Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Part A — Report of Independent Registered Public Accounting Firm

Our auditors are Ernst & Young LLP, located in Tysons, Virginia. Their PCAOB ID number is 42.

Part B — Financial Statements and Supplementary Data

117 | 2024 Annual Report

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of The AES Corporation

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of The AES Corporation (the Company) as of December 31, 2024, and 2023, the related consolidated statements of operations, comprehensive income (loss), changes in equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated March 10, 2025 expressed an adverse opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

118 | 2024 Annual Report

						Allocation of Earnings to Noncontrolling Interests in Tax Equity Partnerships
Description of the Matter						A significant number of renewables projects at AES Clean Energy have been financed with tax equity structures, where the tax equity investors receive a portion of the economic attributes of the facilities, including tax attributes, that vary over the life of the projects. When the allocation of earnings and losses, cash distributions, and tax benefits are not based on fixed ownership percentages, the Company uses the hypothetical liquidation at book value (HLBV) method to calculate the earnings attributable to noncontrolling interest for consolidated partnerships, when it is a reasonable approximation of the profit-sharing arrangement. As discussed in Note 18 to the consolidated financial statements, AES Clean Energy Development and AES Renewable Holdings sold noncontrolling interest to tax equity investors resulting in an increase of $866 million to noncontrolling interest in 2024. Auditing the allocation of earnings to noncontrolling interest holders for significant new tax equity partnerships was complex due to the evaluation of whether a newly established HLBV model used to allocate earnings appropriately reflects the unique substantive profit-sharing terms and features within each arrangement. A greater extent of audit effort and specialized skill and knowledge was required to evaluate compliance with the contractual provisions in each partnership agreement as well as the appropriateness of the investors’ capital account balances used in the HLBV models.
How We Addressed the Matter in Our Audit						We obtained an understanding, evaluated the design and tested the operating effectiveness of the controls over the Company’s process for developing the HLBV model for new tax equity arrangements. For example, we tested management’s review of substantive profit-sharing terms to evaluate whether they are properly reflected in the HLBV model for new arrangements. To test the allocation of earnings to noncontrolling interest holders for new significant tax equity partnerships, we read the related partnership agreements to understand the substantive profit-sharing provisions. We evaluated the HLBV models for consistency with the contractual provisions in the related partnership agreements and tested the capital contributions made by the tax equity investors and tax credits transferred by the partnership. We involved tax subject matter professionals to assist in evaluating the calculation of the investors’ capital accounts used in the HLBV models, including the proceeds attributable to the tax equity investor due to the recognition of investment tax credits and other adjustments as required by the U.S. Internal Revenue Code. Additionally, we tested the allocation of earnings by recalculating the hypothetical liquidation in the HLBV models based on the liquidation provisions of the related partnership agreements.
						Accounting for the Madison and Birdseye Acquisition
Description of the Matter						During 2024, the Company completed the acquisition of the Madison solar project and the Birdseye pipeline of early-stage renewable energy development projects. The transaction was accounted for as a business combination with a purchase price of $20 million paid in cash, as disclosed in Note 26 to the consolidated financial statements. The acquisition resulted in a bargain purchase gain of $20 million, primarily due to the determination that the Madison solar project would qualify for an increased investment tax credit (ITC) based on studies performed subsequent to the acquisition date, which resulted in a measurement period adjustment related to the increase of the fair value of assets acquired. Auditing the Company's accounting for the acquisition was complex due to the unobservable inputs used by management to determine the fair values of the significant assets acquired and liabilities assumed at the acquisition date, primarily consisting of the construction work in progress (CWIP) of $78 million and the off-market virtual power purchase agreement (VPPA) liability of $53 million. These fair value estimates were sensitive to the significant assumptions used, including the market PPA price, forecasted operating expenses, and the discount rates utilized, which affected the bargain purchase gain recognized.

119 | 2024 Annual Report

How We Addressed the Matter in Our Audit						We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company’s controls over the accounting for the acquisition. For example, we tested controls over the Company’s accounting considerations and the valuation of the significant assets acquired and liabilities assumed, including management’s review of the valuation models, the significant assumptions used to develop the estimates, and the completeness and accuracy of the data used in the valuations. To test the estimated fair value of the significant assets acquired and liabilities assumed, we performed audit procedures that included, among others, evaluating the Company's selection of the valuation methodology, evaluating the significant assumptions used, and evaluating the completeness and accuracy of the underlying data supporting the significant assumptions. For example, we compared the significant assumptions used by management to third-party industry and market data and to the Company’s historical operating results. We involved our internal valuation specialists to assist in our evaluation of the reasonableness of the Company’s valuation methodology and the discount rates used in the valuations. We also tested the Company’s measurement period adjustment, including assumptions used in determining the Madison solar project’s qualification for the ITC, and the Company’s assessment over the bargain purchase recognized in the transaction.

/s/ Ernst & Young LLP

We have served as the Company's auditor since 2008.

Tysons, Virginia

March 10, 2025

Consolidated Balance Sheets

December 31, 2024 and 2023

			2024						2023
			(in millions, except share and per share data)
ASSETS
CURRENT ASSETS
Cash and cash equivalents			$	1,524					$	1,426
Restricted cash			437						370
Short-term investments			79						395
Accounts receivable, net of allowance of $52 and $15, respectively			1,646						1,420
Inventory			593						712
Prepaid expenses			157						177
Other current assets, net of allowance of $0 and $14, respectively			1,533						1,387
Current held-for-sale assets			862						762
Total current assets			6,831						6,649
NONCURRENT ASSETS
Property, plant and equipment, net of accumulated depreciation of $8,701 and $8,602, respectively			33,166						29,958
Investments in and advances to affiliates			1,124						941
Debt service reserves and other deposits			78						194
Goodwill			345						348
Other intangible assets, net of accumulated amortization of $426 and $498, respectively			1,947						2,243
Deferred income taxes			365						396
Other noncurrent assets, net of allowance of $20 and $9, respectively			2,917						3,259
Noncurrent held-for-sale assets			633						811
Total noncurrent assets			40,575						38,150
TOTAL ASSETS			$	47,406					$	44,799
LIABILITIES, REDEEMABLE STOCK OF SUBSIDIARIES, AND EQUITY
CURRENT LIABILITIES
Accounts payable			$	1,654					$	2,199
Accrued interest			256						315
Accrued non-income taxes			249						278
Supplier financing arrangements			917						974
Accrued and other liabilities			1,246						1,334
Recourse debt			899						200
Non-recourse debt			2,688						3,932
Current held-for-sale liabilities			662						499
Total current liabilities			8,571						9,731
NONCURRENT LIABILITIES
Recourse debt			4,805						4,264
Non-recourse debt			20,626						18,482
Deferred income taxes			1,490						1,245
Other noncurrent liabilities			2,881						3,114
Noncurrent held-for-sale liabilities			391						514
Total noncurrent liabilities			30,193						27,619
Commitments and Contingencies (see Notes 13 and 14)
Redeemable stock of subsidiaries			938						1,464
EQUITY
THE AES CORPORATION STOCKHOLDERS’ EQUITY
Preferred stock (without par value, 50,000,000 shares authorized; 1,043,050 issued and outstanding at December 31, 2023)			—						838
Common stock ($0.01 par value, 1,200,000,000 shares authorized; 859,709,987 issued and 711,074,269 outstanding at December 31, 2024 and 819,051,591 issued and 669,693,234 outstanding at December 31, 2023)			9						8
Additional paid-in capital			5,913						6,355
Retained earnings (accumulated deficit)			293						(1,386)
Accumulated other comprehensive loss			(766)						(1,514)
Treasury stock, at cost (148,635,718 and 149,358,357 shares, respectively)			(1,805)						(1,813)
Total AES Corporation stockholders’ equity			3,644						2,488
NONCONTROLLING INTERESTS			4,060						3,497
Total equity			7,704						5,985
TOTAL LIABILITIES, REDEEMABLE STOCK OF SUBSIDIARIES, AND EQUITY			$	47,406					$	44,799

See Accompanying Notes to Consolidated Financial Statements.

Consolidated Statements of Operations

Years ended December 31, 2024, 2023, and 2022

			2024						2023						2022
			(in millions, except per share amounts)
Revenue:
Non-Regulated			$	8,756					$	9,245					$	9,079
Regulated			3,522						3,423						3,538
Total revenue			12,278						12,668						12,617
Cost of Sales:
Non-Regulated			(6,985)						(7,173)						(6,907)
Regulated			(2,979)						(2,991)						(3,162)
Total cost of sales			(9,964)						(10,164)						(10,069)
Operating margin			2,314						2,504						2,548
General and administrative expenses			(288)						(255)						(207)
Interest expense			(1,485)						(1,319)						(1,117)
Interest income			381						551						389
Loss on extinguishment of debt			(17)						(63)						(15)
Other expense			(175)						(99)						(68)
Other income			156						89						102
Gain (loss) on disposal and sale of business interests			351						134						(9)
Goodwill impairment expense			—						(12)						(777)
Asset impairment expense			(374)						(1,067)						(763)
Foreign currency transaction gains (losses)			31						(359)						(77)
Other non-operating expense			—						—						(175)
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE TAXES AND EQUITY IN EARNINGS OF AFFILIATES			894						104						(169)
Income tax expense			(59)						(261)						(265)
Net equity in losses of affiliates			(26)						(32)						(71)
INCOME (LOSS) FROM CONTINUING OPERATIONS			809						(189)						(505)
Gain (loss) from disposal of discontinued businesses, net of income tax benefit (expense) of $(7), $7, and $0, respectively			(7)						7						—
NET INCOME (LOSS)			802						(182)						(505)
Less: Net loss (income) attributable to noncontrolling interests and redeemable stock of subsidiaries			877						431						(41)
NET INCOME (LOSS) ATTRIBUTABLE TO THE AES CORPORATION			$	1,679					$	249					$	(546)
AMOUNTS ATTRIBUTABLE TO THE AES CORPORATION COMMON STOCKHOLDERS:
Income (loss) from continuing operations, net of tax			$	1,686					$	242					$	(546)
Income (loss) from discontinued operations, net of tax			(7)						7						—
NET INCOME (LOSS) ATTRIBUTABLE TO THE AES CORPORATION			$	1,679					$	249					$	(546)
BASIC EARNINGS PER SHARE:
Income (loss) from continuing operations attributable to The AES Corporation common stockholders, net of tax			$	2.39					$	0.36					$	(0.82)
Income (loss) from discontinued operations attributable to The AES Corporation common stockholders, net of tax			(0.01)						0.01						—
NET INCOME (LOSS) ATTRIBUTABLE TO THE AES CORPORATION COMMON STOCKHOLDERS			$	2.38					$	0.37					$	(0.82)
DILUTED EARNINGS PER SHARE:
Income (loss) from continuing operations attributable to The AES Corporation common stockholders, net of tax			$	2.37					$	0.34					$	(0.82)
Income (loss) from discontinued operations attributable to The AES Corporation common stockholders, net of tax			(0.01)						0.01						—
NET INCOME (LOSS) ATTRIBUTABLE TO THE AES CORPORATION COMMON STOCKHOLDERS			$	2.36					$	0.35					$	(0.82)

See Accompanying Notes to Consolidated Financial Statements.

Consolidated Statements of Comprehensive Income (Loss)

Years ended December 31, 2024, 2023, and 2022

			2024						2023						2022
			(in millions)
NET INCOME (LOSS)			$	802					$	(182)					$	(505)
Foreign currency translation activity:
Foreign currency translation adjustments, net of $0 income tax for all periods			(236)						146						(36)
Reclassification to earnings, net of $0 income tax for all periods			649						—						—
Total foreign currency translation adjustments			413						146						(36)
Derivative activity:
Change in fair value of derivatives, net of income tax benefit (expense) of $(98), $3, and $(191), respectively			463						(1)						711
Reclassification to earnings, net of income tax expense of $8, $9, and $9, respectively			30						(73)						59
Total change in fair value of derivatives			493						(74)						770
Pension activity:
Change in pension adjustments due to prior service cost, net of $0 income tax for all periods			—						1						—
Change in pension adjustments due to net actuarial gain (loss) for the period, net of income tax benefit (expense) of $2, $0, and $(5), respectively			(5)						(4)						13
Reclassification to earnings, net of income tax expense of $1, $0, and $1, respectively			15						—						1
Total pension adjustments			10						(3)						14
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						—						—
Total change in fair value option liabilities			3						—						—
OTHER COMPREHENSIVE INCOME			919						69						748
COMPREHENSIVE INCOME (LOSS)			1,721						(113)						243
Less: Comprehensive loss (income) attributable to noncontrolling interests and redeemable stock of subsidiaries			208						498						(127)
COMPREHENSIVE INCOME ATTRIBUTABLE TO THE AES CORPORATION			$	1,929					$	385					$	116

See Accompanying Notes to Consolidated Financial Statements.

Consolidated Statements of Changes in Equity

Years ended December 31, 2024, 2023, and 2022

			THE AES CORPORATION STOCKHOLDERS
			Preferred Stock												Common Stock												Treasury Stock												Additional Paid-In Capital						Accumulated Deficit						Accumulated Other Comprehensive Loss						Noncontrolling Interests (1)
(in millions)			Shares						Amount						Shares						Amount						Shares						Amount
Balance at December 31, 2021			1.0						$	838					818.7						$	8					152.0						$	(1,845)					$	7,106					$	(1,089)					$	(2,220)					$	1,769
Net income (loss)			—						—						—						—						—						—						—						(546)						—						128
Foreign currency translation adjustments and reclassification to earnings, net of income tax			—						—						—						—						—						—						—						—						(37)						1
Change in fair value of derivatives and reclassification to earnings, net of income tax			—						—						—						—						—						—						—						—						689						41
Change in pension adjustments and reclassification to earnings, net of income tax			—						—						—						—						—						—						—						—						10						4
Total other comprehensive income			—						—						—						—						—						—						—						—						662						46
Distributions to noncontrolling interests			—						—						—						—						—						—						—						—						—						(200)
Acquisitions of noncontrolling interests			—						—						—						—						—						—						(78)						—						(80)						(387)
Contributions from noncontrolling interests			—						—						—						—						—						—						—						—						—						178
Sales to noncontrolling interests															—						—						—						—						78						—						(2)						473
Issuance of preferred shares in subsidiaries			—						—						—						—						—						—						—						—						—						60
Dividends declared on common stock ($0.6399/share)			—						—						—						—						—						—						(428)						—						—						—
Issuance and exercise of stock-based compensation benefit plans, net of income tax			—						—						0.1						—						(2.0)						23						10						—						—						—
Balance at December 31, 2022			1.0						$	838					818.8						$	8					150.0						$	(1,822)					$	6,688					$	(1,635)					$	(1,640)					$	2,067
Net income (loss)			—						—						—						—						—						—						—						249						—						(372)
Foreign currency translation adjustments and reclassification to earnings, net of income tax			—						—						—						—						—						—						—						—						136						9
Change in fair value of derivatives and reclassification to earnings, net of income tax			—						—						—						—						—						—						—						—						3						(77)
Change in pension adjustments and reclassification to earnings, net of income tax			—						—						—						—						—						—						—						—						(3)						—
Total other comprehensive income (loss)			—						—						—						—						—						—						—						—						136						(68)
Distributions to noncontrolling interests			—						—						—						—						—						—						—						—						—						(261)
Acquisitions of noncontrolling interests			—						—						—						—						—						—						24						—						—						(44)
Sales to noncontrolling interests			—						—						—						—						—						—						85						—						(10)						1,754
Issuance of preferred shares in subsidiaries			—						—						—						—						—						—						—						—						—						421
Dividends declared on AES common stock ($0.6702/share)			—						—						—						—						—						—						(449)						—						—						—
Issuance and exercise of stock-based compensation benefit plans, net of income tax			—						—						0.3						—						(0.6)						9						7						—						—						—
Balance at December 31, 2023			1.0						$	838					819.1						$	8					149.4						$	(1,813)					$	6,355					$	(1,386)					$	(1,514)					$	3,497
Net income (loss)			—						—						—						—						—						—						—						1,679						—						(791)
Foreign currency translation adjustments and reclassification to earnings, net of income tax			—						—						—						—						—						—						—						—						(88)						502
Change in fair value of derivatives and reclassification to earnings, net of income tax			—						—						—						—						—						—						—						—						333						86
Change in pension adjustments and reclassification to earnings, net of income tax			—						—						—						—						—						—						—						—						2						8
Change in fair value option liabilities, net of income tax			—						—						—						—						—						—						—						—						3						—
Total other comprehensive income (loss)			—						—						—						—						—						—						—						—						250						596
Reclassification of redeemable stock of subsidiaries to noncontrolling interests (2)			—						—						—						—						—						—						—						—						—						736
Disposition of business interests			—						—						—						—						—						—						14						—						—						(1,399)
Distributions to noncontrolling interests			—						—						—						—						—						—						—						—						—						(368)
Acquisitions of noncontrolling interests			—						—						—						—						—						—						(802)						—						498						304
Contributions from noncontrolling interests			—						—						—						—						—						—						—						—						—						411
Sales to noncontrolling interests			—						—						—						—						—						—						(19)						—						—						1,074
Conversion of Corporate Units to shares of common stock			(1.0)						(838)						40.5						1						—						—						838						—						—						—
Dividends declared on AES common stock ($0.6935/share)			—						—						—						—						—						—						(493)						—						—						—
Purchase of treasury stock			—						—						—						—						0.1						(3)						3						—						—						—
Issuance and exercise of stock-based compensation benefit plans, net of income tax			—						—						0.1						—						(0.9)						11						17						—						—						—
Balance at December 31, 2024			—						$	—					859.7						$	9					148.6						$	(1,805)					$	5,913					$	293					$	(766)					$	4,060

(1) Excludes redeemable stock of subsidiaries. See Note 17—Redeemable Stock of Subsidiaries.

(2) Related to the reclassification of AES Clean Energy Development common stock and certain tax equity partnerships at AES Clean Energy from Redeemable stock of subsidiaries to Noncontrolling interests. See Note 17—Redeemable Stock of Subsidiaries.

See Accompanying Notes to Consolidated Financial Statements.

Consolidated Statements of Cash Flows

Years ended December 31, 2024, 2023, and 2022

			2024						2023						2022
OPERATING ACTIVITIES:			(in millions)
Net income (loss)			$	802					$	(182)					$	(505)
Adjustments to net income (loss):
Depreciation, amortization, and accretion of AROs			1,264						1,147						1,072
Emissions allowance expense			238						264						425
Loss (gain) on realized/unrealized derivatives			(143)						143						127
Loss (gain) on disposal and sale of business interests			(351)						(134)						9
Impairment expense			374						1,079						1,715
Loss on realized/unrealized foreign currency			108						331						58
Deferred income tax expense (benefit), net of tax credit transfer proceeds allocated to AES			111						(54)						4
Tax credit transfer proceeds allocated to noncontrolling interests			220						—						—
Other			221						130						99
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable			(361)						161						(532)
(Increase) decrease in inventory			86						306						(417)
(Increase) decrease in prepaid expenses and other current assets			269						38						(40)
(Increase) decrease in other assets			(73)						5						433
Increase (decrease) in accounts payable and other current liabilities			(40)						(132)						470
Increase (decrease) in income tax payables, net and other tax payables			(134)						(109)						(51)
Increase (decrease) in other liabilities			161						41						(152)
Net cash provided by operating activities			2,752						3,034						2,715
INVESTING ACTIVITIES:
Capital expenditures			(7,392)						(7,724)						(4,551)
Acquisitions of business interests, net of cash and restricted cash acquired			(246)						(542)						(243)
Proceeds from the sale of business interests, net of cash and restricted cash sold			423						254						1
Sale of short-term investments			796						1,318						1,049
Purchase of short-term investments			(818)						(937)						(1,492)
Contributions and loans to equity affiliates			(103)						(178)						(232)
Affiliate repayments and returns of capital			6						5						149
Purchase of emissions allowances			(206)						(268)						(488)
Other investing			(160)						(116)						(29)
Net cash used in investing activities			(7,700)						(8,188)						(5,836)
FINANCING ACTIVITIES:
Borrowings under the revolving credit facilities			6,806						7,103						5,424
Repayments under the revolving credit facilities			(6,197)						(6,285)						(4,687)
Issuance of recourse debt			1,450						1,400						200
Repayments of recourse debt			(200)						(500)						(29)
Issuance of non-recourse debt			7,236						4,521						5,788
Repayments of non-recourse debt			(4,306)						(2,495)						(3,144)
Payments for financing fees			(138)						(142)						(120)
Purchases under supplier financing arrangements			1,786						1,858						1,042
Repayments of obligations under supplier financing arrangements			(1,794)						(1,491)						(432)
Distributions to noncontrolling interests			(430)						(323)						(265)
Acquisitions of noncontrolling interests			—						(127)						(602)
Contributions from noncontrolling interests			222						102						233
Sales to noncontrolling interests			1,247						1,938						742
Issuance of preferred shares in subsidiaries			—						421						60
Dividends paid on AES common stock			(483)						(444)						(422)
Payments for financed capital expenditures			(127)						(10)						(33)
Other financing			(109)						(121)						3
Net cash provided by financing activities			4,963						5,405						3,758
Effect of exchange rate changes on cash, cash equivalents and restricted cash			(63)						(270)						(56)
(Increase) decrease in cash, cash equivalents and restricted cash of held-for-sale businesses			97						(78)						22
Total increase (decrease) in cash, cash equivalents and restricted cash			49						(97)						603
Cash, cash equivalents and restricted cash, beginning			1,990						2,087						1,484
Cash, cash equivalents and restricted cash, ending			$	2,039					$	1,990					$	2,087

Consolidated Statements of Cash Flows (continued)

Years ended December 31, 2024, 2023, and 2022

			2024						2023						2022
			(in millions)
SUPPLEMENTAL DISCLOSURES:
Cash payments for interest, net of amounts capitalized			$	1,268					$	1,317					$	928
Cash payments for income taxes, net of refunds			345						301						271
SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
Conversion of Corporate Units to shares of common stock (see Note 18)			838						—						—
Noncash recognition of new operating and financing leases (see Note 15)			456						225						134
Noncash contributions from noncontrolling interests			288						60						—
Liabilities derecognized upon completion of remaining performance obligation for sale of Warrior Run receivables (see Note 21)			273						—						—
Dividends declared but not yet paid			125						116						111
Initial recognition of contingent consideration for acquisitions (see Note 26)			76						239						24
Noncash contributions to equity affiliates related to tax credit transfers			—						52						—

See Accompanying Notes to Consolidated Financial Statements.

126 | Notes to Consolidated Financial Statements | December 31, 2024, 2023 and 2022

Notes to Consolidated Financial Statements

1. GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The AES Corporation is a holding company (the "Parent Company") that, through its subsidiaries and affiliates, (collectively, "AES" or "the Company") operates a geographically diversified portfolio of electricity generation and distribution businesses. Generally, the liabilities of individual operating entities are non-recourse to the Parent Company and are isolated to the operating entities. Most of our operating entities are structured as limited liability entities, which limit the liability of shareholders. The structure is generally the same regardless of whether a subsidiary is consolidated under a voting or variable interest model. The preparation of these consolidated financial statements is in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP").

PRINCIPLES OF CONSOLIDATION — The consolidated financial statements of the Company include the accounts of The AES Corporation and its controlled subsidiaries. Furthermore, VIEs in which the Company has an ownership interest and is the primary beneficiary, thus controlling the VIE, have been consolidated. Certain consolidated VIEs have arrangements which may require the Company to contribute additional equity totaling $1.7 billion. Such contributions are generally contingent upon the underlying asset achieving specific project milestones. Intercompany transactions and balances are eliminated in consolidation. Investments in entities where the Company has the ability to exercise significant influence, but not control, are accounted for using the equity method of accounting.

NONCONTROLLING INTERESTS — Noncontrolling interests are classified as a separate component of equity in the Consolidated Balance Sheets and Consolidated Statements of Changes in Equity. Additionally, net income and comprehensive income attributable to noncontrolling interests are reflected separately from consolidated net income and comprehensive income on the Consolidated Statements of Operations and Consolidated Statements of Changes in Equity. Any change in ownership of a subsidiary while the controlling financial interest is retained is accounted for as an equity transaction between the controlling and noncontrolling interests. Losses continue to be attributed to the noncontrolling interests, even when the noncontrolling interests' basis has been reduced to zero.

Noncontrolling interests with redemption features that are not solely within the control of the issuer are classified as temporary equity and are included in Redeemable stock of subsidiaries on the Consolidated Balance Sheets. Generally, initial measurement will be at fair value. The subsequent allocation of income and dividends is classified in temporary equity. Subsequent measurement and classification vary depending on whether the instrument is probable of becoming redeemable. For those securities that are currently redeemable or where it is probable that the instrument will become redeemable, AES recognizes any changes from the carrying value to redemption value at each reporting period against retained earnings or additional paid-in capital in the absence of retained earnings; such adjustments are classified in temporary equity. When the equity instrument is not probable of becoming redeemable, no adjustment to the carrying value is recognized. Instruments that are mandatorily redeemable are classified as a liability.

EQUITY METHOD INVESTMENTS — Investments in entities over which the Company has the ability to exercise significant influence, but not control, are accounted for using the equity method of accounting and reported in Investments in and advances to affiliates on the Consolidated Balance Sheets. The Company’s proportionate share of the net income or loss of these companies is included in Net equity in losses of affiliates on the Consolidated Statements of Operations*.*

The Company utilizes the cumulative earnings approach to determine whether distributions received from equity method investees are returns on investment or returns of investment. The Company discontinues the application of the equity method when an investment is reduced to zero and the Company is not otherwise committed to provide further financial support to the investee. The Company resumes the application of the equity method accounting to the extent that net income is greater than the share of net losses not previously recorded.

Upon acquiring the investment, we determine the fair value of the identifiable assets and assumed liabilities and the basis difference between the fair value and the carrying amount of each corresponding asset or liability in the financial statements of the investee. The AES share of the amortization of the basis difference is recognized in Net equity in losses of affiliates in the Consolidated Statements of Operations over the life of the asset or liability.

127 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

The Company periodically assesses if impairment indicators exist at our equity method investments. When an impairment is observed, any excess of the carrying amount over its estimated fair value is recognized as impairment expense when the loss in value is deemed other-than-temporary and included in Other non-operating expense in the Consolidated Statements of Operations.

BUSINESS INTERESTS — Acquisitions and disposals of business interests are generally transactions pertaining to operational legal entities, which may be accounted for as a consolidated business, an asset acquisition, or an equity method investment. Any gains or losses upon the completion of disposals, which include reclassification of cumulative translation adjustments, are recognized in Gain (loss) on disposal and sale of business interests in the Consolidated Statements of Operations upon completion of the sale.

ALLOCATION OF EARNINGS — Certain of the Company's businesses are subject to profit-sharing arrangements where the allocation of earnings and losses, cash distributions, and tax benefits are not based on fixed ownership percentages.

Many of these arrangements exist for certain U.S. renewable generation partnerships to designate different allocations of value among investors, where the allocations change in form or percentage over the life of the partnership. For these businesses, the Company uses the HLBV method when it is a reasonable approximation of the profit-sharing arrangement. The HLBV method calculates the proceeds that would be attributable to each partner based on the liquidation provisions of the respective operating partnership agreement if the partnership was to be liquidated at book value at the balance sheet date. Each partner’s share of income in the period is equal to the change in the amount of net equity they are legally able to claim based on a hypothetical liquidation of the entity at the end of a reporting period compared to the beginning of that period, adjusted for any capital transactions.

The HLBV method is used both to allocate the equity earnings attributable to AES when the Company accounts for the renewables business as an equity method investment and to calculate the earnings attributable to noncontrolling interest when the business is consolidated by AES. In the early months of operations of a renewable generation facility where HLBV results in a significant decrease in the hypothetical liquidation proceeds attributable to the tax equity investor due to the recognition of ITCs or other adjustments as required by the U.S. Internal Revenue Code, the Company records the impact (sometimes referred to as the ‘Day one gain’) to income in the same period.

In some other arrangements, consolidated subsidiaries are subject to profit-sharing arrangements where cash distributions to noncontrolling interest holders are based on a stated internal rate of return, among other criteria. In many of these arrangements, earnings are allocated to noncontrolling interest holders based on the stated internal rate of return to the noncontrolling interest holders for any given period.

USE OF ESTIMATES — U.S. GAAP requires the Company to make estimates and assumptions that affect the asset and liability balances reported as of the date of the consolidated financial statements, as well as the revenues and expenses recognized during the reporting period. Actual results could differ from those estimates. Items subject to such estimates and assumptions include: estimated useful lives of long-lived assets; asset retirement obligations; impairment of goodwill, long-lived assets and equity method investments; valuation allowances for receivables and deferred tax assets; the recoverability of regulatory assets; regulatory liabilities; the fair value of financial instruments; the fair value of assets and liabilities acquired as business combinations or as asset acquisitions by variable interest entities; contingent consideration arising from business combinations or asset acquisitions by variable interest entities; the measurement of equity method investments or noncontrolling interest using the HLBV method for certain renewable generation partnerships; pension liabilities; the incremental borrowing rates used in the determination of lease liabilities; the determination of lease and non-lease components in certain generation contracts; environmental liabilities; temporary equity; and potential litigation claims and settlements.

