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Derivative Instruments and Hedging Activities | 9 Months Ended
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Sep. 30, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES For further information on the Company’s derivative and hedge accounting policies, see Note 1—General and Summary of Significant Accounting Policies—Derivatives and Hedging Activities of Item 8.—Financial Statements and Supplementary Data in the 2023 Form 10-K. Volume of Activity — The following tables present the Company’s maximum notional (in millions) over the remaining contractual period by type of derivative as of September 30, 2024, and the dates through which the maturities for each type of derivative range:
Interest Rate and Foreign Currency Derivatives |  | Maximum Notional Translated to USD |  | Latest Maturity
Interest rate |  | $ | 10,010 |  |  | 2059
Cross-currency swaps (Brazilian real) |  | 404 |  |  | 2026
Foreign currency: |  |  |  |
Brazilian real |  | 392 |  |  | 2026
Chilean peso |  | 165 |  |  | 2027
Mexican peso |  | 112 |  |  | 2025
Euro |  | 95 |  |  | 2026
Colombian peso |  | 41 |  |  | 2026
Commodity Derivatives |  | Maximum Notional |  | Latest Maturity
Natural Gas (in MMBtu) |  | 213 |  |  | 2029
Power (in MWhs) |  | 51 |  |  | 2040
Coal (in Metric Tons) |  | 11 |  |  | 2027
Accounting and Reporting — Assets and Liabilities — The following tables present the fair value of the Company’s derivative assets and liabilities as of the dates indicated (in millions):
Fair Value | September 30, 2024 |  | December 31, 2023
Assets | Designated |  | Not Designated |  | Total |  | Designated |  | Not Designated |  | Total
Interest rate derivatives | $ | 131 |  |  | $ | — |  |  | $ | 131 |  |  | $ | 184 |  |  | $ | — |  |  | $ | 184 |
Cross-currency derivatives | 10 |  |  | — |  |  | 10 |  |  | — |  |  | — |  |  | — |
Foreign currency derivatives | 21 |  |  | 69 |  |  | 90 |  |  | 23 |  |  | 51 |  |  | 74 |
Commodity derivatives | 1 |  |  | 527 |  |  | 528 |  |  | — |  |  | 128 |  |  | 128 |
Total assets (1) | $ | 163 |  |  | $ | 596 |  |  | $ | 759 |  |  | $ | 207 |  |  | $ | 179 |  |  | $ | 386 |
Liabilities |  |  |  |  |  |  |  |  |  |  |
Interest rate derivatives | $ | 168 |  |  | $ | — |  |  | $ | 168 |  |  | $ | 108 |  |  | $ | — |  |  | $ | 108 |
Cross-currency derivatives | 11 |  |  | — |  |  | 11 |  |  | 63 |  |  | — |  |  | 63 |
Foreign currency derivatives | 9 |  |  | 8 |  |  | 17 |  |  | 5 |  |  | 14 |  |  | 19 |
Commodity derivatives | 78 |  |  | 397 |  |  | 475 |  |  | 107 |  |  | 149 |  |  | 256 |
Total liabilities (1) | $ | 266 |  |  | $ | 405 |  |  | $ | 671 |  |  | $ | 283 |  |  | $ | 163 |  |  | $ | 446 |
| September 30, 2024 |  | December 31, 2023
Fair Value | Assets |  | Liabilities |  | Assets |  | Liabilities
Current | $ | 531 |  |  | $ | 363 |  |  | $ | 216 |  |  | $ | 152 |
Noncurrent | 228 |  |  | 308 |  |  | 170 |  |  | 294 |
Total (1) | $ | 759 |  |  | $ | 671 |  |  | $ | 386 |  |  | $ | 446 |
_____________________________ (1)Includes $234 million of derivative assets reported in Current held-for-sale assets and $236 million of derivative liabilities reported in Current held-for-sale liabilities on the Condensed Consolidated Balance Sheets related to AES Brasil as of September 30, 2024. Earnings and Other Comprehensive Income (Loss) — The following table presents the pre-tax gains (losses) recognized in AOCL and earnings on the Company’s derivative instruments for the periods indicated (in millions):
| Three Months Ended September 30, |  | Nine Months Ended September 30,
