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Segments Segments (Policies) | 9 Months Ended
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Sep. 30, 2024
Segment Reporting [Abstract] |
Segment Reporting | SEGMENTS The segment reporting structure uses the Company’s management reporting structure as its foundation to reflect how the Company manages the businesses internally. The management reporting structure is composed of four SBUs, mainly organized by technology, led by our President and Chief Executive Officer. Using the accounting guidance on segment reporting, the Company determined that its four operating segments are aligned with its four reportable segments corresponding to its SBUs. •Renewables — Solar, wind, energy storage, and hydro generation facilities; •Utilities — AES Indiana, AES Ohio, and AES El Salvador regulated utilities and their generation facilities; •Energy Infrastructure — Natural gas, LNG, coal, pet coke, diesel, and oil generation facilities, and our businesses in Chile, which have a mix of generation sources, including renewables, that are pooled to service our existing PPAs; and •New Energy Technologies — Green hydrogen initiatives and investments in Fluence, Uplight, 5B, and other new and innovative energy technology businesses. Our Renewables, Utilities, and Energy Infrastructure SBUs participate in our generation business line, in which we own and/or operate power plants to generate and sell power to customers, such as utilities, industrial users, and other intermediaries. Our Utilities SBU participates in our utilities business line, in which we own and/or operate utilities to generate or purchase, distribute, transmit, and sell electricity to end-user customers in the residential, commercial, industrial, and governmental sectors within a defined service area. In certain circumstances, our utilities also generate and sell electricity on the wholesale market. Our New Energy Technologies SBU includes investments in new and innovative technologies to support leading-edge greener energy solutions. Included in “Corporate and Other” are the results of the AES self-insurance company, corporate overhead costs which are not directly associated with the operations of our four reportable segments, and certain intercompany charges such as self-insurance premiums which are fully eliminated in consolidation. The Company uses Adjusted EBITDA as its primary segment performance measure. Adjusted EBITDA, a non-GAAP measure, is defined by the Company as earnings before interest income and expense, taxes, depreciation and amortization, adjusted for the impact of NCI and interest, taxes, depreciation and amortization of our equity affiliates, and adding back interest income recognized under service concession arrangements; excluding gains or losses of both consolidated entities and entities accounted for under the equity method due to (a) unrealized gains or losses pertaining to derivative transactions, equity securities, and financial assets and liabilities measured using the fair value option; (b) unrealized foreign currency gains or losses; (c) gains, losses, benefits, and costs associated with dispositions and acquisitions of business interests, including early plant closures, and gains and losses recognized at commencement of sales-type leases; (d) losses due to impairments; and (e) gains, losses, and costs due to the early retirement of debt or troubled debt restructuring. The Company has concluded Adjusted EBITDA better reflects the underlying business performance of the Company and is the most relevant measure considered in the Company's internal evaluation of the financial performance of its segments. Additionally, given its large number of businesses and overall complexity, the Company concluded that Adjusted EBITDA is a more transparent measure that better assists investors in determining which businesses have the greatest impact on the Company's results. Revenue and Adjusted EBITDA are presented before inter-segment eliminations, which includes the effect of intercompany transactions with other segments except for charges for certain management fees and the write-off of intercompany balances, as applicable. All intra-segment activity has been eliminated within the segment. Inter-segment activity has been eliminated within the total consolidated results. The following tables present financial information by segment for the periods indicated (in millions):
