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Cover and table of contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________________________
FORM 10-K
| ☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Fiscal Year Ended December 31, 2024
-OR-
| ☐ | TRANSITION REPORT FILED PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission file number 1-12291
THE AES CORPORATION
(Exact name of registrant as specified in its charter)
| Delaware | 54-1163725 | |||||||
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
| 4300 Wilson Boulevard | |||||||||||
| Arlington, | Virginia | 22203 | |||||||||
| (Address of principal executive offices) | (Zip Code) |
| Registrant's telephone number, including area code: | (703) | 522-1315 |
| Securities registered pursuant to Section 12(b) of the Act: | ||||||||
| Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which Registered | ||||||
| Common Stock, par value $0.01 per share | AES | New York Stock Exchange |
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☒ | Accelerated filer | ☐ | Smaller reporting company | ☐ | Emerging growth company | ☐ | Non-accelerated filer | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
The aggregate market value of the voting and non-voting common equity held by non-affiliates on June 28, 2024, the last business day of the Registrant's most recently completed second fiscal quarter (based on the closing sale price of $17.57 of the Registrant's Common Stock, as reported by the New York Stock Exchange on such date) was approximately $12.49 billion.
The number of shares outstanding of Registrant's Common Stock, par value $0.01 per share, on March 6, 2025 was 711,900,547.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of Registrant's Proxy Statement for its 2025 annual meeting of stockholders are incorporated by reference in Parts II and III
The AES Corporation Fiscal Year 2024 Form 10-K
Table of Contents
| 1 | 2024 Annual Report |
Glossary of Terms
The following is a list of frequently used terms and abbreviations that appear in the text of this report and have the definitions indicated below:
| 2024 Base Rate Order | The order issued in April 2024 by the IURC authorizing AES Indiana to, among other things, increase its basic rates and charges by $71 million annually | ||||
| ACED | AES Clean Energy Development, LLC | ||||
| Adjusted EBITDA | Adjusted earnings before interest income and expense, taxes, depreciation and amortization, a non-GAAP measure of operating performance | ||||
| Adjusted EBITDA with Tax Attributes | Adjusted earnings before interest income and expense, taxes, depreciation and amortization, adding back the pre-tax effect of Production Tax Credits, Investment Tax Credits and depreciation tax deductions allocated to tax equity investors, a non-GAAP measure | ||||
| Adjusted EPS | Adjusted Earnings Per Share, a non-GAAP measure | ||||
| Adjusted PTC | Adjusted Pre-tax Contribution, a non-GAAP measure of operating performance | ||||
| AES | The Parent Company and its subsidiaries and affiliates | ||||
| AES Andes | AES Andes S.A., formerly AES Gener | ||||
| AES Brasil | AES Brasil Operações S.A., formerly branded as AES Tietê | ||||
| AES Indiana | Indianapolis Power & Light Company, formerly branded as IPL. AES Indiana is wholly-owned by IPALCO | ||||
| AES Ohio | The Dayton Power & Light Company, formerly branded as DP&L. AES Ohio is wholly-owned by DPL | ||||
| AES Renewable Holdings | AES Renewable Holdings, LLC, formerly branded as AES Distributed Energy | ||||
| AFUDC | Allowance for Funds Used During Construction | ||||
| AIMCo | Alberta Investment Management Corporation | ||||
| ANEEL | Brazilian National Electric Energy Agency | ||||
| AOCL | Accumulated Other Comprehensive Loss | ||||
| ARO | Asset Retirement Obligations | ||||
| ASC | Accounting Standards Codification | ||||
| BACT | Best Available Control Technology | ||||
| BESS | Battery energy storage system | ||||
| BOT | Build, Operate and Transfer | ||||
| CAA | U.S. Clean Air Act | ||||
| CAMMESA | Wholesale Electric Market Administrator in Argentina | ||||
| CCEE | Brazilian Chamber of Electric Energy Commercialization | ||||
| CCGT | Combined Cycle Gas Turbine | ||||
| CCR | Coal Combustion Residuals, which includes bottom ash, fly ash and air pollution control wastes generated at coal-fired generation plant sites | ||||
| CDPQ | La Caisse de dépôt et placement du Quebéc | ||||
| CECL | Current Expected Credit Loss | ||||
| CEO | Chief Executive Officer | ||||
| CFE | Federal Electricity Commission in Mexico | ||||
| CFO | Chief Financial Officer | ||||
| CO2 | Carbon Dioxide | ||||
| COD | Commercial Operation Date | ||||