2024 |  | 2023 |  | 2024 |  | 2023
Cash flow hedges |  |  |  |  |  |  |
Gains (losses) recognized in AOCL |  |  |  |  |  |  |
Interest rate derivatives | $ | (337) |  |  | $ | 358 |  |  | $ | 3 |  |  | $ | 380 |
Foreign currency derivatives | 10 |  |  | (18) |  |  | — |  |  | (6) |
Commodity derivatives | 1 |  |  | 7 |  |  | 29 |  |  | (20) |
Total | $ | (326) |  |  | $ | 347 |  |  | $ | 32 |  |  | $ | 354 |
Gains (losses) reclassified from AOCL into earnings |  |  |  |  |  |  |
Interest rate derivatives | $ | 2 |  |  | $ | (2) |  |  | $ | (28) |  |  | $ | 47 |
Foreign currency derivatives | 1 |  |  | (1) |  |  | 3 |  |  | (4) |
Commodity derivatives | — |  |  | 4 |  |  | — |  |  | 17 |
Total | $ | 3 |  |  | $ | 1 |  |  | $ | (25) |  |  | $ | 60 |
Gains (losses) on fair value hedging relationship |  |  |  |  |  |  |
Cross-currency derivatives | $ | 4 |  |  | $ | 29 |  |  | $ | (2) |  |  | $ | (57) |
Hedged items | 4 |  |  | 1 |  |  | (1) |  |  | 54 |
Total | $ | 8 |  |  | $ | 30 |  |  | $ | (3) |  |  | $ | (3) |
Gains reclassified from AOCL to earnings due to change in forecast | $ | — |  |  | $ | — |  |  | $ | 11 |  |  | $ | 14 |
Gains (losses) recognized in earnings |  |  |  |  |  |  |
Not designated as hedging instruments: |  |  |  |  |  |  |
Interest rate derivatives | $ | — |  |  | $ | — |  |  | $ | 1 |  |  | $ | — |
Foreign currency derivatives | (12) |  |  | 3 |  |  | 46 |  |  | 3 |
Commodity derivatives and other | 65 |  |  | 74 |  |  | 158 |  |  | 265 |
Total | $ | 53 |  |  | $ | 77 |  |  | $ | 205 |  |  | $ | 268 |
Reclassifications from AOCL to earnings are forecasted to decrease pre-tax income from continuing operations for the twelve months ended September 30, 2025 by $22 million.
FAIR VALUE | FAIR VALUE The fair value of current financial assets and liabilities, debt service reserves, and other deposits 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 in Item 8.—Financial Statements and Supplementary Data of our 2023 Form 10-K. Recurring Measurements 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:
| September 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) | $ | — |  |  | $ | 295 |  |  | $ | — |  |  | $ | 295 |  |  | $ | — |  |  | $ | 360 |  |  | $ | — |  |  | $ | 360 |
Government debt securities | — |  |  | 3 |  |  | — |  |  | 3 |  |  | — |  |  | — |  |  | — |  |  | — |
Total debt securities | — |  |  | 298 |  |  | — |  |  | 298 |  |  | — |  |  | 360 |  |  | — |  |  | 360 |
EQUITY SECURITIES: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Mutual funds | 52 |  |  | — |  |  | — |  |  | 52 |  |  | 46 |  |  | — |  |  | — |  |  | 46 |
Common stock | 4 |  |  | — |  |  | — |  |  | 4 |  |  | — |  |  | — |  |  | — |  |  | — |
Total equity securities | 56 |  |  | — |  |  | — |  |  | 56 |  |  | 46 |  |  | — |  |  | — |  |  | 46 |
DERIVATIVES: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate derivatives | — |  |  | 131 |  |  | — |  |  | 131 |  |  | — |  |  | 182 |  |  | 2 |  |  | 184 |
Cross-currency derivatives | — |  |  | 10 |  |  | — |  |  | 10 |  |  | — |  |  | — |  |  | — |  |  | — |
Foreign currency derivatives | — |  |  | 34 |  |  | 56 |  |  | 90 |  |  | — |  |  | 15 |  |  | 59 |  |  | 74 |
Commodity derivatives | — |  |  | 525 |  |  | 3 |  |  | 528 |  |  | — |  |  | 127 |  |  | 1 |  |  | 128 |
Total derivatives — assets (2) | — |  |  | 700 |  |  | 59 |  |  | 759 |  |  | — |  |  | 324 |  |  | 62 |  |  | 386 |
TOTAL ASSETS | $ | 56 |  |  | $ | 998 |  |  | $ | 59 |  |  | $ | 1,113 |  |  | $ | 46 |  |  | $ | 684 |  |  | $ | 62 |  |  | $ | 792 |
Liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Contingent consideration | $ | — |  |  | $ | — |  |  | $ | 163 |  |  | $ | 163 |  |  | $ | — |  |  | $ | — |  |  | $ | 165 |  |  | $ | 165 |
DERIVATIVES: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate derivatives | — |  |  | 164 |  |  | 4 |  |  | 168 |  |  | — |  |  | 102 |  |  | 6 |  |  | 108 |
Cross-currency derivatives | — |  |  | 11 |  |  | — |  |  | 11 |  |  | — |  |  | 63 |  |  | — |  |  | 63 |
Foreign currency derivatives | — |  |  | 17 |  |  | — |  |  | 17 |  |  | — |  |  | 19 |  |  | — |  |  | 19 |
Commodity derivatives | — |  |  | 399 |  |  | 76 |  |  | 475 |  |  | — |  |  | 145 |  |  | 111 |  |  | 256 |
Total derivatives — liabilities (2) | — |  |  | 591 |  |  | 80 |  |  | 671 |  |  | — |  |  | 329 |  |  | 117 |  |  | 446 |
TOTAL LIABILITIES | $ | — |  |  | $ | 591 |  |  | $ | 243 |  |  | $ | 834 |  |  | $ | — |  |  | $ | 329 |  |  | $ | 282 |  |  | $ | 611 |
_____________________________ (1)Includes $292 million reported in Current held-for-sale assets on the Condensed Consolidated Balance Sheets related to AES Brasil as of September 30, 2024. (2)Includes $234 million of derivative assets reported in Current held-for-sale assets and $236 million of derivative liabilities reported in Current held-for-sale liabilities on the Condensed Consolidated Balance Sheets related to AES Brasil as of September 30, 2024. As of September 30, 2024, all available-for-sale debt securities had stated maturities within one year. There were no other-than-temporary impairments of marketable securities during the three and nine months ended September 30, 2024. The level 3 contingent consideration relates mainly to the acquisition of Bellefield in June 2023. Credit-related impairments are recognized in earnings under ASC 326. Gains and losses on the sale of investments are determined using the specific-identification method. The following table presents gross proceeds from the sale of available-for-sale securities during the periods indicated (in millions):
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
|  | 2024 |  | 2023 |  | 2024 |  | 2023
Gross proceeds from sale of available-for-sale securities |  | $ | 189 |  |  | $ | 308 |  |  | $ | 683 |  |  | $ | 1,047 |
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 nine months ended September 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 September 30, 2024 | Interest Rate |  |  |  | Foreign Currency |  | Commodity |  | Contingent Consideration |  | Total |  |  |
Balance at July 1, 2024 | $ | (2) |  |  |  |  | $ | 60 |  |  | $ | (71) |  |  | $ | (162) |  |  | $ | (175) |  |  |  |
Total realized and unrealized gains (losses): |  |  |  |  |  |  |  |  |  |  |  |  |  |
Included in earnings | — |  |  |  |  | 5 |  |  | — |  |  | (8) |  |  | (3) |  |  |  |
Included in other comprehensive income (loss) — derivative activity | (2) |  |  |  |  | 1 |  |  | (1) |  |  | — |  |  | (2) |  |  |  |
Settlements | — |  |  |  |  | (10) |  |  | (1) |  |  | 7 |  |  | (4) |  |  |  |
Balance at September 30, 2024 | $ | (4) |  |  |  |  | $ | 56 |  |  | $ | (73) |  |  | $ | (163) |  |  | $ | (184) |  |  |  |
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) |  |  | $ | — |  |  | $ | — |  |  | $ | (3) |  |  |  |
| Derivative Assets and Liabilities |  |  |  |  |  |  |
Three Months Ended September 30, 2023 | Interest Rate |  |  |  | Foreign Currency |  | Commodity |  | Contingent Consideration |  | Total |  |  |
Balance at July 1, 2023 | $ | (1) |  |  |  |  | $ | 63 |  |  | $ | (78) |  |  | $ | (274) |  |  | $ | (290) |  |  |  |