HELD-FOR-SALE DISPOSAL GROUPS — A disposal group classified as held-for-sale is reflected on the balance sheet at the lower of its carrying amount or estimated fair value less costs to sell. A loss is recognized if the carrying amount of the disposal group exceeds its estimated fair value less costs to sell. If the fair value of the disposal group subsequently exceeds the carrying amount while the disposal group is still held-for-sale, any impairment expense previously recognized will be reversed up to the lesser of the previously recognized expense or the subsequent excess.

Assets and liabilities related to a disposal group classified as held-for-sale are segregated in the balance sheet in the period in which the disposal group is classified as held-for-sale. Assets and liabilities of held-for-sale disposal groups are classified as current when they are expected to be settled or disposed of within twelve months and as

128 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

noncurrent when they are not expected to be settled or disposed of within the next twelve months. Transactions between the held-for-sale disposal group and businesses that are expected to continue to exist after the disposal are not eliminated to appropriately reflect the continuing operations and balances held-for-sale. See Note 25—Held-for-Sale and Dispositions for further information.

DISCONTINUED OPERATIONS — Discontinued operations reporting occurs only when the disposal of a business or a group of businesses represents a strategic shift that has (or will have) a major effect on the Company's operations and financial results. The Company reports financial results for discontinued operations separately from continuing operations to distinguish the financial impact of disposal transactions from ongoing operations. Prior period amounts in the Consolidated Statements of Operations and Consolidated Balance Sheets are retrospectively revised to reflect the businesses determined to be discontinued operations. The cash flows of businesses that are determined to be discontinued operations are included within the relevant categories within operating, investing and financing activities on the face of the Consolidated Statements of Cash Flows.

Transactions between the businesses determined to be discontinued operations and businesses that are expected to continue to exist after the disposal are not eliminated to appropriately reflect the continuing operations and balances held-for-sale. The results of discontinued operations include any gain or loss recognized on closing or adjustment of the carrying amount to fair value less costs to sell, including gains or losses associated with noncontrolling interests upon completion of the disposal transaction. Adjustments related to components previously reported as discontinued operations under prior accounting guidance are presented as discontinued operations in the current period even if the disposed-of component to which the adjustments are related would not meet the criteria for presentation as a discontinued operation under current guidance.

FAIR VALUE — Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly, hypothetical transaction between market participants at the measurement date, or exit price. The Company applies the fair value measurement accounting guidance to financial assets and liabilities in determining the fair value of investments in marketable debt and equity securities, included in the Consolidated Balance Sheet line items Short-term investments and Other noncurrent assets; derivative assets, included in Other current assets and Other noncurrent assets; and, derivative liabilities, included in Accrued and other liabilities (current) and Other noncurrent liabilities. The Company applies the fair value measurement guidance to nonfinancial assets and liabilities upon the acquisition of a business or assets, or in conjunction with the measurement of an asset retirement obligation or a potential impairment loss on an asset group, equity method investments, or goodwill.

When determining the fair value measurements for assets and liabilities required to be reflected at their fair values, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the assets or liabilities, such as inherent risk, transfer restrictions and risk of nonperformance. The Company is prohibited from including transaction costs and any adjustments for blockage factors in determining fair value.

In determining fair value measurements, the Company maximizes the use of observable inputs and minimizes the use of unobservable inputs. Assets and liabilities are categorized within a fair value hierarchy based upon the lowest level of input that is significant to the fair value measurement:

• Level 1: Quoted prices in active markets for identical assets or liabilities;

• Level 2: Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; or

• Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair values of the assets or liabilities.

Any transfers between all levels within the fair value hierarchy levels are recognized at the end of the reporting period.

CASH AND CASH EQUIVALENTS — The Company considers unrestricted cash on hand, cash balances not restricted as to withdrawal or usage, deposits in banks, certificates of deposit and short-term marketable securities with original maturities of three months or less to be cash and cash equivalents.

RESTRICTED CASH AND DEBT SERVICE RESERVES — Cash balances restricted as to withdrawal or usage, primarily via contract, are considered restricted cash.

129 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

The following table provides a summary of cash, cash equivalents, and restricted cash amounts reported on the Consolidated Balance Sheets that reconcile to the total of such amounts as shown on the Consolidated Statements of Cash Flows (in millions):

			December 31, 2024						December 31, 2023
Cash and cash equivalents			$	1,524					$	1,426
Restricted cash			437						370
Debt service reserves and other deposits			78						194
Cash, Cash Equivalents and Restricted Cash			$	2,039					$	1,990

INVESTMENTS IN MARKETABLE SECURITIES — The Company's marketable investments are primarily certificates of deposit, government debt securities and money market funds.

Short-term investments consist of marketable equity securities and debt securities with original maturities in excess of three months with remaining maturities of less than one year. Marketable debt securities where the Company has both the positive intent and ability to hold to maturity are classified as held-to-maturity and are carried at amortized cost, net of any allowance for credit losses in accordance with ASC 326. Remaining marketable debt securities are classified as available-for-sale or trading and are carried at fair value.

Unrealized gains or losses on available-for-sale debt securities that are not credit-related are reflected in AOCL, a separate component of equity, and the Consolidated Statements of Comprehensive Income (Loss). Any credit-related impairments are recognized as an allowance with a corresponding impact recognized as a credit loss in Other expense. Unrealized gains or losses on equity investments are reported in Other income. Interest and dividends on investments are reported in Interest income and Other income, respectively. Gains and losses on sales of investments are determined using the specific identification method.

ACCOUNTS AND NOTES RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES — Accounts and notes receivable are carried at amortized cost. The Company periodically assesses the collectability of accounts receivable, considering factors such as historical collection experience, the age of accounts receivable and other currently available evidence supporting collectability, and records an allowance for credit losses for the estimated uncollectible amount as appropriate. Credit losses on accounts and notes receivable are generally recognized in Cost of Sales. Certain of our businesses charge interest on accounts receivable. Interest income is recognized on an accrual basis. When collection of such interest is not reasonably assured, interest income is recognized as cash is received. Individual accounts and notes receivable are written off when they are no longer deemed collectible.

INVENTORY — Inventory primarily consists of fuel and other raw materials used to generate power, and operational spare parts and supplies used to maintain power generation and distribution facilities. Inventory is carried at lower of cost or net realizable value. Cost is the sum of the purchase price and expenditures incurred to bring the inventory to its existing location. Inventory is primarily valued using the average cost method. Generally, if it is expected fuel inventory will not be recovered through revenue earned from power generation, an impairment is recognized to reflect the fuel at net realizable value. The carrying amount of spare parts and supplies is typically reduced only in instances where the items are considered obsolete.

LONG-LIVED ASSETS — Long-lived assets include property, plant and equipment, assets under finance leases and intangible assets subject to amortization (i.e., finite-lived intangible assets).

Property, plant and equipment — Property, plant and equipment are stated at cost, net of accumulated depreciation. The cost of renewals and improvements that extend the useful life of property, plant and equipment are capitalized.

Construction progress payments, engineering costs, insurance costs, salaries, interest and other costs directly relating to construction in progress are capitalized during the construction period, provided the completion of the construction project is deemed probable, or expensed at the time construction completion is determined to no longer be probable. The continued capitalization of such costs is subject to risks related to successful completion, including those related to government approvals, site identification, financing, construction permitting and contract compliance. Assets are placed in service when an asset group is ready for its intended use. Government subsidies, refundable income tax credits that are accounted for as government grants, and liquidated damages recovered for construction delays are recorded as a reduction to property, plant and equipment and reflected in cash flows from investing activities. Maintenance and repairs are charged to expense as incurred.

Depreciation, after consideration of salvage value and asset retirement obligations, is computed using the straight-line method over the estimated useful lives of the assets, which are determined on a composite or

130 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

component basis. Capital spare parts, including rotable spare parts, are included in electric generation and distribution assets. If the spare part is considered a component, it is depreciated over its useful life after the part is placed in service. If the spare part is deemed part of a composite asset, the part is depreciated over the composite useful life even when being held as a spare part.

Certain of the Company's subsidiaries operate under concession contracts. Certain estimates are utilized to determine depreciation expense for the subsidiaries, including the useful lives of the property, plant and equipment and the amounts to be recovered at the end of the concession contract. The amounts to be recovered under these concession contracts are based on estimates that are inherently uncertain and actual amounts recovered may differ from those estimates. These concession contracts are not within the scope of ASC 853.

Intangible Assets Subject to Amortization — Finite-lived intangible assets are amortized over their useful lives which range from 1 – 50 years and are included in the Consolidated Balance Sheet line item Other intangible assets. Net assets acquired in a business combination recognized as project development intangibles represent the value attributable to in-process development associated with future operating assets. An intangible asset is recognized when construction activities have yet to commence and the development work completed consists of contractual arrangements which are intangible in nature, such as permitting, contracting, and surveying. Amortization is computed using the straight-line method beginning when a project is placed in service and continuing over the estimated useful lives of the assets. The Company accounts for purchased emission allowances as intangible assets and records an expense when they are utilized or sold. Granted emission allowances are valued at zero.

Impairment of Long-lived Assets — When circumstances indicate the carrying amount of long-lived assets in a held-for-use asset group may not be recoverable, the Company evaluates the assets for potential impairment using internal projections of undiscounted cash flows resulting from the use and eventual disposal of the assets. Events or changes in circumstances that may necessitate a recoverability evaluation include, but are not limited to, adverse changes in the regulatory environment, unfavorable changes in power prices or fuel costs, increased competition due to additional capacity in the grid, technological advancements, declining trends in demand, or an expectation it is more likely than not that the asset will be disposed of before the end of its previously estimated useful life. If the carrying amount of the assets exceeds the undiscounted cash flows, an impairment expense is recognized for the amount by which the carrying amount of the asset group exceeds its fair value (subject to the carrying amount not being reduced below fair value for any individual long-lived asset that is determinable without undue cost and effort). An impairment expense for certain assets may be reduced by the establishment of a regulatory asset if recovery through approved rates is probable.

DEBT ISSUANCE COSTS — Costs incurred in connection with the issuance of long-term debt are deferred and presented as a direct reduction from the face amount of that debt and amortized over the related financing period using the effective interest method. Debt issuance costs related to a line-of-credit or revolving credit facility are deferred and presented as an asset and amortized over the related financing period. Make-whole payments in connection with early debt retirements are classified as cash flows used in financing activities.

GOODWILL AND INDEFINITE-LIVED INTANGIBLE ASSETS — The Company evaluates goodwill and indefinite-lived intangible assets for impairment on an annual basis and whenever events or changes in circumstances necessitate an evaluation for impairment. The Company's annual impairment testing date is October 1st.

Goodwill — Goodwill represents the excess of the purchase price of the business acquisition over the fair value of identifiable net assets acquired. Goodwill resulting from an acquisition is assigned to the reporting units that are expected to benefit from the synergies of the acquisition. Generally, each AES business with a goodwill balance constitutes a reporting unit as they are not similar to other businesses in a segment nor are they reported to segment management together with other businesses.

Goodwill is evaluated for impairment either under the qualitative assessment option or the quantitative test option to determine the fair value of the reporting unit. If goodwill is determined to be impaired, an impairment loss measured at the amount by which the reporting unit’s carrying amount exceeds its fair value, not to exceed the carrying amount of goodwill, is recorded.

Indefinite-Lived Intangible Assets — The Company's indefinite-lived intangible assets primarily include land-use rights and transmission rights. Indefinite-lived intangible assets are evaluated for impairment either under the qualitative assessment option or by performing the quantitative impairment test. If the carrying amount of an

131 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

intangible asset being tested for impairment exceeds its fair value, the excess is recognized as impairment expense.

ACCOUNTS PAYABLE AND OTHER ACCRUED LIABILITIES — Accounts payable consists of amounts due to trade creditors related to the Company's core business operations. These payables include amounts owed to vendors and suppliers for items such as energy purchased for resale, fuel, maintenance, inventory and other raw materials. The remaining balance of other accrued liabilities includes items such as income taxes, regulatory liabilities, legal contingencies, environmental remediation costs, and employee-related costs, including payroll, and benefits.

REGULATORY ASSETS AND LIABILITIES — The Company recognizes assets and liabilities that result from regulated ratemaking processes. Regulatory assets generally represent incurred costs which have been deferred due to the probable future recovery via customer rates. Generally, returns earned on regulatory assets are reflected in the Consolidated Statements of Operations within Interest income. Regulatory liabilities generally represent obligations to refund customers. Management continually assesses whether regulatory assets are probable of future recovery and regulatory liabilities are probable of future payment by considering factors such as applicable regulatory changes, recent rate orders applicable to other regulated entities, and the status of any pending or potential deregulation legislation. If future recovery of costs previously deferred ceases to be probable, the related regulatory assets are written off and recognized in income from continuing operations.

PENSION AND OTHER POSTRETIREMENT PLANS — The Company recognizes in its Consolidated Balance Sheets an asset or liability reflecting the funded status of pension and other postretirement plans with current-year changes in actuarial gains or losses recognized in AOCL, except for those plans at certain of the Company's regulated utilities that can recover portions of their pension and postretirement obligations through future rates. All plan assets are recorded at fair value and categorized by level within the fair value hierarchy as described in Note 1—General and Summary of Significant Accounting Policies—Fair Value. AES follows the measurement date provisions of the accounting guidance, which require a year-end measurement date of plan assets and obligations for all defined benefit plans.

INCOME TAXES — Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of the existing assets and liabilities, and their respective income tax basis. The Company establishes a valuation allowance when it is more likely than not that all or a portion of a deferred tax asset will not be realized. The Company's tax positions are evaluated under a more likely than not recognition threshold and measurement analysis before they are recognized for financial statement reporting.

Uncertain tax positions have been classified as noncurrent income tax liabilities unless expected to be paid within one year. The Company's policy for interest and penalties related to income tax exposures is to recognize interest and penalties as a component of the provision for income taxes in the Consolidated Statements of Operations.

The Company has elected to treat GILTI as an expense in the period in which the tax is accrued. Accordingly, no deferred tax assets or liabilities are recorded related to GILTI.

The Company applies the flow-through method to account for its investment tax credits.

The Company's accounting policy for releasing the income tax effects from AOCL occurs on a portfolio basis.

The Company has elected an accounting policy not to consider the effects of being subject to the corporate alternative minimum tax in future periods when assessing the realizability of our deferred tax assets, carryforwards, and tax credits. Any effect on the realization of deferred tax assets will be recognized in the period they arise.

Historically, the Company has financed renewables projects with investments from tax equity investors who are allocated certain tax benefits associated with renewable energy projects (e.g. investment tax credits) through partnership agreements. The U.S. Inflation Reduction Act of 2022 (the "IRA") allows the owners of renewable energy projects to transfer tax credits directly to unrelated tax credit buyers. This provides the Company with the flexibility to obtain financing on any particular project with (i) the transfer of tax credits or (ii) investments from tax equity investors who are allocated tax benefits. The Company may also elect to retain the tax credit and use it to reduce its tax liability.

132 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

The Company accounts for tax credits that it will retain or transfer under ASC 740—Income Taxes, as a reduction in income tax expense by either including the expected amount of the tax credit to be claimed or the cash to be received when transferred, respectively, in the calculation of its annual effective tax rate throughout the year the renewables project is placed in service. The estimated tax credits are updated on a quarterly basis, with the year-end calculation including only the tax credits that are associated with projects placed in service, comprising credits claimed or transferred during the year. In assessing realizability for credits to be transferred, the Company includes cash it anticipates receiving in establishing any valuation allowance and establishes a valuation allowance equal to its best estimate of any discount on the transfer. During the year ended December 31, 2024, the Company executed agreements to transfer ITCs directly to third parties for $555 million. Of this amount, $309 million and $26 million was allocated to AES and recorded as an income tax benefit in 2024 and 2023, respectively, and $220 million was allocated to noncontrolling interests and treated as a contribution from noncontrolling interest holders. The Company received cash proceeds from these tax credit transfers of $480 million during the year ended December 31, 2024, and recorded a receivable in Other current assets on the Consolidated Balance Sheets for the remaining $75 million, which is expected to be received in March 2025. The receipt of cash from the transfer of tax credits is treated as an operating cash inflow on the Consolidated Statements of Cash Flows.

ASSET RETIREMENT OBLIGATIONS — The Company records the fair value of a liability for a legal obligation to retire an asset in the period in which the obligation is incurred. When a new liability is recognized, the Company capitalizes the costs of the liability by increasing the carrying amount of the related long-lived asset. The liability is accreted to its present value each period and the capitalized cost is depreciated over the useful life of the related asset. Upon settlement of the obligation, the Company eliminates the liability and, based on the actual cost to retire, may incur a gain or loss.

FOREIGN CURRENCY TRANSLATION — A business's functional currency is the currency of the primary economic environment in which the business operates and is generally the currency in which the business generates and expends cash. Subsidiaries and affiliates whose functional currency is a currency other than the U.S. dollar translate their assets and liabilities into U.S. dollars at the current exchange rates in effect at the end of the fiscal period. Adjustments arising from the translation of the balance sheet of such subsidiaries are included in AOCL. The revenue and expense accounts of such subsidiaries and affiliates are translated into U.S. dollars at the average exchange rates for the period. Gains and losses on intercompany foreign currency transactions that are long-term in nature and which the Company does not intend to settle in the foreseeable future, are also recognized in AOCL. Gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in determining net income. Accumulated foreign currency translation adjustments are reclassified from AOCL to net income only when realized upon sale or upon complete or substantially complete liquidation of the investment in a foreign entity. The accumulated adjustments are included in carrying amounts in impairment assessments where the Company has committed to a plan that will cause the accumulated adjustments to be reclassified to earnings.

REVENUE RECOGNITION — Revenue is earned from the sale of electricity from our utilities, the production and sale of electricity and capacity from our generation facilities, and development and construction of generation facilities. Revenue is recognized upon the transfer of control of promised goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. Revenue is recorded net of any taxes assessed on and collected from customers, which are remitted to the governmental authorities.

Utilities — Our utilities sell electricity directly to end-users, such as homes and businesses, and bill customers directly. The majority of our utility contracts have a single performance obligation, as the promises to transfer energy, capacity, and other distribution and/or transmission services are not distinct. Additionally, as the performance obligation is satisfied over time as energy is delivered, and the same method is used to measure progress, the performance obligation meets the criteria to be considered a series. Utility revenue is classified as regulated on the Consolidated Statements of Operations.

In exchange for the right to sell or distribute electricity in a service territory, our utility businesses are subject to government regulation. This regulation sets the framework for the prices (“tariffs”) that our utilities are allowed to charge customers for electricity. Since tariffs are determined by the regulator, the price that our utilities have the right to bill corresponds directly with the value to the customer of the utility's performance completed in each period. The Company also has some month-to-month contracts. Revenue under these contracts is recognized using an

133 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

output method measured by the MWh delivered each month, which best depicts the transfer of goods or services to the customer, at the approved tariff.

The Company has businesses where it sells and purchases power to and from ISOs and RTOs. Our utility businesses generally purchase power to satisfy the demand of customers that is not contracted through separate PPAs. In these instances, the Company accounts for these transactions on a net hourly basis because the transactions are settled on a net hourly basis. In limited situations, a utility customer may choose to receive generation services from a third-party provider, in which case the Company may serve as a billing agent for the provider and recognize revenue on a net basis.

Generation — Most of our generation fleet sells electricity under contracts to customers such as utilities, industrial users, and corporate clients. Our generation contracts, based on specific facts and circumstances, can have one or more performance obligations as the promise to transfer energy, capacity, and other services may or may not be distinct depending on the nature of the market and terms of the contract.

For contracts determined to have multiple performance obligations, we allocate revenue to each performance obligation based on its relative standalone selling price using a market or expected cost plus margin approach. Additionally, the Company allocates variable consideration to one or more, but not all, distinct goods or services that form part of a single performance obligation when (1) the variable consideration relates specifically to the efforts to transfer the distinct good or service and (2) the variable consideration depicts the amount to which the Company expects to be entitled in exchange for transferring the promised good or service to the customer.

If the contract is determined to contain a performance obligation related to capacity, the performance obligation is generally satisfied over time, and if we use the same method to measure progress, the performance obligations meet the criteria to be considered a series. In measuring progress toward satisfaction of a performance obligation, the Company applies the "right to invoice" practical expedient when available and recognizes revenue in the amount to which the Company has a right to consideration from a customer that corresponds directly with the value of the performance completed to date. Revenue from generation businesses is classified as non-regulated on the Consolidated Statements of Operations.

Energy performance obligations are recognized using an output method, as energy delivered best depicts the transfer of goods or services to the customer. Performance obligations to deliver energy are generally satisfied when the MW is generated. In certain contracts, if plant availability exceeds a contractual target, the Company may receive a performance bonus payment, or if the plant availability falls below a guaranteed minimum target, we may incur a non-availability penalty. Such bonuses or penalties represent a form of variable consideration and are estimated and recognized when it is probable that there will not be a significant reversal.

Certain generation contracts contain operating and sales-type leases where capacity payments are generally considered lease elements. In such cases, the allocation between the lease and non-lease elements is made at the inception of the lease following the guidance in ASC 842.

In assessing whether variable quantities are considered variable consideration or an option to acquire additional goods and services, the Company evaluates the nature of the promise and the legally enforceable rights in the contract. In some contracts, such as requirement contracts, the legally enforceable rights merely give the customer a right to purchase additional goods and services which are distinct. In these contracts, the customer's action results in a new obligation, and the variable quantities are considered an option.

When energy or capacity is sold or purchased in the spot market or to ISOs, the Company assesses the facts and circumstances to determine gross versus net presentation of spot revenues and purchases. Generally, the nature of the performance obligation is to sell surplus energy or capacity above contractual commitments, or to purchase energy or capacity to satisfy deficits. Generally, on an hourly basis, a generator is either a net seller or a net buyer in terms of the amount of energy or capacity transacted with the ISO. In these situations, the Company recognizes revenue for the hours where the generator is a net seller and cost of sales for the hours where the generator is a net buyer.

The transaction price allocated to a construction performance obligation is recognized as revenue over time as construction activity occurs, with revenue being fully recognized upon completion of construction. These contracts may include a difference in timing between revenue recognition and the collection of cash receipts, which may be collected over the term of the entire arrangement. The timing difference could result in a significant financing component for the construction performance obligation if determined to be a material component of the transaction

134 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

price. The Company accounts for a significant financing component under the effective interest rate method, recognizing a long-term receivable for the expected future payments related to the construction performance obligation in the Other noncurrent assets line item on the Consolidated Balance Sheets. As payments are collected from the customer over the term of the contract, consideration related to the construction performance obligation is bifurcated between the principal repayment of the long-term receivable and the related interest income, recognized in the Consolidated Statements of Operations.

Contract Balances — The timing of revenue recognition, billings, and cash collections results in accounts receivable and contract liabilities. Accounts receivable represent unconditional rights to consideration and consist of both billed amounts and unbilled amounts typically resulting from sales under long-term contracts when revenue recognized exceeds the amount billed to the customer. We bill both generation and utilities customers on a contractually agreed-upon schedule, typically at periodic intervals (e.g., monthly). The calculation of revenue earned but not yet billed is based on the number of days not billed in the month, the estimated amount of energy delivered during those days and the estimated average price per customer class for that month.

Our contract liabilities consist of deferred revenue which is classified as current or noncurrent based on the timing of when we expect to recognize revenue. The current portion of our contract liabilities is reported in Accrued and other liabilities and the noncurrent portion is reported in Other noncurrent liabilities on the Consolidated Balance Sheets.

Remaining Performance Obligations — The transaction price allocated to remaining performance obligations represents future consideration for unsatisfied (or partially unsatisfied) performance obligations at the end of the reporting period. The Company has elected to apply the optional disclosure exemptions under ASC 606. Therefore, the amount disclosed in Note 21—Revenue excludes contracts with an original length of one year or less, contracts for which we recognize revenue based on the amount we have the right to invoice for services performed, and variable consideration allocated entirely to a wholly unsatisfied performance obligation when the consideration relates specifically to our efforts to satisfy the performance obligation and depicts the amount to which we expect to be entitled. As such, consideration for energy is excluded from the amount disclosed as the variable consideration relates to the amount of energy delivered and reflects the value the Company expects to receive for the energy transferred. Estimates of revenue expected to be recognized in future periods also exclude unexercised customer options to purchase additional goods or services that do not represent material rights to the customer.

LEASES — The Company has operating and finance leases for energy production facilities, land, office space, transmission lines, vehicles and other operating equipment in which the Company is the lessee. The Company has elected an accounting policy, applied to all classes of assets, to not separate lease components from non-lease components where the Company is a lessee. Operating leases with an initial term of 12 months or less are not recorded on the balance sheet, but are expensed on a straight-line basis over the lease term. The Company’s leases do not contain any material residual value guarantees, restrictive covenants or subleases.

Right-of-use assets represent our right to use an underlying asset for the lease term while lease liabilities represent our obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized on commencement of the lease based on the present value of lease payments over the lease term. Generally, the rate implicit in the lease is not readily determinable; as such, we use the subsidiaries’ incremental borrowing rate based on the information available at commencement in determining the present value of lease payments. The right-of-use asset also includes any lease payments made and excludes lease incentives that are paid or payable to the lessee at commencement. The lease term includes the option to extend or terminate the lease if it is reasonably certain that the option will be exercised.

The Company has operating leases for certain generation contracts that contain provisions to provide capacity to a customer, which is a stand-ready obligation to deliver energy when required by the customer in which the Company is the lessor. Capacity payments are generally considered lease elements as they cover the majority of available output from a facility. The allocation of contract payments between the lease and non-lease elements is made at the inception of the lease. Fixed lease payments from such contracts are recognized as lease revenue on a straight-line basis over the lease term, whereas variable lease payments are recognized when earned.

The Company has sales-type leases for BESS in which the Company is the lessor. These arrangements allow customers the ability to determine when to charge and discharge the BESS, representing the transfer of control and constitutes the arrangement as a sales-type lease. Upon commencement of the lease, the book value of the leased

135 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

asset is removed from the balance sheet and a net investment in sales-type lease is recognized based on the present value of fixed payments under the contract and the residual value of the underlying asset.

SHARE-BASED COMPENSATION — The Company grants share-based compensation in the form of restricted stock units, performance stock units, performance cash units, and stock options. The expense is based on the grant-date fair value of the equity or liability instrument issued and is recognized on a straight-line basis over the requisite service period, net of estimated forfeitures. The Company uses a Black-Scholes option pricing model to estimate the fair value of stock options granted to its employees.

GENERAL AND ADMINISTRATIVE EXPENSES — General and administrative expenses include corporate and other expenses related to corporate staff functions and initiatives, primarily executive management, finance, legal, human resources, and information systems, which are not directly allocable to our business segments. Additionally, all costs associated with corporate business development efforts are classified as general and administrative expenses.

DERIVATIVES AND HEDGING ACTIVITIES — Under the accounting standards for derivatives and hedging, the Company recognizes all contracts that meet the definition of a derivative, except those designated as normal purchase or normal sale at inception, as either assets or liabilities in the Consolidated Balance Sheets and measures those instruments at fair value. See Note 5—Fair Value and Fair value in this section for additional discussion regarding the determination of fair value.

PPAs and fuel supply agreements are evaluated to assess if they either meet the definition of a derivative or contain an embedded derivative requiring separate valuation and accounting. When available, the Company elects the normal purchase normal sale scope exception for these contracts.

The Company typically designates its derivative instruments as cash flow hedges if they meet the criteria specified in ASC 815. The Company enters into interest rate swap agreements in order to hedge the variability of expected future cash interest payments. Foreign currency derivative contracts are primarily used to reduce risks arising from variability in forecasted cash flows denominated in non-functional currencies. The objective of these contracts is to minimize the impact of foreign currency fluctuations on operating results. The Company also enters into commodity futures, swaps and options to hedge price variability inherent in forecasted purchases and sales of electricity, fuels, and other commodities. The objectives of the commodity contracts are to minimize the impact of variability in spot commodity prices and stabilize estimated revenue and expense streams. The Company does not use derivative instruments for speculative purposes.

For our cash flow hedges, changes in fair value are deferred in AOCL and are recognized into earnings as the hedged transactions affect earnings. If a derivative is no longer highly effective, hedge accounting will be discontinued prospectively. For cash flow hedges of forecasted transactions, AES estimates the future cash flows of the forecasted transactions and evaluates the probability of the occurrence and timing of such transactions.