| CPI | U.S. Consumer Price Index | ||||
| CSAPR | U.S. Cross-State Air Pollution Rule | ||||
| CWA | U.S. Clean Water Act | ||||
| CWIP | Construction Work In Progress | ||||
| DG Comp | Directorate-General for Competition of the European Commission | ||||
| DOJ | U.S. Department of Justice | ||||
| DPL | DPL Inc. | ||||
| DPP | Dominican Power Partners | ||||
| EBITDA | Earnings before interest income and expense, taxes, depreciation and amortization, a non-GAAP measure of operating performance | ||||
| EPA | U.S. Environmental Protection Agency | ||||
| EPC | Engineering, Procurement, and Construction | ||||
| ERCOT | Electric Reliability Council of Texas | ||||
| ESP | Electric Security Plan | ||||
| EU | European Union | ||||
| EURIBOR | Euro Inter Bank Offered Rate | ||||
| EVN | Electricity of Vietnam | ||||
| FERC | U.S. Federal Energy Regulatory Commission | ||||
| 2 | 2024 Annual Report |
| Fluence | Fluence Energy, Inc and its subsidiaries, including Fluence Energy, LLC, which was previously our joint venture with Siemens AG (Nasdaq: FLNC) | ||||
| FONINVEMEM | Fund for the Investment Needed to Increase the Supply of Electricity in the Wholesale Market in Argentina | ||||
| FPA | U.S. Federal Power Act | ||||
| GAAP | Generally Accepted Accounting Principles in the United States | ||||
| GHG | Greenhouse Gas | ||||
| GILTI | Global Intangible Low Taxed Income | ||||
| GSF | Generation Scaling Factor | ||||
| GW | Gigawatts | ||||
| GWh | Gigawatt Hours | ||||
| HLBV | Hypothetical Liquidation Book Value | ||||
| IPALCO | IPALCO Enterprises, Inc. | ||||
| IPP | Independent Power Producers | ||||
| ISO | Independent System Operator | ||||
| ITC | Investment Tax Credit | ||||
| IURC | Indiana Utility Regulatory Commission | ||||
| LIBOR | London Inter Bank Offered Rate | ||||
| LNG | Liquefied Natural Gas | ||||
| MISO | Midcontinent Independent System Operator, Inc. | ||||
| MMBtu | Million British Thermal Units | ||||
| MRE | Energy Reallocation Mechanism | ||||
| MW | Megawatts | ||||
| MWh | Megawatt Hours | ||||
| NAAQS | U.S. National Ambient Air Quality Standards | ||||
| NCI | Noncontrolling Interest | ||||
| NEK | Natsionalna Elektricheska Kompania (state-owned electricity public supplier in Bulgaria) | ||||
| NERC | North American Electric Reliability Corporation | ||||
| NM | Not Meaningful | ||||
| NOV | Notice of Violation | ||||
| NOX | Nitrogen Dioxide | ||||
| NPDES | National Pollutant Discharge Elimination System | ||||
| NSPS | New Source Performance Standards | ||||
| O&M | Operations and Maintenance | ||||
| ONS | National System Operator in Brazil | ||||
| OTC Policy | Statewide Water Quality Control Policy on the Use of Coastal and Estuarine Waters for Power Plant Cooling | ||||
| OVEC | Ohio Valley Electric Corporation, an electric generating company in which AES Ohio has a 4.9% interest | ||||
| Parent Company | The AES Corporation | ||||
| PCU | Performance Cash Units | ||||
| Pet Coke | Petroleum Coke | ||||
| PJM | PJM Interconnection, LLC | ||||
| PM | Particulate Matter | ||||
| PPA | Power Purchase Agreement | ||||
| PREPA | Puerto Rico Electric Power Authority | ||||
| PSU | Performance Stock Unit | ||||
| PUCO | The Public Utilities Commission of Ohio | ||||
| PURPA | U.S. Public Utility Regulatory Policies Act | ||||
| QF | Qualifying Facility | ||||
| REC | Renewable energy credit | ||||
| RSU | Restricted Stock Unit | ||||
| RTO | Regional Transmission Organization | ||||
| SADI | Argentine Interconnected System | ||||
| SBU | Strategic Business Unit | ||||
| SEC | U.S. Securities and Exchange Commission | ||||
| SEET | Significantly Excessive Earnings Test | ||||
| SEN | Sistema Electrico Nacional in Chile | ||||
| SIN | National Interconnected System in Colombia | ||||
| SIP | State Implementation Plan | ||||
| SO2 | Sulfur Dioxide | ||||
| SWRCB | California State Water Resources Board | ||||
| TCJA | Tax Cuts and Jobs Act | ||||
| TDSIC | Transmission, Distribution, and Storage System Improvement Charge |
| 3 | 2024 Annual Report |
| U.S. | United States | ||||
| USD | United States Dollar | ||||
| VAT | Value Added Tax | ||||
| VIE | Variable Interest Entity | ||||
| Vinacomin | Vietnam National Coal-Mineral Industries Holding Corporation Ltd. | ||||
| 4 | 2024 Annual Report |
EXPLANATORY NOTE
Restatement Background
In this Annual Report on Form 10-K for the year ended December 31, 2024 (the "2024 Form 10-K"), The AES Corporation is restating its previously issued (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statements of Comprehensive Income, and (iv) Condensed Consolidated Statements of Changes in Equity 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.