Total realized and unrealized gains (losses): |  |  |  |  |  |  |  |  |  |  |  |  |  |
Included in earnings | — |  |  |  |  | (6) |  |  | (3) |  |  | (1) |  |  | (10) |  |  |  |
Included in other comprehensive income (loss) — derivative activity | 5 |  |  |  |  | (2) |  |  | 7 |  |  | — |  |  | 10 |  |  |  |
Acquisitions | — |  |  |  |  | — |  |  | — |  |  | 3 |  |  | 3 |  |  |  |
Settlements | — |  |  |  |  | (9) |  |  | (2) |  |  | 5 |  |  | (6) |  |  |  |
Transfers of assets, net out of Level 3 | (4) |  |  |  |  | — |  |  | — |  |  | — |  |  | (4) |  |  |  |
Balance at September 30, 2023 | $ | — |  |  |  |  | $ | 46 |  |  | $ | (76) |  |  | $ | (267) |  |  | $ | (297) |  |  |  |
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 | $ | — |  |  |  |  | $ | (13) |  |  | $ | (3) |  |  | $ | (1) |  |  | $ | (17) |  |  |  |
| Derivative Assets and Liabilities |  |  |  |
Nine Months Ended September 30, 2024 | Interest Rate |  |  |  | Foreign Currency |  | Commodity |  | Contingent Consideration |  | Total
Balance at January 1, 2024 | $ | (4) |  |  |  |  | $ | 59 |  |  | $ | (110) |  |  | $ | (165) |  |  | $ | (220) |
Total realized and unrealized gains (losses): |  |  |  |  |  |  |  |  |  |  |
Included in earnings | — |  |  |  |  | 19 |  |  | 4 |  |  | (3) |  |  | 20 |
Included in other comprehensive income (loss) — derivative activity | — |  |  |  |  | 6 |  |  | 31 |  |  | — |  |  | 37 |
Included in regulatory (assets) liabilities | — |  |  |  |  | — |  |  | 5 |  |  | — |  |  | 5 |
Acquisitions | — |  |  |  |  | — |  |  | — |  |  | (14) |  |  | (14) |
Settlements | — |  |  |  |  | (28) |  |  | (3) |  |  | 19 |  |  | (12) |
Balance at September 30, 2024 | $ | (4) |  |  |  |  | $ | 56 |  |  | $ | (73) |  |  | $ | (163) |  |  | $ | (184) |
Total gains (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) |  |  | $ | 6 |  |  | $ | — |  |  | $ | 3 |
| Derivative Assets and Liabilities |  |  |  |
Nine Months Ended September 30, 2023 | Interest Rate |  |  |  | Foreign Currency |  | Commodity |  | Contingent Consideration |  | Total
Balance at January 1, 2023 | $ | — |  |  |  |  | $ | 64 |  |  | $ | (47) |  |  | $ | (48) |  |  | $ | (31) |
Total realized and unrealized gains (losses): |  |  |  |  |  |  |  |  |  |  |
Included in earnings | — |  |  |  |  | — |  |  | (3) |  |  | (9) |  |  | (12) |
Included in other comprehensive income (loss) — derivative activity | 2 |  |  |  |  | — |  |  | (20) |  |  | — |  |  | (18) |
Included in regulatory (assets) liabilities | — |  |  |  |  | — |  |  | (2) |  |  | — |  |  | (2) |
Acquisitions | — |  |  |  |  | — |  |  | — |  |  | (215) |  |  | (215) |
Settlements | — |  |  |  |  | (18) |  |  | (5) |  |  | 5 |  |  | (18) |
Transfers of (assets) liabilities, net out of Level 3 | (2) |  |  |  |  | — |  |  | 1 |  |  | — |  |  | (1) |
Balance at September 30, 2023 | $ | — |  |  |  |  | $ | 46 |  |  | $ | (76) |  |  | $ | (267) |  |  | $ | (297) |
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 | $ | — |  |  |  |  | $ | (14) |  |  | $ | (4) |  |  | $ | (9) |  |  | $ | (27) |
The following table summarizes the significant unobservable inputs used for Level 3 derivative assets (liabilities) as of September 30, 2024 (in millions, except range amounts):
Type of Derivative |  | Fair Value |  | Unobservable Input |  |  | Amount or Range (Average)
Interest rate |  | $ | (4) |  |  | Subsidiary credit spread |  |  | 0.8% to 3.2% (2.3%)
Foreign currency: |  |  |  |  |  |  |
Argentine peso |  | 56 |  |  | Argentine peso to U.S. dollar currency exchange rate after one year |  |  | 1,254 to 1,456 (1,351)