Changes in the fair value of derivatives not designated and qualifying as accounting hedges are immediately recognized in earnings. Regardless of when gains or losses on derivatives are recognized in earnings, they are generally classified as interest expense for interest rate and cross-currency derivatives, foreign currency transaction gains or losses for foreign currency derivatives, and non-regulated revenue or non-regulated cost of sales for commodity and other derivatives. Cash flows arising from derivatives are included in the Consolidated Statements of Cash Flows as an operating activity given the nature of the underlying risk being economically hedged and the lack of significant financing elements, except that cash flows on designated and qualifying hedges of variable-rate interest during construction are classified as an investing activity. Cash payments and receipts to terminate interest rate derivatives prior to the end of their effective date are classified as an operating activity; however, they are excluded from the Cash payments for interest, net of amounts capitalized supplementary disclosure on the Consolidated Statements of Cash Flows. These cash receipts totaled $187 million, $181 million, and $239 million for the years ended December 31, 2024, 2023, and 2022, respectively. The Company has elected not to offset derivative positions on the balance sheet where a right to offset exists.

CREDIT LOSSES — In accordance with ASC 326, the Company records an allowance for CECL for accounts and notes receivable, financing receivables, contract assets, net investments in leases recognized as a lessor, held-to-maturity debt securities, financial guarantees related to the non-payment of a financial obligation, and off-balance sheet credit exposures not accounted for as insurance. The Company has elected to write off accrued interest receivables by reversing interest income. The CECL allowance is based on the asset's amortized cost and reflects management's expected risk of credit losses over the remaining contractual life of the asset. CECL allowances are

136 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

estimated using relevant information about the collectability of cash flows and considering information about past events, current conditions, and reasonable and supportable forecasts of future economic conditions.

NEW ACCOUNTING PRONOUNCEMENTS — The following table provides a brief description of recent accounting pronouncements that had an impact on the Company’s consolidated financial statements. Accounting pronouncements not listed below were assessed and determined to be either not applicable or did not have a material impact on the Company’s consolidated financial statements.

New Accounting Standards Adopted
ASU Number and Name			Description			Date of Adoption			Effect on the financial statements upon adoption
2022-04,Liabilities - Supplier Finance Programs (Topic 450-50): Disclosure of Supplier Finance Program Obligations			This update is to provide additional information and disclosures about an entity’s use of supplier finance programs to see how these programs will affect an entity’s working capital, liquidity, and cash flows. Entities that use supplier finance programs as the buyer party should disclose (1) the key terms of the payment terms and assets pledged as security or other forms of guarantees provided and (2) the unpaid amount outstanding, a description of where those obligations are presented on the balance sheet, and a rollforward of those obligations during the annual period.			January 1, 2023, except for the rollforward information, which was adopted December 31, 2024			The ASU only requires disclosures related to the Company's supplier finance programs and does not affect the recognition, measurement, or presentation of supplier finance program obligations on the balance sheet or cash flow statement. The Company adopted the new disclosure requirements in the first quarter of 2023, except for the annual requirement to disclose rollforward information, which the Company adopted and presented beginning in the 2024 annual financial statements. See Note 12—Obligations for impact.
2023-07 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures			The amendments in this section are designed to improve the disclosures related to Segment reporting on an interim and annual basis. Public companies must disclose significant segment expenses and an amount for other segment items. This will also require that a company disclose its annual disclosures under Topic 280 in each interim period. Furthermore, companies will need to disclose the Chief Operating Decision Maker (CODM) and how the CODM assesses the performance of a segment. Lastly, public companies that have a single reportable segment must report the required disclosures under topic 280.			December 31, 2024			The Company adopted this standard on a retrospective basis. See Note 19—Segments and Geographic Information for impact

137 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

New Accounting Pronouncements Issued But Not Yet Effective — The following table provides a brief description of recent accounting pronouncements that could have a material impact on the Company’s consolidated financial statements once adopted. Accounting pronouncements not listed below were assessed and determined to be either not applicable or are expected to have no material impact on the Company’s consolidated financial statements.

New Accounting Standards Issued But Not Yet Effective
ASU Number and Name			Description			Date of Adoption			Effect on the financial statements upon adoption
2023-06 Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative			In U.S. Securities and Exchange Commission (SEC) Release No. 33-10532, Disclosure Update and Simplification, issued August 17, 2018, the SEC referred certain of its disclosure requirements that overlap with, but require incremental information to, generally accepted accounting principles (GAAP) to the FASB for potential incorporation into the Codification. The amendments in this Update are the result of the Board’s decision to incorporate into the Codification 14 of the 27 disclosures referred by the SEC. The amendments in this Update represent changes to clarify or improve disclosure and presentation requirements of a variety of Topics. Many of the amendments allow users to more easily compare entities subject to the SEC’s existing disclosures with those entities that were not previously subject to the SEC’s requirements. Also, the amendments align the requirements in the Codification with the SEC’s regulations.			The effective date for each amendment will be the date on which the SEC's removal of that related disclosure becomes effective, with early adoption prohibited. The amendments in this Update should be applied prospectively.			The Company will provide the required disclosures on a prospective basis on the date each amendment becomes effective. The Company does not expect ASU 2023-06 will have any impact to our consolidated financial statements.
2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures			The amendments in this Update require that public business entities on an annual basis (1) disclose specific categories in the rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold. Furthermore, companies are required to disclose a disaggregated amount of income taxes paid at a federal, state, and foreign level as well as a breakdown of income taxes paid in a jurisdiction that comprises 5% of a company's total income taxes paid. Lastly, this ASU requires that companies disclose income (loss) from continuing operations before income tax at a domestic and foreign level and that companies disclose income tax expense from continuing operations on a federal, state, and foreign level.			The amendments in this Update are effective for fiscal years beginning after December 15, 2024			The Company is currently evaluating the impact of adopting the standard on its consolidated financial statements.
2024-03: Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40)			The amendments in this Update require disclosure, in the notes to financial statements, of specified information about certain costs and expenses. The amendments require that at each interim and annual reporting period an entity: 1. Disclose the amounts of (a) purchases of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, and (e) depreciation, depletion, and amortization recognized as part of oil- and gas-producing activities (DD&A) (or other amounts of depletion expense) included in each relevant expense caption. A relevant expense caption is an expense caption presented on the face of the income statement within continuing operations that contains any of the expense categories listed in (a)–(e). 2. Include certain amounts that are already required to be disclosed under current generally accepted accounting principles (GAAP) in the same disclosure as the other disaggregation requirements. 3. Disclose a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively. 4. Disclose the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses.			The date for each amendment in this Update is effective for fiscal years beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted			The Company is currently evaluating the impact of adopting the standard on its consolidated financial statements.
2024-04: Debt—Debt with Conversion and Other Options (Subtopic 470-20)			The amendments in this Update clarify the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion.			The date for each amendment in this Update is effective beginning after December 15, 2025, and interim reporting periods within those annual reporting periods.			The Company is currently evaluating the impact of adopting the standard on its consolidated financial statements.

138 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

2. INVENTORY

Inventory is valued primarily using the average-cost method. The following table summarizes the Company's inventory balances as of the dates indicated (in millions):

December 31,						2024						2023
Fuel and other raw materials						$	246					$	424
Spare parts and supplies						347						288
Total						$	593					$	712

3. PROPERTY, PLANT AND EQUIPMENT

The following table summarizes the components of property, plant and equipment (in millions) with their estimated useful lives (in years). The amounts are stated net of all prior asset impairment losses recognized.

			Estimated Useful Life						December 31,
			(in years)			2024						2023
Electric generation and distribution facilities			8-40						$	29,740					$	27,517
Other buildings			3-48						1,232						1,239
Furniture, fixtures and equipment			3-30						423						397
Other			5-39						1,428						1,037
Total electric generation, distribution assets and other									32,823						30,190
Accumulated depreciation									(8,701)						(8,602)
Net electric generation, distribution assets and other									$	24,122					$	21,588
Land									610						522
Construction in progress									8,434						7,848
Property, plant and equipment, net									$	33,166					$	29,958

The following table summarizes depreciation expense (including the amortization of assets recorded under finance leases and the amortization of asset retirement obligations) and interest capitalized during development and construction on qualifying assets for the periods indicated (in millions):

Years Ended December 31,						2024						2023						2022
Depreciation expense						$	1,146					$	1,045					$	982
Interest capitalized during development and construction						637						563						224

Property, plant and equipment, net of accumulated depreciation, of $9.9 billion and $9.5 billion was mortgaged, pledged or subject to liens as of December 31, 2024 and 2023, respectively, including assets classified as held-for-sale.

The following table summarizes non-regulated and regulated electric generation, distribution, and other property, plant and equipment and accumulated depreciation as of the dates indicated (in millions):

December 31,						2024						2023
Non-regulated electric generation assets and other, gross						$	21,954					$	20,195
Non-regulated accumulated depreciation						(4,704)						(4,777)
Non-regulated electric generation assets and other, net						17,250						15,418
Regulated electric generation, distribution assets and other, gross						10,869						9,995
Regulated accumulated depreciation						(3,997)						(3,825)
Regulated electric generation, distribution assets and other, net						6,872						6,170
Net electric generation, distribution assets and other						$	24,122					$	21,588

4. ASSET RETIREMENT OBLIGATIONS

The following table presents amounts recognized related to asset retirement obligations for the periods indicated (in millions):

139 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

						2024						2023
Balance at January 1						$	778					$	757
Additional liabilities incurred						61						40
Liabilities settled						(30)						(14)
Accretion expense (1)						41						31
Change in estimated cash flows						127						(35)
Sale of business or reclassification to held-for-sale liabilities						(58)						—
Other						1						(1)
Balance at December 31						$	920					$	778

---

(1)Includes $16 million and $13 million at AES Indiana for the years ended December 31, 2024 and 2023, respectively, reflected as a change in regulatory liabilities on the Consolidated Balance Sheets. See Note 11—Regulatory Assets and Liabilities for further information.

The Company's asset retirement obligations include active ash landfills, water treatment basins, and the removal or dismantlement of certain plants and equipment. The Company uses the expected cash flow technique to determine the initial value of ARO liabilities, which is estimated by discounting expected cash outflows to their present value using market-based rates at the initial recording of the liabilities. Cash outflows are based on the approximate future disposal costs as determined by market information, historical information, or other management estimates. Subsequent downward revisions of ARO liabilities are discounted using the market-based rates that existed when the liability was initially recognized. These inputs to the fair value of the ARO liabilities are considered Level 3 inputs under the fair value hierarchy.

During the year ended December 31, 2024, the Company increased the asset retirement obligations and corresponding assets at AES Indiana and AES Clean Energy by $129 million and $73 million, respectively. The increase at AES Indiana is primarily related to revisions to cash flow estimates due to increases in closure costs and groundwater treatment measures for ash ponds and landfills. The increase at AES Clean Energy is mostly due to additional liabilities incurred for sites that were placed in service during 2024. This was offset by decreases at Ventanas of $43 million due to held-for-sale classification in December 2024, and $15 million at AES Brasil due to the sale of the business in October 2024.

During the year ended December 31, 2023, the Company increased the asset retirement obligations and corresponding assets at AES Clean Energy and AES Indiana by $43 million and $34 million, respectively. This was offset by decreases at Southland Energy and AES Brasil of $51 million and $20 million, respectively. The increase at AES Clean Energy is mostly due to an upward revision of estimated cash flows as a result of a decommissioning study done in the fourth quarter of 2023, which mostly impacted the estimated cash flows related to solar assets. The increase at AES Indiana is mostly due to additional liabilities incurred due to revised remediation plans for ash ponds at Eagle Valley and AES Indiana's solar projects. The decrease at Southland Energy is mostly due to a downward revision of estimated cash flows as a result of revised quotes from vendors for the demolition of the Southland legacy units. The decrease at AES Brasil is mostly due to a downward revision of estimated cash flows at the Mandacaru, Salinas, and Cubico II wind complexes and AES Brasil solar facilities.

5. 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

140 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

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

141 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

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:

142 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

						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)

143 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

			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

144 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

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.

145 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

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

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(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						—

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(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.

146 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

6. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

Volume of Activity — The following table presents the Company's maximum notional (in millions) over the remaining contractual period by type of derivative as of December 31, 2024, and the dates through which the maturities for each type of derivative range:

Interest Rate and Foreign Currency Derivatives						Maximum Notional Translated to USD						Latest Maturity**(1)**
Interest rate						$	9,566					2059
Foreign currency:
Chilean peso						133						2027
Colombian peso						68						2027
Mexican peso						39						2026

Commodity Derivatives						Maximum Notional						Latest Maturity
Natural Gas (in MMBtu)						303						2029
Power (in MWhs) (2)						62						2040
Coal (in Metric Tonnes)						7						2027

---

(1)Maturity dates are consistent for both designated and non-designated positions.

(2)Includes one contract designated as a cash flow hedge with a final maturity date in 2038.

Accounting and Reporting — Assets and Liabilities — The following tables present the fair value of the Company's derivative assets and liabilities as of the dates indicated (in millions):

Fair Value						December 31, 2024																		December 31, 2023
Assets						Designated						Not Designated						Total						Designated						Not Designated						Total
Interest rate derivatives						$	349					$	—					$	349					$	184					$	—					$	184
Foreign currency derivatives						16						45						61						23						51						74
Commodity derivatives						4						274						278						—						128						128
Total assets						$	369					$	319					$	688					$	207					$	179					$	386
Liabilities
Interest rate derivatives						$	15					$	—					$	15					$	108					$	—					$	108
Cross-currency derivatives (1)						—						—						—						63						—						63
Foreign currency derivatives						10						8						18						5						14						19
Commodity derivatives						29						226						255						107						149						256
Total liabilities						$	54					$	234					$	288					$	283					$	163					$	446

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(1)As of December 31, 2023, the carrying amount of debt hedged by cross-currency derivatives designated as fair value hedges was $386 million. As of December 31, 2024, there was no carrying amount since the associated debt was included in the carrying value of AES Brasil, which was sold in October 2024.

						December 31, 2024												December 31, 2023
Fair Value						Assets						Liabilities						Assets						Liabilities
Current						$	369					$	170					$	216					$	152
Noncurrent						319						118						170						294
Total (1)						$	688					$	288					$	386					$	446

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(1)Includes $3 million of derivative assets reported in Current held-for-sale assets and $3 million of derivative liabilities reported in Current held-for-sale liabilities on the Consolidated Balance Sheets related to Dominican Republic Renewables as of December 31, 2024.

Credit Risk-Related Contingent Features			December 31, 2024						December 31, 2023
Net position of derivatives subject to master netting arrangements and subject to collateralization			$	8					$	(4)
Cash collateral held by third parties or in escrow			54						104

147 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

Earnings and Other Comprehensive Income (Loss) — The following table presents the pre-tax gains (losses) recognized in AOCL and earnings related to all derivative instruments for the periods indicated (in millions):

						Years Ended December 31,
2024						2023						2022
Cash flow hedges
Gains (losses) recognized in AOCL
Interest rate derivatives						$	493					$	42					$	869
Foreign currency derivatives						(12)						2						17
Commodity derivatives						80						(48)						16
Total						$	561					$	(4)					$	902
Gains (losses) reclassified from AOCL to earnings
Interest rate derivatives — Interest expense						$	(32)					$	51					$	(72)
Foreign currency derivatives — Foreign currency transaction gains (losses)						(6)						(4)						2
Commodity derivatives — Cost of sales—Non-Regulated						—						17						2
Total						$	(38)					$	64					$	(68)
Gains (losses) on fair value hedging relationships
Cross-currency derivatives
Derivatives designated as hedging instruments						$	63					$	(72)					$	(35)
Hedged items						(58)						58						26
Total						$	5					$	(14)					$	(9)
Loss reclassified from AOCL to earnings due to impairment of assets						$	—					$	—					$	(16)
Gains reclassified from AOCL to earnings due to change in forecast						$	11					$	14					$	26
Gain (losses) recognized in earnings related to
Not designated as hedging instruments:
Interest rate derivatives — Interest expense						$	—					$	(7)					$	4
Foreign currency derivatives — Foreign currency transaction gains (losses)						66						19						21
Commodity derivatives — Revenue—Non-Regulated						255						205						(111)
Commodity derivatives — Cost of sales—Non-Regulated						(97)						56						68
Total						$	224					$	273					$	(18)

Reclassifications from AOCL to earnings are forecasted to decrease pre-tax income from continuing operations by $13 million for the twelve months ended December 31, 2025, primarily related to interest rate derivatives.

7. FINANCING RECEIVABLES

Receivables with contractual maturities of greater than one year are considered financing receivables. The following table presents long-term financing receivables, excluding lease receivables and amounts classified as held for sale, by country as of the dates indicated (in millions).

			December 31, 2024																		December 31, 2023
			Gross Receivable						Allowance						Net Receivable						Gross Receivable						Allowance						Net Receivable
U.S.			$	48					$	15					$	33					$	149					$	—					$	149
Chile			45						—						45						33						—						33
Other			9						—						9						11						—						11
Total			$	102					$	15					$	87					$	193					$	—					$	193

U.S. — AES has recorded non-current receivables pertaining to the sale of the Redondo Beach land. The anticipated collection period extends beyond December 31, 2025. As of December 31, 2023, a significant financing receivable existed for the Warrior Run PPA termination agreement where $108 million was recorded in Other non-current assets on the Consolidated Balance Sheets. On February 1, 2024, the Company executed an agreement to sell all remaining future cash flows under the termination agreement. At the time of execution, the transaction was considered a sale of future revenue under U.S. GAAP. Upon completion of the remaining performance obligation in May 2024, the corresponding receivable balance of $267 million, net of valuation allowance of $7 million, was derecognized*.* See Note 21—Revenue for further details regarding the Warrior Run PPA termination agreement.

Chile — AES Andes has recorded receivables pertaining to revenues recognized on regulated energy contracts that were impacted by the Stabilization Funds created by the Chilean government in October 2019, August 2022, and April 2024, in conjunction with the Tariff Stabilization Laws. Historically, the government updated the prices for these contracts every six months to reflect the contracts' indexation to exchange rates and commodities prices. The Tariff Stabilization Laws do not allow the pass-through of these contractual indexation updates to customers beyond the pricing in effect at July 1, 2019, until new lower-cost renewables contracts are incorporated to supply regulated contracts. Consequently, costs incurred in excess of the July 1, 2019 price were

148 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

accumulated and borne by generators. As of December 31, 2024, AES Andes aimed to reduce its exposure through the sale of receivables.

Through different agreements and programs, as of December 31, 2024 AES Andes sold and collected $151 million and $217 million related to agreements executed in August 2023 and October 2024 to sell up to $227 million and $254 million of receivables pursuant to the Stabilization Funds, respectively. As of December 31, 2024, $8 million of current receivables and $5 million of noncurrent receivables were recorded in Accounts receivable and Other noncurrent assets, respectively. Additionally, $39 million of payment deferrals granted to mining customers as part of our green blend agreements were recorded as financing receivables included in Other noncurrent assets at December 31, 2024.

8. ALLOWANCE FOR CREDIT LOSSES

The following table represents the rollforward of the allowance for credit losses for the periods indicated (in millions):

Twelve Months Ended December 31, 2024			Accounts Receivable						Mong Duong Loan Receivable (1)						Argentina Receivables												Other (2)						Total
CECL reserve balance at beginning of period			$	15					$	25					$	7											$	17					$	64
Current period provision			43						—						—												15						58
Write-offs charged against allowance			(7)						—						—												(6)						(13)
Recoveries collected			1						(2)						—												—						(1)
Allowance derecognized due to disposal of a business			—						—						—												(7)						(7)
Foreign exchange			—						—						(2)												(3)						(5)
CECL reserve balance at end of period			$	52					$	23					$	5											$	16					$	96

Twelve Months Ended December 31, 2023			Accounts Receivable						Mong Duong Loan Receivable (1)						Argentina Receivables						Lease Receivable (3)						Other						Total
CECL reserve balance at beginning of period			$	3					$	28					$	30					$	20					$	2					$	83
Current period provision			23						—						—						—						17						40
Write-offs charged against allowance			(15)						—						—						(20)						—						(35)
Recoveries collected			2						(3)						—						—						—						(1)
Foreign exchange			2						—						(23)						—						(2)						(23)
CECL reserve balance at end of period			$	15					$	25					$	7					$	—					$	17					$	64

---

(1)Mong Duong loan receivable credit losses allowance was classified in held-for-sale assets on the Consolidated Balance Sheets as of December 31, 2024 and 2023.

(2)Primarily relates to credit losses allowance on financing receivables in the U.S. and credit losses allowance at AES Brasil which was sold on October 31, 2024.

(3)Lease receivable credit losses allowance at Southland Energy (AES Gilbert).

During 2024, the current period provision and allowance for credit losses on customer accounts receivable increased due to a temporary pause of customer disconnections and certain collection efforts and write-off processes after the implementation of customer billing system upgrades at our utilities. This has resulted in higher past due customer receivables as of December 31, 2024. The utilities anticipate reinstituting customer disconnections and write-off processes during 2025.

149 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

9. INVESTMENTS IN AND ADVANCES TO AFFILIATES

The following table summarizes the relevant effective equity ownership interest and carrying values for the Company's investments accounted for under the equity method as of the periods indicated:

December 31,									2024						2023						2024						2023
Affiliate			Country						Carrying Value (in millions)												Ownership Interest %
sPower (1)			United States						$	548					$	423					50		%				50		%
Grupo Energía Gas Panamá (2)			Panama						194						114						24		%				24		%
Fluence			United States						155						148						28		%				29		%
Uplight			United States						82						86						25		%				29		%
Energía Natural Dominicana Enadom (3)			Dominican Republic						65						77						33		%				33		%
Mesa La Paz			Mexico						43						42						50		%				50		%
Other affiliates (4)			Various						37						51
Total									$	1,124					$	941

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(1)The Company owns 50% of sPower, LLC and accounts for its investment as an equity method investment. Furthermore, there are two specific portfolios of operating solar and wind assets, OpCo A and OpCo B, in which sPower, LLC owns 51%, resulting in an AES effective ownership of approximately 26% in these portfolios.

(2)The Company's ownership in Grupo Energía Gas Panamá is held through AES Panama, a 49%-owned consolidated subsidiary. AES Panama owns 49% of Grupo Energía Gas Panamá, resulting in an AES effective ownership of 24%.

(3)The Company's ownership in Energía Natural Dominicana Enadom is held through Andres, a 65%-owned consolidated subsidiary. Andres owns 50% of Energía Natural Dominicana Enadom, resulting in an AES effective ownership of 33%.

(4)Includes Bosforo, Jordan, Barry, Alto Maipo, and various other equity method investments. Barry and Alto Maipo represent VIEs in which the Company holds a variable interest but is not the primary beneficiary.

Jordan — In March 2024, the Company completed the sale of approximately 26% ownership interest in Amman East and IPP4 for a sale price of $58 million. After adjusting for dividends received since the execution of the sale and purchase agreement, the Company received a net cash payment of $45 million. After completion of the sale, the Company retained 10% ownership interest in each of the businesses, which are accounted for as equity method investments. See Note 25—Held-for-Sale and Dispositions for further information. Amman East and IPP4 are reported in the Energy Infrastructure SBU reportable segment.

Uplight — In February 2024, Uplight acquired AutoGrid, a market leader in the Virtual Power Plant space, from Schneider Electric. As part of the transaction, Schneider contributed an additional $40 million to Uplight, and Uplight issued approximately 91 million additional common units to Schneider as consideration for the acquisition. No incremental investment was required from AES or any other investor. As a result, AES' 29% ownership interest in Uplight was diluted to 25%. The transaction was accounted for as a partial disposition in which AES recognized a gain of $52 million in Gain (loss) on disposal and sale of business interests upon remeasurement. As the Company still does not control but has significant influence over Uplight after the transaction, it continues to be accounted for as an equity method investment and is reported in the New Energy Technologies SBU reportable segment.

Fluence — In December 2023, the Company redeemed 7,087,500 common units of Fluence Energy, LLC. Fluence Energy, Inc. settled this redemption through the issuance of an equivalent number of shares of its Class A common stock. In conjunction with this redemption, the Company executed a public sale of the Class A shares, resulting in proceeds received of $156 million, after expenses, and a pre-tax gain on sale of $136 million, recorded in Gain (loss) on disposal and sale of business interests. As a result of this transaction, AES' ownership interest decreased from 33% to 29%. As the Company still does not control but has significant influence over Fluence after the transaction, it continues to be accounted for as an equity method investment. Fluence is reported in the New Energy Technologies SBU reportable segment.

Grupo Energía Gas Panamá — In September 2023, AES Latin America completed the sale of its interest in Grupo Energía Gas Panamá, a joint venture formed for the Gatun combined cycle natural gas development project, to AES Panama, a 49%-owned consolidated subsidiary. As a result of the transaction, the Company’s effective ownership in Grupo Energía Gas Panamá decreased from 49% to approximately 24%. As the Company still does not control the investment after this transaction, it continues to be accounted for as an equity method investment and is reported in the Energy Infrastructure SBU reportable segment.

sPower — In December 2022, the Company agreed to sell 49% of its indirect interest in a portfolio of sPower's operating assets ("OpCo B"). At the time the purchase and sale agreement was signed, a loss was expected upon closing the transaction. The expected loss on sale was identified as a triggering event and the Company evaluated whether its investment in sPower was other-than-temporarily impaired. Based on management’s estimate of fair

150 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

value of $432 million, the Company recognized an other-than-temporary impairment of $175 million in Other non-operating expense in December 2022.

sPower primarily holds operating assets where the tax credits associated with underlying projects have already been allocated to tax equity investors. The application of HLBV accounting increases the carrying value of these investments, as earnings are initially disproportionately allocated to the sponsor entity. Since sPower does not have any ongoing development or other value creation activities following the transfer of these activities to AES Clean Energy Development, the impairment adjusts the carrying value to the fair market value of the operating assets.

On February 28, 2023, sPower closed on the sale for $196 million. As a result of the transaction, the Company received $98 million in sales proceeds and recorded a pre-tax gain on sale of $5 million, recorded in Gain (loss) on disposal and sale of business interests. After the sale, the Company's ownership interest in OpCo B decreased from 50% to approximately 26%. As the Company still does not control but has significant influence over sPower after the transaction, it continues to be accounted for as an equity method investment. sPower is reported in the Renewables SBU reportable segment.

Alto Maipo — In May 2022, Alto Maipo emerged from bankruptcy in accordance with Chapter 11 of the U.S. Bankruptcy Code. Alto Maipo, as restructured, is considered a VIE. As the Company lacks the power to make significant decisions, it does not meet the criteria to be considered the primary beneficiary of Alto Maipo and therefore will not consolidate the entity. The Company has elected the fair value option to account for its investment in Alto Maipo as management believes this approach will better reflect the economics of its equity interest. As of December 31, 2024, the fair value is insignificant. Alto Maipo is reported in the Energy Infrastructure SBU reportable segment.

Barry — The Company holds a 100% ownership interest in AES Barry Ltd. ("Barry"), a dormant entity in the U.K. that disposed of its generation and other operating assets. Due to a debt agreement, no material financial or operating decisions can be made without the banks' consent, and the Company does not control Barry. As of both December 31, 2024 and 2023, other long-term liabilities included $41 million related to this debt agreement. Barry is reported in the Energy Infrastructure SBU reportable segment.

Summarized Financial Information — The following tables summarize financial information of the Company's 50%-or-less-owned affiliates and majority-owned unconsolidated subsidiaries that are accounted for using the equity method (in millions):

			50%-or-less Owned Affiliates																		Majority-Owned Unconsolidated Subsidiaries**(1)**
Years ended December 31,			2024						2023						2022						2024						2023						2022
Revenue			$	3,553					$	2,905					$	1,780					$	1					$	1					$	1
Operating income (loss)			141						(28)						(361)						(1)						(1)						(1)
Net loss			(107)						(182)						(527)						(1)						(1)						—
Net loss attributable to affiliates			(12)						(157)						(405)						(1)						(1)						—
December 31,			2024						2023												2024						2023
Current assets			$	2,493					$	1,759											$	132					$	117
Noncurrent assets			7,808						7,569												408						533
Current liabilities			2,023						1,638												129						114
Noncurrent liabilities			4,270						4,085												448						572
Stockholders' equity			2,960						2,318												(37)						(30)
Noncontrolling interests			1,048						1,287												—						(6)

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(1)The summarized financial information of Alto Maipo is not included in the table above as the Company is not the primary beneficiary, the fair value of the investment is insignificant, and the investment in Alto Maipo is not material to the financial results of the Company.

At December 31, 2024, retained earnings included $383 million related to the undistributed losses of the Company's affiliates. Dividends received from these affiliates were $32 million, $5 million, and $47 million for the years ended December 31, 2024, 2023, and 2022, respectively. As of December 31, 2024, the aggregate carrying amount of our investments in equity affiliates exceeded the underlying equity in the net assets of our equity affiliates by $23 million.