During the normal course of the preparation of its audited consolidated financial statements for the year ended December 31, 2024, and not related to the Form 12(b)-25 that was filed, the Company determined that we used incomplete data in the estimation of fair value of the net assets of AES Brasil, which was used in the calculation of impairment expense after AES Brasil was classified as held-for-sale in Q2 2024. The result of which caused an overstatement of impairment expense that was calculated in Q2 2024 and Q3 2024. The Company evaluated the adjustments to impairment expense recorded in Q2 and Q3 2024, and after assessing the materiality of such adjustments, is restating its financial statements for each of the quarterly periods ended June 30, 2024 and September 30, 2024 in this 2024 Form 10-K for the year ended December 31, 2024. The correct held-for-sale value was used in the calculation of the gain on the AES Brasil disposal group recorded in Q4 2024.
Due to the discovery of this error, the Company's management identified a material weakness in the Company's internal control over financial reporting that existed at December 31, 2024. The company did not design effective controls over management's review of the disposition of AES Brasil, a complex non-routine transaction; specifically, due to the use of incomplete data used in the impairment calculation of the AES Brasil disposal group.
We have not filed, and do not intend to file, any amendments to our previously filed Quarterly Reports on Form 10-Q for the restated periods. Accordingly, investors should rely only on the financial information and other disclosures regarding the restated periods in this Form 10-K or in our future filings with the SEC as applicable, and not any previously issued or filed reports, earnings releases, or investor presentations. See Note 30—Restatement (unaudited) in the notes to the audited consolidated financial statements included in Item 8.—Financial Statements of this Form 10-K.
Restatement Overview
In connection with the restatement of the prior quarterly financial statements, the Company, in the 2024 Form 10-K:
(i) restated its unaudited Condensed Consolidated Balance Sheets as of June 30, 2024 and September 30, 2024; Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2024 and for the three and nine months ended September 30, 2024; Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2024 and for the three and nine months ended September 30, 2024; and Condensed Consolidated Statements of Changes in Equity for the six months ended June 30, 2024 and for the nine months ended September 30, 2024, in Note 30—Restatement (unaudited) to the unaudited consolidated financial statements, in Item 8.—Financial Statements of this Form 10-K;
(ii) added a risk factor relating to its material weakness in its internal control over financial reporting in Item 1A of this Form 10-K; and
(iii) updated its disclosures regarding its controls and procedures in Item 9A.—Controls and Procedures of this Form 10-K.
The financial information that has been previously filed or otherwise reported for the prior quarterly financial statements is superseded by the information in this Annual Report on Form 10-K. See Note 30—Restatement (unaudited) in the notes to the audited consolidated financial statements in Item 8.—Financial Statements of this Form 10-K for additional information on the restatement and the related financial statement impact.
Internal Control Considerations
In connection with the restatement described above, management has determined that the overstatement of impairment expense and related impact on the gain on disposition of the AES Brasil disposal group resulted in a material weakness in internal control over financial reporting as of December 31, 2024. For a discussion of management's considerations of the Company's disclosure controls and procedures, internal control over financial reporting, and material weakness identified, refer to Item 9A.—Controls and Procedures of this Form 10-K.
| 5 | 2024 Annual Report |
PART I
In this Annual Report the terms “AES,” “the Company,” “us,” or “we” refer to The AES Corporation and all of its subsidiaries and affiliates, collectively. The terms “The AES Corporation” and “Parent Company” refer only to the parent, publicly held holding company, The AES Corporation, excluding its subsidiaries and affiliates.
Forward-Looking Information and Risk Factor Summary
In this filing we make statements concerning our expectations, beliefs, plans, objectives, goals, strategies, and future events or performance. Such statements are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Although we believe that these forward-looking statements and the underlying assumptions are reasonable, we cannot assure you that they will prove to be correct.
