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Equity | 9 Months Ended
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Sep. 30, 2025
Equity [Abstract] |
EQUITY | EQUITY Equity Units In March 2021, the Company issued 10,430,500 Equity Units 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 forward stock purchase contract (“2024 Purchase Contracts”) and a 10% undivided beneficial ownership interest in one share of 0% Series A Cumulative Perpetual Convertible Preferred Stock, issued without par and with a liquidation preference of $1,000 per share (“Series A Preferred Stock”). The Company concluded that the Equity Units should be accounted for as one unit of account based on the economic linkage between the 2024 Purchase Contracts and the Series A Preferred Stock, as well as the Company's assessment of the applicable accounting guidance relating to combining freestanding instruments. The Equity Units represent mandatorily convertible preferred stock. Accordingly, the shares associated with the combined instrument were reflected in diluted earnings per share using the if-converted method. In conjunction with the issuance of the Equity Units, the Company received approximately $1 billion in proceeds, net of underwriting costs and commissions, before offering expenses. The proceeds for the issuance of 1,043,050 shares were attributed to the Series A Preferred Stock for $838 million and $205 million for the present value of the quarterly payments due to holders of the 2024 Purchase Contracts ("Contract Adjustment Payments"). The proceeds were used for the development of the AES renewables businesses, U.S. utility businesses, LNG infrastructure, and for other developments determined by management. The Series A Preferred Stock did not bear any dividends and the liquidation preference of the convertible preferred stock did not accrete. The Series A Preferred Stock had no maturity date and would remain outstanding unless converted by holders or redeemed by the Company. Holders of the preferred shares had limited voting rights. The Series A Preferred Stock was pledged as collateral to support holders’ purchase obligations under the 2024 Purchase Contracts, which obligated the holders to purchase, on February 15, 2024, for a price of $100 in cash, a maximum number of 57,467,883 shares of the Company’s common stock (subject to customary anti-dilution adjustments). The initial settlement rate determining the number of shares that each holder must purchase could not exceed the maximum settlement rate and was determined over a market value averaging period preceding February 15, 2024. The initial maximum settlement rate of 3.864 was calculated using an initial reference price of $25.88, equal to the last reported sale price of the Company’s common stock on March 4, 2021. 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 the maximum settlement rate of 3.8859, equivalent to a reference price of $25.73. The Series A Preferred Stock was canceled and 40,531,845 shares of AES common stock were issued upon conversion. The Company paid Contract Adjustment Payments to the holders of the 2024 Purchase Contracts at a rate of 6.875% per annum, payable quarterly in arrears on February 15, May 15, August 15, and November 15, commencing on May 15, 2021. The $205 million present value of the Contract Adjustment Payments at inception reduced the Series A Preferred Stock. As each quarterly Contract Adjustment Payment was made, the related liability was reduced and the difference between the cash payment and the present value accreted to interest expense, approximately $5 million over the three-year term. The final Contract Adjustment Payments were made on February 15, 2024. Equity Transactions with Noncontrolling Interests AES Clean Energy Tax Equity Partnerships — The majority of solar projects in the U.S. have been financed with tax equity structures, in which tax equity investors receive a portion of the economic attributes of the facilities, including tax attributes, that vary over the life of the projects. The substance of such arrangements is that of a preferred structure, whereby tax equity investors are granted preferential returns in the form of significant earnings and tax allocations from the partnership, until a specified internal rate of return is achieved. During the nine months ended September 30, 2025 