151 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

10. 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 balance			318						—						27						3						348
Goodwill derecognized due to disposal of a business			—						—						—						(3)						(3)
Balance as of December 31, 2024
Goodwill			353						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:

152 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

			December 31, 2024																		December 31, 2023
			Gross Balance						Accumulated Amortization						Net Balance						Gross Balance						Accumulated Amortization						Net Balance
Subject to Amortization
Internal-use software			$	794					$	(333)					$	461					$	696					$	(324)					$	372
Contracts			68						(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 rights			19						(19)						—						222						(71)						151
Land use rights			108						(3)						105						119						(3)						116
Other (3)			28						(5)						23						45						(20)						25
Subtotal			2,346						(426)						1,920						2,691						(498)						2,193
Indefinite-Lived Intangible Assets
Land use rights			8						—						8						22						—						22
Transmission rights			17						—						17						20						—						20
Other			2						—						2						8						—						8
Subtotal			27						—						27						50						—						50
Total			$	2,373					$	(426)					$	1,947					$	2,741					$	(498)					$	2,243

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(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, 2024			Amount						Subject to Amortization/Indefinite-Lived						Weighted Average Amortization Period (in years)						Amortization Method
Internal-use software			$	114					Subject to Amortization						11						Straight-line
Project development			134						Subject to Amortization						40						Straight-line
Emissions allowances			8						Subject to Amortization						Various						As utilized
Land use rights			2						Various						N/A						Various
Other			8						Various						N/A						N/A
Total			$	266

December 31, 2023			Amount						Subject to Amortization/Indefinite-Lived						Weighted Average Amortization Period (in years)						Amortization Method
Internal-use software			$	159					Subject to Amortization						15						Straight-line
Contracts			12						Subject to Amortization						21						Straight-line
Project development			242						Subject to Amortization						39						Straight-line
Emissions allowances			23						Subject to Amortization						Various						As utilized
Land use rights			91						Various						N/A						Various
Other			9						Various						N/A						N/A
Total			$	536

The following table summarizes the estimated amortization expense by intangible asset category for 2025 through 2029:

(in millions)			2025						2026						2027						2028						2029
Internal-use software			$	58					$	55					$	52					$	49					$	47
Contracts			2						2						2						2						2
Project development			14						16						16						16						16
Other			3						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.

153 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

11. REGULATORY ASSETS AND LIABILITIES

The Company has recorded regulatory assets and liabilities (in millions) that it expects to pass through to its customers in accordance with, and subject to, regulatory provisions as follows:

December 31,			2024						2023						Recovery/Refund Period Ends
Regulatory assets
Current regulatory assets:
Undercollection of rate riders			$	177					$	127					2025
El Salvador energy pass through costs recovery			117						119						2025
Other			37						19						2025
Total current regulatory assets			331						265
Noncurrent regulatory assets:
AES Indiana and AES Ohio defined benefit pension obligations (1)			183						179						Various
AES Indiana Petersburg Units 1 and 2 retirement costs (1)			129						260						2033
AES Indiana Petersburg Units 3 and 4 retirement costs (1)			94						—						Various
AES Indiana environmental costs			65						70						Various
AES Indiana Hoosier Wind termination of pre-existing PPA (1) (2)			53						—						2039
AES Indiana TDSIC costs (1)			52						36						Various
El Salvador energy pass through costs recovery			39						—						Various
AES Ohio regulatory compliance costs (1)			33						45						2028
Other			143						108						Various
Total noncurrent regulatory assets			791						698
Total regulatory assets			$	1,122					$	963
Regulatory liabilities
Current regulatory liabilities:
Overcollection of costs to be passed back to customers			$	18					$	34					2025
Other			4						7						2025
Total current regulatory liabilities			22						41
Noncurrent regulatory liabilities:
AES Indiana and AES Ohio accrued costs of removal and AROs			465						586						Life of assets
AES Indiana and AES Ohio income taxes payable to customers through rates			93						117						Various
Other			5						6						Various
Total noncurrent regulatory liabilities			563						709
Total regulatory liabilities			$	585					$	750

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(1)Past expenditures on which the Company earns a rate of return.

(2)AES Indiana acquired the Hoosier Wind project in February 2024. See Note 26—Acquisitions for further information.

Our current regulatory assets and liabilities primarily consist of under or overcollection of costs that are generally non-controllable, such as purchased electricity, energy transmission, fuel costs, and other sector costs. These costs are recoverable or refundable as defined by the laws and regulations in our markets. Our noncurrent regulatory assets include defined pension and postretirement benefit obligations equal to the previously unrecognized actuarial gains and losses and prior service costs that are expected to be recovered through future rates, as well as the carrying value of AES Indiana's Petersburg Units 1 through 4 at their retirement dates, which are amortized over the life of the assets beginning on the dates of retirement. Other current and noncurrent regulatory assets primarily consist of:

• Project development costs, mainly legal and consulting fees, incurred for renewables projects as well as carrying costs on AES Indiana's investments in the projects;

• Vegetation management costs and proactive reliability optimization at AES Ohio;

• Materials and supplies inventories related to AES Indiana's Petersburg Units 3 and 4;

• Deferred Midcontinent ISO costs at AES Indiana; and

• Unamortized premiums reacquired or redeemed on long-term debt, which are amortized over the lives of the original issuances, at AES Indiana.

Our noncurrent regulatory liabilities primarily consist of obligations for removal costs which do not have an associated legal retirement obligation. Our noncurrent regulatory liabilities also include deferred income taxes related to differences in income recognition between tax laws and accounting methods, which will be passed through to our regulated customers via a decrease in future retail rates.

154 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

In the accompanying Consolidated Balance Sheets, current regulatory assets and liabilities are reflected in Other current assets and Accrued and other liabilities, respectively, and noncurrent regulatory assets and liabilities are reflected in Other noncurrent assets and Other noncurrent liabilities, respectively. All of the regulatory assets and liabilities as of December 31, 2024 and December 31, 2023 are related to the Utilities SBU reportable segment.

Pending Regulatory Action — AES Ohio is facing appeals from the Office of the Ohio Consumers’ Council (“OCC”) regarding the PUCO’s decisions to approve the reversion to ESP 1 and the Smart Grid Comprehensive Settlement. The OCC is specifically seeking a refund of Rate Stabilization Charge revenues dating back to August 2021 and has appealed the final PUCO order with respect to the 2018 and 2019 SEET, which was part of the Smart Grid Comprehensive Settlement. Oral arguments for these appeals are scheduled for April 2025. Additionally, AES Ohio reached a settlement on its Smart Grid Phase 2 plan, which includes a 4-year plan for significant investments in grid modernization and distribution system enhancements; AES Ohio expects an order from the PUCO in the second quarter of 2025. In November 2024, AES Ohio filed an application with the PUCO to increase its distribution rates; the procedural schedule for the new distribution rate case has not yet been established.

12. OBLIGATIONS

NON-RECOURSE DEBT — Non-recourse debt represents debt issued by one of our subsidiaries to be repaid solely from the subsidiary's assets. Repayments of the loans, and interest thereon, is secured solely by the capital stock, physical assets, contracts, and cash flows of that subsidiary, and the Parent Company is not otherwise liable for such debt. The following table summarizes the carrying amount and terms of non-recourse debt at our subsidiaries, excluding amounts classified as held for sale, as of the periods indicated (in millions):

NON-RECOURSE DEBT			Weighted Average Interest Rate						Maturity						December 31,
2024						2023
Variable Rate:
Bank loans (1)			6.49%						2025 - 2038						$	5,132					$	5,568
Notes and bonds			8.00%						2025						105						1,768
Revolver borrowings			6.25%						2025 - 2028						3,147						2,356
Other			11.15%						2030						16						31
Fixed Rate:
Bank loans			6.55%						2025 - 2064						2,610						1,473
Notes and bonds			5.23%						2025 - 2079						11,737						11,228
Other (2)			9.38%						2025 - 2061						297						53
Unamortized (discount) premium & debt issuance (costs), net															(301)						(333)
Subtotal															$	22,743					$	22,144
Less: Current maturities (3) (4)															(2,670)						(3,924)
Noncurrent maturities (3) (4)															$	20,073					$	18,220

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(1) Variable rate bank loans as of December 31, 2023 includes $249 million at Dominican Republic Renewables, which was classified as held and used as of December 31, 2023, but is classified as held-for-sale as of December 31, 2024. See Note 25—Held-for-Sale and Dispositions for further information.

(2) Other fixed rate debt includes $250 million related to preferred shares that include mandatory redemption features at Bellefield Equity Holdings and are therefore classified as a liability under ASC 480 as of December 31, 2024.

(3) Excludes $18 million and $8 million (current) and $553 million and $262 million (noncurrent) finance lease liabilities included in the respective non-recourse debt line items on the Consolidated Balance Sheets as of December 31, 2024 and 2023, respectively. See Note 15—Leases for further information.

(4) Includes $650 million (current) and $8.2 billion (noncurrent) of non-recourse debt related to VIEs as of December 31, 2024.

The interest rate on variable rate debt represents the total of a variable component that is based on changes in an interest rate index and a fixed component. The Company has interest rate swap agreements that economically fix the variable component of the interest rates on the portion of the variable rate debt being hedged in an aggregate notional principal amount of approximately $3.7 billion on non-recourse debt outstanding at December 31, 2024.

The following table summarizes the amounts due under our non-recourse debt agreements for the next five years and thereafter, as of December 31, 2024 (in millions):

December 31,			Annual Maturities
2025			$	2,678
2026			4,858
2027			3,052
2028			993
2029			1,796
Thereafter			9,667
Unamortized (discount) premium & debt issuance (costs), net			(301)
Total			$	22,743

155 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

As of December 31, 2024, AES subsidiaries had approximately $1.7 billion in various unused committed credit lines to support their working capital, debt service reserves, and other business needs. These credit lines can be used for borrowings, letters of credit, or a combination of these uses.

Significant transactions — During the year ended December 31, 2024, the Company’s following subsidiaries had significant debt issuances (in millions):

Subsidiary									Issuances (1)
AES Clean Energy									$	3,219
AES Indiana (2)									1,450
AES Andes									1,248

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(1)These amounts do not include revolving credit facility activity at the Company's subsidiaries.

(2)Issuances related to both AES Indiana and its parent company, IPALCO.

AES Clean Energy — In December 2024, Bellefield 2 Seller, LLC executed a construction, tax equity bridge, and letter of credit financing agreement for commitments of up to $1.7 billion. As of December 31, 2024, there were $394 million in borrowings under the facilities at an interest rate of 5.70%, maturing in 2026.

In November 2024, AES Clean Energy, AES Clean Energy Development, and Bellefield Equity Holdings LLC ("Bellefield") entered into several key agreements with HASI, including an investment agreement under which HASI invested $250 million in Bellefield in exchange for a preferred membership interest. AES Clean Energy holds a call option under which there is an unconditional obligation to redeem HASI’s preferred shares in Bellefield at the earlier of the substantial completion date or December 1, 2026, with the redemption amount consisting of the initial investment plus a 10% internal rate of return. As the call option on the preferred shares includes mandatory redemption features, the instrument was classified as a liability under ASC 480 and was recorded at its fair value, which equals the gross proceeds received of $250 million. The instrument will be accreted to its redemption amount using the effective interest method.

In July 2024, AES Clean Energy Development executed a construction loan that includes letters of credit to further support the construction and operation of certain projects. As of December 31, 2024, there were no borrowings under the agreement.

In December 2023, Bellefield Portfolio Seller, LLC and Bellefield 1 Finco, LLC, subsidiaries of AES Clean Energy Development, executed a construction, tax equity bridge, and letter of credit financing agreement for commitments of up to $2.4 billion due in 2026. As of December 31, 2024, there was $1.7 billion in outstanding borrowings under the facilities, and the net proceeds were used primarily to repay existing indebtedness and to fund development of renewables projects.

In October 2023, Rexford I Holdings, LLC, a subsidiary of AES Renewable Holdings, executed a $300 million bridge loan due in 2024. The net proceeds from this issuance were used primarily to fund development of renewables projects. The bridge loan was repaid in July 2024.

In December 2022, AES Clean Energy Development, AES Renewable Holdings, and sPower, an equity method investment, collectively referred to as the Issuers, entered into a Master Indenture agreement whereby long-term notes will be issued from time to time to finance or refinance operating wind, solar, and storage projects that are owned by the Issuers. On December 13, 2022, the Issuers entered into the Note Purchase Agreement for the issuance of up to $647 million of 6.55% Senior Notes due in 2047. The Notes were sold on December 14, 2022, at par for $647 million. The Issuers have executed amendments to the Note Purchase Agreement, which have resulted in an aggregate principal amount of notes issued of $2.2 billion as of December 31, 2024, including $491 million in 6.81% notes issued in May 2024, and $842 million in 6.04% notes issued in November 2024. Each of the Issuers is considered a “Co-Issuer” and will be jointly and severally liable with each other Co-Issuer for all obligations under the facility. As a result of the notes issued in 2024, AES Clean Energy Development and AES Renewable Holdings recorded, in aggregate, an increase in liabilities of $1.1 billion, resulting in an aggregate carrying amount of notes of $1.4 billion as of December 31, 2024.

In 2021, AES Clean Energy Development, AES Renewable Holdings, and sPower, collectively referred to as the Borrowers, executed two Credit Agreements with aggregate commitments of $1.2 billion and maturity dates in December 2024 and September 2025. The Borrowers executed amendments to the revolving credit facilities, which resulted in an aggregate increase in the commitments of $2.6 billion, bringing the total commitments under the new agreements to $3.8 billion. Under 2024 amendments, the maturity dates of the Credit Agreements were extended to

156 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

May 2027 and June 2028. Each of the Borrowers is considered a “Co-Borrower” and will be jointly and severally liable with each other Co-Borrower for all obligations under the facilities. As a result of increases in commitments used and net of repayments, AES Clean Energy Development and AES Renewable Holdings recorded, in aggregate, an increase in liabilities of $638 million in 2024, resulting in total commitments used under the revolving credit facilities, as of December 31, 2024, of $2.9 billion. As of December 31, 2024, the aggregate commitments used under the revolving credit facilities for the Co-Borrowers was $3.1 billion.

AES Indiana — In August 2024, AES Indiana entered into an unsecured $400 million 364-day term loan agreement, maturing August 2025. AES Indiana drew $300 million at closing and drew the remaining $100 million in October 2024, with the proceeds being used for general corporate purposes at AES Indiana.

In March 2024, AES Indiana issued $650 million aggregate principal of 5.70% First Mortgage Bonds due April 2054. The net proceeds from this issuance were used to repay existing indebtedness, including its unsecured $300 million term loan due in November 2024 and amounts outstanding under its $350 million revolving credit agreement maturing in December 2027, and for general corporate purposes at AES Indiana.

In March 2024, IPALCO issued $400 million aggregate principal of 5.75% senior secured notes due April 2034. In April 2024, the net proceeds from this issuance, together with cash on hand, were used to redeem the outstanding $405 million of IPALCO’s 3.70% senior secured notes due in September 2024.

In November 2023, AES Indiana executed a $300 million term loan due in 2024. The net proceeds from this issuance were used for general corporate purposes at AES Indiana. The term loan was repaid in March 2024.

AES Andes — In March 2024, AES Andes issued $500 million aggregate principal of 6.30% senior unsecured notes due in 2029. The net proceeds from the issuance were used to purchase via tender offer $100 million and $43 million aggregate principal of its 6.35% and 5.00% notes due in 2079 and 2025, respectively, and repay other existing indebtedness.

In June 2024, AES Andes issued $530 million in Junior Subordinated Notes at 8.15%, due in 2055. The proceeds were used to repay its 7.125% notes due in 2079. As a result of the transaction, the Company recognized a loss on extinguishment of debt of $8 million.

AES Puerto Rico — On June 1, 2023, AES Puerto Rico was unable to pay principal and interest obligations on its Series A Bond Loans due to insufficient funds resulting from financial difficulties at the business. AES Puerto Rico signed forbearance and standstill agreements with its noteholders in July 2023 because of the insufficiency of funds to meet these obligations. On March 5, 2024, AES Puerto Rico and its noteholders executed a financial restructuring, under which the $156 million (including interest) of 6.625% Series A Bond Loans due 2026 was exchanged for $112 million of 6.625% senior secured bonds due January 2028 and $44 million of preferred shares in AES Puerto Rico. The preferred shares bear interest at 3.125% and contains an option whereby AES may call the preferred shares to be converted into 99.9% of the ordinary shares of AES Puerto Rico between December 30, 2025 and December 30, 2027, or would have the option to settle the preferred shares in cash. The noteholders also provided a $23 million bridge loan due March 2026 bearing interest at prime plus 4%. AES Puerto Rico is required to make mandatory prepayments through cash sweeps based on excess cash (as defined in the loan agreements) available from operations on the bridge loan, senior secured bonds, and preferred shares interest. The financial restructuring was accounted for as a troubled debt restructuring in accordance with ASC 470-60, “Troubled Debt Restructurings by Debtors” as AES Puerto Rico was experiencing financial difficulties and the lenders granted a concession. No gain was recognized for the year ended December 31, 2024 as a result of this transaction. As of December 31, 2024, cash settlement of the preferred shares is contingent, as the amounts would not be required to be settled in cash if the option to settle the preferred shares with common shares is exercised.

157 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

AES Ohio — In December 2023, AES Ohio issued $200 million of First Mortgage Bonds in a private placement offering, in which $92 million aggregate principal of 5.49% bonds and $108 million aggregate principal of 5.70% bonds due in 2028 and 2033, respectively, were issued. The net proceeds from the issuances were used primarily to repay existing indebtedness and for general corporate purposes at AES Ohio.

Netherlands and Colon — In January 2023, AES Hispanola Holdings BV and Colon, as co-borrowers, executed a $350 million credit agreement at 8.85%, due in 2028. The Company allocated $300 million and $50 million of the proceeds from the agreement to AES Hispanola Holdings BV and Colon, respectively. The net proceeds from the agreement were used to partially repay the $500 million bridge loan executed in 2022. The remaining principal outstanding of the bridge loan was repaid with proceeds from operating cash flows as well as cash from the Parent Company. As a result of these transactions, the Company recognized a loss on extinguishment of debt of $1 million.

Non-Recourse Debt Covenants, Restrictions and Defaults — The terms of the Company's non-recourse debt include certain financial and nonfinancial covenants. These covenants are limited to subsidiary activity and vary among the subsidiaries. These covenants may include, but are not limited to, maintenance of certain reserves and financial ratios, minimum levels of working capital and limitations on incurring additional indebtedness.

As of December 31, 2024 and 2023, approximately $147 million and $341 million, respectively, of restricted cash was maintained in accordance with certain covenants of the non-recourse debt agreements. Of these amounts, $79 million and $158 million, respectively, were included within Restricted cash and $68 million and $183 million, respectively, were included within Debt service reserves and other deposits in the accompanying Consolidated Balance Sheets. As of December 31, 2024 and 2023, approximately $155 million and $90 million, respectively, of the restricted cash balances were for collateral held to cover potential liability for current and future insurance claims being assumed by AGIC, AES' captive insurance company. Of total restricted cash and debt service reserves of $515 million, $245 million related to VIEs as of December 31, 2024.

Various lender and governmental provisions restrict the ability of certain of the Company's subsidiaries to transfer their net assets to the Parent Company. Such restricted net assets of subsidiaries amounted to approximately $885 million at December 31, 2024.

The following table summarizes the Company's subsidiary non-recourse debt in default (in millions) as of December 31, 2024. Due to the defaults, these amounts are included in the current portion of non-recourse debt:

			Primary Nature of Default						December 31, 2024
Subsidiary			Debt in Default						Net Assets (Liabilities)
AES Dominican Renewable Energy (1)			Covenant						$	354					$	88
AES Puerto Rico			Payment						158						(416)
AES Ilumina (Puerto Rico)			Covenant						22						30
AES Jordan Solar			Covenant						6						12
Total									$	540

---

(1)On February 6, 2025, AES Dominican Renewable Energy failed to comply with a covenant on its debt, resulting in a technical default. AES Dominican Renewable Energy is classified as held-for-sale as of December 31, 2024, therefore the associated non-recourse debt is classified in Current held-for-sale liabilities on the Consolidated Balance Sheet.

AES Puerto Rico is in payment default on its long-term debt and preferred shares due to failure to implement the cash sweep mechanism in accordance with the terms of the loan agreements. AES Puerto Rico is working with the noteholders to resolve this matter. All other subsidiary defaults listed are not payment defaults, but are instead technical defaults triggered by failure to comply with covenants or other requirements contained in the non-recourse debt documents of the applicable subsidiary.

AES Mexico Generation Holdings (TEG and TEP) — In December 2024, AES Mexico Generation Holdings executed an amendment to the original credit agreement with its noteholders, obtaining waivers for prior covenant default events through June 30, 2025. As of December 31, 2024, the AES Mexico Generation Holdings debt balance of $128 million was not in default.

The AES Corporation's recourse debt agreements include cross-default clauses that will trigger if a subsidiary provides 20% or more of the Parent Company's total cash distributions from businesses for the four most recently completed fiscal quarters and has an outstanding principal in excess of $200 million in default. As of December 31, 2024, the Company's subsidiaries had no defaults which resulted in a cross-default under the recourse debt of the Parent Company. In the event the Parent Company is not in compliance with the financial covenants of its revolving

158 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

credit facilities, restricted payments will be limited to regular quarterly shareholder dividends at the then-prevailing rate. Payment defaults and bankruptcy defaults would preclude the making of any restricted payments.

RECOURSE DEBT — Recourse debt represents debt that the Parent Company has an obligation to settle. This can be debt issued directly by the Parent Company or debt issued by a subsidiary under which the Parent Company has explicit commitments such as guarantees, indemnities, letters of credit, or agreements to settle if the subsidiary defaults. The following table summarizes the carrying amount and terms of recourse debt as of the periods indicated (in millions):

			Interest Rate						Final Maturity						December 31, 2024						December 31, 2023
Senior Variable Rate Term Loan			SOFR + 1.125%						2024						$	—					$	200
Senior Unsecured Note			3.30%						2025						900						900
Senior Unsecured Note			1.375%						2026						800						800
Senior Unsecured Note			5.45%						2028						900						900
Senior Unsecured Note			3.95%						2030						700						700
Senior Unsecured Note			2.45%						2031						1,000						1,000
Junior Unsecured Note			7.60%						2055						950						—
Junior Unsecured Note			6.95%						2055						500						—
Unamortized (discount) premium & debt issuance (costs), net															(46)						(36)
Subtotal															$	5,704					$	4,464
Less: Current maturities															(899)						(200)
Noncurrent maturities															$	4,805					$	4,264

The following table summarizes the principal amounts due under our recourse debt for the next five years and thereafter (in millions):

December 31,			Annual Maturities
2025			$	900
2026			800
2027			—
2028			900
2029			—
Thereafter			3,150
Unamortized (discount) premium & debt issuance (costs), net			(46)
Total recourse debt			$	5,704

Subordinated Notes due January 2055 — In May 2024, the Company issued $950 million aggregate principal of 7.60% fixed-to-fixed reset rate subordinated notes due in January 2055. AES allocates the net proceeds from this offering to one or more eligible green projects, which may include the development or redevelopment of such projects. Pending such allocation, the net proceeds from the offering are used for general corporate purposes.

Subordinated Notes due July 2055 — In December 2024, the Company issued $500 million aggregate principal of 6.95% fixed-to-fixed reset rate subordinated notes due in July 2055. AES utilized the net proceeds from this offering to repay existing indebtedness, including borrowings under the revolving facility of its senior credit facility and commercial paper program.

Senior Notes due 2028 — In May 2023, the Company issued $900 million aggregate principal of 5.45% senior notes due in 2028. The Company used the proceeds from this issuance for general corporate purposes and to fund investments in the Company’s Renewables and Utilities SBUs.

AES Clean Energy Development — In March 2023, AES Clean Energy Development Holdings, LLC executed a $500 million bridge loan due in December 2023 and used the proceeds for general corporate purposes. The obligations under the bridge loan were unsecured and fully guaranteed by the Parent Company. The bridge loan was repaid in December 2023.

159 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

Commercial Paper Program — In March 2023, the Company established a commercial paper program under which the Company may issue unsecured commercial paper notes (the “Notes”) up to a maximum aggregate face amount of $750 million outstanding at any time. The maturities of the Notes may vary but will not exceed 397 days from the date of issuance. The proceeds of the Notes will be used for general corporate purposes. The Notes will be sold on customary terms in the U.S. commercial paper market on a private placement basis. The commercial paper program is backed by the Company's $1.8 billion in revolving credit facilities, and the Company cannot issue commercial paper in an aggregate amount exceeding the then available capacity under its revolving credit facilities. During 2024, the Company borrowed and repaid approximately $57.9 billion under the commercial paper program, with average daily outstanding borrowings of $611 million. As of December 31, 2024, the Company had no outstanding borrowings under the commercial paper program.

Revolving Credit Facilities — In December 2024, AES executed a $300 million senior unsecured revolving credit facility, maturing in December 2026. The aggregate commitment under its previously existing revolving credit facility is $1.5 billion and matures in August 2027. As of December 31, 2024, AES had no outstanding drawings under either of its revolving credit facilities.

Recourse Debt Covenants and Guarantees — The Company's obligations under the indentures governing the senior notes due 2025 and 2030 are currently unsecured following the achievement of two investment grade ratings and the release of security in accordance with the terms of the facility and the notes. If the Company’s credit rating falls below "Investment Grade" from at least two of Fitch Investors Service Inc., Standard & Poor’s Ratings Services or Moody’s Investors Service, Inc., as determined in accordance with the terms of the revolving credit facility and indenture dated May 15, 2020 (BBB-, or in the case of Moody’s Investor Services, Inc. Baa3), then the obligations under the indentures governing the senior notes due 2025 and 2030 become, subject to certain exceptions, secured by (i) all of the capital stock of domestic subsidiaries owned directly by the Company or certain subsidiaries and 65% of the capital stock of certain foreign subsidiaries owned directly by the Company and certain subsidiaries, and (ii) certain intercompany receivables, certain intercompany notes, and certain intercompany tax sharing agreements.

Each revolving credit facility contains customary covenants and restrictions on the Company's ability to engage in certain activities, including, but not limited to, limitations on liens; restrictions on mergers and acquisitions and the disposition of assets; and other financial reporting requirements.

Each revolving credit facility also contains one financial covenant, evaluated quarterly, requiring the Company to maintain a maximum ratio of recourse debt to adjusted operating cash flow of 5.75 times.

The terms of the Company's senior notes contain certain customary covenants, including limitations on the Company's ability to incur liens or enter into sale and leaseback transactions.

SUPPLIER FINANCING ARRANGEMENTS — With some purchases, the Company enters into supplier financing arrangements with the goal of securing improved payment terms. The Company confirms supplier invoices to an intermediary financial institution who will pay the supplier directly or reimburse the Company for payments made to the supplier. These arrangements are included in Supplier financing arrangements on the Consolidated Balance Sheets in Current liabilities as the amounts are all due in less than a year; the related interest expense is recorded on the Consolidated Statements of Operations within Interest expense. These agreements ranged from less than $1 million to $69 million with a weighted average interest rate of 6.83% and 7.51% as of December 31, 2024 and December 31, 2023, respectively. Of the amounts outstanding under supplier financing arrangements, $616 million and $814 million were guaranteed by the Company as of December 31, 2024 and 2023, respectively.

The following table shows a rollforward for outstanding supplier financing arrangements for the years ended December 31, 2024 and 2023 (in millions):

						2024						2023
Balance at January 1						$	974					$	662
Invoices confirmed during the year						1,737						1,907
Confirmed invoices paid during the year						(1,794)						(1,595)
Balance at December 31						$	917					$	974

160 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

13. COMMITMENTS

The Company enters into long-term contracts for construction projects, maintenance and service, transmission of electricity, operations services and purchases of electricity and fuel. In general, these contracts are subject to variable quantities or prices and are terminable only in limited circumstances. The following table shows the future minimum commitments for continuing operations under these contracts as of December 31, 2024 for 2025 through 2029 and thereafter as well as actual purchases under these contracts for the years ended December 31, 2024, 2023, and 2022 (in millions):

Actual purchases during the year ended December 31,			Electricity Purchase Contracts						Fuel Purchase Contracts						Other Purchase Contracts
2022			$	1,156					$	3,375					$	3,602
2023			1,134						1,982						3,181
2024			797						1,869						3,507
Future commitments for the year ending December 31,
2025			$	759					$	1,701					$	2,485
2026			731						1,005						262
2027			660						774						192
2028			648						528						140
2029			640						474						142
Thereafter			5,484						1,259						892
Total			$	8,922					$	5,741					$	4,113

14. CONTINGENCIES

Parent Guarantees and Letters of Credit — In connection with certain project financings (including tax equity transactions), acquisitions and dispositions, power purchases, EPC contracts, and other agreements, the Parent Company has expressly undertaken limited obligations and commitments, most of which will only be effective or will be terminated upon the occurrence of future events. In the normal course of business, the Parent Company has entered into various agreements, mainly guarantees and letters of credit, to provide financial or performance assurance to third parties on behalf of AES businesses. These agreements are entered into primarily to support or enhance the creditworthiness otherwise achieved by a business on a stand-alone basis, thereby facilitating the availability of sufficient credit to accomplish their intended business purposes. Most of the contingent obligations relate to future performance commitments which the Company or its businesses expect to fulfill within the normal course of business. The expiration dates of these guarantees vary from less than 1 year to no more than 32 years.

