Accounting Changes and Error Corrections

12 Months Ended

Dec. 31, 2024

Accounting Changes and Error Corrections [Abstract]

RESTATEMENT (UNAUDITED)

We restated the unaudited quarterly financial information as of and for the three and six months ended June 30, 2024, and as of and for the three and nine months ended September 30, 2024, to correct misstatements associated with the calculation of asset impairment expense for the AES Brasil disposal group. The misstatements were primarily due to the use of incomplete data in the estimation of the fair value of net assets of AES Brasil, which was used in the calculation of the impairment expense after AES Brasil was classified as held-for-sale in the second quarter of 2024. The impairment expense previously reported was overstated by $192 million for the three and six months ended June 30, 2024 and overstated by $5 million for the three months ended September 30, 2024.

Description of Restatement Tables — See below for a reconciliation from the previously reported amounts in the Company's Quarterly Reports on Form 10-Q to the restated amounts as of and for the three and six months ended June 30, 2024, and as of and for the three and nine months ended September 30, 2024. These amounts are labeled as "Previously Reported" in the table below. The amounts labeled "Adjustments" represent the effects of this restatement.

Effects of the Restatement on Quarterly Results (Unaudited) — The tables below illustrate the impact of the restatement on the historical unaudited Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Operations, Condensed Consolidated Statements of Comprehensive Income, and Condensed Consolidated Statements of Changes in Equity for the interim quarters impacted, each as compared with the amounts presented in the Form 10-Qs previously filed with the SEC.

Since the restatement is associated with the calculation of asset impairment expense, a non-cash activity, there was no impact to net cash provided by (used in) operating, investing, or financing activities on the Condensed Consolidated Statements of Cash Flows. The restatement resulted in an increase to Net income and an offsetting decrease to Impairment expense of $192 million for the six months ended June 30, 2024, and an increase to Net income and an offsetting decrease to Impairment expense of $197 million for the nine months ended September 30, 2024.

Condensed Consolidated Balance Sheets (Unaudited)


	June 30, 2024						September 30, 2024
	Previously Reported		Adjustments		Restated		Previously Reported		Adjustments		Restated
(in millions, except share and per share amounts)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	1,773	$	—	$	1,773	$	1,919	$	—	$	1,919
Restricted cash	299		—		299		563		—		563
Short-term investments	61		—		61		62		—		62
Accounts receivable, net of allowance of $22 and $32, respectively	1,507		—		1,507		1,868		—		1,868
Inventory	661		—		661		646		—		646
Prepaid expenses	141		—		141		134		—		134
Other current assets, net of allowance of $0 for all periods	1,458		—		1,458		1,460		—		1,460
Current held-for-sale assets (1)	3,655		177		3,832		3,874		186		4,060
Total current assets	9,555		177		9,732		10,526		186		10,712
NONCURRENT ASSETS


Property, plant and equipment, net of accumulated depreciation of $8,270 and $8,505, respectively	30,732		—		30,732		32,354		—		32,354

Investments in and advances to affiliates	1,156		—		1,156		1,162		—		1,162
Debt service reserves and other deposits	76		—		76		77		—		77
Goodwill	348		—		348		348		—		348
Other intangible assets, net of accumulated amortization of $420 and $426, respectively	1,879		—		1,879		1,928		—		1,928
Deferred income taxes	435		—		435		421		—		421


Other noncurrent assets, net of allowance of $11 for all periods	2,845		—		2,845		2,593		—		2,593
Noncurrent held-for-sale assets	712		—		712		670		—		670
Total noncurrent assets	38,183		—		38,183		39,553		—		39,553
TOTAL ASSETS	$	47,738	$	177	$	47,915	$	50,079	$	186	$	50,265
LIABILITIES, REDEEMABLE STOCK OF SUBSIDIARIES, AND EQUITY
CURRENT LIABILITIES
Accounts payable	$	1,869	$	—	$	1,869	$	1,965	$	—	$	1,965
Accrued interest	242		—		242		328		—		328
Accrued non-income taxes	229		—		229		257		—		257
Supplier financing arrangements	553		—		553		698		—		698
Accrued and other liabilities	1,043		—		1,043		1,182		—		1,182
Recourse debt	890		—		890		1,709		—		1,709
Non-recourse debt	2,176		—		2,176		3,237		—		3,237