Forward-looking statements involve a number of risks and uncertainties, and there are factors that could cause actual results to differ materially from those expressed or implied in our forward-looking statements. Some of those factors (in addition to others described elsewhere in this report and in subsequent securities filings) include:
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the economic climate, particularly the state of the economy in the areas in which we operate, which impacts demand for electricity in many of our key markets, including the fact that the global economy faces considerable uncertainty for the foreseeable future, which further increases many of the risks discussed in this Form 10-K;
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changes in the price of electricity at which our generation businesses sell into the wholesale market and our utility businesses purchase to distribute to their customers, and the success of our risk management practices, such as our ability to hedge our exposure to such market price risk;
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changes in the prices and availability of coal, gas and other fuels (including our ability to have fuel transported to our facilities) and the success of our risk management practices, such as our ability to hedge our exposure to such market price risk, and our ability to meet credit support requirements for fuel and power supply contracts;
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changes in and access to the financial markets, particularly changes affecting the availability and cost of capital in order to refinance existing debt and finance capital expenditures, acquisitions, investments and other corporate purposes;
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changes in inflation, demand for power, interest rates and foreign currency exchange rates, including our ability to hedge our interest rate and foreign currency risk;
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our ability to fulfill our obligations, manage liquidity and comply with covenants under our recourse and non-recourse debt, including our ability to manage our significant liquidity needs and to comply with covenants under our revolving credit facilities and other existing financing obligations;
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our ability to receive funds from our subsidiaries by way of dividends, fees, interest, loans or otherwise;
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changes in our or any of our subsidiaries' corporate credit ratings or the ratings of our or any of our subsidiaries' debt securities or preferred stock, and changes in the rating agencies' ratings criteria;
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our ability to purchase and sell assets at attractive prices and on other attractive terms;
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our ability to compete in markets where we do business;
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our ability to operate power generation, distribution and transmission facilities, including managing availability, outages and equipment failures;
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our ability to manage our operational and maintenance costs and the performance and reliability of our generating plants, including our ability to reduce unscheduled down times;
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our ability to enter into long-term contracts, which limit volatility in our results of operations and cash flow, such as PPAs, fuel supply, and other agreements and to manage counterparty credit risks in these agreements;
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variations in weather, especially mild winters and cooler summers in the areas in which we operate, the occurrence of difficult hydrological conditions for our hydropower plants, as well as hurricanes and other storms and disasters, wildfires and low levels of wind or sunlight for our wind and solar facilities;
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pandemics, or the future outbreak of any other highly infectious or contagious disease;
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the performance of our contracts by our contract counterparties, including suppliers or customers;
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severe weather and natural disasters;
| 6 | 2024 Annual Report |
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our ability to manage global supply chain disruptions;
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our ability to raise sufficient capital to fund development projects or to successfully execute our development projects;
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the success of our initiatives in renewable energy projects and energy storage projects;
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the availability of government incentives or policies that support the development of renewable energy generation projects;
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our ability to execute on our strategies or achieve expectations related to environmental, social, and governance matters;
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our ability to keep up with advances in technology;
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changes in number of customers or in customer usage;
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the operations of our joint ventures and equity method investments that we do not control;
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our ability to achieve reasonable rate treatment in our utility businesses;
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changes in laws, rules and regulations affecting our international businesses, particularly in developing countries;
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changes in laws, rules and regulations affecting our utilities businesses, including, but not limited to, regulations which may affect competition, the ability to recover net utility assets and other potential stranded costs by our utilities;
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changes in law resulting from new local, state, federal or international energy legislation and changes in political or regulatory oversight or incentives affecting our wind business and solar projects, our other renewables projects and our initiatives in GHG reductions and energy storage, including government policies or tax incentives;
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changes in environmental laws, including requirements for reduced emissions, GHG legislation, regulation, and/or treaties and CCR regulation and remediation;
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changes in tax laws, including U.S. tax reform, and challenges to our tax positions;
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the effects of litigation and government and regulatory investigations;
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the performance of our acquisitions;
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our ability to maintain adequate insurance;
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decreases in the value of pension plan assets, increases in pension plan expenses, and our ability to fund defined benefit pension and other postretirement plans at our subsidiaries;
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losses on the sale or write-down of assets due to impairment events or changes in management intent with regard to either holding or selling certain assets;
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changes in accounting standards, corporate governance and securities law requirements;
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our ability to maintain effective internal control over financial reporting;
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our ability to remediate the material weakness described in Item 9A;
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our ability to attract and retain talented directors, management and other personnel;
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cyber-attacks and information security breaches; and
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data privacy.
These factors, in addition to others described elsewhere in this Form 10-K, including those described under Item 1A.—Risk Factors and in subsequent securities filings, should not be construed as a comprehensive listing of factors that could cause results to vary from our forward-looking information.
We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. If one or more forward-looking statements are updated, no inference should be drawn that additional updates will be made with respect to those or other forward-looking statements.