The following table summarizes the Parent Company's contingent contractual obligations as of December 31, 2024. Amounts presented in the following table represent the Parent Company's current undiscounted exposure to guarantees and the range of maximum undiscounted potential exposure per individual agreement. The maximum exposure is not reduced by the amounts, if any, that could be recovered under the recourse or collateralization provisions in the guarantees.

Contingent Contractual Obligations						Maximum Exposure (in millions)						Number of Agreements						Maximum Exposure Range for Each Agreement (in millions)
Guarantees and commitments						$	3,040					89						< $1 — 350
Letters of credit under bilateral agreements						378						9						$11 — 88
Letters of credit under the unsecured credit facilities						129						28						< $1 — 50
Letters of credit under the revolving credit facilities						18						9						< $1 — 4
Surety bonds						2						2						< $1 — 1
Total						$	3,567					137

During the year ended December 31, 2024, the Parent Company paid letter of credit fees ranging from 1% to 3% per annum on the outstanding amounts of letters of credit.

Subsidiary Guarantees and Letters of Credit — In connection with certain project financings (including tax equity transactions), acquisitions and dispositions, power purchases, EPC contracts, and other agreements, certain of the Company's subsidiaries have expressly undertaken limited obligations and commitments, most of which will only be effective or will be terminated upon the occurrence of future events, or are customary payment guarantees for amounts due under existing contracts in the normal course of business. These contingent contractual obligations are issued at the subsidiary level and are non-recourse to the Parent Company. As of December 31, 2024, the maximum undiscounted potential exposure to guarantees and letters of credit issued by our subsidiaries was $5.3 billion, including $2.2 billion of customary payment guarantees under EPC contracts and other agreements, $1.4

161 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

billion of letters of credit outstanding, $1.2 billion of surety bonds and other guarantees issued by insurance companies, and $388 million of tax equity financing related guarantees.

Environmental — The Company periodically reviews its obligations as they relate to compliance with environmental laws, including site restoration and remediation. For the periods ended December 31, 2024 and 2023, the Company recognized liabilities of $2 million and $9 million, respectively, for projected environmental remediation costs. These amounts are reported on the Consolidated Balance Sheets within Accrued and other liabilities and Other noncurrent liabilities. Due to the uncertainties associated with environmental assessment and remediation activities, future costs of compliance or remediation could be higher or lower than the amount currently accrued. Moreover, where no liability has been recognized, it is reasonably possible that the Company may be required to incur remediation costs or make expenditures in amounts that could be material but could not be estimated as of December 31, 2024. Unasserted claims are not included in the range of potential losses related to environmental matters until it is probable that a claim will be asserted and there is a reasonable possibility that the outcome will be unfavorable. In aggregate, the Company estimates the range of potential losses related to environmental matters, where estimable, to be immaterial. The amounts considered reasonably possible do not include amounts accrued as discussed above.

Litigation — The Company is involved in certain claims, suits and legal proceedings in the normal course of business. The Company accrues for litigation and claims when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. The Company has recognized aggregate liabilities for all claims of approximately $5 million and $17 million as of December 31, 2024 and 2023, respectively. These amounts are reported on the Consolidated Balance Sheets within Accrued and other liabilities and Other noncurrent liabilities. A significant portion of these accrued liabilities relate to regulatory matters and commercial disputes in international jurisdictions. There can be no assurance that these accrued liabilities will be adequate to cover all existing and future claims or that we will have the liquidity to pay such claims as they arise.

Where no accrued liability has been recognized, it is reasonably possible that some matters could be decided unfavorably to the Company and could require the Company to pay damages or make expenditures in amounts that could be material but could not be estimated as of December 31, 2024. The material contingencies where a loss is reasonably possible primarily include disputes with offtakers, suppliers and EPC contractors; alleged breaches of contract; alleged violation of laws and regulations; income tax and non-income tax matters with tax authorities; and regulatory matters. In aggregate, the Company estimates the range of potential losses, where estimable, related to these reasonably possible material contingencies to be between $39 million and $66 million. Included in this range is a reasonably possible legal contingency for environmental remediation costs related to AES Sul, a business the Company disposed of in 2016, estimated to be approximately R$15 million to R$60 million ($2 million to $10 million). The amounts considered reasonably possible do not include the amounts accrued, as discussed above. These material contingencies do not include income tax-related contingencies which are considered part of our uncertain tax positions. See Note 24—Income Taxes for further information.

15. LEASES

LESSEE — The following table summarizes the amounts recognized on the Consolidated Balance Sheets related to lease asset and liability balances as of the dates indicated (in millions):

						Consolidated Balance Sheet Classification						December 31, 2024									December 31, 2023
Assets
Right-of-use assets — finance leases						Property, plant and equipment, net						$	547								$	250
Right-of-use assets — operating leases						Other noncurrent assets						372									380
Total right-of-use assets												$	919								$	630
Liabilities
Finance lease liabilities (current)						Non-recourse debt (current liabilities)						$	18								$	8
Finance lease liabilities (noncurrent)						Non-recourse debt (noncurrent liabilities)						553									262
Total finance lease liabilities												571									270
Operating lease liabilities (current)						Accrued and other liabilities						26									37
Operating lease liabilities (noncurrent)						Other noncurrent liabilities						392									387
Total operating lease liabilities												418									424
Total lease liabilities												$	989								$	694

162 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

The following table summarizes supplemental balance sheet information related to leases as of the dates indicated:

Lease Term and Discount Rate			December 31, 2024						December 31, 2023
Weighted-average remaining lease term — finance leases			36 years						34 years
Weighted-average remaining lease term — operating leases			27 years						27 years
Weighted-average discount rate — finance leases			5.38		%				5.36		%
Weighted-average discount rate — operating leases			7.25		%				7.70		%

The following table summarizes the components of lease cost recognized in Cost of Sales on the Consolidated Statements of Operations for the periods indicated (in millions):

			Years Ended December 31,
Components of Lease Cost			2024						2023
Operating lease cost			$	56					$	52
Finance lease cost:
Amortization of right-of-use assets			13						7
Interest on lease liabilities			22						10
Short-term lease costs			18						16
Total lease cost			$	109					$	85

Operating cash outflows from operating leases included in the measurement of lease liabilities were $59 million and $54 million for the years ended December 31, 2024 and 2023, respectively, and operating cash outflows from finance leases were $7 million and $5 million for the years ended December 31, 2024 and 2023, respectively. Right-of-use assets obtained in exchange for new operating and finance lease liabilities were $129 million and $327 million, respectively, for the year ended December 31, 2024, and $129 million and $96 million, respectively, for the year ended December 31, 2023.

The following table shows the future lease payments under operating and finance leases for continuing operations together with the present value of the net lease payments as of December 31, 2024 for 2025 through 2029 and thereafter (in millions):

			Maturity of Lease Liabilities
			Finance Leases						Operating Leases
2025			$	28					$	48
2026			28						52
2027			29						50
2028			29						47
2029			30						45
Thereafter			1,153						1,167
Total			1,297						1,409
Less: Imputed interest			(726)						(991)
Present value of lease payments			$	571					$	418

LESSOR — The Company has operating leases for certain generation contracts that contain provisions to provide capacity to a customer, which is a stand-ready obligation to deliver energy when required by the customer. Capacity payments are generally considered lease elements as they cover the majority of available output from a facility. The allocation of contract payments between the lease and non-lease elements is made at the inception of the lease. Lease payments from such contracts are recognized as lease revenue on a straight-line basis over the lease term, whereas variable lease payments are recognized when earned.

The following table presents lease revenue from operating leases in which the Company is the lessor, recognized in Revenue on the Consolidated Statements of Operations for the periods indicated (in millions):

									Years Ended December 31,
Operating Lease Revenue															2024						2023
Non-variable lease revenue															$	414					$	425
Variable lease revenue															61						65
Total lease revenue															$	475					$	490

163 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

The following table presents the underlying gross assets and accumulated depreciation of operating leases included in Property, plant and equipment on the Consolidated Balance Sheets as of the dates indicated (in millions):

Property, Plant and Equipment, Net						December 31, 2024						December 31, 2023
Gross assets						$	1,085					$	1,227
Less: Accumulated depreciation						(218)						(182)
Net assets						$	867					$	1,045

The option to extend or terminate a lease is based on customary early termination provisions in the contract, such as payment defaults, bankruptcy, or lack of performance on energy delivery. The Company has not recognized any early terminations as of December 31, 2024. Certain leases may provide for variable lease payments based on usage or index-based (e.g., the U.S. Consumer Price Index) adjustments to lease payments.

The following table shows the future lease receipts as of December 31, 2024 for 2025 through 2029 and thereafter (in millions):

			Future Cash Receipts for
			Sales-Type Leases						Operating Leases
2025			$	44					$	242
2026			44						136
2027			44						65
2028			44						—
2029			44						—
Thereafter			604						1
Total			$	824					$	444
Less: Imputed interest			(371)
Present value of total lease receipts			$	453

Battery Storage Lease Arrangements — The Company constructs and operates projects consisting only of a stand-alone BESS facility, as well as projects that pair a BESS with solar energy systems. These projects allow more flexibility on when to provide energy to the grid. The Company will enter into PPAs for the full output of the facility that allow customers the ability to determine when to charge and discharge the BESS. These arrangements include both lease and non-lease elements under ASC 842, with the BESS component typically constituting a sales-type lease.

The following table presents variable lease revenue, interest income, and gains (losses) on commencement of sales-type leases in which the Company is the lessor for the periods indicated (in millions):

									Years Ended December 31,
Sales-Type Leases															2024						2023
Variable lease revenue															$	3					$	3
Interest income															19						13
Net gains (losses) on commencement of sales-types leases (1)															(67)						(20)

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(1)Gains and losses are recognized in Other income and Other expense, respectively, in the Consolidated Statement of Operations. See Note 22—Other Income and Expense for further information.

16. BENEFIT PLANS

Defined Contribution Plans — The Company sponsors four defined contribution plans ("the DC Plans"). Two plans cover U.S. non-union employees; one for Parent Company and certain U.S. business employees, and one for AES Ohio employees. The remaining two plans include union and non-union employees at AES Indiana and union employees at AES Ohio. The DC Plans are qualified under section 401 of the Internal Revenue Code. Most U.S. employees of the Company are eligible to participate in the appropriate plan except for those employees who are covered by a collective bargaining agreement, unless such agreement specifically provides that the employee is considered an eligible employee under a plan. Within the DC Plans, the Company provides matching contributions in addition to other non-matching contributions. Participants are fully vested in their own contributions. The Company's contributions vest over various time periods ranging from immediate up to five years. For the years ended December 31, 2024, 2023 and 2022, costs for defined contribution plans were approximately $47 million, $40 million and $31 million, respectively.

Defined Benefit Plans — Certain of the Company's subsidiaries have defined benefit pension plans covering substantially all of their respective employees ("the DB Plans"). Pension benefits are based on years of credited

164 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

service, age of the participant, and average earnings. Of the 27 active DB Plans as of December 31, 2024, five are at U.S. subsidiaries and the remaining plans are at foreign subsidiaries.

The following table reconciles the Company's funded status, both domestic and foreign, as of the periods indicated (in millions):

						2024												2023
						U.S.						Foreign						U.S.						Foreign
Change in projected benefit obligation:
Benefit obligation as of January 1						$	875					$	190					$	914					$	177
Service cost						8						3						8						4
Interest cost						43						17						47						21
Plan amendments						7						—						2						—
Plan settlements						—						(3)						—						(1)
Benefits paid						(61)						(11)						(115)						(15)
Divestitures						—						(99)						—						—
Actuarial loss (gain)						(30)						(6)						19						(2)
Effect of foreign currency exchange rate changes						—						(20)						—						6
Benefit obligation as of December 31						$	842					$	71					$	875					$	190
Change in plan assets:
Fair value of plan assets as of January 1						$	883					$	127					$	911					$	114
Actual return on plan assets						13						7						80						10
Employer contributions						8						8						8						9
Plan settlements						—						(3)						—						(1)
Benefits paid						(60)						(11)						(116)						(15)
Divestitures						—						(100)						—						—
Effect of foreign currency exchange rate changes						—						(14)						—						10
Fair value of plan assets as of December 31						$	844					$	14					$	883					$	127
Reconciliation of funded status:
Funded status as of December 31						$	2					$	(57)					$	8					$	(63)

The following table summarizes the amounts recognized on the Consolidated Balance Sheets related to the funded status of the DB Plans, both domestic and foreign, as of the dates indicated (in millions):

December 31,						2024												2023
Amounts Recognized on the Consolidated Balance Sheets						U.S.						Foreign						U.S.						Foreign
Noncurrent assets						$	25					$	3					$	41					$	10
Accrued benefit liability—current						—						(8)						—						(9)
Accrued benefit liability—noncurrent						(23)						(52)						(33)						(64)
Net amount recognized at end of year						$	2					$	(57)					$	8					$	(63)

The following table summarizes the Company's U.S. and foreign accumulated benefit obligation as of the dates indicated (in millions):

December 31,			2024												2023
			U.S.						Foreign						U.S.						Foreign
Accumulated benefit obligation			$	829					$	64					$	860					$	182
Information for pension plans with an accumulated benefit obligation in excess of plan assets:
Accumulated benefit obligation			$	301					$	59					$	316					$	174
Fair value of plan assets			285						3						292						107
Information for pension plans with a projected benefit obligation in excess of plan assets:
Projected benefit obligation			$	308					$	64					$	325					$	180
Fair value of plan assets			285						3						292						107

The following table summarizes the significant weighted average assumptions used in the calculation of benefit obligation and net periodic benefit cost, both domestic and foreign, as of the periods indicated:

December 31,						2024												2023
						U.S.						Foreign						U.S.						Foreign
Benefit Obligation:			Discount rate			5.64		%				9.74		%				5.17		%				11.14		%
			Rate of compensation increase			2.75		%				5.32		%				2.75		%				8.01		%
Periodic Benefit Cost:			Discount rate			5.17		%				11.14		%	(1)			5.41		%				13.23		%	(1)
			Expected long-term rate of return on plan assets			5.21		%				9.28		%				5.55		%				9.44		%
			Rate of compensation increase			2.75		%				8.01		%				2.75		%				11.06		%

---

(1)Includes an inflation factor that is used to calculate future periodic benefit cost, but is not used to calculate the benefit obligation.

165 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

The Company establishes its estimated long-term return on plan assets considering various factors, which include the targeted asset allocation percentages, historic returns, and expected future returns.

The measurement of pension obligations, costs, and liabilities is dependent on a variety of assumptions. These assumptions include estimates of the present value of projected future pension payments to all plan participants, taking into consideration the likelihood of potential future events such as salary increases and demographic experience. These assumptions may have an effect on the amount and timing of future contributions.

The assumptions used in developing the required estimates include the following key factors: discount rates, salary growth, retirement rates, inflation, expected return on plan assets, and mortality rates. The effects of actual results differing from the Company's assumptions are accumulated and amortized over future periods and, therefore, generally affect the Company's recognized expense in such future periods. Unrecognized gains or losses are amortized using the “corridor approach,” under which the net gain or loss in excess of 10% of the greater of the projected benefit obligation or the market-related value of the assets, if applicable, is amortized.

Sensitivity of the Company's pension funded status to the indicated increase or decrease in the discount rate and long-term rate of return on plan assets assumptions is shown below. Note that these sensitivities may be asymmetric and are specific to the base conditions at year-end 2024. They also may not be additive, so the impact of changing multiple factors simultaneously cannot be calculated by combining the individual sensitivities shown. The funded status as of December 31, 2024 is affected by the assumptions as of that date. Pension expense for 2024 is affected by the December 31, 2023 assumptions. The impact on pension expense from a one percentage point change in these assumptions is shown in the following table (in millions):

Increase of 1% in the discount rate						$	(4)
Decrease of 1% in the discount rate						4
Increase of 1% in the long-term rate of return on plan assets						(10)
Decrease of 1% in the long-term rate of return on plan assets						10

The following table summarizes the components of the net periodic benefit cost, both domestic and foreign, for the years indicated (in millions):

December 31,						2024												2023												2022
Components of Net Periodic Benefit Cost:						U.S.						Foreign						U.S.						Foreign						U.S.						Foreign
Service cost						$	8					$	3					$	8					$	4					$	14					$	4
Interest cost						43						17						47						21						28						17
Expected return on plan assets						(46)						(9)						(52)						(11)						(53)						(7)
Amortization of prior service cost						3						—						3						—						4						—
Amortization of net loss						7						—						7						—						8						1
Total Net Periodic Benefit Cost						$	15					$	12					$	13					$	14					$	1					$	15

The following table summarizes the amounts reflected in AOCL, including AOCL attributable to noncontrolling interests, on the Consolidated Balance Sheet as of December 31, 2024, that have not yet been recognized as components of net periodic benefit cost (in millions):

December 31, 2024			Accumulated Other Comprehensive Income (Loss)
			U.S.						Foreign
Prior service cost			$	(2)					$	1
Unrecognized net actuarial loss			(22)						(11)
Total			$	(24)					$	(10)

The following table summarizes the Company's target allocation for 2024 and pension plan asset allocation, both domestic and foreign, as of the dates indicated:

																		Percentage of Plan Assets as of December 31,
						Target Allocations												2024												2023
Asset Category						U.S.						Foreign						U.S.						Foreign						U.S.						Foreign
Mutual Funds
			Equity securities			21.80%						—%						22.00		%				—		%				21.80		%				5.30		%
			Debt securities			78.20%						100.00%						77.00		%				100.00		%				77.60		%				89.30		%
Real estate						—%						—%						—		%				—		%				—		%				0.80		%
Other						—%						—%						1.00		%				—		%				0.60		%				4.60		%
Total pension assets																		100.00		%				100.00		%				100.00		%				100.00		%

The U.S. DB Plans seek to achieve the following long-term investment objectives:

• maintenance of sufficient income and liquidity to pay retirement benefits and other lump sum payments;

166 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

• long-term rate of return in excess of the annualized inflation rate;

• long-term rate of return, net of relevant fees, that meets or exceeds the assumed actuarial rate; and

• long-term competitive rate of return on investments, net of expenses, that equals or exceeds various benchmark rates.

The asset allocation is reviewed periodically to determine a suitable asset allocation which seeks to manage risk through portfolio diversification and takes into account the above-stated objectives, in conjunction with current funding levels, cash flow conditions, and economic and industry trends. The following table summarizes the Company's U.S. DB Plan assets by category of investment and level within the fair value hierarchy as of the dates indicated (in millions):

						December 31, 2024																								December 31, 2023
U.S. Plans						Level 1						Level 2						Level 3						Total						Level 1						Level 2						Level 3						Total
Mutual Funds			Equity securities (1)			$	—					$	193					$	—					$	193					$	—					$	193					$	—					$	193
			Debt securities (1)			—						646						—						646						—						685						—						685
Cash and cash equivalents						5						—						—						5						5						—						—						5
Total plan assets						$	5					$	839					$	—					$	844					$	5					$	878					$	—					$	883

---

(1)For the U.S. plans, the balances under the equity securities and debt securities categories represent investments through common collective trusts, for which the underlying investments are equity and debt securities.

The investment strategy of the foreign DB Plans seeks to maximize return on investment while minimizing risk. The assumed asset allocation has less exposure to equities in order to closely match market conditions and near term forecasts. The following table summarizes the Company's foreign DB plan assets by category of investment and level within the fair value hierarchy as of the dates indicated (in millions):

						December 31, 2024																								December 31, 2023
Foreign Plans						Level 1						Level 2						Level 3						Total						Level 1						Level 2						Level 3						Total
Equity Securities			Private equity			$	—					$	—					$	—					$	—					$	—					$	—					$	2					$	2
Mutual Funds			Equity securities (1)			—						—						—						—						—						5						—						5
			Debt securities (1)			—						14						—						14						40						73						—						113
Real estate			Real estate			—						—						—						—						—						—						1						1
Other			Other assets			—						—						—						—						1						3						2						6
Total plan assets						$	—					$	14					$	—					$	14					$	41					$	81					$	5					$	127

---

(1)Mutual funds categorized as debt securities and equity securities consist of mutual funds for which debt securities and equity securities are the primary underlying investment.

The following table summarizes the estimated cash flows for U.S. and foreign expected employer contributions and expected future benefit payments, both domestic and foreign (in millions):

						U.S.						Foreign
Expected employer contribution in 2025						$	8					$	8
Expected benefit payments for fiscal year ending:
2025						65						10
2026						65						7
2027						65						9
2028						66						9
2029						66						10
2030 - 2034						322						65

17. REDEEMABLE STOCK OF SUBSIDIARIES

The following table is a reconciliation of changes in redeemable stock of subsidiaries (in millions):

167 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

December 31,			2024						2023						2022
Balance at the beginning of the period			$	1,464					$	1,321					$	1,257
Net loss			(86)						(59)						(87)
Other comprehensive income			73						1						40
Reclassification of redeemable stock of subsidiaries to noncontrolling interests			(736)						—						—
Disposition of business interests			(18)						—						—
Distributions to holders of redeemable stock of subsidiaries			(61)						(62)						(64)
Acquisitions of redeemable stock of subsidiaries			—						—						(60)
Contributions from holders of redeemable stock of subsidiaries			105						163						67
Sales of redeemable stock of subsidiaries			197						100						168
Balance at the end of the period			$	938					$	1,464					$	1,321

The following table summarizes the Company's redeemable stock of subsidiaries balances as of the periods indicated (in millions):

December 31,						2024						2023
IPALCO common stock						$	835					$	773
AES Clean Energy tax equity partnerships						65						129
AES Indiana Pike County BESS tax equity partnership						38						—
AES Clean Energy Development common stock						—						544
Potengi common and preferred stock						—						18
Total redeemable stock of subsidiaries						$	938					$	1,464

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.

In some cases, these agreements contain certain partnership rights, though not currently in effect, that may enable the tax equity investor to exit in the future. As a result, the noncontrolling ownership interest is considered temporary equity. Some of these tax equity partnership agreements have redemption features dependent upon the passage of time, therefore the noncontrolling ownership interests are probable of becoming redeemable. As of December 31, 2024, the carrying values of these noncontrolling ownership interests exceeded the redemption values, therefore no adjustments to the carrying values were necessary. Certain other tax equity partnership agreements have redemption features contingent upon the underlying assets achieving agreed-upon project milestones. The Company has concluded it is probable that these projects will reach the specified milestones, therefore the noncontrolling ownership interests are not probable of becoming redeemable and subsequent adjustments to the carrying value were not required.

In 2024, 2023, and 2022, AES Clean Energy, through multiple transactions, sold noncontrolling interests in project companies to tax equity investors, resulting in increases to Redeemable stock of subsidiaries of $159 million,$100 million, and $157 million, respectively. During 2024, certain renewables development projects with redemption features were placed in service, resulting in the expiration of the redemption features. As a result, noncontrolling ownership interests of $159 million were reclassified from Redeemable stock of subsidiaries to Noncontrolling interests on the Consolidated Balance Sheets. AES Clean Energy is reported in the Renewables SBU reportable segment.

Pike County BESS — In December 2024, AES Indiana sold a noncontrolling interest in the Pike County energy storage project to a tax equity investor, resulting in a $38 million increase to Redeemable stock of subsidiaries. The redemption feature of the tax equity partnership agreement is contingent upon the underlying assets being placed in service by a guaranteed date. The Company has concluded it is probable that the project will be placed in service by the guaranteed date, therefore the noncontrolling ownership interest is not probable of becoming redeemable and subsequent adjustments to the carrying value were not required. AES Indiana is reported in the Utilities SBU reportable segment.

168 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

IPALCO — In December 2022 and during 2024, CDPQ made equity capital contributions of $77 million and $68 million, respectively, to IPALCO as part of capital calls primarily to raise proceeds for AES Indiana's TDSIC and replacement generation project and for funding needs related to AES Indiana’s capital expenditure program. The Company and CDPQ made capital contributions on a proportional share basis, therefore the contributions did not change the Company’s ownership interest in IPALCO. The Company has concluded that the likelihood of an event that would allow CDPQ to redeem its interest under the terms of the shareholder agreement is remote, but would require redemption at fair value. Therefore, the noncontrolling ownership interest is not probable of becoming redeemable and subsequent adjustments to the carrying value were not required. IPALCO is reported in the Utilities SBU reportable segment.

AES Clean Energy Development — As part of the formation of AES Clean Energy Development in February 2021, the noncontrolling interest partner received certain partnership rights that would enable them to exit in the future. As a result, the noncontrolling ownership interest was considered temporary equity. In May 2024, these redemption features expired without being exercised and the noncontrolling ownership interest of $577 million was reclassified from Redeemable stock of subsidiaries to Noncontrolling interests on the Consolidated Balance Sheets. AES Clean Energy Development is reported in the Renewables SBU reportable segment.

Potengi — In March 2022, Tucano Holding I (“Tucano”), a subsidiary of AES Brasil, issued new shares in the Potengi wind development project. BRF S.A. (“BRF”) acquired shares representing 24% of the equity in the project for $12 million, reducing the Company’s indirect ownership interest in Potengi to 35.5%. As the Company maintained control after the transaction, Potengi continued to be consolidated by the Company. As part of the transaction, BRF was given an option to sell its entire ownership interest at the conclusion of the PPA term and therefore the noncontrolling ownership interest was considered temporary equity.

In October 2024, the Company completed the sale of its 47.3% controlling interest in AES Brasil, which included the Potengi wind development project. See Note 25—Held-for-Sale and Dispositions for further information. Prior to its sale, Potengi was reported in the Renewables SBU reportable segment.

AES Indiana Preferred Stock — In December 2022, AES Indiana redeemed all of its outstanding preferred shares for $60 million. The preferred shares were retired upon redemption as there is no intention for the shares to be reissued. AES Indiana is reported in the Utilities SBU reportable segment.

18. 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 represented 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.

169 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

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 2024, 2023, and 2022, AES Clean Energy Development and AES Renewable Holdings, through multiple transactions, sold noncontrolling interests in project companies to tax equity investors, resulting in the following increases to NCI (in millions):

Business						2024						2023						2022
AES Clean Energy Development						$	603					$	1,039					$	230
AES Renewable Holdings						263						124						88

In the third quarter of 2023, AES Renewable Holdings completed buyouts of tax equity partners at Buffalo Gap I, Buffalo Gap II and six other project companies, resulting in a decrease to NCI of $45 million and an increase to additional paid-in capital of $34 million. AES Clean Energy Development and AES Renewable Holdings are reported in the Renewables SBU reportable segment.

AES Brasiliana — In October 2024, prior to and separate from the sale of AES Brasil, the Company completed the acquisition of the remaining noncontrolling ownership interest in AES Brasiliana Holdings Ltda. ("AES Brasiliana") for a nominal amount. This transaction resulted in a $304 million decrease in Parent Company Stockholders' Equity due to a decrease in additional paid-in-capital of $802 million, offset by the reclassification of cumulative translation adjustments from NCI to AOCL of $498 million. As the Company maintained control after the acquisition, AES Brasiliana continues to be consolidated by the Company within the Renewables SBU reportable segment.

Chile Renovables — Under its renewables partnership agreement with Global Infrastructure Management, LLC (“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. During 2024, 2023, and 2022, AES Andes completed the sale of the following projects to Chile Renovables (in millions):

170 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

Business						Transaction Period						Sale Price						Increase to Noncontrolling Interests						Increase (Decrease) to Additional Paid-In Capital
Andes Solar 2a						January 2022						$	37					$	28					$	9
Los Olmos						June 2022						80						68						12
Campo Lindo						September 2023						50						59						(9)
Bolero						November 2023						58						57						1
Andes Solar 2b						December 2023						156						145						11
Mesamávida						February 2024						40						51						(11)

In December 2023, Chile Renovables issued $275 million of preferred shares to GIP, the proceeds of which will be used to fund the development of an additional pipeline of renewables projects. Under the terms of the operating agreement, GIP will receive 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 will convert to common stock and GIP may make additional contributions to maintain its 49% ownership interest. In the fourth quarter of 2024, the San Matias, Andes Solar IV, and Andes Solar 2b Expansion projects reached commercial operations. The preferred shares were converted to common stock and GIP made additional contributions of $77 million, resulting in an increase to NCI of $74 million and an increase 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 Energy Infrastructure 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.

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 Dominicana — In December 2023, the Company completed the sale of a 20% ownership interest in AES Dominicana for $192 million. AES Dominicana consists of five operating subsidiaries: Andres, Los Mina, Bayasol, Santanasol, and Agua Clara. This transaction decreased the Company's economic interest to 65% and resulted in a $74 million increase in Parent Company Stockholder's Equity due to an increase in additional paid-in-capital of $73 million and the reclassification of accumulated other comprehensive losses from AOCL to NCI of $1 million. As the Company maintained control after the sale, AES Dominicana continues to be consolidated by the Company. Andres and Los Mina are included within the Energy Infrastructure SBU reportable segment and Bayasol, Santanasol, and Aqua Clara are included within the Renewables SBU reportable segment.

