.S. dollar currency exchange rate after one year

1,187 to 1,592 (1,376)

Commodity:

CAISO energy swap

(75)

Forward energy prices per MWh after 2030

$12.39 to $121.53 ($62.15)

Other

Total

(13)

Financial instruments not measured at fair value in the condensed consolidated balance sheets

The following table presents (in millions) the carrying amount, fair value, and fair value hierarchy of the Company’s financial assets and liabilities that are not measured at fair value in the Condensed Consolidated Balance Sheets as of the periods indicated, but for which fair value is disclosed:


		June 30, 2024
		Carrying Amount		Fair Value
				Total		Level 1		Level 2		Level 3
Assets:	Accounts receivable — noncurrent (1)	$	96	$	157	$	—	$	—	$	157
Liabilities:	Non-recourse debt	22,004		22,294		—		20,241		2,053
	Recourse debt	6,146		5,896		—		5,896		—


		December 31, 2023
		Carrying Amount		Fair Value
				Total		Level 1		Level 2		Level 3
Assets:	Accounts receivable — noncurrent (1)	$	193	$	239	$	—	$	—	$	239
Liabilities:	Non-recourse debt	22,144		22,174		—		20,676		1,498
	Recourse debt	4,464		4,210		—		4,210		—

_____________________________

(1)These amounts primarily relate to the sale of the Redondo Beach land, the amounts impacted by the Stabilization Funds enacted by the Chilean government, and for December 31, 2023 only, the receivables under the Warrior Run PPA termination agreement. These are included in Other noncurrent assets in the accompanying Condensed Consolidated Balance Sheets.