Current held-for-sale liabilities	2,821		—		2,821		2,999		—		2,999
Total current liabilities	9,823		—		9,823		12,375		—		12,375
NONCURRENT LIABILITIES
Recourse debt	5,256		—		5,256		4,840		—		4,840
Non-recourse debt	20,232		—		20,232		19,666		—		19,666

Deferred income taxes	1,588		—		1,588		1,696		—		1,696

Other noncurrent liabilities	2,452		—		2,452		2,501		—		2,501
Noncurrent held-for-sale liabilities	457		—		457		457		—		457
Total noncurrent liabilities	29,985		—		29,985		29,160		—		29,160

Redeemable stock of subsidiaries	901		—		901		905		—		905
EQUITY
THE AES CORPORATION STOCKHOLDERS’ EQUITY

Common stock (0.01 par value, 1,200,000,000 shares authorized; 859,584,456 issued and 710,823,239 outstanding at June 30, 2024, and 859,709,987 issued and 711,027,043 outstanding at September 30, 2024)	9		—		9		9		—		9
Additional paid-in capital	7,067		—		7,067		6,949		—		6,949
Accumulated deficit	(769)		91		(678)		(267)		93		(174)
Accumulated other comprehensive loss	(1,409)		(7)		(1,416)		(1,595)		(5)		(1,600)
Treasury stock, at cost (148,761,217 and 148,682,944 shares at June 30, 2024 and September 30, 2024, respectively)	(1,807)		—		(1,807)		(1,806)		—		(1,806)
Total AES Corporation stockholders’ equity	3,091		84		3,175		3,290		88		3,378
NONCONTROLLING INTERESTS (2)	3,938		93		4,031		4,349		98		4,447
Total equity	7,029		177		7,206		7,639		186		7,825
TOTAL LIABILITIES, REDEEMABLE STOCK OF SUBSIDIARIES, AND EQUITY	$	47,738	$	177	$	47,915	$	50,079	$	186	$	50,265

_____________________________

(1)The adjustments to current held-for-sale assets for the overstatement of impairment expense of the AES Brasil disposal group include the impact of foreign currency translation adjustments at the balance sheet date.

(2)As the Company had a 47.3% ownership interest in the AES Brasil disposal group, the noncontrolling interests adjustments reflect the allocation of the overstatement of impairment expense to noncontrolling interest holders, inclusive of the impact of foreign currency translation adjustments at the balance sheet date.

Condensed Consolidated Statements of Operations (Unaudited)


	Three Months Ended June 30, 2024						Six Months Ended June 30, 2024
(in millions, except share and per share amounts)	Previously Reported		Adjustments		Restated		Previously Reported		Adjustments		Restated
Revenue:
Non-Regulated	$	2,070	$	—	$	2,070	$	4,302	$	—	$	4,302
Regulated	872		—		872		1,725		—		1,725
Total revenue	2,942		—		2,942		6,027		—		6,027
Cost of Sales:
Non-Regulated	(1,671)		—		(1,671)		(3,404)		—		(3,404)
Regulated	(718)		—		(718)		(1,451)		—		(1,451)
Total cost of sales	(2,389)		—		(2,389)		(4,855)		—		(4,855)
Operating margin	553		—		553		1,172		—		1,172
General and administrative expenses	(66)		—		(66)		(141)		—		(141)
Interest expense	(389)		—		(389)		(746)		—		(746)
Interest income	88		—		88		193		—		193
Loss on extinguishment of debt	(9)		—		(9)		(10)		—		(10)
Other expense	(84)		—		(84)		(122)		—		(122)
Other income	21		—		21		56		—		56
Gain on disposal and sale of business interests	1		—		1		44		—		44

