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Goodwill and Other Intangible Assets
 12 Months Ended
Dec. 31, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
GOODWILL AND OTHER INTANGIBLE ASSETS GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill — The following table summarizes the carrying amount of goodwill by reportable segment for the years ended December 31, 2024 and 2023 (in millions):
Renewables SBU
Utilities SBU
Energy Infrastructure SBU
New Energy Technologies SBU
Total
Balance as of December 31, 2023
Goodwill$353 $2,709 $683 $3 $3,748 
Accumulated impairment losses(35)(2,709)(656)— (3,400)
Net balance318 — 27 3 348 
Goodwill derecognized due to disposal of a business— — — (3)(3)
Balance as of December 31, 2024
Goodwill353 2,709 683 — 3,745 
Accumulated impairment losses(35)(2,709)(656)— (3,400)
Net balance$318 $— $27 $— $345 
TEG TEP — During the fourth quarter of 2023, the Company performed the goodwill impairment test for the TEG TEP reporting unit. The fair value of the reporting unit was determined under the income approach using a discounted cash flow valuation model. The estimated fair value was less than its carrying amount and as a result the Company recognized impairment expense of $12 million, reducing the goodwill balance of TEG TEP to zero. The decrease in fair value since the date of our last impairment test on July 31, 2023 was primarily driven by an increase in the discount rate due to increasing risk of non-renewal of operating permits required to operate after March 31, 2024. In 2024, TEG and TEP successfully migrated to the new energy regime and currently operate according to ISO instructions. TEG and TEP are reported in the Energy Infrastructure SBU reportable segment.
AES Andes — During the fourth quarter of 2022, the Company performed the annual goodwill impairment test for the AES Andes reporting unit. The fair value of the reporting unit was determined under the income approach using a discounted cash flow valuation model. The estimated fair value was less than its carrying amount and as a result the Company recognized impairment expense of $644 million, reducing the goodwill balance of AES Andes to zero. The decrease in fair value since the date of our last impairment test was primarily driven by a higher discount rate resulting from increased interest rates and country risk premiums, as well as a decrease in forecasted energy prices and other unfavorable macroeconomic assumptions in Colombia. AES Andes is reported in the Energy Infrastructure SBU reportable segment.
AES El Salvador — During the fourth quarter of 2022, the Company performed the annual goodwill impairment test for the El Salvador reporting unit. The Company performed a quantitative impairment test and utilized the income approach. The estimated fair value was less than its carrying amount and as a result the Company recognized goodwill impairment expense of $133 million, reducing the goodwill balance of AES El Salvador to zero. Since the date of our last impairment test in 2021, the Company had seen market participants substantially increase return expectations for the perceived country risk for El Salvador. The impact of the increase has substantially increased our discount rate, resulting in a full impairment. AES El Salvador is reported in the Utilities SBU reportable segment.
Other Intangible Assets — The following table summarizes the balances comprising Other intangible assets in the accompanying Consolidated Balance Sheets (in millions) as of the dates indicated:
December 31, 2024December 31, 2023
Gross BalanceAccumulated AmortizationNet BalanceGross BalanceAccumulated AmortizationNet Balance
Subject to Amortization
Internal-use software$794 $(333)$461 $696 $(324)$372 
Contracts68 (29)39 337 (37)300 
Project development (1)
1,328 (37)1,291 1,222 (43)1,179 
Emissions allowances (2)
1 — 1 50 — 50 
Concession rights19 (19)— 222 (71)151 
Land use rights108 (3)105 119 (3)116 
Other (3)
28 (5)23 45 (20)25 
Subtotal2,346 (426)1,920 2,691 (498)2,193 
Indefinite-Lived Intangible Assets
Land use rights8 — 8 22 — 22 
Transmission rights17 — 17 20 — 20 
Other2 — 2 8 — 8 
Subtotal27 — 27 50 — 50 
Total$2,373 $(426)$1,947 $2,741 $(498)$2,243 
_____________________________
(1)Includes emission offset fee to the Air Quality Management District in order to transfer emission offsets from retired legacy Southland units to the new CCGT.
(2)Acquired or purchased emissions allowances are finite-lived intangible assets that are expensed when utilized and included in net income for the year.
(3)Includes management rights, renewable energy credits and incentives, and other individually insignificant intangible assets.
The following tables summarize other intangible assets acquired during the periods indicated (in millions):
December 31, 2024AmountSubject to Amortization/Indefinite-LivedWeighted Average Amortization Period (in years)Amortization Method
Internal-use software$114 Subject to Amortization11Straight-line
Project development134 Subject to Amortization40Straight-line
Emissions allowances8 Subject to AmortizationVariousAs utilized
Land use rights2 VariousN/AVarious
Other8 VariousN/AN/A
Total$266 
December 31, 2023Amount Subject to Amortization/Indefinite-LivedWeighted Average Amortization Period (in years)Amortization Method
Internal-use software$159 Subject to Amortization15Straight-line
Contracts12 Subject to Amortization21Straight-line
Project development242 Subject to Amortization39Straight-line
Emissions allowances23 Subject to AmortizationVariousAs utilized
Land use rights91 VariousN/AVarious
Other9 VariousN/AN/A
Total$536 
The following table summarizes the estimated amortization expense by intangible asset category for 2025 through 2029:
(in millions)20252026202720282029
Internal-use software$58 $55 $52 $49 $47 
Contracts2 2 2 2 2 
Project development14 16 16 16 16 
Other3 3 3 3 3 
Total$77 $76 $73 $70 $68 
Intangible asset amortization expense was $88 million, $82 million and $71 million for the years ended December 31, 2024, 2023 and 2022, respectively.