Commodity: |  |  |  |  |  |  |
CAISO energy swap |  | (75) |  |  | Forward energy prices per MWh after 2030 |  |  | $11.85 to $132.09 ($65.40)
Other |  | 2 |  |  |  |  |  |
Total |  | $ | (21) |  |  |  |  |  |
For the Argentine peso foreign currency derivatives, increases in the estimate of the above exchange rate would increase the value of the derivative. For the CAISO energy swap, increases in the estimate above would decrease the value of the derivative. Contingent consideration is primarily related to future milestone payments associated with acquisitions of renewables development projects. The estimated fair value of contingent consideration is determined using probability-weighted discounted cash flows based on internal forecasts, which are considered Level 3 inputs. Changes in Level 3 inputs, particularly changes in the probability of achieving development milestones, could result in material changes to the fair value of the contingent consideration and could materially impact the amount of expense or income recorded each reporting period. Contingent consideration is updated quarterly with any prospective changes in fair value recorded through earnings. Nonrecurring Measurements The Company measures fair value using the applicable fair value measurement guidance. Impairment expense, shown as pre-tax loss below, is measured by comparing the fair value at the evaluation date to the then-latest available carrying amount and is included in Asset impairment expense on the Condensed Consolidated Statements of Operations. The following table summarizes our major categories of asset groups measured at fair value on a nonrecurring basis and their level within the fair value hierarchy (in millions):
| Measurement Date |  | Carrying Amount (1) |  | Fair Value |  | Pre-tax Loss
Nine Months Ended September 30, 2024 |  | Level 1 |  | Level 2 |  | Level 3 |
Held-for-sale businesses: (2) |  |  |  |  |  |  |  |  |  |  |
Mong Duong | 3/31/2024 |  | $ | 450 |  |  | $ | — |  |  | $ | 413 |  |  | $ | — |  |  | $ | 37 |
AES Brasil (3) | 5/15/2024 |  | 1,556 |  |  | — |  |  | 1,352 |  |  | — |  |  | 217 |
Mong Duong (5) | 6/30/2024 |  | 390 |  |  | — |  |  | 389 |  |  | — |  |  | 6 |
AES Brasil (4) | 9/30/2024 |  | 1,351 |  |  | — |  |  | 1,313 |  |  | — |  |  | 60 |
Mong Duong (5) | 9/30/2024 |  | 407 |  |  | — |  |  | 400 |  |  | — |  |  | 11 |
| Measurement Date |  | Carrying Amount (1) |  | Fair Value |  |
Nine Months Ended September 30, 2023 |  | Level 1 |  | Level 2 |  | Level 3 |  | Pre-tax Loss
Long-lived asset groups held and used: |  |  |  |  |  |  |  |  |  |  |
Norgener (6) | 5/1/2023 |  | $ | 196 |  |  | $ | — |  |  | $ | — |  |  | $ | 24 |  |  | $ | 137 |
GAF Projects (AES Renewable Holdings) | 5/31/2023 |  | 29 |  |  | — |  |  | — |  |  | 11 |  |  | 18 |
TEG | 7/31/2023 |  | 170 |  |  | — |  |  | — |  |  | 93 |  |  | 77 |
TEP | 7/31/2023 |  | 153 |  |  | — |  |  | — |  |  | 94 |  |  | 59 |
Held-for-sale businesses: (2) |  |  |  |  |  |  |  |  |  |  |
Jordan (7) | 3/31/2023 |  | $ | 179 |  |  | $ | — |  |  | $ | 170 |  |  | $ | — |  |  | $ | 14 |
Jordan (7) | 6/30/2023 |  | 179 |  |  | — |  |  | 170 |  |  | — |  |  | 15 |
Jordan (7) | 9/30/2023 |  | 178 |  |  | — |  |  | 170 |  |  | — |  |  | 14 |
