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Fair Value | 12 Months Ended
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Dec. 31, 2024
Fair Value Disclosures [Abstract] |
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. Valuation Techniques — The fair value measurement accounting guidance describes three main approaches to measuring the fair value of assets and liabilities: (1) market approach, (2) income approach, and (3) cost approach. The market approach uses prices and other relevant information generated from market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to convert future amounts to a single present value amount. The measurement is based on current market expectations of the return on those future amounts. The cost approach is based on the amount that would currently be required to replace an asset. The Company measures its investments and derivatives at fair value on a recurring basis. Additionally, in connection with annual or event-driven impairment evaluations, certain nonfinancial assets and liabilities are measured at fair value on a nonrecurring basis. These include long-lived tangible assets (i.e., property, plant and equipment), goodwill, and intangible assets (e.g., sales concessions, land use rights and water rights, etc.). In general, the Company determines the fair value of investments and derivatives using the market approach and the income approach, respectively. In the nonrecurring measurements of nonfinancial assets and liabilities, all three approaches are considered; however, the value estimated under the income approach is often the most representative of fair value. Investments — The Company's investments measured at fair value generally consist of marketable debt and equity securities. Equity securities are either measured at fair value using quoted market prices or based on comparisons to market data obtained for similar assets. Debt securities primarily consist of government debt securities and certificates of deposit held by foreign subsidiaries. Debt securities are measured at fair value based on comparisons to market data obtained for similar assets. Derivatives — Derivatives are measured at fair value using quoted market prices or the income approach utilizing spot and forward benchmark interest rates, foreign exchange rates, commodity prices, volatilities and credit data, as applicable. When significant inputs are not observable, the Company uses relevant techniques to determine the inputs, such as regression analysis or prices for similarly traded instruments available in the market. The Company's methodology to fair value its derivatives is to start with any observable inputs; however, in certain instances the published forward rates or prices may not extend through the remaining term of the contract, and management must make assumptions to extrapolate the curve, which necessitates the use of unobservable inputs, such as proxy commodity prices or historical settlements to forecast forward prices. With respect to credit inputs, in certain instances the spread that reflects the credit or nonperformance risk is unobservable, requiring the use of proxy yield curves of similar credit quality. To determine the fair value of a derivative, cash flows are discounted using the relevant spot benchmark interest rate. The Company then makes a credit valuation adjustment ("CVA"), as applicable, by further discounting the cash flows for nonperformance or credit risk based on the observable or estimated debt spread of the Company's subsidiary or its counterparty and the tenor of the respective derivative instrument. The CVA for potential future scenarios in which the derivative is in an asset position is based on the counterparty's credit ratings, credit default swap spreads, and debt spreads, as available. The CVA for potential future scenarios in which the derivative is in a liability position is based on the Parent Company's or the subsidiary's current debt spread. In the absence of readily obtainable credit information, the Parent Company's or the subsidiary's estimated credit rating and spreads of comparably rated entities or the respective country's debt spreads are used as a proxy. All derivative instruments are analyzed individually and are subject to unique risk exposures. The fair value hierarchy of an asset or a liability is based on the level of significance of the input assumptions. An input assumption is considered significant if it affects the fair value by at least 10%. Assets and liabilities are classified as Level 3 when the use of unobservable inputs is significant. When the use of unobservable inputs is insignificant, assets and liabilities are classified as Level 2. Transfers between Level 3 and Level 2 result from changes in significance of unobservable inputs used to calculate the CVA. Contingent