and 2024, AES Clean Energy Development and AES Renewable Holdings, through multiple transactions, sold noncontrolling interests in project companies to tax equity investors, resulting in increases to NCI of $434 million and $599 million, respectively. During the third quarter of 2025, AES Renewable Holdings completed buyouts of tax equity partners at Buffalo Gap I, Buffalo Gap II, and Buffalo Gap III, resulting in a decrease to NCI of $28 million and a decrease to additional paid-in capital of $42 million. AES Clean Energy Development and AES Renewable Holdings are reported in the Renewables SBU reportable segment. Cochrane — In May 2025, the Company acquired the remaining 40% of the common shares in Empresa Electrica Cochrane SpA (“Cochrane”), a coal-fired plant in Chile, from a third-party investor for $89 million, increasing AES’ ownership in Cochrane to 96.7%. This transaction resulted in a $40 million decrease in Parent Company Stockholder’s Equity due to a decrease in additional paid-in-capital of $23 million and a reclassification of accumulated other comprehensive losses from NCI to AOCL of $17 million. The preferred shares in Cochrane, previously issued by AES Andes in September 2020, remain outstanding. Under the terms of the operating agreement, preferred shareholders have the preferential right to receive distributions from the earnings or available distributable capital of Cochrane until reaching their original investment plus a specified rate of return. Cochrane is reported in the Energy Infrastructure SBU reportable segment. AES Indiana Pike County BESS — In March 2025, as a result of the Pike County BESS project being placed in service, the noncontrolling ownership interest of $38 million was reclassified from Redeemable stock of subsidiaries to Noncontrolling interests on the Condensed Consolidated Balance Sheets. See Note 11—Redeemable Stock of Subsidiaries for further information. Subsequently, AES Indiana received an additional $150 million from the tax equity investor, resulting in an increase to NCI. AES Indiana is reported in the Utilities SBU reportable segment. Hardy Hills Solar — In December 2023, AES Indiana sold a noncontrolling interest in the Hardy Hills solar project to a tax equity investor, resulting in a $79 million increase to NCI. In May 2024, the project reached commercial operations and AES Indiana received an additional $47 million from the tax equity investor. AES Indiana is reported in the Utilities SBU reportable segment. AES Puerto Rico Solar — In May 2024, AES CFE Holding II entered into an agreement for the sale of a 30% ownership interest in the Marahu project for $35 million, resulting in an increase to NCI. As the Company maintained control after this transaction, AES Puerto Rico Solar continues to be consolidated by the Company within the Renewables SBU reportable segment. Chile Renovables — Under its renewables partnership agreement with GIP, AES Andes will contribute a specified pipeline of renewables development projects to Chile Renovables as the projects reach commercial operations, and GIP may make additional contributions to maintain its 49% ownership interest. In February 2024, AES Andes completed the sale of Mesamávida to Chile Renovables for $40 million, resulting in an increase to NCI of $51 million and a decrease to additional paid-in capital of $11 million. In December 2023, Chile Renovables issued $275 million of preferred shares to GIP, the proceeds of which are being used to fund the development of an additional pipeline of renewables projects. Under the terms of the operating agreement, GIP receives an escalating specified internal rate of return up until the point the projects reach commercial operations. As each project reaches commercial operations, the preferred shares convert to common stock and GIP may make additional contributions to maintain its 49% ownership interest. In February 2025, the Andes Solar 2a BESS project reached commercial operations. The preferred shares were converted to common stock and GIP made additional contributions of $14 million, resulting in an increase to NCI of $17 million and a decrease to additional paid-in capital of $3 million. As the Company maintained control after each of these transactions, Chile Renovables continues to be consolidated by the Company within the Renewables SBU reportable segment. AES Renewable Holdings — In December 2023, AES Renewable Holdings issued preferred shares in a portfolio of operating assets ("OpCo 1"). Under the terms of the operating agreement, the preferred shareholder will receive cash distributions disproportionate to its ownership interest in OpCo 1 until a specified internal rate of return is reached. AES Renewable Holdings is reported in the Renewables SBU reportable segment. The following table summarizes the net income (loss) attributable to The AES Corporation and all transfers (to) from noncontrolling interests for the periods indicated (in millions):
