Earnings Per Share

9 Months Ended

Sep. 30, 2024

Basic and diluted earnings per share are based on the weighted average number of shares of common stock and potential common stock outstanding during the period. Potential common stock, for purposes of determining diluted earnings per share, includes the effects of dilutive RSUs, stock options, and equity units. The effect of such potential common stock is computed using the treasury stock method for RSUs and stock options, and is computed using the if-converted method for equity units.

The following table is a reconciliation of the numerator and denominator of the basic and diluted earnings per share computation for income from continuing operations for the three and nine months ended September 30, 2024 and 2023, where income represents the numerator and weighted average shares represent the denominator.


Three Months Ended September 30,	2024					2023
(in millions, except per share data)	Income		Shares	$ per Share		Income		Shares	$ per Share

BASIC EARNINGS PER SHARE
Income from continuing operations attributable to The AES Corporation common stockholders	$	509	711	$	0.72	$	231	670	$	0.34



EFFECT OF DILUTIVE SECURITIES

Stock options	—		—	—		—		—	—
Restricted stock units	—		2	—		—		2	—
Equity units	—		—	—		—		40	(0.02)
DILUTED EARNINGS PER SHARE	$	509	713	$	0.72	$	231	712	$	0.32


Nine Months Ended	2024					2023
(in millions, except per share data)	Income		Shares	$ per Share		Income		Shares	$ per Share

BASIC EARNINGS PER SHARE
Income from continuing operations attributable to The AES Corporation common stockholders	$	1,126	704	$	1.60	$	343	669	$	0.51



EFFECT OF DILUTIVE SECURITIES

Stock options	—		—	—		—		1	—
Restricted stock units	—		2	—		—		2	—
Equity units	—		7	(0.02)		1		40	(0.03)
DILUTED EARNINGS PER SHARE	$	1,126	713	$	1.58	$	344	712	$	0.48

For the three and nine months ended September 30, 2024, the calculation of diluted earnings per share excluded 1 million outstanding stock awards, respectively, which would be anti-dilutive. These stock awards could potentially dilute basic earnings per share in the future.

The calculation of diluted earnings per share excluded 2 million outstanding stock awards for the three and nine months ended September 30, 2023, which would be anti-dilutive. These stock awards could potentially dilute basic earnings per share in the future.

As described in Note 12—Equity, the Company issued 10,430,500 Equity Units in March 2021 with a total notional value of $1,043 million. Each Equity Unit had a stated amount of $100 and was initially issued as a Corporate Unit, consisting of a 2024 Purchase Contract and a 10% undivided beneficial ownership interest in one share of Series A Preferred Stock. The conversion rate was initially 31.5428 shares of common stock per one share of Series A Preferred Stock, which was equivalent to an initial conversion price of approximately $31.70 per share of common stock. The Series A Preferred Stock and the 2024 Purchase Contracts were accounted for as one unit of account. In calculating diluted EPS, the Company has applied the if-converted method to determine the impact of the forward purchase feature and considered if there are incremental shares that should be included related to the Series A Preferred conversion value. On February 15, 2024, the Series A Preferred Stock was tendered to satisfy the 2024 Purchase Contract's settlement price and the Corporate Units were converted into shares of the Company's common stock at a settlement rate of 3.8859, equivalent to a reference price of $25.73. The Series A Preferred Stock was canceled upon conversion.