consideration — 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. Gains and losses on the remeasurement of contingent consideration are recognized in Other income and Other expense, respectively. Debt — Recourse and non-recourse debt are carried at amortized cost. The fair value of recourse debt is estimated based on quoted market prices. The fair value of non-recourse debt is estimated based upon interest rates and other features of the loan. In general, the carrying amount of variable rate debt is a close approximation of its fair value. For fixed rate loans, the fair value is estimated using quoted market prices or discounted cash flow ("DCF") analyses. The fair value of recourse and non-recourse debt excludes accrued interest at the valuation date. The fair value was determined using available market information as of December 31, 2024. The Company is not aware of any factors that would significantly affect the fair value amounts subsequent to December 31, 2024. Nonrecurring measurements — For nonrecurring measurements derived using the income approach, fair value is generally determined using valuation models based on the principles of DCF. The income approach is most often used in the impairment evaluation of long-lived tangible assets, equity method investments, goodwill, and intangible assets. Where the use of market observable data is limited or not available for certain input assumptions, the Company develops its own estimates using a variety of techniques such as regression analysis and extrapolations. Depending on the complexity of a valuation, an independent valuation firm may be engaged to assist management in the valuation process. For nonrecurring measurements derived using the market approach, recent market transactions involving the sale of identical or similar assets are considered. The use of this approach is limited because it is often difficult to identify sale transactions of identical or similar assets. This approach is used in impairment evaluations of certain intangible assets. Otherwise, it is used to corroborate the fair value determined under the income approach. For nonrecurring measurements derived using the cost approach, fair value is typically based upon a replacement cost approach. This approach involves a considerable amount of judgment, which is why its use is limited to the measurement of long-lived tangible assets. Like the market approach, this approach is also used to corroborate the fair value determined under the income approach. Fair Value Considerations — In determining fair value, the Company considers the source of observable market data inputs, liquidity of the instrument, the credit risk of the counterparty, and the risk of the Company's or its counterparty's nonperformance. The conditions and criteria used to assess these factors are: Sources of market assumptions — The Company derives most of its market assumptions from market efficient data sources (e.g., Bloomberg and Reuters). To determine fair value where market data is not readily available, management uses comparable market sources and empirical evidence to develop its own estimates of market assumptions. Market liquidity — The Company evaluates market liquidity based on whether the financial or physical instrument, or the underlying asset, is traded in an active or inactive market. An active market exists if the prices are fully transparent to market participants, can be measured by market bid and ask quotes, the market has a relatively large proportion of trading volume as compared to the Company's current trading volume, and the market has a significant number of market participants that will allow the market to rapidly absorb the quantity of assets traded without significantly affecting the market price. Another factor the Company considers when determining whether a market is active or inactive is the presence of government or regulatory controls over pricing that could make it difficult to establish a market-based price when entering into a transaction. Nonperformance risk — Nonperformance risk refers to the risk that an obligation will not be fulfilled and affects the value at which a liability is transferred or an asset is sold. Nonperformance risk includes, but may not be limited to, the Company's or its counterparty's credit and settlement risk. Nonperformance risk adjustments are dependent on credit spreads, letters of credit, collateral, other arrangements available, and the nature of master netting arrangements. The Company is party to various interest rate swaps and options, foreign currency options and forwards, and derivatives and embedded derivatives, which subject the Company to nonperformance risk. The financial and physical instruments held at the subsidiary level are generally non-recourse to the Parent Company. Nonperformance risk on the investments held by the Company is incorporated in the fair value derived from quoted market data to mark the investments to fair value. Recurring Measurements — The following table presents, by level within the fair value hierarchy as described in Note 1—General and Summary of Significant Accounting Policies, 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:
|  | December 31, 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 |  | $ | — |  |  | $ | 4 |  |  | $ | — |  |  | $ | 4 |  |  | $ | — |  |  | $ | 360 |  |  | $ | — |  |  | $ | 360 |
Government debt securities |  | — |  |  | 4 |  |  | — |  |  | 4 |  |  | — |  |  | — |  |  | — |  |  | — |
Total debt securities |  | — |  |  | 8 |  |  | — |  |  | 8 |  |  | — |  |  | 360 |  |  | — |  |  | 360 |
EQUITY SECURITIES: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Mutual funds |  | 51 |  |  | — |  |  | — |  |  | 51 |  |  | 46 |  |  | — |  |  | — |  |  | 46 |
Common stock |  | 4 |  |  | — |  |  | — |  |  | 4 |  |  | — |  |  | — |  |  | — |  |  | — |
Total equity securities |  | 55 |  |  | — |  |  | — |  |  | 55 |  |  | 46 |  |  | — |  |  | — |  |  | 46 |
DERIVATIVES: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate derivatives |  | — |  |  | 349 |  |  | — |  |  | 349 |  |  | — |  |  | 182 |  |  | 2 |  |  | 184 |
Foreign currency derivatives |  | — |  |  | 9 |  |  | 52 |  |  | 61 |  |  | — |  |  | 15 |  |  | 59 |  |  | 74 |
Commodity derivatives |  | 193 |  |  | 80 |  |  | 5 |  |  | 278 |  |  | — |  |  | 127 |  |  | 1 |  |  | 128 |
Total derivatives — assets |  | 193 |  |  | 438 |  |  | 57 |  |  | 688 |  |  | — |  |  | 324 |  |  | 62 |  |  | 386 |
TOTAL ASSETS |  | $ | 248 |  |  | $ | 446 |  |  | $ | 57 |  |  | $ | 751 |  |  | $ | 46 |  |  | $ | 684 |  |  | $ | 62 |  |  | $ | 792 |
Liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Contingent consideration |  | $ | — |  |  | $ | — |  |  | $ | 145 |  |  | $ | 145 |  |  | $ | — |  |  | $ | — |  |  | $ | 165 |  |  | $ | 165 |
DERIVATIVES: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate derivatives |  | — |  |  | 14 |  |  | 1 |  |  | 15 |  |  | — |  |  | 102 |  |  | 6 |  |  | 108 |
Cross-currency derivatives |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 63 |  |  | — |  |  | 63 |
Foreign currency derivatives |  | — |  |  | 18 |  |  | — |  |  | 18 |  |  | — |  |  | 19 |  |  | — |  |  | 19 |
Commodity derivatives |  | 185 |  |  | 44 |  |  | 26 |  |  | 255 |  |  | — |  |  | 145 |  |  | 111 |  |  | 256 |
Total derivatives — liabilities |  | 185 |  |  | 76 |  |  | 27 |  |  | 288 |  |  | — |  |  | 329 |  |  | 117 |  |  | 446 |
TOTAL LIABILITIES |  | $ | 185 |  |  | $ | 76 |  |  | $ | 172 |  |  | $ | 433 |  |  | $ | — |  |  | $ | 329 |  |  | $ | 282 |  |  | $ | 611 |
As of December 31, 2024, all available-for-sale debt securities had stated maturities within one year. For the years ended December 31, 2024 and 2023, no impairments of marketable securities were recognized in earnings or other comprehensive income (loss). Gains and losses on the sale of investments are determined using the specific-identification method. The following table presents gross proceeds from sale of available-for-sale securities for the periods indicated (in millions):
Year Ended December 31, |  | 2024 |  | 2023 |  | 2022
Gross proceeds from sale of available-for-sale securities |  | $ | 717 |  |  | $ | 1,377 |  |  | $ | 1,065 |
The Company accounts for equity securities without readily determinable fair values using the measurement alternative in accordance with ASC 321. These securities are measured at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer. As of both December 31, 2024 and 2023, the carrying amount of equity securities accounted for using the measurement alternative was $62 million. Upward adjustments resulting from observable price changes are recorded in Other income and impairments and downward adjustments are recorded in Other expense. 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 years ended December 31, 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 |  |  |  |
Year Ended December 31, 2024 | Interest Rate |  |  |  | Foreign Currency |  | Commodity |  | Contingent Consideration |  | Total
Balance at January 1 | $ | (4) |  |  |  |  | $ | 59 |  |  | $ | (110) |  |  | $ | (165) |  |  | $ | (220) |
Total realized and unrealized gains (losses): |  |  |  |  |  |  |  |  |  |  |
Included in earnings | — |  |  |  |  | 23 |  |  | 4 |  |  | (10) |  |  | 17 |
Included in other comprehensive income — derivative activity | 3 |  |  |  |  | 8 |  |  | 84 |  |  | — |  |  | 95 |
Included in other comprehensive income — foreign currency translation activity | — |  |  |  |  | — |  |  | — |  |  | 1 |  |  | 1 |
Included in regulatory (assets) liabilities | — |  |  |  |  | — |  |  | 5 |  |  | — |  |  | 5 |