| Three Months Ended September 30, |  | Nine Months Ended September 30,
Total Revenue | 2024 |  | 2023 |  | 2024 |  | 2023
Renewables SBU | $ | 726 |  |  | $ | 708 |  |  | $ | 1,941 |  |  | $ | 1,744 |
Utilities SBU | 961 |  |  | 880 |  |  | 2,730 |  |  | 2,703 |
Energy Infrastructure SBU | 1,623 |  |  | 1,861 |  |  | 4,706 |  |  | 5,239 |
New Energy Technologies SBU | 1 |  |  | — |  |  | 1 |  |  | 75 |
Corporate and Other | 33 |  |  | 29 |  |  | 106 |  |  | 96 |
Eliminations | (55) |  |  | (44) |  |  | (168) |  |  | (157) |
Total Revenue | $ | 3,289 |  |  | $ | 3,434 |  |  | $ | 9,316 |  |  | $ | 9,700 |
| Three Months Ended September 30, |  | Nine Months Ended September 30,
Reconciliation of Adjusted EBITDA (in millions) | 2024 |  | 2023 |  | 2024 |  | 2023
Net income | $ | 210 |  |  | $ | 291 |  |  | $ | 449 |  |  | $ | 461 |
Income tax expense | 103 |  |  | 109 |  |  | 52 |  |  | 179 |
Interest expense | 379 |  |  | 326 |  |  | 1,125 |  |  | 966 |
Interest income | (119) |  |  | (144) |  |  | (312) |  |  | (398) |
Depreciation and amortization | 306 |  |  | 286 |  |  | 926 |  |  | 836 |
EBITDA | $ | 879 |  |  | $ | 868 |  |  | $ | 2,240 |  |  | $ | 2,044 |
Less: Discontinued operations | 7 |  |  | — |  |  | 7 |  |  | — |
Less: Adjustment for noncontrolling interests and redeemable stock of subsidiaries (1) | (229) |  |  | (183) |  |  | (471) |  |  | (508) |
Less: Income tax expense (benefit), interest expense (income) and depreciation and amortization from equity affiliates | 30 |  |  | 27 |  |  | 91 |  |  | 93 |
Interest income recognized under service concession arrangements | 16 |  |  | 18 |  |  | 49 |  |  | 54 |
Unrealized derivatives, equity securities, and financial assets and liabilities losses (gains) | (47) |  |  | 10 |  |  | (185) |  |  | 3 |
Unrealized foreign currency losses | 7 |  |  | 97 |  |  | 10 |  |  | 161 |
Disposition/acquisition losses (gains) | (11) |  |  | 8 |  |  | 8 |  |  | 21 |
Impairment losses | 39 |  |  | 145 |  |  | 179 |  |  | 318 |
Loss on extinguishment of debt and troubled debt restructuring | 1 |  |  | — |  |  | 51 |  |  | 1 |
Adjusted EBITDA | $ | 692 |  |  | $ | 990 |  |  | $ | 1,979 |  |  | $ | 2,187 |
_____________________________ (1)The allocation of earnings and losses to tax equity investors from both consolidated entities and equity affiliates is removed from Adjusted EBITDA.
| Three Months Ended September 30, |  | Nine Months Ended September 30,
Adjusted EBITDA | 2024 |  | 2023 |  | 2024 |  | 2023
Renewables SBU | $ | 199 |  |  | $ | 267 |  |  | $ | 443 |  |  | $ | 557 |
Utilities SBU | 223 |  |  | 216 |  |  | 619 |  |  | 526 |
Energy Infrastructure SBU | 299 |  |  | 520 |  |  | 969 |  |  | 1,165 |
New Energy Technologies SBU | (7) |  |  | (22) |  |  | (38) |  |  | (61) |
Corporate and Other | (23) |  |  | 8 |  |  | (3) |  |  | 20 |
Eliminations | 1 |  |  | 1 |  |  | (11) |  |  | (20) |
Adjusted EBITDA | $ | 692 |  |  | $ | 990 |  |  | $ | 1,979 |  |  | $ | 2,187 |
The Company uses long-lived assets as its measure of segment assets. Long-lived assets include amounts recorded in Property, plant and equipment, net and right-of-use assets for operating leases recorded in Other noncurrent assets on the Condensed Consolidated Balance Sheets.
Long-Lived Assets | September 30, 2024 |  | December 31, 2023
Renewables SBU | $ | 16,463 |  |  | $ | 15,735 |
Utilities SBU | 8,481 |  |  | 7,166 |
Energy Infrastructure SBU | 7,750 |  |  | 7,414 |
New Energy Technologies SBU | 19 |  |  | 14 |
Corporate and Other | 25 |  |  | 9 |
Long-Lived Assets | 32,738 |  |  | 30,338 |
Current assets | 10,526 |  |  | 6,649 |
Investments in and advances to affiliates | 1,162 |  |  | 941 |
Debt service reserves and other deposits | 77 |  |  | 194 |
Goodwill | 348 |  |  | 348 |
Other intangible assets | 1,928 |  |  | 2,243 |
Deferred income taxes | 421 |  |  | 396 |
Other noncurrent assets, excluding right-of-use assets for operating leases | 2,209 |  |  | 2,879 |
Noncurrent held-for-sale assets | 670 |  |  | 811 |
Total Assets | $ | 50,079 |  |  | $ | 44,799 |

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