Colon — In December 2023, the Company completed the sale of a 35% ownership interest in Colon for $146 million, which decreased the Company's economic interest to 65%. This transaction resulted in a $43 million increase in Parent Company Stockholder's Equity due to an increase in additional paid-in-capital of $31 million and the reclassification of accumulated other comprehensive losses from AOCL to NCI of $12 million. As the Company maintained control after the sale, Colon continues to be consolidated by the Company within the Energy Infrastructure SBU reportable segment.

AES Renewable Holdings — In December 2023, AES Renewable Holdings issued preferred shares in a portfolio of operating assets ("OpCo 1") to HASI for total proceeds of $143 million. Under the terms of the operating agreement, HASI will receive cash distributions disproportionate to its ownership interest in OpCo 1 until a specified internal rate of return is reached. As the Company maintained control after the transaction, AES Renewable Holdings continues to be consolidated by the Company within the Renewables SBU reportable segment.

AES Panama — In September 2023, AES Latin America completed the sale of its interest in the Grupo Energía Gas Panamá joint venture to AES Panama, a 49%-owned consolidated subsidiary. See Note 9—Investments in and Advances to Affiliates for further information. As a result of the transaction, AES Panama received $42 million from noncontrolling interest holders and the Company reclassified accumulated other comprehensive income from AOCL to NCI of $23 million. AES Panama is reported in the Renewables SBU reportable segment however the investment in Grupo Energía Gas Panamá is reported in the Energy Infrastructure SBU reportable segment.

171 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

Southland Energy — In December 2022, the Company completed the sale of a 14.9% ownership interest in the Southland Energy assets for $157 million, which decreased the Company's economic interest to 50.1%. This transaction resulted in a $91 million increase in Parent Company Stockholder's Equity due to an increase in additional paid-in-capital of $94 million, net of tax and transaction costs, partially offset by the reclassification of accumulated other comprehensive income from AOCL to NCI of $3 million. As the Company maintained control after the sale, Southland Energy continues to be consolidated by the Company. The CCGT units and interconnected battery-based energy storage facilities are included within the Energy Infrastructure SBU and Renewables SBU reportable segments, respectively.

AES Brasil — In September 2022, AES Brasil commenced a private placement offering for its existing shareholders to subscribe for up to 116 million newly issued shares, of which 107 million were subscribed. AES Holdings Brasil Ltda. ("AHB") and noncontrolling interest holders subscribed for 54 million and 53 million shares, respectively, thereby increasing AES’ indirect beneficial interest in AES Brasil to 47.4% and resulting in additional capital contributions from noncontrolling interest holders of $98 million, an increase in additional paid-in capital of $10 million, and the reclassification of accumulated other comprehensive losses from NCI to AOCL of $3 million. Prior to its sale in October 2024, AES Brasil was reported in the Renewables SBU reportable segment.

Guaimbê Holding — In January 2022, the Ventus wind complex and AGV solar complex were incorporated by Guaimbê Solar Holding S.A. (“Guaimbê Holding”), a subsidiary of AES Brasil. Guaimbê Holding issued additional preferred shares representing 3.5% ownership in the subsidiary for total proceeds of $63 million. The transaction decreased the Company’s indirect ownership interest to 35.8%. As the Company maintained control after the transaction, Guaimbê Holding continued to be consolidated by the Company within the Renewables SBU reportable segment until the sale of AES Brasil in October 2024.

AES Andes — In January 2022, Inversiones Cachagua SpA, an AES subsidiary, completed a tender offer for the shares of AES Andes held by minority shareholders for $522 million, net of transaction costs. Upon completion, AES' indirect beneficial interest in AES Andes increased from 67.1% to 98.1%. Through multiple transactions in 2022 following the tender offer, Cachagua acquired an additional 1.3% ownership in AES Andes for $22 million, further increasing AES’ indirect beneficial interest to 99.4% The tender offer and these follow-on transactions resulted in a $172 million decrease to Parent Company Stockholder’s Equity due to a decrease in additional paid-in capital of $96 million and the reclassification of accumulated other comprehensive losses from NCI to AOCL of $76 million. AES Andes is reported in the Energy Infrastructure SBU reportable segment.

Cochrane — Under the terms of the operating agreement of Cochrane, preferred shareholders have the right to receive an annual amount of $12 million from any dividends or distributions of capital, until reaching their original investment plus a specified rate of return. Cochrane is reported in the Energy Infrastructure 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):

Year Ended December 31,						2024						2023						2022
Net income (loss) attributable to The AES Corporation						$	1,679					$	249					$	(546)
Transfers (to) from noncontrolling interest:
Increase (decrease) in The AES Corporation's paid-in capital for sale of subsidiary shares						(19)						85						78
Increase (decrease) in The AES Corporation's paid-in capital for acquisition of subsidiary shares						(802)						24						(78)
Net transfers (to) from noncontrolling interest						(821)						109						—
Change from net income (loss) attributable to The AES Corporation and transfers (to) from noncontrolling interests						$	858					$	358					$	(546)

172 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

Accumulated Other Comprehensive Loss — The changes in AOCL by component, net of tax and NCI, for the periods indicated were as follows (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 December 31, 2021			$	(1,734)					$	(456)					$	(30)					$	—					$	(2,220)
Other comprehensive income (loss) before reclassifications			(37)						645						10						—						618
Amount reclassified to earnings			—						44						—						—						44
Other comprehensive income (loss)			(37)						689						10						—						662
Reclassification from NCI due to share sales and repurchases			(57)						(22)						(3)						—						(82)
Balance at December 31, 2022			$	(1,828)					$	211					$	(23)					$	—					$	(1,640)
Other comprehensive income (loss) before reclassifications			136						55						(3)						—						188
Amount reclassified to earnings			—						(52)						—						—						(52)
Other comprehensive income (loss)			136						3						(3)						—						136
Reclassification from NCI due to share sales			—						(10)						—						—						(10)
Balance at December 31, 2023			$	(1,692)					$	204					$	(26)					$	—					$	(1,514)
Other comprehensive income (loss) before reclassifications			(159)						315						(5)						3						154
Amount reclassified to earnings			71						18						7						—						96
Other comprehensive income (loss)			(88)						333						2						3						250
Reclassification from NCI due to share repurchases			498						—						—						—						498
Balance at December 31, 2024			$	(1,282)					$	537					$	(24)					$	3					$	(766)

Reclassifications out of AOCL are presented in the following table. Amounts for the periods indicated are in millions and those in parenthesis indicate debits to the Consolidated Statements of Operations.

Details About												Year Ended December 31,
AOCL Components						Affected Line Item in the Consolidated Statements of Operations						2024						2023						2022
Foreign currency translation adjustments, net
						Gain (loss) on disposal and sale of business interests						$	(649)					$	—					$	—
						Net income (loss) attributable to The AES Corporation						$	(649)					$	—					$	—
						Less: Net income (loss) attributable to The AES Corporation—reclassified out of NCI and redeemable stock of subsidiaries						578						—						—
						Net income (loss) attributable to The AES Corporation—reclassified out of AOCL						$	(71)					$	—					$	—
Change in fair value of derivatives, net
						Non-regulated revenue						$	—					$	(8)					$	(1)
						Non-regulated cost of sales						(2)						(3)						(1)
						Interest expense						(32)						17						(58)
						Gain (loss) on disposal and sale of business interests						(8)						33						—
						Asset impairment expense						—						—						(16)
						Foreign currency transaction gains (losses)						2						(3)						2
						Income (loss) from continuing operations before taxes and equity in earnings of affiliates						(40)						36						(74)
						Income tax expense						8						9						9
						Net equity in losses of affiliates						2						28						6
						Net income (loss)						(30)						73						(59)
						Less: Net loss (income) attributable to noncontrolling interests and redeemable stock of subsidiaries						8						(21)						15
						Net income (loss) attributable to The AES Corporation						$	(22)					$	52					$	(44)
						Less: Net income (loss) attributable to The AES Corporation—reclassified out of NCI						4						—						—
						Net income (loss) attributable to The AES Corporation—reclassified out of AOCL						$	(18)					$	52					$	(44)
Pension adjustments, net
						Non-regulated cost of sales						$	—					$	—					$	(1)
						Other expense						(2)						—						(1)
						Gain (loss) on disposal and sale of business interests						(14)						—						—
						Income (loss) from continuing operations before taxes and equity in earnings of affiliates						(16)						—						(2)
						Income tax expense						1						—						1
						Net income (loss)						(15)						—						(1)
						Less: Net loss (income) attributable to noncontrolling interests and redeemable stock of subsidiaries						—						—						1
						Net income (loss) attributable to The AES Corporation						$	(15)					$	—					$	—
						Less: Net income (loss) attributable to The AES Corporation—reclassified out of NCI						8						—						—
						Net income (loss) attributable to The AES Corporation—reclassified out of AOCL						$	(7)					$	—					$	—
Total reclassifications out of AOCL for the period, net of income tax and noncontrolling interests												$	(96)					$	52					$	(44)

Common Stock Dividends — The Parent Company paid dividends of $0.1725 per outstanding share to its common stockholders during the first, second, third, and fourth quarters of 2024 for dividends declared in December

173 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

2023, February 2024, July 2024, and October 2024, respectively.

On December 6, 2024, the Board of Directors declared a quarterly common stock dividend of $0.17595 per share payable on February 14, 2025 to shareholders of record at the close of business on January 31, 2025.

Stock Repurchase Program — No shares were repurchased in 2024 under the Stock Repurchase Program. The cumulative repurchases from the commencement of the Stock Repurchase Program in July 2010 through December 31, 2024 totaled 154.3 million shares for a total cost of $1.9 billion, at an average price per share of $12.12 (including a nominal amount of commissions). As of December 31, 2024, $264 million remained available for repurchase under the Stock Repurchase Program.

The common stock repurchased has been classified as treasury stock and accounted for using the cost method. A total of 148,635,718 and 149,358,357 shares were held as treasury stock at December 31, 2024 and December 31, 2023, respectively. Restricted stock units under the Company's employee benefit plans are issued from treasury stock. The Company has not retired any common stock repurchased since it began the Stock Repurchase Program in July 2010.

19. SEGMENTS AND GEOGRAPHIC INFORMATION

The segment reporting structure uses the Company’s management reporting structure as its foundation to reflect how the Company manages the businesses internally. The management reporting structure is composed of four SBUs, mainly organized by technology, led by our President and Chief Executive Officer, who is our Chief Operating Decision Maker. Using the accounting guidance on segment reporting, the Company determined that its four operating segments are aligned with its four reportable segments corresponding to its SBUs.

*•*Renewables — Solar, wind, energy storage, and hydro generation facilities;

*•*Utilities — AES Indiana, AES Ohio, and AES El Salvador regulated utilities and their generation facilities;

*•*Energy Infrastructure — Natural gas, LNG, coal, pet coke, diesel, and oil generation facilities, and our businesses in Chile, which have a mix of generation sources, including renewables, that are pooled to service our existing PPAs; and

*•*New Energy Technologies — Investments in Fluence, Uplight, Maximo, and other new and innovative energy technology businesses.

Our Renewables, Utilities, and Energy Infrastructure SBUs participate in our generation business line, in which we own and/or operate power plants to generate and sell power to customers, such as utilities, industrial users, and other intermediaries. Our Utilities SBU participates in our utilities business line, in which we own and/or operate utilities to generate or purchase, distribute, transmit, and sell electricity to end-user customers in the residential, commercial, industrial, and governmental sectors within a defined service area. In certain circumstances, our utilities also generate and sell electricity on the wholesale market. Our New Energy Technologies SBU includes investments in new and innovative technologies to support leading-edge greener energy solutions.

Included in "Corporate and Other" are the results of the AES self-insurance company, corporate overhead costs which are not directly associated with the operations of our four reportable segments, and certain intercompany charges such as self-insurance premiums which are fully eliminated in consolidation.

The Company uses Adjusted EBITDA as its primary segment performance measure. Adjusted EBITDA, a non-GAAP measure, is defined by the Company as earnings before interest income and expense, taxes, depreciation, amortization, and accretion of AROs, adjusted for the impact of NCI and interest, taxes, depreciation, amortization, and accretion of AROs of our equity affiliates, and adding back interest income recognized under service concession arrangements; excluding gains or losses of both consolidated entities and entities accounted for under the equity method due to (a) unrealized gains or losses pertaining to derivative transactions, equity securities, and financial assets and liabilities measured using the fair value option; (b) unrealized foreign currency gains or losses; (c) gains, losses, benefits, and costs associated with dispositions and acquisitions of business interests, including early plant closures, and gains and losses recognized at commencement of sales-type leases; (d) losses due to impairments; and (e) gains, losses, and costs due to the early retirement of debt or troubled debt restructuring. During the year ended December 31, 2024, the Company updated the definition of Adjusted EBITDA to include accretion of AROs in the depreciation and amortization add-back, as this is how the Chief Operating Decision Maker evaluates the underlying business performance of the segments. For comparability and consistency, segment Adjusted EBITDA figures presented below have been recast to conform to the current presentation. The impact of

174 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

this update resulted in an increase to Adjusted EBITDA of $22 million, $16 million, and $18 million in each of the years ended December 31, 2024, 2023, and 2022, respectively.

The Company has concluded Adjusted EBITDA better reflects the underlying business performance of the Company and is the most relevant measure considered in the Company's internal evaluation of the financial performance of its segments. Additionally, given its large number of businesses and overall complexity, the Company concluded that Adjusted EBITDA is a more transparent measure that better assists investors in determining which businesses have the greatest impact on the Company's results. The Chief Operating Decision Maker uses Adjusted EBITDA to allocate resources and capital for each segment in the annual budget and forecasting process, including making decisions on where to reinvest profits to support segment growth. On a monthly basis, the Chief Operating Decision Maker reviews variances in budget versus actual Adjusted EBITDA and monitors changes in forecasted Adjusted EBITDA to assess the underlying operating performance and analyze risks and opportunities at each segment.

Revenue and Adjusted EBITDA are presented before inter-segment eliminations, which includes the effect of intercompany transactions with other segments except for charges for certain management fees and the write-off of intercompany balances, as applicable. All intra-segment activity has been eliminated within the segment. Inter-segment activity has been eliminated within the total consolidated results.

The following tables present financial information by segment for the periods indicated (in millions):

			Year Ended December 31, 2024
			Renewables SBU						Utilities SBU						Energy Infrastructure SBU						New Energy Technologies SBU						Total
Revenue			$	2,510					$	3,608					$	6,238					$	1					$	12,357
Corporate and other																											162
Eliminations																											(241)
Total Revenue																											$	12,278
Less:
Total cost of sales excluding depreciation, amortization, and accretion of AROs (1)			1,752						2,607						4,568						8
Other segment items (2)			206						209						304						31
Segment Adjusted EBITDA			$	552					$	792					$	1,366					$	(38)					$	2,672
Reconciliation to income from continuing operations before taxes
Corporate and other																											11
Eliminations																											(44)
Interest expense																											(1,485)
Interest income																											381
Depreciation, amortization, and accretion of AROs																											(1,264)
Adjusted for:
Noncontrolling interests and redeemable stock of subsidiaries																											734
Income tax expense (benefit), interest expense (income), and depreciation, amortization, and accretion of AROs from equity affiliates																											(136)
Interest income recognized under service concession arrangements																											(65)
Unrealized derivative and equity securities gains																											94
Unrealized foreign currency losses																											(16)
Disposition/acquisition losses																											323
Impairment losses																											(280)
Loss on extinguishment of debt																											(57)
Income from continuing operations before taxes																											$	868

---

(1)Segment-level total cost of sales excluding depreciation, amortization, and accretion of AROs is considered regularly provided to the chief operating decision maker. Total cost of sales excluding depreciation, amortization, and accretion of AROs includes items such as fuel cost, electricity purchases, transmission charges, supplies, salaries and wages, consulting costs, IT costs, market fees, insurance, and lease expense.

(2)Other segment items for each reportable segment includes:

Renewables SBU — business development costs, miscellaneous gains and losses in Other income and Other expense, realized foreign currency gains and losses, earnings from equity affiliates, and adjustment for noncontrolling interest expense.

Utilities SBU — miscellaneous gains and losses in Other income and Other expense, earnings from equity affiliates, and adjustment for noncontrolling interest expense.

Energy Infrastructure SBU — business development costs, miscellaneous gains and losses in Other income and Other expense, realized foreign currency gains and losses, earnings from equity affiliates, and adjustment for noncontrolling interest expense.

New Energy Technologies SBU — earnings from equity affiliates, and miscellaneous gains and losses in Other income and Other expense.

175 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

			Year Ended December 31, 2023
			Renewables SBU						Utilities SBU						Energy Infrastructure SBU						New Energy Technologies SBU						Total
Revenue			$	2,339					$	3,495					$	6,836					$	76					$	12,746
Corporate and other																											138
Eliminations																											(216)
Total Revenue																											$	12,668
Less:
Total cost of sales excluding depreciation, amortization, and accretion of AROs (1)			1,504						2,662						5,022						84
Other segment items (2)			183						155						274						54
Segment Adjusted EBITDA			$	652					$	678					$	1,540					$	(62)					$	2,808
Reconciliation to income from continuing operations before taxes
Corporate and other																											22
Eliminations																											(2)
Interest expense																											(1,319)
Interest income																											551
Depreciation, amortization, and accretion of AROs																											(1,147)
Adjusted for:
Noncontrolling interests and redeemable stock of subsidiaries																											556
Income tax expense (benefit), interest expense (income), and depreciation, amortization, and accretion of AROs from equity affiliates																											(131)
Interest income recognized under service concession arrangements																											(71)
Unrealized derivative and equity securities losses																											(34)
Unrealized foreign currency losses																											(301)
Disposition/acquisition gains																											79
Impairment losses																											(877)
Loss on extinguishment of debt																											(62)
Income from continuing operations before taxes																											$	72

---

(1)Segment-level total cost of sales excluding depreciation, amortization, and accretion of AROs is considered regularly provided to the chief operating decision maker. Total cost of sales excluding depreciation, amortization, and accretion of AROs includes items such as fuel cost, electricity purchases, transmission charges, supplies, salaries and wages, consulting costs, IT costs, market fees, insurance, and lease expense.

(2)Other segment items for each reportable segment includes:

Renewables SBU — business development costs, miscellaneous gains and losses in Other income and Other expense, realized foreign currency gains and losses, earnings from equity affiliates, and adjustment for noncontrolling interest expense.

Utilities SBU — miscellaneous gains and losses in Other income and Other expense, earnings from equity affiliates, and adjustment for noncontrolling interest expense.

Energy Infrastructure SBU — business development costs, miscellaneous gains and losses in Other income and Other expense, realized foreign currency gains and losses, earnings from equity affiliates, and adjustment for noncontrolling interest expense.

New Energy Technologies SBU — earnings from equity affiliates, and miscellaneous gains and losses in Other income and Other expense.

176 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

			Year Ended December 31, 2022
			Renewables SBU						Utilities SBU						Energy Infrastructure SBU						New Energy Technologies SBU						Total
Revenue			$	1,893					$	3,617					$	7,204					$	3					$	12,717
Corporate and other																											116
Eliminations																											(216)
Total Revenue																											$	12,617
Less:
Total cost of sales excluding depreciation, amortization, and accretion of AROs (1)			1,097						2,861						5,249						8
Other segment items (2)			183						144						109						111
Segment Adjusted EBITDA			$	613					$	612					$	1,846					$	(116)					$	2,955
Reconciliation to income from continuing operations before taxes
Corporate and other																											(19)
Eliminations																											13
Interest expense																											(1,117)
Interest income																											389
Depreciation, amortization, and accretion of AROs																											(1,072)
Adjusted for:
Noncontrolling interests and redeemable stock of subsidiaries																											707
Income tax expense (benefit), interest expense (income), and depreciation, amortization, and accretion of AROs from equity affiliates																											(128)
Interest income recognized under service concession arrangements																											(77)
Unrealized derivative and equity securities losses																											(131)
Unrealized foreign currency losses																											(42)
Disposition/acquisition losses																											(40)
Impairment losses																											(1,658)
Loss on extinguishment of debt																											(20)
Income from continuing operations before taxes																											$	(240)

---

(1)Segment-level total cost of sales excluding depreciation, amortization, and accretion of AROs is considered regularly provided to the chief operating decision maker. Total cost of sales excluding depreciation, amortization, and accretion of AROs includes items such as fuel cost, electricity purchases, transmission charges, supplies, salaries and wages, consulting costs, IT costs, market fees, insurance, and lease expense.

(2)Other segment items for each reportable segment includes:

Renewables SBU — business development costs, miscellaneous gains and losses in Other income and Other expense, realized foreign currency gains and losses, earnings from equity affiliates, and adjustment for noncontrolling interest expense.

Utilities SBU — miscellaneous gains and losses in Other income and Other expense, earnings from equity affiliates, and adjustment for noncontrolling interest expense.

Energy Infrastructure SBU — business development costs, miscellaneous gains and losses in Other income and Other expense, realized foreign currency gains and losses, earnings from equity affiliates, and adjustment for noncontrolling interest expense.

New Energy Technologies SBU — earnings from equity affiliates, and miscellaneous gains and losses in Other income and Other expense.

The Company uses long-lived assets as its measure of segment assets. Long-lived assets includes amounts recorded in Property, plant and equipment, net and right-of-use assets for operating leases recorded in Other noncurrent assets on the Consolidated Balance Sheets.

			Long-Lived Assets
Year Ended December 31,			2024						2023						2022
Renewables SBU			$	17,028					$	15,735					$	9,533
Utilities SBU			8,535						7,166						6,311
Energy Infrastructure SBU			7,928						7,414						7,532
New Energy Technologies SBU			22						14						2
Corporate and Other			25						9						17
Long-Lived Assets			33,538						30,338						23,395
Current assets			6,831						6,649						7,643
Investments in and advances to affiliates			1,124						941						952
Debt service reserves and other deposits			78						194						177
Goodwill			345						348						362
Other intangible assets			1,947						2,243						1,841
Deferred income taxes			365						396						319
Other noncurrent assets, excluding right-of-use assets for operating leases			2,545						2,879						3,674
Noncurrent held-for-sale assets			633						811						—
Total Assets			$	47,406					$	44,799					$	38,363

177 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

									Depreciation, Amortization, and Accretion of AROs																		Capital Expenditures
Year Ended December 31,																					2024						2023						2022						2024						2023						2022
Renewables SBU																					$	401					$	345					$	268					$	5,170					$	5,759					$	2,972
Utilities SBU																					458						400						376						1,570						1,374						859
Energy Infrastructure SBU																					397						392						416						733						585						742
New Energy Technologies SBU																					1						1						2						11						5						—
Corporate and Other																					7						9						10						35						10						11
Total																					$	1,264					$	1,147					$	1,072					$	7,519					$	7,733					$	4,584

			Interest Income																		Interest Expense																		Net Equity in Earnings (Losses) of Affiliates
Year Ended December 31,			2024						2023						2022						2024						2023						2022						2024						2023						2022
Renewables SBU			$	109					$	181					$	131					$	414					$	326					$	236					$	19					$	41					$	28
Utilities SBU			12						12						8						294						243						234						4						5						6
Energy Infrastructure SBU			233						337						246						483						534						488						10						6						9
New Energy Technologies SBU			7						2						—						—						—						—						(20)						(84)						(114)
Corporate and Other			20						19						4						294						216						159						(39)						—						—
Total			$	381					$	551					$	389					$	1,485					$	1,319					$	1,117					$	(26)					$	(32)					$	(71)

The following table presents information, by country, about the Company's consolidated operations for each of the three years ended December 31, 2024, 2023, and 2022, and as of December 31, 2024 and 2023 (in millions). Revenue is recorded in the country in which it is earned and assets are recorded in the country in which they are located.

			Total Revenue																		Long-Lived Assets
Year Ended December 31,			2024						2023						2022						2024						2023
United States (1)			$	4,689					$	4,439					$	4,093					$	25,261					$	19,750
Non-U.S.:
Chile			1,534						1,932						2,064						3,563						3,018
Dominican Republic			1,451						1,400						1,591						805						1,098
El Salvador			1,036						935						902						472						442
Colombia			686						706						417						358						390
Brazil			616						697						560						—						2,482
Panama			666						644						678						1,882						1,910
Mexico			462						536						595						275						271
Bulgaria			478						528						790						421						483
Argentina			318						407						501						437						431
Vietnam (2)			312						344						323						—						—
Jordan			28						97						102						38						39
Other Non-U.S.			2						3						1						26						24
Total Non-U.S.			7,589						8,229						8,524						8,277						10,588
Total			$	12,278					$	12,668					$	12,617					$	33,538					$	30,338

---

(1) Includes Puerto Rico revenues of $426 million, $269 million, and $293 million for the years ended December 31, 2024, 2023, and 2022, respectively, and long-lived assets of $572 million and $145 million as of December 31, 2024 and 2023, respectively.

(2) The Mong Duong 2 power project is operated under a BOT contract. The Mong Duong assets were classified as held-for-sale as of December 31, 2024 and 2023. See Note 21—Revenue and Note 25—Held-for-Sale and Dispositions for further information.

20. SHARE-BASED COMPENSATION

RESTRICTED STOCK

Restricted Stock Units — The Company issues RSUs under its long-term compensation plan. The RSUs are generally granted based upon a percentage of the participant's base salary. Most RSUs have a three-year vesting period and vest evenly in annual increments over that period. In all circumstances, RSUs granted by AES do not entitle the holder the right, or obligate AES, to settle the RSU in cash or other assets of AES.

For the years ended December 31, 2024, 2023, and 2022, RSUs issued had a grant date fair value equal to the closing price of the Company's stock on the grant date. The Company does not discount the grant date fair values to reflect any post-vesting restrictions. RSUs granted to employees during the years ended December 31, 2024, 2023, and 2022 had grant date weighted average fair values per RSU of $16.01, $22.33, and $20.92, respectively.

The 2022 and 2023 RSUs awarded to certain executives have a performance condition related to the achievement of environmental and social goals for the three-year periods ending December 31, 2024, and

178 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

December 31, 2025, respectively. This performance condition can adjust the final number of units that vest to increase or decrease by up to 15% of the total units for all three years. The adjustment will be reflected in the number of units that vest at the end of the three-year performance period.

The following table summarizes the components of the Company's stock-based compensation related to its employee RSUs recognized in the Company's consolidated financial statements (in millions):

December 31,						2024						2023						2022
RSU expense before income tax						$	22					$	16					$	16
Tax benefit						(5)						(3)						(2)
RSU expense, net of tax						$	17					$	13					$	14
Total value of RSUs converted (1)						$	9					$	10					$	8
Total fair value of RSUs vested						$	19					$	15					$	13

---

(1)Amount represents fair market value on the date of conversion.

Cash was not used to settle RSUs in the years ended December 31, 2024, 2023, and 2022. $2 million and $1 million of compensation cost was capitalized as part of the cost of an asset during the years ended December 31, 2024 and 2023, respectively. In the year ended December 31, 2022, no compensation cost was capitalized as part of the cost of an asset. As of December 31, 2024, total unrecognized compensation cost related to RSUs of $28 million is expected to be recognized over a weighted average period of approximately 1.7 years. There were no modifications to RSU awards during the year ended December 31, 2024.

A summary of the activity of RSUs for the year ended December 31, 2024 follows (RSUs in thousands):

						RSUs						Weighted Average Grant Date Fair Values						Weighted Average Remaining Vesting Term (in years)
Nonvested at December 31, 2023						2,043						$	22.60
Vested						(811)						23.34
Forfeited and expired						(174)						19.77
Granted						1,553						16.01
Nonvested at December 31, 2024						2,611						$	18.64					1.63
Expected to vest at December 31, 2024						2,449						$	18.70

The Company initially recognizes compensation cost on the estimated number of instruments for which the requisite service is expected to be rendered. In 2024, AES has estimated a weighted average forfeiture rate of 7.89% for RSUs granted in 2024. This estimate will be revised if subsequent information indicates that the actual number of instruments forfeited is likely to differ from previous estimates. Based on the estimated forfeiture rate, the Company expects to expense $23 million on a straight-line basis over a weighted average period of three years.

The following table summarizes the RSUs that vested and were converted during the periods indicated (RSUs in thousands):

Year Ended December 31,						2024						2023						2022
RSUs vested during the year						811						632						576
RSUs converted during the year, net of shares withheld for taxes						514						407						380
Shares withheld for taxes						297						225						196

OTHER SHARE BASED COMPENSATION

The Company has three other share-based award programs. The Company has recorded expense of $12 million, $2 million, and $23 million for 2024, 2023, and 2022, respectively, related to these programs.

Performance Stock Units — In 2022, 2023, and 2024, the Company issued PSUs to officers under its long-term compensation plan. PSUs are stock units which include performance conditions. For 2022, 2023, and 2024, performance conditions are based on the Company’s Parent Free Cash Flow target. The performance conditions determine the vesting and final share equivalent per PSU and can result in earning an award payout range of 0% to 200%, depending on the achievement. The Company believes it is probable that the performance condition will be met and will continue to be evaluated throughout the performance period. In all circumstances, PSUs granted by AES do not entitle the holder the right, or obligate AES, to settle the stock units in cash or other assets of AES.