Acquisitions | — |  |  |  |  | — |  |  | — |  |  | (76) |  |  | (76) |
Settlements | — |  |  |  |  | (38) |  |  | (4) |  |  | 105 |  |  | 63 |
Balance at December 31 | $ | (1) |  |  |  |  | $ | 52 |  |  | $ | (21) |  |  | $ | (145) |  |  | $ | (115) |
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 | $ | — |  |  |  |  | $ | (6) |  |  | $ | 6 |  |  | $ | (10) |  |  | $ | (10) |
| Derivative Assets and Liabilities |  |  |  |
Year Ended December 31, 2023 | Interest Rate |  |  |  | Foreign Currency |  | Commodity |  | Contingent Consideration |  | Total
Balance at January 1 | $ | — |  |  |  |  | $ | 64 |  |  | $ | (47) |  |  | $ | (48) |  |  | $ | (31) |
Total realized and unrealized gains (losses): |  |  |  |  |  |  |  |  |  |  |
Included in earnings | — |  |  |  |  | 16 |  |  | (10) |  |  | 14 |  |  | 20 |
Included in other comprehensive income — derivative activity | 1 |  |  |  |  | 6 |  |  | (48) |  |  | — |  |  | (41) |
Included in regulatory (assets) liabilities | — |  |  |  |  | — |  |  | (1) |  |  | — |  |  | (1) |
Acquisitions | — |  |  |  |  | — |  |  | — |  |  | (239) |  |  | (239) |
Settlements | (1) |  |  |  |  | (27) |  |  | (5) |  |  | 108 |  |  | 75 |
Transfers of assets/(liabilities), net into Level 3 | (4) |  |  |  |  | — |  |  | — |  |  | — |  |  | (4) |
Transfers of (assets)/liabilities, net out of Level 3 | — |  |  |  |  | — |  |  | 1 |  |  | — |  |  | 1 |
Balance at December 31 | $ | (4) |  |  |  |  | $ | 59 |  |  | $ | (110) |  |  | $ | (165) |  |  | $ | (220) |
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 | $ | — |  |  |  |  | $ | (4) |  |  | $ | (13) |  |  | $ | 14 |  |  | $ | (3) |
The following table summarizes the significant unobservable inputs used for the Level 3 derivative assets (liabilities) as of December 31, 2024 (in millions, except range amounts):
Type of Derivative |  | Fair Value |  | Unobservable Input |  | Amount or Range (Average) |  |
Interest rate |  | $ | (1) |  |  | Subsidiary credit spread |  | 1.5% to 3.1% (2.3%) |  |
Foreign currency: |  |  |  |  |  |  |  |
Argentine peso |  | 52 |  |  | Argentine peso to USD currency exchange rate after one year |  | 1,244 to 1,330 (1,287) |  |
Commodity: |  |  |  |  |  |  |  |
CAISO energy swap |  | (22) |  |  | Forward energy prices per MWh after 2030 |  | $10.32 to $111.38 ($49.98) |  |
Other |  | 1 |  |  |  |  |  |  |
Total |  | $ | 30 |  |  |  |  |  |  |
For the Argentine peso foreign currency derivatives, increases (decreases) in the estimate of the above exchange rate would increase (decrease) the value of the derivative. For the CAISO Energy Swap, increases (decreases) in the estimate above would decrease (increase) the value of the derivative. 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. 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):
Year Ended December 31, 2024 |  | Measurement Date |  | Carrying Amount (1) |  | Fair Value |  | Pre-tax Loss
Assets |  |  | 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 |  | 1,577 |  |  | — |  |  | 1,565 |  |  | — |  |  | 25 |
Mong Duong (5) |  | 6/30/2024 |  | 390 |  |  | — |  |  | 389 |  |  | — |  |  | 6 |
AES Brasil (4) |  | 9/30/2024 |  | 1,581 |  |  | — |  |  | 1,548 |  |  | — |  |  | 55 |
Mong Duong (5) |  | 9/30/2024 |  | 407 |  |  | — |  |  | 400 |  |  | — |  |  | 11 |
Mong Duong (5) |  | 12/31/2024 |  | 365 |  |  | — |  |  | 362 |  |  | — |  |  | 8 |
Ventanas |  | 12/31/2024 |  | 131 |  |  | — |  |  | 6 |  |  | — |  |  | 125 |
Year Ended December 31, 2023 |  | Measurement Date |  | Carrying Amount (1) |  | Fair Value |  | Pre-tax Loss
Assets |  |  | Level 1 |  | Level 2 |  | Level 3 |
Long-lived asset groups held and used: (6) |  |  |  |  |  |  |  |  |  |  |  |
Norgener (7) |  | 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 |
New York Wind |  | 11/30/2023 |  | 310 |  |  | — |  |  | — |  |  | 124 |  |  | 186 |
Warrior Run (8) |  | 11/30/2023 |  | 250 |  |  | — |  |  | — |  |  | 25 |  |  | 198 |
Held-for-sale businesses: (2) |  |  |  |  |  |  |  |  |  |  |  |
Jordan (9) |  | 3/31/2023 |  | $ | 179 |  |  | $ | — |  |  | $ | 170 |  |  | $ | — |  |  | $ | 14 |
Jordan (9) |  | 6/30/2023 |  | 179 |  |  | — |  |  | 170 |  |  | — |  |  | 15 |
Jordan (9) |  | 9/30/2023 |  | 178 |  |  | — |  |  | 170 |  |  | — |  |  | 14 |
Jordan (9) |  | 12/31/2023 |  | 180 |  |  | — |  |  | 170 |  |  | — |  |  | 16 |
Mong Duong (5) |  | 12/31/2023 |  | 575 |  |  | — |  |  | 413 |  |  | — |  |  | 167 |
Goodwill: (10) |  |  |  |  |  |  |  |  |  |  |  |
TEG TEP |  | 10/1/2023 |  | $ | 12 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 12 |