Asset impairment expense	(230)		192		(38)		(276)		192		(84)
Foreign currency transaction gains	38		—		38		30		—		30

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE TAXES AND EQUITY IN EARNINGS OF AFFILIATES	(77)		192		115		200		192		392
Income tax benefit	35		—		35		51		—		51
Net equity in earnings (losses) of affiliates	3		—		3		(12)		—		(12)



NET INCOME (LOSS)	(39)		192		153		239		192		431



Less: Net loss (income) attributable to noncontrolling interests and redeemable stock of subsidiaries	224		(101)		123		378		(101)		277
NET INCOME ATTRIBUTABLE TO THE AES CORPORATION	$	185	$	91	$	276	$	617	$	91	$	708




BASIC EARNINGS PER SHARE:


NET INCOME ATTRIBUTABLE TO THE AES CORPORATION COMMON STOCKHOLDERS	$	0.27	$	0.13	$	0.40	$	0.88	$	0.13	$	1.01
DILUTED EARNINGS PER SHARE:


NET INCOME ATTRIBUTABLE TO THE AES CORPORATION COMMON STOCKHOLDERS	$	0.27	$	0.12	$	0.39	$	0.87	$	0.12	$	0.99


	Three Months Ended September 30, 2024	Nine Months Ended September 30, 2024
(in millions, except share and per share amounts)			Previously Reported		Adjustments		Restated		Previously Reported		Adjustments		Restated
Revenue:
Non-Regulated			$	2,352	$	—	$	2,352	$	6,654	$	—	$	6,654
Regulated			937		—		937		2,662		—		2,662
Total revenue			3,289		—		3,289		9,316		—		9,316
Cost of Sales:
Non-Regulated			(1,794)		—		(1,794)		(5,198)		—		(5,198)
Regulated			(773)		—		(773)		(2,224)		—		(2,224)
Total cost of sales			(2,567)		—		(2,567)		(7,422)		—		(7,422)
Operating margin			722		—		722		1,894		—		1,894
General and administrative expenses			(57)		—		(57)		(198)		—		(198)
Interest expense			(379)		—		(379)		(1,125)		—		(1,125)
Interest income			119		—		119		312		—		312
Loss on extinguishment of debt			(1)		—		(1)		(11)		—		(11)
Other expense			(31)		—		(31)		(153)		—		(153)
Other income			64		—		64		120		—		120
Gain (loss) on disposal and sale of business interests			(1)		—		(1)		43		—		43

Asset impairment expense			(79)		5		(74)		(355)		197		(158)
Foreign currency transaction gains (losses)			(28)		—		(28)		2		—		2

INCOME FROM CONTINUING OPERATIONS BEFORE TAXES AND EQUITY IN EARNINGS OF AFFILIATES			329		5		334		529		197		726
Income tax expense			(103)		—		(103)		(52)		—		(52)
Net equity in losses of affiliates			(9)		—		(9)		(21)		—		(21)
INCOME FROM CONTINUING OPERATIONS			217		5		222		456		197		653

Loss from disposal of discontinued businesses			(7)		—		(7)		(7)		—		(7)
NET INCOME			210		5		215		449		197		646