Performance Cash Units — In 2022, 2023, and 2024, the Company issued PCUs to its officers under its long-term compensation plan. The value for the 2022 and 2023 units is dependent on the market condition of total stockholder return on AES common stock as compared to the total stockholder return of the Standard and Poor's

179 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

500 Utilities Sector Index, Standard and Poor's 500 Index, and MSCI Emerging Markets Latin America Index over a three-year measurement period. The value for the 2024 units is dependent on the market condition of total stockholder return on AES common stock as compared to the total stockholder return of the Standard and Poor's 500 Utilities Sector Index, Standard and Poor's 500 Index, and a custom Clean Energy peer group over a three-year measurement period. Since PCUs are settled in cash, they qualify for liability accounting and periodic measurement is required.

Stock options — In the past, AES granted options to non-employee directors to purchase shares of common stock at a price equal to 100% of the market price at the date the option was granted. AES has not granted options since 2021. All stock options are fully vested and have a contractual term of 10 years. In all circumstances, stock options granted by AES do not entitle the holder the right, or oblige AES, to settle the stock options in cash or other assets of AES.

21. REVENUE

The following table presents our revenue from contracts with customers and other revenue for the periods indicated (in millions):

			Year Ended December 31, 2024
			Renewables SBU						Utilities SBU						Energy Infrastructure SBU						New Energy Technologies SBU						Corporate, Other and Eliminations						Total
Non-Regulated Revenue
Revenue from contracts with customers			$	2,294					$	82					$	5,543					$	1					$	(78)					$	7,842
Other non-regulated revenue (1)			216						4						695						—						(1)						914
Total non-regulated revenue			2,510						86						6,238						1						(79)						8,756
Regulated Revenue
Revenue from contracts with customers			—						3,496						—						—						—						3,496
Other regulated revenue			—						26						—						—						—						26
Total regulated revenue			—						3,522						—						—						—						3,522
Total revenue			$	2,510					$	3,608					$	6,238					$	1					$	(79)					$	12,278

			Year Ended December 31, 2023
			Renewables SBU						Utilities SBU						Energy Infrastructure SBU						New Energy Technologies SBU						Corporate, Other and Eliminations						Total
Non-Regulated Revenue
Revenue from contracts with customers			$	2,198					$	68					$	6,181					$	75					$	(77)					$	8,445
Other non-regulated revenue (1)			141						4						655						1						(1)						800
Total non-regulated revenue			2,339						72						6,836						76						(78)						9,245
Regulated Revenue
Revenue from contracts with customers			—						3,391						—						—						—						3,391
Other regulated revenue			—						32						—						—						—						32
Total regulated revenue			—						3,423						—						—						—						3,423
Total revenue			$	2,339					$	3,495					$	6,836					$	76					$	(78)					$	12,668

			Year Ended December 31, 2022
			Renewables SBU						Utilities SBU						Energy Infrastructure SBU						New Energy Technologies SBU						Corporate, Other and Eliminations						Total
Non-Regulated Revenue
Revenue from contracts with customers			$	1,791					$	75					$	6,871					$	1					$	(100)					$	8,638
Other non-regulated revenue (1)			102						4						333						2						—						441
Total non-regulated revenue			1,893						79						7,204						3						(100)						9,079
Regulated Revenue
Revenue from contracts with customers			—						3,507						—						—						—						3,507
Other regulated revenue			—						31						—						—						—						31
Total regulated revenue			—						3,538						—						—						—						3,538
Total revenue			$	1,893					$	3,617					$	7,204					$	3					$	(100)					$	12,617

---

(1)Other non-regulated revenue primarily includes lease and derivative activity not accounted for under ASC 606.

180 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

Contract Balances — The timing of revenue recognition, billings, and cash collections results in accounts receivable and contract liabilities. The contract liabilities from contracts with customers were $237 million and $328 million as of December 31, 2024 and December 31, 2023, respectively.

During the years ended December 31, 2024 and 2023, we recognized revenue of $79 million and $70 million, respectively, that was included in the corresponding contract liability balance at the beginning of the periods.

In June 2023, the Company closed on an agreement to terminate the PPA for the Warrior Run coal-fired power plant for total consideration of $357 million, to be paid by the offtaker through the end of the previous contract term in January 2030. Under the termination agreement, the plant provided capacity through May 2024. The termination represented a contract modification under which the discounted termination payments, as well as a pre-existing contract liability, were recognized as revenue on a straight-line basis over the remaining performance obligation period for approximately $32 million per month. On February 1, 2024, the Company executed a receivable sale agreement to transfer all of its rights, title, and interest in the remaining future cash flows under this agreement. At the time of execution, the transaction was considered a sale of future revenue under U.S. GAAP, and as such, the net proceeds of $273 million were recorded as debt. Upon completion of the remaining performance obligation in May 2024, the corresponding receivable balance of $267 million, net of valuation allowance of $7 million, and the remaining debt balance of $260 million were derecognized upon accounting for the transaction as a sale of receivables.

A significant financing arrangement exists for our Mong Duong plant in Vietnam. The plant was constructed under a BOT contract and will be transferred to the Vietnamese government after the completion of a 25 year PPA. The performance obligation to construct the facility was substantially completed in 2015. Contract consideration related to the construction, but not yet collected through the 25 year PPA, was reflected on the Consolidated Balance Sheet. As of December 31, 2024 and December 31, 2023, Mong Duong met the held-for-sale criteria and the loan receivable balance of $963 million and $1.1 billion, net of CECL reserve of $23 million and $26 million, respectively, was classified as held-for-sale assets. Of the loan receivable balance, $121 million and $108 million, respectively, was classified in Current held-for-sale assets, and $842 million and $962 million, respectively, was classified in Noncurrent held-for-sale assets on the Consolidated Balance Sheet. See Note 25*—Held-for-Sale and Dispositions* for further information.

Remaining Performance Obligations — The transaction price allocated to remaining performance obligations represents future consideration for unsatisfied (or partially unsatisfied) performance obligations at the end of the reporting period. As of December 31, 2024, the aggregate amount of transaction price allocated to remaining performance obligations was $7 million, primarily consisting of fixed consideration for the sale of renewable energy credits ("RECs") in long-term contracts in the U.S. We expect to recognize revenue of approximately $1 million per year between 2025 and 2029, and the remainder thereafter.

22. OTHER INCOME AND EXPENSE

Other income generally includes gains on insurance recoveries in excess of property damage, gains on asset sales and liability extinguishments, favorable judgments on contingencies, allowance for funds used during construction, and other income from miscellaneous transactions. Other expense generally includes losses on asset

181 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

sales and dispositions, losses on legal contingencies, and losses from other miscellaneous transactions. The components are summarized as follows (in millions):

			Year Ended December 31,			2024						2023						2022
Other Income			Gain on remeasurement of contingent consideration (1)			$	33					$	16					$	3
			Gain on bargain purchase (2)			20						—						—
			Gain on acquisition (3)			14						—						—
			Indexation adjustment of receivables (4)			12						—						—
			Insurance proceeds (5)			12						6						12
			AFUDC (US Utilities)			10						14						10
			Contract termination			5						—						—
			Gain on commencement of sales-type leases			5						—						—
			Gain on sale and disposal of assets			4						19						—
			Dividend income on investments			4						6						3
			Legal settlements			—						4						6
			Gain on remeasurement of investment (6)			—						—						22
			Liquidated damages under a power sales agreement			—						—						10
			Gain on remeasurement to acquisition-date fair value			—						—						5
			Non-service pension income			—						—						5
			Gain on acquired customer contracts			—						—						5
			Other			37						24						21
			Total other income			$	156					$	89					$	102
Other Expense			Loss on commencement of sales-type leases (7)			$	72					$	20					$	5
			Loss on remeasurement of contingent consideration (1)			43						—						—
			Cost related to troubled debt restructuring (8)			20						—						—
			Loss on sale and disposal of assets (9)			13						49						13
			Non-service pension and other postretirement costs			10						12						—
			Legal contingencies and settlements			—						2						8
			Cost of disposition of business interests (10)			—						—						15
			Other			17						16						27
			Total other expense			$	175					$	99					$	68

---

(1)Related to certain remeasurements of contingent consideration on projects acquired at AES Clean Energy. See Note 26—Acquisitions for further information about development projects recently acquired and Note 5—Fair Value for further information about remeasurement to fair value.

(2)Related to a bargain purchase gain recognized on the Madison and Birdseye acquisition. See Note 26—Acquisitions for further information.

(3)For the year ended December 31, 2024, related to the acquisition of Felix, a VIE that does not meet the definition of a business. See Note 26—Acquisitions for further information.

(4)Related to an indexation adjustment on receivables for regulated energy contracts impacted by the Tariff Stabilization Laws at Chile. See Note 7—Financing Receivables for further information.

(5)For the year ended December 31, 2022, primarily related to insurance recoveries associated with property damage at TermoAndes.

(6)For the year ended December 31, 2022, related to the remeasurement of our existing investment in 5B, accounted for using the measurement alternative.

(7)Related to losses recognized at commencement of sales-type leases at AES Renewable Holdings. See Note 15—Leases for further information.

(8)Related to legal expenses and other direct costs associated with the troubled debt restructuring at Puerto Rico. See Note 12—Obligations for further information.

(9)For the year ended December 31, 2023, primarily related to impairments of inventory due to planned early plant closures at Ventanas 2, Norgener, and Warrior Run.

(10)Cost of disposition of a business interest at AES Gilbert due to a fire incident in April 2022, including the recognition of an allowance on the sales-type lease receivable.

182 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

23. ASSET IMPAIRMENT EXPENSE

Year ended December 31, (in millions)						2024						2023						2022
Ventanas						$	125					$	—					$	—
AES Clean Energy Development Projects (ACED)						95						151						18
AES Brasil						80						—						—
Mong Duong						62						167						—
Warrior Run						—						198						—
New York Wind						—						186						—
Norgener						—						137						—
TEG						—						77						104
TEP						—						59						89
Jordan						—						59						76
GAF Projects (AES Renewable Holdings)						—						18						—
Maritza						—						—						468
Other						12						15						8
Total						$	374					$	1,067					$	763

Ventanas — In December 2024, the Company entered into an agreement to sell Ventanas, a coal-fired plant in Chile, and Nucleo SpA, an entity comprised of a labor force and an O&M contract with Ventanas (collectively "Ventanas"). As of December 31, 2024, Ventanas was classified as held-for-sale. The carrying amount of the Ventanas disposal group exceeded the agreed-upon sales price and as a result, the Company recognized pre-tax impairment expense of $125 million. The sale of Ventanas closed in January 2025. See Note 25*—Held-for-Sale and Dispositions* for further information. Prior to its sale, Ventanas was reported in the Energy Infrastructure SBU reportable segment.

AES Clean Energy Development Projects — AES Clean Energy Development has a pipeline of U.S. renewables projects that are in various stages of development and construction. In some cases, if development efforts are not successful, the Company may abandon a particular project, writing off all the intangible assets and capitalized development costs incurred. The fair value of each abandoned project with no salvage value is determined to be zero as there are no future projected cash flows.

In 2024, 2023, and 2022, the Company recognized pre-tax asset impairment expense related to the write-off of projects that were determined to be no longer viable totaling $95 million, $151 million, and $18 million, respectively. The impairment expense recognized in 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 26*—Acquisitions* for further information. AES Clean Energy Development is reported in the Renewables SBU reportable segment.

AES Brasil — In May 2024, the Company entered into an agreement to sell its 47.3% controlling interest in AES Brasil, a 5.2 GW portfolio of renewable energy facilities. Upon meeting the held-for-sale criteria in May 2024, the Company performed an impairment analysis and determined that the carrying value of the disposal group of $1,577 million was greater than its fair value less costs to sell of $1,552 million. As a result, the Company recognized pre-tax impairment expense of $25 million. The Company performed a subsequent impairment analysis as of September 30, 2024 and recognized additional pre-tax impairment expense of $55 million, primarily due to depreciation of the Brazilian real and increased costs to sell. The sale of AES Brasil closed in October 2024. See Note 25—Held-for-Sale and Dispositions for further information. Prior to its sale, AES Brasil was reported in the Renewables SBU reportable segment.

Mong Duong — In November 2023, the Company entered into an agreement to sell its entire 51% ownership interest in Mong Duong 2, a coal-fired plant in Vietnam, and 51% equity interest in Mong Duong Finance Holdings B.V., an SPV accounted for as an equity affiliate (collectively "Mong Duong"), and as of December 31, 2024, Mong Duong continued to be classified as held-for-sale. The carrying amount of the Mong Duong disposal group exceeded the expected sales proceeds and as a result, the Company recognized total pre-tax impairment expense of $62 million and $167 million during 2024 and 2023, respectively. See Note 25*—Held-for-Sale and Dispositions* for further information. Mong Duong is reported in the Energy Infrastructure SBU reportable segment.

Warrior Run — On September 30, 2023, the Company filed a Generator Deactivation Notice with PJM stating its intention to either retire or mothball the Warrior Run coal-fired facility on June 1, 2024. On November 30, 2023, PJM approved the potential deactivation, therefore management reassessed the economic useful life of the generation facility. Due to the approval from PJM and the absence of other economically viable options, an

183 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

impairment indicator was identified. The Company performed an impairment analysis as of November 30, 2023, and determined that the fair value of the asset group was $25 million, using the income approach. As a result, and since pre-tax losses were limited to the carrying value of the long-lived assets, the Company recognized pre-tax asset impairment expense of $198 million. The Company retired the generation facility in June 2024. Prior to its retirement, Warrior Run was reported in the Energy Infrastructure SBU reportable segment.

New York Wind — In November 2023, AES Clean Energy Development, LLC ("ACED") was awarded ten projects from NYSERDA, six of which were related to the repowering of existing wind assets in New York that were acquired in November 2021. On November 28, 2023, the Company approved plans to execute the repowering project and sign a PPA with NYSERDA for the energy and capacity related to the repowered assets. As the repowering will result in decommissioning the existing turbines and reducing their depreciable lives, the approval to move forward with the repowering project was identified as an impairment indicator. The Company performed an impairment analysis as of November 30, 2023, and determined that the fair value of the asset group was $124 million, using the income approach. As a result, the Company recognized pre-tax asset impairment expense of $186 million. New York Wind is reported in the Renewables SBU reportable segment.

TEG and TEP — On October 1, 2022, the Company performed the annual goodwill impairment test for the TEG TEP reporting unit. The quantitative impairment test resulted in an estimated fair value of the reporting unit which was less than its carrying amount. The failure of the goodwill impairment test was identified as an impairment indicator for the long-lived assets of the TEG and TEP asset groups. The Company performed an impairment analysis as of October 1, 2022, and determined that the carrying amounts of the asset groups were not recoverable. The TEG and TEP asset groups were determined to have fair values of $164 million and $147 million, respectively, using the income approach. As a result, the Company recognized pre-tax asset impairment expense of $104 million and $89 million, respectively. Subsequent to the asset impairment being recorded, the Company re-performed the goodwill test and no impairment was noted.

During the third quarter of 2023, management identified an impairment indicator at the TEG and TEP asset groups due to a reduction in expected capacity cash flows after expiration of the current PPA. The Company performed an impairment analysis as of July 31, 2023, and determined that the carrying amounts of the asset groups were not recoverable. The TEG and TEP asset groups were determined to have fair values of $93 million and $94 million, respectively, using the income approach. As a result, the Company recognized pre-tax asset impairment expense of $77 million and $59 million, respectively. TEG and TEP are reported in the Energy Infrastructure SBU reportable segment.

Norgener — In May 2023, AES Andes announced its intention to accelerate the retirement of the Norgener coal-fired plant in Chile in order to further advance its decarbonization strategy. Due to this strategic development and the resulting decrease in useful life of the generation facility, the Company performed an impairment analysis as of May 1, 2023, and determined that the carrying amount of the asset group was not recoverable. The Norgener asset group was determined to have a fair value of $24 million, using the income approach. As a result, and since pre-tax losses were limited to the carrying amount of the long-lived assets, the Company recognized pre-tax asset impairment expense of $137 million. The Company retired the generation facility in April 2024. Prior to its retirement, Norgener was reported in the Energy Infrastructure SBU reportable segment.

Jordan — In November 2020, the Company signed an agreement to sell approximately 26% ownership interest in Amman East and IPP4 for $58 million. The generation plants were classified as held-for-sale until the sale was completed in March 2024. Due to the delay in closing the transaction, the carrying amount of the disposal group in subsequent periods exceeded the agreed-upon sales price, and total pre-tax impairment expense of $59 million and $76 million was recorded during 2023 and 2022, respectively. See Note 25*—Held-for-Sale and Dispositions* for further information. Amman East and IPP4 are reported in the Energy Infrastructure SBU reportable segment.

GAF Projects — During the second quarter of 2023, management concluded that the carrying value of six project companies at AES Renewable Holdings (the “GAF Projects”) may not be recoverable as the expected purchase price on the buyout of tax equity investors implied a loss on the transaction. The buyout was completed in July 2023. Management performed a recoverability test as of May 31, 2023 and concluded that the undiscounted cash flows of the GAF Projects did not exceed the carrying values of the asset groups for five of the six projects. The asset groups for the GAF Projects were determined to have a fair value of $11 million, using the income

184 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

approach. As a result, the Company recognized pre-tax asset impairment expense of $18 million. AES Renewable Holdings is reported in the Renewables SBU reportable segment.

Maritza — In May 2022, the Council for the European Union approved Bulgaria’s National Recovery and Resilience plan which commits the country to cease generating electricity from coal beyond 2038. As this plan is expected to prohibit the Company from operating the Maritza coal-fired plant through its estimated useful life, it was determined that an indicator of impairment had occurred. The Company reassessed the useful life of the facility and performed an impairment analysis as of April 30, 2022, in which it was determined that the carrying amount of the asset group was not recoverable. The Maritza asset group was determined to have a fair value of $452 million, using the income approach. As a result, the Company recognized pre-tax asset impairment expense of $468 million. Maritza is reported in the Energy Infrastructure SBU reportable segment.

24. INCOME TAXES

Income Tax Provision — The following table summarizes the expense for income taxes on continuing operations for the periods indicated (in millions):

December 31,						2024						2023						2022
Federal:			Current			$	4					$	9					$	3
			Deferred			(220)						15						(18)
State:			Current			29						16						2
			Deferred			23						30						1
Foreign:			Current			249						289						256
			Deferred			(26)						(98)						21
Total						$	59					$	261					$	265

Effective and Statutory Rate Reconciliation — The following table summarizes a reconciliation of the U.S. statutory federal income tax rate to the Company's effective tax rate as a percentage of income from continuing operations before taxes for the periods indicated:

December 31,			2024						2023						2022
Statutory Federal tax rate			21		%				21		%				21		%
State taxes, net of Federal tax benefit			(2)		%				87		%				(1)		%
Taxes on foreign earnings			(10)		%				14		%				(42)		%
Valuation allowance			52		%				83		%				(10)		%
Uncertain tax positions			—		%				—		%				7		%
U.S. Investment Tax Credit			(31)		%				(70)		%				—		%
Noncontrolling interest in U.S. subsidiaries			25		%				115		%				—		%
Nondeductible goodwill impairments			—		%				3		%				(127)		%
U.S. capital loss			(41)		%				—		%				—		%
U.S. interest expense			(5)		%				—		%				—		%
Other—net			(2)		%				(2)		%				(5)		%
Effective tax rate			7		%				251		%				(157)		%

For 2024, the (31)% U.S. Investment Tax Credit relates to investment tax credits for renewables projects placed in service this year. The (41)% U.S. capital loss relates to capital losses associated with the restructuring of a foreign holding company, which is offset in part by valuation allowance of approximately $304 million. The associated state impact is included in the (2)% state taxes, net of Federal tax benefit and is offset by valuation allowance of $74 million. Further, included in the (10)% taxes on foreign earnings is approximately $42 million of income tax benefit for the tax over book investment basis difference related to Ventanas.

For 2023, included in the 14% taxes on foreign earnings are inflationary and foreign currency benefits at our Argentine businesses. Further, the Company recorded tax expense associated with the change in realizability of deferred tax assets at certain of those Argentine businesses, which is included in the 83% valuation allowance item. The (70)% U.S. Investment Tax Credit relates to investment tax credits for renewables projects placed in service in 2023. Not included in the 2023 effective tax rate is $28 million of income tax expense recorded to additional paid-in capital resulting from the Company's sales of a 20% ownership interest in AES Dominicana and a 35% ownership interest in Colon. See Note 18—Equity for details of the sales.

For 2022, included in the (42)% taxes on foreign earnings is the impact of favorable LNG transactions at the Energy Infrastructure SBU and inflation and foreign currency impacts at certain Argentine businesses. The (127)% nondeductible goodwill impairments relates to the impairments at AES Andes and AES El Salvador. Not included in the 2022 effective tax rate is $27 million of income tax expense recorded to additional paid-in capital

185 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

related to the Company's sale of a 14.9% ownership interest in the Southland Energy assets. See Note 18—Equity for details of the sale.

Income Tax Receivables and Payables — The current income taxes receivable and payable are included in Other current assets and Accrued and other liabilities, respectively, on the accompanying Consolidated Balance Sheets. The noncurrent income taxes receivable and payable are included in Other noncurrent assets and Other noncurrent liabilities, respectively, on the accompanying Consolidated Balance Sheets. The following table summarizes the income taxes receivable and payable as of the periods indicated (in millions):

December 31,						2024						2023
Income taxes receivable—current						$	85					$	95
Income taxes receivable—noncurrent						32						41
Total income taxes receivable						$	117					$	136
Income taxes payable—current						$	71					$	103
Income taxes payable—noncurrent						—						—
Total income taxes payable						$	71					$	103

Deferred Income Taxes — Deferred income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes and (b) operating loss and tax credit carryforwards. These items are stated at the enacted tax rates that are expected to be in effect when taxes are actually paid or recovered.

As of December 31, 2024, the Company had federal net operating loss carryforwards for tax return purposes of approximately $589 million, which carry forward indefinitely. The Company also had capital loss carryforwards of approximately $1.7 billion, which expire in 2029. Further, the Company had federal general business tax credit carryforwards of approximately $54 million, which expire in 2040 and beyond. The Company had state net operating loss carryforwards as of December 31, 2024 of approximately $4.7 billion expiring primarily in years 2025 to 2044. As of December 31, 2024, the Company had foreign net operating loss carryforwards of approximately $2.4 billion that expire at various times beginning in 2025 and some of which carry forward without expiration.

Valuation allowances increased $241 million during 2024 to $913 million at December 31, 2024. This net increase was primarily due to valuation allowance resulting from current period U.S. capital losses associated with the restructuring of a foreign holding company, partially offset by valuation allowance change related to the sale of AES Brasil.

Valuation allowances increased $95 million during 2023 to $672 million at December 31, 2023. This net increase was primarily due to valuation allowance established at acquisition of a Chilean subsidiary, as well as changes in realizability of deferred tax assets at certain Argentine subsidiaries.

The Company believes that it is more likely than not that the net deferred tax assets as shown below will be realized when future taxable income is generated through the reversal of existing taxable temporary differences and income that is expected to be generated by businesses that have long-term contracts or a history of generating taxable income.

The following table summarizes deferred tax assets and liabilities, as of the periods indicated (in millions):

December 31,						2024						2023
Differences between book and tax basis of property						$	(1,104)					$	(966)
Investment in U.S. tax partnerships						(785)						(578)
Other taxable temporary differences						(438)						(403)
Total deferred tax liability						(2,327)						(1,947)
Operating loss carryforwards						933						1,132
Capital loss carryforwards						501						65
Bad debt and other book provisions						91						92
Tax credit carryforwards						48						72
Other deductible temporary differences						542						409
Total gross deferred tax asset						2,115						1,770
Less: Valuation allowance						(913)						(672)
Total net deferred tax asset						1,202						1,098
Net deferred tax liability						$	(1,125)					$	(849)

The Company considers undistributed earnings of certain foreign subsidiaries to be indefinitely reinvested outside of the U.S. No taxes have been recorded with respect to our indefinitely reinvested earnings in accordance

186 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

with the relevant accounting guidance for income taxes. Should the earnings be remitted as dividends, the Company may be subject to additional foreign withholding and state income taxes. Under the TCJA, future distributions from foreign subsidiaries will generally be subject to a federal dividends received deduction in the U.S. As of December 31, 2024, the cumulative amount of U.S. GAAP foreign un-remitted earnings upon which additional income taxes have not been provided is approximately $1 billion. It is not practicable to estimate the amount of any additional taxes which may be payable on the undistributed earnings.

Income from operations in certain countries is subject to reduced tax rates as a result of satisfying specific commitments regarding employment and capital investment. The Company's income tax benefits related to the tax status of these operations are estimated to be $28 million, $19 million and $27 million for the years ended December 31, 2024, 2023 and 2022, respectively. The per share effect of these benefits after noncontrolling interests was $0.03, $0.02 and $0.02 for each of the years ended December 31, 2024, 2023 and 2022, respectively. Included in the Company's income tax benefits is the benefit related to our operations in Vietnam, which is estimated to be $14 million, $16 million and $18 million for the years ended December 31, 2024, 2023 and 2022, respectively. The per share effect of these benefits related to our operations in Vietnam after noncontrolling interest was $0.01 for each of the years ended December 31, 2024, 2023 and 2022.

The following table shows the income (loss) from continuing operations, before income taxes, net equity in earnings of affiliates and noncontrolling interests, for the periods indicated (in millions):

December 31,						2024						2023						2022
U.S.						$	(264)					$	(238)					$	22
Non-U.S.						1,158						342						(191)
Total						$	894					$	104					$	(169)

Uncertain Tax Positions — Uncertain tax positions have been classified as noncurrent income tax liabilities unless they are expected to be paid within one year. The Company's policy for interest and penalties related to income tax exposures is to recognize interest and penalties as a component of the provision for income taxes in the Consolidated Statements of Operations. The following table shows the total amount of gross accrued income taxes related to interest and penalties included in the Consolidated Balance Sheets for the periods indicated (in millions):

December 31,						2024						2023
Interest related						$	2					$	2
Penalties related						—						—

The following table shows the expense/(benefit) related to interest and penalties on unrecognized tax benefits for the periods indicated (in millions):

December 31,						2024						2023						2022
Total benefit for interest related to unrecognized tax benefits						$	—					$	—					$	—
Total expense for penalties related to unrecognized tax benefits						—						—						—

We are potentially subject to income tax audits in numerous jurisdictions in the U.S. and internationally until the applicable statute of limitations expires. Tax audits by their nature are often complex and can require several years to complete. The following is a summary of tax years potentially subject to examination in the significant tax and business jurisdictions in which we operate:

Jurisdiction						Tax Years Subject to Examination
Argentina						2018 - 2024
Brazil						2018 - 2024
Chile						2021 - 2024
Colombia						2018 - 2024
Dominican Republic						2021 - 2024
El Salvador						2021 - 2024
Netherlands						2018 - 2024
Panama						2021 - 2024
United States (Federal)						2021 - 2024

As of December 31, 2024, 2023 and 2022, the total amount of unrecognized tax benefits was $108 million, $107 million and $107 million, respectively. The total amount of unrecognized tax benefits that would benefit the effective tax rate as of December 31, 2024, 2023 and 2022 is $108 million, $107 million and $107 million, respectively, of which $1 million, $1 million, and $2 million, respectively, would be in the form of tax attributes that would warrant a full valuation allowance. Further, the total amount of unrecognized tax benefit that would benefit the

187 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

effective tax rate as of 2024 would be reduced by approximately $34 million of tax expense related to remeasurement from 35% to 21%.

The total amount of unrecognized tax benefits anticipated to result in a net increase to unrecognized tax benefits within 12 months of December 31, 2024 is estimated to be between zero and $10 million, primarily as a result of ongoing audits, including potential tax exam resolutions.

The following is a reconciliation of the beginning and ending amounts of unrecognized tax benefits for the periods indicated (in millions):

						2024						2023						2022
Balance at January 1						$	107					$	107					$	122
Additions for current year tax positions						—						1						4
Additions for tax positions of prior years						2						—						—
Reductions for tax positions of prior years						—						(1)						(16)
Settlements						—						—						(3)
Lapse of statute of limitations						(1)						—						—
Balance at December 31						$	108					$	107					$	107

The Company and certain of its subsidiaries are currently under examination by the relevant taxing authorities for various tax years. The Company regularly assesses the potential outcome of these examinations in each of the taxing jurisdictions when determining the adequacy of the amount of unrecognized tax benefit recorded. While it is often difficult to predict the final outcome or the timing of resolution of any particular uncertain tax position, we believe we have appropriately accrued for our uncertain tax benefits. However, audit outcomes and the timing of audit settlements and future events that would impact our previously recorded unrecognized tax benefits and the range of anticipated increases or decreases in unrecognized tax benefits are subject to significant uncertainty. It is possible that the ultimate outcome of current or future examinations may exceed our provision for current unrecognized tax benefits in amounts that could be material, but cannot be estimated as of December 31, 2024. Our effective tax rate and net income in any given future period could therefore be materially impacted.