|  | Nine Months Ended September 30,
|  | 2025 |  | 2024
Net income attributable to The AES Corporation |  | $ | 590 |  |  | $ | 1,212 |
Transfers (to) from noncontrolling interest: |  |  |  |
Increase (decrease) in The AES Corporation's paid-in capital for sale of subsidiary shares |  | 180 |  |  | (15) |
Additional paid-in capital transferred to redeemable stock of subsidiaries (1) |  | (188) |  |  | — |
Decrease in The AES Corporation's paid-in capital for acquisition of subsidiary shares |  | (62) |  |  | 2 |
Net transfers to noncontrolling interest |  | (70) |  |  | (13) |
Change from net income attributable to The AES Corporation and transfers (to) from noncontrolling interests |  | $ | 520 |  |  | $ | 1,199 |
_______________________________ (1) See Note 11—Redeemable Stock of Subsidiaries for further information on increase in paid-in capital transferred to redeemable stock of subsidiaries. Accumulated Other Comprehensive Loss — The following table summarizes the changes in AOCL by component, net of tax and NCI, for the nine months ended September 30, 2025 (in millions):
| Foreign currency translation adjustments, net |  | Change in fair value of derivatives, net |  | Pension adjustments, net |  | Change in fair value option liabilities, net |  | Total
Balance at the beginning of the period | $ | (1,282) |  |  | $ | 537 |  |  | $ | (24) |  |  | $ | 3 |  |  | $ | (766) |
Other comprehensive income (loss) before reclassifications | 89 |  |  | (117) |  |  | (4) |  |  | — |  |  | (32) |
Amount reclassified to earnings | — |  |  | (10) |  |  | — |  |  | — |  |  | (10) |
Other comprehensive income (loss) | 89 |  |  | (127) |  |  | (4) |  |  | — |  |  | (42) |
Reclassification from NCI due to share sales and repurchases | — |  |  | (17) |  |  | 8 |  |  | — |  |  | (9) |
Balance at the end of the period | $ | (1,193) |  |  | $ | 393 |  |  | $ | (20) |  |  | $ | 3 |  |  | $ | (817) |
Reclassifications out of AOCL are presented in the following table. The Company’s accounting policy for releasing the income tax effects from AOCL occurs on a portfolio basis. Amounts for the periods indicated are in millions and those in parentheses indicate debits to the Condensed Consolidated Statements of Operations:
AOCL Components |  | Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
Change in fair value of derivatives, net |  |  |  |  |  |  |  |
|  | Non-regulated cost of sales |  | $ | (4) |  |  | $ | (1) |  |  | $ | (2) |  |  | $ | (2) |
|  | Interest expense |  | 2 |  |  | 3 |  |  | 12 |  |  | (27) |
|  | Foreign currency transaction gains (losses) |  | 1 |  |  | 1 |  |  | 6 |  |  | 3 |
|  | Income (loss) from continuing operations before taxes and equity in earnings of affiliates |  | (1) |  |  | 3 |  |  | 16 |  |  | (26) |
|  | Income tax benefit (expense) |  | — |  |  | — |  |  | (12) |  |  | 7 |
|  | Net equity in earnings (losses) of affiliates |  | 2 |  |  | — |  |  | 2 |  |  | 1 |
|  | Net income (loss) |  | 1 |  |  | 3 |  |  | 6 |  |  | (18) |
|  | Less: Net loss attributable to noncontrolling interests and redeemable stock of subsidiaries |  | — |  |  | — |  |  | 4 |  |  | 4 |
|  | Net income (loss) attributable to The AES Corporation |  | $ | 1 |  |  | $ | 3 |  |  | $ | 10 |  |  | $ | (14) |
Common Stock Dividends — The Parent Company paid dividends of $0.17595 per outstanding share to its common stockholders during the first, second, and third quarters of 2025 for dividends declared in December 2024, February 2025, and July 2025, respectively. On October 9, 2025, the Board of Directors declared a quarterly common stock dividend of $0.17595 per share payable on November 14, 2025, to shareholders of record at the close of business on October 31, 2025.

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