Less: Net loss (income) attributable to noncontrolling interests and redeemable stock of subsidiaries			292		(3)		289		670		(104)		566
NET INCOME ATTRIBUTABLE TO THE AES CORPORATION			$	502	$	2	$	504	$	1,119	$	93	$	1,212
AMOUNTS ATTRIBUTABLE TO THE AES CORPORATION COMMON STOCKHOLDERS:
Income from continuing operations, net of tax			$	509	$	2	$	511	$	1,126	$	93	$	1,219
Loss from discontinued operations, net of tax			(7)		—		(7)		(7)		—		(7)
NET INCOME ATTRIBUTABLE TO THE AES CORPORATION			$	502	$	2	$	504	$	1,119	$	93	$	1,212
BASIC EARNINGS PER SHARE:
Income from continuing operations attributable to The AES Corporation common stockholders, net of tax			$	0.72	$	—	$	0.72	$	1.60	$	0.13	$	1.73
Loss from discontinued operations attributable to The AES Corporation common stockholders, net of tax			(0.01)		—		(0.01)		(0.01)		—		(0.01)
NET INCOME ATTRIBUTABLE TO THE AES CORPORATION COMMON STOCKHOLDERS			$	0.71	$	—	$	0.71	$	1.59	$	0.13	$	1.72
DILUTED EARNINGS PER SHARE:
Income from continuing operations attributable to The AES Corporation common stockholders, net of tax			$	0.72	$	—	$	0.72	$	1.58	$	0.13	$	1.71
Loss from discontinued operations attributable to The AES Corporation common stockholders, net of tax			(0.01)		—		(0.01)		(0.01)		—		(0.01)
NET INCOME ATTRIBUTABLE TO THE AES CORPORATION COMMON STOCKHOLDERS			$	0.71	$	—	$	0.71	$	1.57	$	0.13	$	1.70

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)


	Three Months Ended June 30, 2024						Six Months Ended June 30, 2024
(in millions)	Previously Reported		Adjustments		Restated		Previously Reported		Adjustments		Restated
NET INCOME (LOSS)	$	(39)	$	192	$	153	$	239	$	192	$	431
Foreign currency translation activity:
Foreign currency translation adjustments, net of $0 income tax for all periods	(121)		(15)		(136)		(164)		(15)		(179)

Total foreign currency translation adjustments	(121)		(15)		(136)		(164)		(15)		(179)
Derivative activity:
Change in fair value of derivatives, net of income tax expense of $22 and $66, respectively	92		—		92		292		—		292
Reclassification to earnings, net of $7 income tax expense for all periods	23		—		23		21		—		21
Total change in fair value of derivatives	115		—		115		313		—		313
Pension activity:

Change in pension adjustments due to net actuarial gain for the period, net of $0 income tax for all periods	1		—		1		1		—		1

Total pension adjustments	1		—		1		1		—		1
Fair value option liabilities activity:
Change in fair value option liabilities due to instrument-specific credit risk, net of $0 income tax for all periods	—		—		—		3		—		3

Total change in fair value option liabilities	—		—		—		3		—		3
OTHER COMPREHENSIVE INCOME (LOSS)	(5)		(15)		(20)		153		(15)		138
COMPREHENSIVE INCOME (LOSS)	(44)		177		133		392		177		569
Less: Comprehensive loss (income) attributable to noncontrolling interests and redeemable stock of subsidiaries	234		(93)		141		330		(93)		237
COMPREHENSIVE INCOME ATTRIBUTABLE TO THE AES CORPORATION	$	190	$	84	$	274	$	722	$	84	$	806


	Three Months Ended September 30, 2024	Nine Months Ended September 30, 2024
(in millions)			Previously Reported		Adjustments		Restated		Previously Reported		Adjustments		Restated
NET INCOME			$	210	$	5	$	215	$	449	$	197	$	646
Foreign currency translation activity:
Foreign currency translation adjustments, net of $9 income tax benefit for all periods			36		4		40		(128)		(11)		(139)

Total foreign currency translation adjustments			36		4		40		(128)		(11)		(139)
Derivative activity:
Change in fair value of derivatives, net of income tax benefit (expense) of $65 and $(1), respectively			(262)		—		(262)		30		—		30
Reclassification to earnings, net of income tax expense of $0 and $7, respectively			(3)		—		(3)		18		—		18
Total change in fair value of derivatives			(265)		—		(265)		48		—		48
Pension activity:

Change in pension adjustments due to net actuarial gain for the period, net of $0 income tax for all periods			—		—		—		1		—		1
Total pension adjustments			—		—		—		1		—		1
Fair value option liabilities activity:
Change in fair value option liabilities due to instrument-specific credit risk, net of $0 income tax for all periods			—		—		—		3		—		3

Total change in fair value option liabilities			—		—		—		3		—		3
OTHER COMPREHENSIVE INCOME (LOSS)			(229)		4		(225)		(76)		(11)		(87)
COMPREHENSIVE INCOME (LOSS)			(19)		9		(10)		373		186		559
Less: Comprehensive loss (income) attributable to noncontrolling interests and redeemable stock of subsidiaries			335		(5)		330		665		(98)		567
COMPREHENSIVE INCOME ATTRIBUTABLE TO THE AES CORPORATION			$	316	$	4	$	320	$	1,038	$	88	$	1,126

Condensed Consolidated Statements of Changes in Equity (Unaudited)


		Six Months Ended June 30, 2024
	Common Stock		Treasury Stock			Additional Paid-In Capital			Accumulated Deficit		Accumulated Other Comprehensive Loss		Noncontrolling Interests
(in millions)		Shares	Amount		Shares			Amount
Previously Reported
Balance at March 31, 2024		859.6	$	9	148.9	$	(1,809)		$	7,068	$	(954)	$	(1,414)	$	3,380
Net income (loss)		—	—		—	—			—		185		—		(214)
Foreign currency translation adjustments and reclassification to earnings, net of income tax		—	—		—	—			—		—		(87)		(33)
Change in fair value of derivatives and reclassification to earnings, net of income tax		—	—		—	—			—		—		92		(15)
Change in pension adjustments and reclassification to earnings, net of income tax		—	—		—	—			—		—		—		1
Total other comprehensive income (loss)		—	—		—	—			—		—		5		(47)
Adjustments to redemption value of redeemable stock of subsidiaries		—	—		—	—			6		—		—		—
Reclassification of redeemable stock of subsidiaries to noncontrolling interests		—	—		—	—			—		—		—		670
Distributions to noncontrolling interests		—	—		—	—			—		—		—		(94)

Contributions from noncontrolling interests		—	—		—	—			—		—		—		51
Sales to noncontrolling interests		—	—		—	—			(9)		—		—		192
Dividends declared on AES common stock		—	—		—	—			(7)		—		—		—
Issuance and exercise of stock-based compensation benefit plans, net of income tax		—	—		(0.1)	2			9		—		—		—
Balance at June 30, 2024		859.6	$	9	148.8	$	(1,807)		$	7,067	$	(769)	$	(1,409)	$	3,938

Adjustments

Net income		—	—		—	—			—		91		—		101
Foreign currency translation adjustments and reclassification to earnings, net of income tax		—	—		—	—			—		—		(7)		(8)











Total adjustments		—	$	—	—	$	—		$	—	$	91	$	(7)	$	93

Restated
Balance at March 31, 2024		859.6	$	9	148.9	$	(1,809)		$	7,068	$	(954)	$	(1,414)	$	3,380
Net income (loss)		—	—		—	—			—		276		—		(113)
Foreign currency translation adjustments and reclassification to earnings, net of income tax		—	—		—	—			—		—		(94)		(41)
Change in fair value of derivatives and reclassification to earnings, net of income tax		—	—		—	—			—		—		92		(15)
Change in pension adjustments and reclassification to earnings, net of income tax		—	—		—	—			—		—		—		1
Total other comprehensive loss		—	—		—	—			—		—		(2)		(55)
Adjustments to redemption value of redeemable stock of subsidiaries		—	—		—	—			6		—		—		—
Reclassification of redeemable stock of subsidiaries to noncontrolling interests		—	—		—	—			—		—		—		670
Distributions to noncontrolling interests		—	—		—	—			—		—		—		(94)