_____________________________ (1)Represents the carrying values of the asset groups at the dates of measurement, before fair value adjustment. (2)See Note 18—Held-for-Sale and Dispositions for further information. (3)The pre-tax loss recognized was calculated using the fair value of the AES Brasil disposal group less costs to sell of $13 million. For purposes of the impairment analysis, the Company used the carrying value of the disposal group as of April 30, 2024. A subsequent impairment analysis was performed as of June 30, 2024 and no additional impairment was identified. (4)The pre-tax loss recognized was calculated using the fair value of the AES Brasil disposal group less costs to sell of $22 million. (5)The pre-tax loss recognized was calculated using the fair value of the Mong Duong disposal group less costs to sell of $5 million for both the June 30, 2024 and September 30, 2024 measurement dates. (6)The Norgener asset group includes long-lived assets, inventory, land, and other working capital, however per ASC 360-10, the pre-tax impairment expense is limited to the carrying amount of the long-lived assets. See Note 16—Asset Impairment Expense for further information. The Company evaluated the carrying amount of the assets outside the scope of ASC 360-10 and determined that the carrying value of the other assets should not be reduced. (7)The pre-tax loss recognized was calculated using the fair value of the Jordan disposal group less costs to sell of $5 million, $6 million, and $6 million for the March 31, 2023, June 30, 2023, and September 30, 2023 measurement dates, respectively. The following table summarizes the significant unobservable inputs used in the Level 3 measurement of long-lived assets held and used measured on a nonrecurring basis during the nine months ended September 30, 2023 (in millions, except range amounts):
Nine Months Ended September 30, 2023 | Fair Value |  | Valuation Technique |  | Unobservable Input |  | Range (Weighted Average) |  |  |  |  |  |  |
Long-lived asset groups held and used: |  |  |  |  |  |  |  |  |  |  |  |  |  |
TEP | $ | 94 |  |  | Discounted cash flow |  | Annual revenue growth |  | (31)% to 6% (-2%) |  |  |  |  |  |  |
|  |  |  |  | Annual variable margin |  | 22% to 37% (26%) |  |  |  |  |  |  |
|  |  |  |  | Discount rate |  | 14% to 25% (14%) |  |  |  |  |  |  |
TEG | 93 |  |  | Discounted cash flow |  | Annual revenue growth |  | (7)% to 9% (0%) |  |  |  |  |  |  |
|  |  |  |  | Annual variable margin |  | 14% to 33% (20%) |  |  |  |  |  |  |
|  |  |  |  | Discount rate |  | 14% to 25% (14%) |  |  |  |  |  |  |
Norgener (1) | 24 |  |  | Discounted cash flow |  | Annual revenue growth |  | (90)% to 994% (85%) |  |  |  |  |  |  |
|  |  |  |  | Annual variable margin |  | (75)% to 276% (16%) |  |  |  |  |  |  |
GAF Projects (AES Renewable Holdings) | 11 |  |  | Discounted cash flow |  | Annual revenue growth |  | (42)% to 44% (1%) |  |  |  |  |  |  |
|  |  |  |  | Discount rate |  | 9% |  |  |  |  |  |  |
Total | $ | 222 |  |  |  |  |  |  |  |  |  |  |  |  |  |
_____________________________ (1)The fair value of the Norgener asset group is mainly related to existing coal inventory not subject to impairment under ASC 360-10. 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:
|  | September 30, 2024
|  | Carrying Amount |  | Fair Value
|  | Total |  | Level 1 |  | Level 2 |  | Level 3
Assets: | Accounts receivable — noncurrent (1) | $ | 97 |  |  | $ | 166 |  |  | $ | — |  |  | $ | — |  |  | $ | 166 |
Liabilities: | Non-recourse debt | 22,483 |  |  | 23,150 |  |  | — |  |  | 20,919 |  |  | 2,231 |
| Recourse debt | 6,549 |  |  | 6,459 |  |  | — |  |  | 6,459 |  |  | — |
|  | 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. See Note 5—Financing Receivables for further information.

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