_____________________________ (1)Represents the carrying values of the asset groups at the dates of measurement, before fair value adjustment. (2)See Note 25—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. 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. (6)See Note 23—Asset Impairment Expense for further information. Per ASC 360-10, the pre-tax impairment expense for long-lived asset groups held and used is limited to the carrying amount of the long-lived assets. (7)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. 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. (8)The Warrior Run asset group includes long-lived assets, inventory, 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. The Company evaluated the carrying amount of the assets outside the scope of ASC 360-10 and recognized an inventory impairment of $6 million in Other expense. See Note 22—Other Income and Expense for further information. (9)The pre-tax loss recognized was calculated using the fair value of the Jordan disposal group less costs to sell of $5 million for the March 31, 2023 measurement date and $6 million for the June 30, 2023, September 30, 2023, and December 31, 2023 measurement dates. (10)See Note 10—Goodwill and Other Intangible Assets for further information. AES Clean Energy Development Projects — On a quarterly basis, the Company reviews the status of development projects to identify projects that are no longer viable and will be abandoned. The fair value of each abandoned project with no salvage value is determined to be zero as there are no future projected cash flows, resulting in a full write-off of the carrying value of project development intangibles and capitalized development costs incurred. The Company recognized $95 million and $151 million of pre-tax asset impairment expense in 2024 and 2023, respectively, including $137 million during the fourth quarter of 2023 primarily related to the write-off of project development intangibles which were recognized at fair value when the Company acquired sPower's development platform as part of the formation of AES Clean Energy Development. See Note 23—Asset Impairment Expense for further information. The following table summarizes the significant unobservable inputs used in the Level 3 measurement of long-lived asset groups held and used measured on a nonrecurring basis during the year ended December 31, 2023 (in millions, except range amounts):
December 31, 2023 |  | Fair Value |  | Valuation Technique |  | Unobservable Input |  | Range (Weighted Average) |  |
Long-lived asset groups held and used: |  |  |  |  |  |  |  |  |  |
New York Wind |  | $ | 124 |  |  | Discounted cash flow |  | Annual revenue growth |  | -1% to 5% (2%) |  |
|  |  |  |  |  | Annual variable margin |  | 2% to 17% (9%) |  |
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%) |  |
Warrior Run (1) |  | 25 |  |  | Discounted cash flow |  | Annual variable margin |  | -931% to 74% (-506%) |  |
Norgener (2) |  | 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 |  | $ | 371 |  |  |  |  |  |  |  |  |
_____________________________ (1)The fair value of the Warrior Run asset group was mainly related to cash on hand and existing coal inventory not subject to impairment under ASC 360-10, and is partially reduced by expected decommissioning and demolition costs. (2)The fair value of the Norgener asset group subsequent to the impairment analysis performed on May 1, 2023 was mainly related to existing coal inventory not subject to impairment under ASC 360-10. In December 2023, the Company recognized an inventory impairment of $23 million in Other expense. See Note 22—Other Income and Expense for further information. Financial Instruments not Measured at Fair Value in the 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 Consolidated Balance Sheets as of the dates indicated, but for which fair value is disclosed:
|  |  | December 31, 2024
|  |  | Carrying Amount |  | Fair Value
|  |  | Total |  | Level 1 |  | Level 2 |  | Level 3
Assets: | Accounts receivable — noncurrent (1) |  | $ | 87 |  |  | $ | 171 |  |  | $ | — |  |  | $ | — |  |  | $ | 171 |
Liabilities: | Non-recourse debt |  | 22,743 |  |  | 23,066 |  |  | — |  |  | 20,981 |  |  | 2,085 |
| Recourse debt |  | 5,704 |  |  | 4,538 |  |  | — |  |  | 4,538 |  |  | — |
|  |  | 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 on the Consolidated Balance Sheets. See Note 7—Financing Receivables for further information.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 107 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-107 Reference 2: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 100 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-100 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (c)(3) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2E -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2E Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (g) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 940 -SubTopic 820 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478119/940-820-50-1 + Details
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