Contributions from noncontrolling interests		—	—		—	—			—		—		—		51
Sales to noncontrolling interests		—	—		—	—			(9)		—		—		192
Dividends declared on AES common stock		—	—		—	—			(7)		—		—		—
Issuance and exercise of stock-based compensation benefit plans, net of income tax		—	—		(0.1)	2			9		—		—		—
Balance at June 30, 2024		859.6	$	9	148.8	$	(1,807)		$	7,067	$	(678)	$	(1,416)	$	4,031


		Nine Months Ended September 30, 2024
	Common Stock		Treasury Stock			Additional Paid-In Capital			Accumulated Deficit		Accumulated Other Comprehensive Loss		Noncontrolling Interests
(in millions)		Shares	Amount		Shares			Amount
Previously Reported
Balance at June 30, 2024		859.6	$	9	148.8	$	(1,807)		$	7,067	$	(769)	$	(1,409)	$	3,938
Net income (loss)		—	—		—	—			—		502		—		(308)
Foreign currency translation adjustments and reclassification to earnings, net of income tax		—	—		—	—			—		—		23		13
Change in fair value of derivatives and reclassification to earnings, net of income tax		—	—		—	—			—		—		(209)		(56)

Total other comprehensive loss		—	—		—	—			—		—		(186)		(43)

Reclassification of redeemable stock of subsidiaries to noncontrolling interests		—	—		—	—			—		—		—		62
Distributions to noncontrolling interests		—	—		—	—			—		—		—		(20)
Acquisitions of noncontrolling interests		—	—		—	—			2		—		—		(2)
Contributions from noncontrolling interests		—	—		—	—			—		—		—		233
Sales to noncontrolling interests		—	—		—	—			(7)		—		—		489
Dividends declared on AES common stock		—	—		—	—			(123)		—		—		—
Issuance and exercise of stock-based compensation benefit plans, net of income tax		0.1	—		(0.1)	1			10		—		—		—
Balance at September 30, 2024		859.7	$	9	148.7	$	(1,806)		$	6,949	$	(267)	$	(1,595)	$	4,349

Adjustments
Balance at June 30, 2024		—	$	—	—	$	—		$	—	$	91	$	(7)	$	93
Net income		—	—		—	—			—		2		—		3
Foreign currency translation adjustments and reclassification to earnings, net of income tax		—	—		—	—			—		—		2		2











Total adjustments		—	$	—	—	$	—		$	—	$	93	$	(5)	$	98

Restated
Balance at June 30, 2024		859.6	$	9	148.8	$	(1,807)		$	7,067	$	(678)	$	(1,416)	$	4,031
Net income (loss)		—	—		—	—			—		504		—		(305)
Foreign currency translation adjustments and reclassification to earnings, net of income tax		—	—		—	—			—		—		25		15
Change in fair value of derivatives and reclassification to earnings, net of income tax		—	—		—	—			—		—		(209)		(56)

Total other comprehensive loss		—	—		—	—			—		—		(184)		(41)

Reclassification of redeemable stock of subsidiaries to noncontrolling interests		—	—		—	—			—		—		—		62
Distributions to noncontrolling interests		—	—		—	—			—		—		—		(20)
Acquisitions of noncontrolling interests		—	—		—	—			2		—		—		(2)
Contributions from noncontrolling interests		—	—		—	—			—		—		—		233
Sales to noncontrolling interests		—	—		—	—			(7)		—		—		489
Dividends declared on common stock		—	—		—	—			(123)		—		—		—
Issuance and exercise of stock-based compensation benefit plans, net of income tax		0.1	—		(0.1)	1			10		—		—		—
Balance at September 30, 2024		859.7	$	9	148.7	$	(1,806)		$	6,949	$	(174)	$	(1,600)	$	4,447