25. HELD-FOR-SALE AND DISPOSITIONS

Held-for-Sale

Ventanas — In December 2024, the Company signed an agreement for the sale of its 100% ownership interest in Empresa Electrica Ventanas SpA and Nucleo SpA (collectively "Ventanas"), owner of a coal-fired energy generation facility in Chile, for $5 million. The sale closed in January 2025. Ventanas was classified as held-for-sale but did not meet the criteria to be reported as discontinued operations. On a consolidated basis, the carrying value of net assets after impairment of the plant held-for-sale as of December 31, 2024 was $6 million, and a pre-tax asset impairment expense of $125 million was recorded. See Note 23*—Asset Impairment Expense* for further information. As of December 31, 2024, the significant assets and liabilities of Ventanas are inventory, deferred income tax, and accrued asset retirement obligation for $58 million, $56 million, and $43 million, respectively. Ventanas is reported in the Energy Infrastructure SBU reportable segment.

Dominican Republic Renewables — In December 2024, the Company entered into an agreement to sell 50% of its interests in AES DR Renewable Holding and its subsidiaries (collectively "Dominican Republic Renewables"), whose main objective is the operation and administration of energy generation assets from primary energy resources. After completion of the sale, the Company will retain a 50% ownership in Dominican Republic Renewables, which will be accounted for as an equity method investment. The sale is expected to close in the second quarter of 2025. As a result, Dominican Republic Renewables was classified as held-for-sale but did not meet the criteria to be reported as discontinued operations. Since the fair value less cost to sell exceeds the carrying value, there is no impairment to be recorded. The carrying value of net assets held-for-sale as of December 31, 2024 was $95 million on a consolidated basis. As of December 31, 2024, the significant assets and liabilities of Dominican Republic Renewables are property, plant and equipment and debt of $414 million and $350 million, respectively. Dominican Republic Renewables is reported in the Renewables SBU reportable segment.

188 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

Mong Duong — In November 2023, the Company entered into an agreement to sell its entire 51% ownership interest in Mong Duong 2, a coal-fired plant in Vietnam, and 51% equity interest in Mong Duong Finance Holdings B.V, an SPV accounted for as an equity affiliate (collectively "Mong Duong"). The sale is subject to regulatory approval and is expected to close by early 2026. As a result, Mong Duong was classified as held-for-sale, but did not meet the criteria to be reported as discontinued operations. On a consolidated basis, the carrying value of net assets after impairment of the plant held-for-sale as of December 31, 2024 was $357 million. Management has recorded pre-tax asset impairment expense of $62 million at Mong Duong. See Note 23*—Asset Impairment Expense* for further information. As of December 31, 2024, the significant assets and liabilities of Mong Duong are a long term financing receivable of $963 million and debt of $526 million, respectively. Mong Duong is reported in the Energy Infrastructure SBU reportable segment.

Excluding any impairment charges, pre-tax income (loss) and pre-tax income (loss) attributable to AES of businesses held-for-sale as of December 31, 2024 was as follows (in millions):

Year Ended December 31,			2024						2023						2022
Pre-tax income of businesses held-for-sale:
Mong Duong			$	79					$	92					$	109
Ventanas			3						13						(5)
Dominican Republic Renewables			(6)						(4)						4
Total pre-tax income of businesses held-for-sale			$	76					$	101					$	108
Pre-tax income attributable to AES of businesses held-for-sale:
Mong Duong			$	34					$	40					$	50
Ventanas			3						13						(5)
Dominican Republic Renewables			(4)						(3)						3
Total pre-tax income attributable to AES of businesses held-for-sale			$	33					$	50					$	48

Dispositions

AES Brasil — In October 2024, the Company completed the sale of its 47.3% controlling interest in AES Brasil Energia S.A. ("AES Brasil"), a 5.2 GW portfolio of renewable energy that is 51% hydroelectric, 43% wind, and 6% solar, for $586 million, resulting in a pre-tax gain on sale of $312 million reported in Gain (loss) on disposal and sale of business interests on the Consolidated Statement of Operations. The sale did not meet the criteria to be reported as discontinued operations. Prior to its sale, AES Brasil was reported in the Renewables SBU reportable segment.

Jordan — In March 2024, the Company completed the sale of approximately 26% ownership interest in the Amman East and IPP4 generation plants for a sale price of $58 million. After adjusting for dividends received since the execution of the sale and purchase agreement, the Company received a net cash payment of $45 million. The transaction resulted in a pre-tax loss on sale of $10 million, reported in Gain (loss) on disposal and sale of business interests on the Consolidated Statement of Operations. After completion of the sale, the Company retained 10% ownership interest in each of the businesses, whose fair value was measured using the market approach technique, resulting in deconsolidation and recognition as equity method investments. Amman East and IPP4 are reported in the Energy Infrastructure SBU reportable segment.

The following table summarizes, excluding any impairment charge or gain/loss on sale, the pre-tax income attributable to AES of disposed businesses for the periods indicated (in millions):

Year Ended December 31,			2024						2023						2022
AES Brasil			$	7					$	49					$	22
Jordan			5						21						(6)
Total			$	12					$	70					$	16

189 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

26. ACQUISITIONS

Atacama Solar — On December 27, 2024, the Company closed an agreement for the purchase of 100% of Atacama Solar SpA, which owns and operates photovoltaic plants with a capacity of 150 MW and is developing a 250 MW BESS as well as a 100 MW solar project. This acquisition will enhance the operational capacity, and the total consideration was $105 million. The main assets acquired were PP&E valued at $102 million and right-of-use assets for $28 million. The transaction was accounted for as an asset acquisition that did not meet the definition of a business. As Atacama Solar is not a VIE, any difference between the fair value of the assets and the consideration transferred was allocated to PP&E and intangible assets on a relative fair value basis. Atacama Solar is reported in the Renewables SBU reportable segment.

Felix — Felix DevCo, LLC ("Felix") was a joint venture with Air Products formed in 2022 to develop a green hydrogen production facility in Texas, and was previously accounted for as an equity method investment. On November 5, 2024, the Company acquired the remaining 50% ownership interest in Felix from Air Products as part of a step-acquisition for $34 million, including contingent consideration of $14 million. The main assets acquired were development intangibles valued at $74 million. As a result of the transaction, Felix was consolidated by the Company and no longer accounts for its investment under the equity method. The Company recognized a gain on the acquisition of $14 million reported in Other income on the Consolidated Statements of Operations. Felix is reported in the Renewables SBU reportable segment.

AES Clean Energy Solar Project Acquisitions — In 2024, the Company closed on the acquisitions of 1.1 GW of renewables development projects in Texas, Virginia, Illinois, and California (the purchase of 100% of the equity interests in Armadillo, Red Brick, Pulaski, Staley, Stags, and Jasmine solar projects). The total consideration of these acquisitions was $97 million, including contingent consideration of $44 million. The contingent consideration will be updated quarterly with any prospective changes in fair value recorded through earnings. The fair value of the consideration paid was attributed to identifiable assets and liabilities, consisting of intangible assets for $92 million, primarily project development intangibles, right-of-use assets for $40 million, PP&E for $18 million, and lease liabilities for $40 million. The transactions were accounted for as asset acquisitions of variable interest entities that did not meet the definition of a business. AES Clean Energy is reported in the Renewables SBU reportable segment.

Long Point and Hot Air — On September 20, 2024, the Company entered into an agreement to purchase Long Point, an early development-stage project consisting of a 300 MW wind facility, a 150 MW solar facility, and a 40 MW battery storage facility, and Hot Air, an early development-stage 350 MW wind facility, both located in Arizona. The transaction was accounted for as an asset acquisition. The total consideration paid of $6 million, including transaction costs, was allocated to the identifiable assets and liabilities on a relative fair value basis, primarily consisting of intangible assets. The remaining contingent consideration of up to $47 million, which is not recorded at this time, will be recognized as part of the projects’ assets when the contingencies are resolved, and the consideration is paid or becomes payable. Long Point and Hot Air are reported in the Renewables SBU reportable segment.

Madison and Birdseye — On April 5, 2024, the Company closed on the acquisition of the Madison solar project, a 63 MW construction-stage solar project in Virginia under contract with a 15-year virtual power purchase agreement ("VPPA"), and a pipeline of early-stage renewable energy development projects ("Birdseye"), to enhance its renewable energy portfolio. The transaction was accounted for as a business combination with a purchase price of $20 million paid in cash; therefore, the assets acquired and liabilities assumed at the acquisition date, primarily consisting of CWIP valued at $78 million and an off-market VPPA liability of $53 million, were recorded at their fair values. The Company recorded preliminary amounts for the purchase price allocation at the time of the acquisition. During the fourth quarter of 2024, the Company finalized the purchase price allocation and made measurement-period adjustments to the fair value of the assets acquired, primarily due to the determination that the Madison solar project would qualify for an increased ITC based on studies performed subsequent to the acquisition date.

The acquisition resulted in a bargain purchase gain of $20 million, recognized in Other income on the Consolidated Statements of Operations. This gain represents the excess of the estimated fair value of the net assets acquired over the purchase price. The primary reason for the bargain purchase gain was the determination that the Madison solar project would qualify for an increased ITC, which had not been assigned value in the purchase price. Additionally, the safe harbor period was expiring at the end of 2024 for certain equipment associated with the Madison solar project, jeopardizing the tax credits associated with the asset. In order to capture the highest value from the project, the seller needed to complete a sale to a buyer that could complete construction

190 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

in 2024. This is consistent with the seller's announcement in February 2023 that they would no longer invest in non-regulated solar generation projects and intended to divest their portfolio. Before recognizing the bargain purchase gain, the Company reassessed whether all assets and liabilities were correctly identified and valued. This included a reassessment of the reasonableness of all significant assumptions used in the calculation of the fair value of assets acquired and liabilities assumed, including the market PPA price, forecasted operating expenses, and the discount rates utilized. We conducted an analysis and made detailed inquiries to confirm there were no material unrecorded liabilities or contingencies that would decrease the valuation. We monitored the projects subsequent to the acquisition and did not identify any indicators that the fair value of the net assets acquired should be reduced or that the assets were impaired. Madison and Birdseye are reported in the Renewables SBU reportable segment.

Rexford — On October 2, 2023, the Company, through its subsidiary Rexford 1 Holdings, LLC., entered into an agreement for the purchase of 100% of the membership interests in 20SD 8me LLC., a 300 MW solar and 240 MW BESS project. The transaction was accounted for as an asset acquisition of variable interest entities that did not meet the definition of a business. The assets acquired and liabilities assumed were recorded at their fair values, which equaled the fair value of the consideration paid of approximately $253 million, including contingent consideration of $4 million. The nature of the assets acquired is largely tangible as they relate to construction in progress, along with typical working capital items and certain equipment.

We estimated the fair value of the construction in progress at approximately $282 million, using a discounted cash flow valuation methodology. The cash flow assumptions align with executed contracts, and incorporate forward energy pricing curves after the expiration date of such contracts. The cash flow and discount rates assumptions are considered Level 3 inputs. The contingent consideration will be updated quarterly with any prospective changes in fair value recorded through earnings. Rexford is reported in the Renewables SBU reportable segment.

Hoosier Wind — In August 2023, the Company, through its subsidiary AES Indiana, filed for IURC issuance of a Certificate of Public Convenience and Necessity approving the acquisition of 100% of the interests in Hoosier Wind Project, LLC., which is an existing 106 MW wind facility located in Benton County, Indiana. IURC approval was received on January 24, 2024, and the transaction closed on February 29, 2024. The transaction was accounted for as an asset acquisition. Of the total consideration transferred of $93 million, including transaction costs, approximately $49 million was allocated to the identifiable assets acquired on a relative fair value basis, primarily consisting of tangible wind farm assets and typical working capital items. The remaining consideration was allocated to the termination of the pre-existing PPA between AES Indiana and the Hoosier Wind Project, estimated using a discounted cash flow valuation methodology, which was deferred as a long-term regulatory asset resulting from AES Indiana regulatory approval to recover associated costs. Hoosier Wind is reported in the Utilities SBU reportable segment.

Petersburg Solar Project — On August 31, 2023, the Company entered into agreements for project development and for the purchase of 100% of the membership in Petersburg Energy Center, LLC, a 250 MW solar and BESS project. The transaction was accounted for as an asset acquisition of variable interest entities that did not meet the definition of a business. The assets acquired and liabilities assumed were recorded at their fair values, which equaled the fair value of the consideration paid of approximately $49 million. Petersburg Solar Project is reported in the Utilities SBU reportable segment.

Calhoun — On July 18, 2023, the Company entered into an agreement for the purchase of 100% of the membership interests in Calhoun County Solar Project, LLC., which holds a late development-stage 125 MW solar project. The transaction was accounted for as an asset acquisition of variable interest entities that did not meet the definition of a business. The assets acquired and liabilities assumed were recorded at their fair values, which equaled the fair value of the consideration paid of approximately $64 million, including contingent consideration of $42 million. The estimated fair value of the contingent consideration for Calhoun was determined using probability-weighted discounted cash flows based on internal forecasts, which are considered Level 3 inputs. The probability of achieving the milestone payment used to calculate the acquisition date fair value of the contingent consideration was 99%. Payments under the contingent consideration arrangement are largely binary and thus, a single probability of achieving the milestone was applied in the calculation of fair value. The contingent consideration will be updated quarterly with any prospective changes in fair value recorded through earnings. Calhoun is reported in the Renewables SBU reportable segment.

191 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

Bellefield — On June 5, 2023, the Company entered into an agreement for the purchase of 100% of the membership interests in the Bellefield projects, consisting of two late development-stage solar and BESS projects of 1 GW each. The transaction was accounted for as an asset acquisition of variable interest entities that did not meet the definition of a business. The Company agreed to make total cash payments including reimbursement of development and equipment costs of up to approximately $449 million, a portion of which is contingent upon future milestones and price adjustments. This contingent consideration will be updated quarterly with any prospective changes in fair value recorded through earnings.

The assets acquired and liabilities assumed were recorded at their fair values, which equaled the fair value of the consideration to be paid of approximately $358 million, including cash paid of $165 million, contingent consideration of $165 million, and deferred payments of $28 million. The significant assets acquired include project development intangibles, land option intangibles, deposits made towards integral equipment purchases, and typical working capital items.

We estimated the fair value of the project development intangibles at approximately $200 million, using a discounted cash flow valuation methodology. The cash flow assumptions align with executed contracts, and incorporate forward energy pricing curves after the expiration date of such contracts. The cash flow assumptions and discount rates are considered Level 3 inputs.

We estimated the fair value of the land option intangibles at approximately $82 million, by comparing the intrinsic value (estimated using a sales comparison approach for purchase options and an income capitalization method for lease options) and the strike price of each option.

The estimated fair value of the contingent consideration of Bellefield was determined using probability-weighted discounted cash flows based on internal forecasts, which are considered Level 3 inputs. The weighted average probability of achieving the development milestones used to calculate the acquisition date fair value of the contingent consideration was 91.9%. Payments under the contingent consideration arrangements are largely binary and thus, a single probability of achieving the milestone was applied in the calculation of fair value. The contingent consideration will be updated quarterly with any prospective changes in fair value recorded through earnings. Bellefield is reported in the Renewables SBU reportable segment.

Bolero Solar Park — On June 9, 2023, the Company, through its subsidiary AES Andes S.A., acquired 100% of the equity interests in Helio Atacama Tres SpA, owner of the Bolero photovoltaic power plant for consideration of $114 million. The transaction was accounted for as an asset acquisition that did not meet the definition of a business. As Helio Atacama Tres is not a VIE, any difference between the fair value of the assets and consideration transferred will be allocated to PP&E on a relative fair value basis. Helio Atacama Tres is reported in the Energy Infrastructure SBU reportable segment.

Cubico II — On November 30, 2022, the Company, through its subsidiary AES Brasil Energia S.A ("AES Brasil") acquired 100% of shares of an operational wind complex comprised of (i) Ventos de São Tomé Holding S.A., (ii) Ventos de São Tito Holdings S.A., and (iii) REB Empreendimentos e Administradora de Bens S.A. The transaction was accounted for as an asset acquisition that did not meet the definition of a business. The assets acquired and liabilities assumed were recorded at their relative fair values. The total purchase price for the acquisition was $185 million. The Cubico II wind complex was reported in the Renewables SBU reportable segment prior to the sale of AES Brasil in October 2024.

Agua Clara — On June 17, 2022, the Company, through its subsidiaries AES Dominican Renewable Energy and AES Andres DR, S.A., acquired 100% of the equity interests in Agua Clara, S.A.S., a wind project, for consideration of $98 million. The transaction was accounted for as an asset acquisition that did not meet the definition of a business. As Agua Clara is not a VIE, any difference between the fair value of the assets and consideration transferred was allocated to PP&E on a relative fair value basis. Agua Clara is reported in the Renewables SBU reportable segment.

Tunica Windpower, LLC — On June 17, 2022, the Company entered into an agreement for the purchase of 100% of the membership interests in Tunica Windpower, LLC. The transaction was accounted for as an asset acquisition of variable interest entities that did not meet the definition of a business. The assets acquired and liabilities assumed were recorded at their fair values, which equaled the fair value of the consideration paid of approximately $22 million, including contingent consideration of $7 million. The contingent consideration will be updated quarterly with any prospective changes in fair value recorded through earnings. Tunica Windpower is reported in the Renewables SBU reportable segment.

192 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

Windsor PV1, LLC — On May 27, 2022, the Company entered into an agreement for the purchase of 100% of the membership interests in Windsor PV1, LLC, an early development-stage solar project. The transaction was accounted for as an asset acquisition of variable interest entities that did not meet the definition of a business. The assets acquired and liabilities assumed were recorded at their fair values, which equaled the fair value of the consideration paid of approximately $17 million, including contingent consideration of $5 million. The contingent consideration will be updated quarterly with any prospective changes in fair value recorded through earnings. Windsor is reported in the Renewables SBU reportable segment.

27. EARNINGS PER SHARE

Basic and diluted earnings per share are based on the weighted-average number of shares of common stock and potential common stock outstanding during the period. Potential common stock, for purposes of determining diluted earnings per share, includes the effects of dilutive RSUs, stock options, and equity units. The effect of such potential common stock is computed using the treasury stock method for RSUs and stock options, and is computed using the if-converted method for equity units.

The following table is a reconciliation of the numerator and denominator of the basic and diluted earnings per share computation for income from continuing operations for the years ended December 31, 2024, 2023 and 2022, where income represents the numerator and weighted-average shares represent the denominator.

Year Ended December 31,			2024																		2023																		2022
(in millions, except per share data)			Income						Shares						$ per Share						Income						Shares						$ per Share						Loss						Shares						$ per Share
BASIC EARNINGS (LOSS) PER SHARE
Income (loss) from continuing operations attributable to The AES Corporation common stockholders			$	1,686					706						$	2.39					$	242					669						$	0.36					$	(546)					668						$	(0.82)
EFFECT OF DILUTIVE SECURITIES
Stock options			—						—						—						—						1						—						—						—						—
Restricted stock units			—						2						—						—						2						—						—						—						—
Equity units			—						5						(0.02)						1						40						(0.02)						—						—						—
DILUTED EARNINGS (LOSS) PER SHARE			$	1,686					713						$	2.37					$	243					712						$	0.34					$	(546)					668						$	(0.82)

The calculation of diluted earnings per share excluded 2 million outstanding stock awards for the years ended December 31, 2024 and December 31, 2023, which would be anti-dilutive. These stock awards could potentially dilute basic earnings per share in the future.

For the year ended December 31, 2022, the calculation of diluted earnings per share excluded 5 million outstanding stock awards and 40 million shares underlying our March 2021 Equity Units because their impact would be anti-dilutive given the loss from continuing operations. These shares could potentially dilute basic earnings per share in the future. Had the Company generated income, potential shares of common stock of 3 million related to the stock awards and 40 million related to the Equity Units would have been included in diluted weighted-average shares outstanding for the year ended December 31, 2022.

As described in Note 18*—Equity*, the Company issued 10,430,500 Equity Units in March 2021 with a total notional value of $1,043 million. Each Equity Unit has a stated amount of $100 and was initially issued as a Corporate Unit, consisting of a 2024 Purchase Contract and a 10% undivided beneficial ownership interest in one share of Series A Preferred Stock. The conversion rate was initially 31.5428 shares of common stock per one share of Series A Preferred Stock, which was equivalent to an initial conversion price of approximately $31.70 per share of common stock. The Series A Preferred Stock and the 2024 Purchase Contracts were accounted for as one unit of account. In calculating diluted EPS, the Company has applied the if-converted method to determine the impact of the forward purchase feature and considered if there are incremental shares that should be included related to the Series A Preferred conversion value. On February 15, 2024, the Series A Preferred Stock was tendered to satisfy the Purchase Contract's settlement price and the Corporate Units were converted into shares of the Company's common stock at a settlement rate of 3.8859, equivalent to a reference price of $25.73. The Series A Preferred Stock was cancelled upon conversion.

28. RISKS AND UNCERTAINTIES

AES is a diversified power generation and utility company organized into four technology-based SBUs. See additional discussion of the Company's principal markets in Note 19—Segments and Geographic Information. Within our four SBUs, we have two primary lines of business: generation and utilities. The generation line of

193 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

business uses a wide range of fuels and technologies to generate electricity such as coal, gas, hydro, wind, solar, and biomass. Our utilities business comprises businesses that transmit, distribute, and in certain circumstances, generate power. In addition, the Company has operations in the renewables area. These efforts include projects primarily in wind, solar, and energy storage.

Operating and Economic Risks — The Company operates in several developing economies where macroeconomic conditions are typically more volatile than developed economies. Deteriorating market conditions and evolving industry expectations to transition away from fossil fuel sources for generation expose the Company to the risk of decreased earnings and cash flows due to, among other factors, adverse fluctuations in the commodities and foreign currency spot markets, and potential changes in the estimated useful lives of our thermal plants. Additionally, credit markets around the globe continue to tighten their standards, which could impact our ability to finance growth projects through access to capital markets. Currently, the Company has an investment grade rating from both Standard & Poor's and Fitch of BBB- and an investment grade rating from Moody's of Baa3. A downgrade in our current investment grade ratings could affect the Company's ability to finance new and/or existing development projects at competitive interest rates. As of December 31, 2024, the Company had $1.5 billion of unrestricted cash and cash equivalents.

During 2024, 62% of our revenue was generated outside the U.S. and a significant portion of our international operations is conducted in developing countries. We continue to invest in several developing countries to expand our existing platform and operations. International operations, particularly the operation, financing, and development of projects in developing countries, entail significant risks and uncertainties, including, without limitation:

• economic, social, and political instability in any particular country or region;

• inability to economically hedge energy prices;

• volatility in commodity prices;

• adverse changes in currency exchange rates;

• government restrictions on converting currencies or repatriating funds;

• unexpected changes in foreign laws, regulatory framework, or in trade, monetary or fiscal policies;

• high inflation and monetary fluctuations;

• restrictions on imports of solar panels, wind turbines, coal, oil, gas, or other raw materials required by our generation businesses to operate;

• threatened or consummated expropriation or nationalization of our assets by foreign governments;

• unwillingness of governments, government agencies, similar organizations, or other counterparties to honor their commitments;

• unwillingness of governments, government agencies, courts, or similar bodies to enforce contracts that are economically advantageous to subsidiaries of the Company and economically unfavorable to counterparties, against such counterparties, whether such counterparties are governments or private parties;

• inability to obtain access to fair and equitable political, regulatory, administrative, and legal systems;

• adverse changes in government tax policy;

• potentially adverse tax consequences of operating in multiple jurisdictions;

• difficulties in enforcing our contractual rights, enforcing judgments, or obtaining a just result in local jurisdictions; and

• inability to obtain financing on expected terms.

Any of these factors, individually or in combination with others, could materially and adversely affect our business, results of operations, and financial condition. In addition, our Latin American operations experience volatility in revenue and earnings which have caused and are expected to cause significant volatility in our results of operations and cash flows. The volatility is caused by regulatory and economic difficulties, political instability, indexation of certain PPAs to fuel prices, and currency fluctuations being experienced in many of these countries. This volatility reduces the predictability and enhances the uncertainty associated with cash flows from these businesses.

Our inability to predict, influence or respond appropriately to changes in law or regulatory schemes, including any inability to obtain reasonable increases in tariffs or tariff adjustments for increased expenses, could adversely

194 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

impact our results of operations or our ability to meet publicly announced projections or analysts' expectations. Furthermore, changes in laws or regulations or changes in the application or interpretation of regulatory provisions in jurisdictions where we operate, particularly our utility businesses where electricity tariffs are subject to regulatory review or approval, could adversely affect our business, including, but not limited to:

• changes in the determination, definition, or classification of costs to be included as reimbursable or pass-through costs;

• changes in the definition or determination of controllable or noncontrollable costs;

• adverse changes in tax law;

• changes in the definition of events which may or may not qualify as changes in economic equilibrium;

• changes in the timing of tariff increases;

• other changes in the regulatory determinations under the relevant concessions; or

• changes in environmental regulations, including regulations relating to GHG emissions in any of our businesses.

Any of the above events may result in lower margins for the affected businesses, which can adversely affect our results of operations.

Foreign Currency Risks — AES operates businesses in many foreign countries and such operations could be impacted by significant fluctuations in foreign currency exchange rates. Fluctuations in currency exchange rate between the USD and the following currencies could create significant fluctuations in earnings and cash flows: the Argentine peso, the Chilean peso, the Colombian peso, the Dominican peso, the Euro, and the Mexican peso.

Concentrations — Due to the geographical diversity of its operations, the Company does not have any significant concentration of customers or sources of fuel supply. Several of the Company's generation businesses rely on PPAs with one or a limited number of customers for the majority of, and in some cases all of, the relevant businesses' output over the term of the PPAs. However, no single customer accounted for 10% or more of total revenue in 2024, 2023 or 2022.

The cash flows and results of operations of our businesses depend on the credit quality of our customers and the continued ability of our customers and suppliers to meet their obligations under PPAs and fuel supply agreements. If a substantial portion of the Company's long-term PPAs and/or fuel supply were modified or terminated, the Company would be adversely affected to the extent that it would be unable to replace such contracts at equally favorable terms.

29. RELATED PARTY TRANSACTIONS

Certain of our businesses in Panama are partially owned by governments either directly or through state-owned institutions. In the ordinary course of business, these businesses enter into energy purchase and sale transactions, and transmission agreements with other state-owned institutions which are controlled by such governments. In the Dominican Republic, AES conducts revenue generating business with parties which are investors in AES equity method investees. These business relationships affect both Revenue—Non-Regulated and Cost of Sales—Non-Regulated. Furthermore, in 2021, the Company began construction projects with Fluence relating to energy storage. These related party transactions primarily present themselves as construction in progress, as seen below. Additionally, the Company provides certain support and management services to several of its affiliates under various agreements.

The Company's Consolidated Statements of Operations included the following transactions with related parties for the periods indicated (in millions):

Years Ended December 31,			2024						2023						2022
Revenue—Non-Regulated			$	746					$	1,055					$	1,093
Cost of Sales—Non-Regulated			143						576						352
Cost of Sales—Regulated			34						39						39
Interest income			12						9						10
Interest expense			26						36						95
Other income			23						28						17

195 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

The following table summarizes the balances that relate to related party transactions for balance sheet accounts included in the Company's Consolidated Balance Sheets as of the periods indicated (in millions):

December 31,			2024						2023
Receivables from related parties			$	166					$	584
Accounts and notes payable to related parties (1)			1,016						1,411
Property, plant, and equipment, net			851						671
Prepaid expenses			11						25

---

(1)Includes $526 million and $639 million of debt to Mong Duong Finance Holdings B.V., as of December 31, 2024 and 2023, respectively. Mong Duong was classified as held-for-sale in December 2024 and 2023.

30. 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

196 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

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.

197 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

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

198 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

															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

199 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

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

200 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

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

201 | Notes to Consolidated Financial Statements—(Continued) | December 31, 2024, 2023 and 2022

															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

31. SUBSEQUENT EVENTS

Restructuring Program — In February 2025, the company approved and initiated a restructuring program to streamline our organization given the significantly lower number of countries that we operate in. Additionally, we are right sizing our development company to focus on executing on the backlog and pursuing larger but fewer projects to better serve our core customers. This program is not expected to have an impact on the Company's operating segments.

AES Dominican Renewable Energy — On February 6, 2025, AES Dominican Renewable Energy failed to comply with a covenant on its debt, resulting in a technical default. See Note 12—Obligations for further information. AES Dominican Renewable Energy is reported in the Renewables SBU reportable segment and was classified as held-for-sale in the current period. See Note 25—Held-For-Sale and Dispositions for further information.

AES Ohio — On March 5, 2025, DPL received approval from the PUCO for the previously announced sale of an aggregate indirect equity interest of approximately 30% in AES Ohio to CDPQ.

202 | 2024 Annual Report