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Cover and table of contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 1-12291

THE AES CORPORATION

(Exact name of registrant as specified in its charter)


Delaware						54-1163725
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)


4300 Wilson Boulevard
Arlington,	Virginia	22203
(Address of principal executive offices)		(Zip Code)


Registrant's telephone number, including area code:			(703)			522-1315


Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, par value $0.01 per share	AES	New York Stock Exchange
Corporate Units	AESC	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer			☒			Accelerated filer			☐			Smaller reporting company			☐			Emerging growth company			☐			Non-accelerated filer			☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares outstanding of Registrant’s Common Stock, par value $0.01 per share, on August 1, 2023 was 669,629,035.

The AES Corporation

Form 10-Q for the Quarterly Period ended June 30, 2023

Table of Contents


Glossary of Terms		1

PART I: FINANCIAL INFORMATION		3

ITEM 1.	FINANCIAL STATEMENTS (UNAUDITED)	3
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations	4
	Condensed Consolidated Statements of Comprehensive Income (Loss)	5
	Condensed Consolidated Statements of Changes in Equity	6
	Condensed Consolidated Statements of Cash Flows	8
	Notes to Condensed Consolidated Financial Statements	9
	Note 1 - Financial Statement Presentation	9
	Note 2 - Inventory	12

	Note 3 - Fair Value	12
	Note 4 - Derivative Instruments and Hedging Activities	16
	Note 5 - Financing Receivables	17
	Note 6 - Investments in and Advances to Affiliates	18
	Note 7 - Debt	18
	Note 8 - Commitments and Contingencies	20
	Note 9 - Leases	21
	Note 10 - Redeemable Stock of Subsidiaries	22
	Note 11 - Equity	23
	Note 12 - Segments	25
	Note 13 - Revenue	28
	Note 14 - Other Income and Expense	29
	Note 15 - Asset Impairment Expense	29


	Note 1 6 - Held-for-Sale	30
	Note 1 7 - Acquisitions	31
	Note 1 8 - Earnings Per Share	32
	Note 19 - Risks and Uncertainties	33


ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	34
	Executive Summary	34

	Review of Consolidated Results of Operations	38
	SBU Performance Analysis	44
	Key Trends and Uncertainties	52
	Capital Resources and Liquidity	59
	Critical Accounting Policies and Estimates	65

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	66

ITEM 4.	CONTROLS AND PROCEDURES	68

PART II: OTHER INFORMATION		69

ITEM 1.	LEGAL PROCEEDINGS	69

ITEM 1A.	RISK FACTORS	72

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	72

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	72

ITEM 4.	MINE SAFETY DISCLOSURES	72

ITEM 5.	OTHER INFORMATION	72

ITEM 6.	EXHIBITS	73

SIGNATURES		74

1 | The AES Corporation | June 30, 2023 Form 10-Q

Glossary of Terms

The following terms and acronyms appear in the text of this report and have the definitions indicated below:



Adjusted EBITDA			Adjusted earnings before interest income and expense, taxes, depreciation and amortization, a non-GAAP measure of operating performance
Adjusted EBITDA with Tax Attributes			Adjusted earnings before interest income and expense, taxes, depreciation and amortization, adding back the pre-tax effect of Production Tax Credits, Investment Tax Credits and depreciation tax expense allocated to tax equity investors, a non-GAAP measure
Adjusted EPS			Adjusted Earnings Per Share, a non-GAAP measure
Adjusted PTC			Adjusted Pre-tax Contribution, a non-GAAP measure of operating performance
AES			The Parent Company and its subsidiaries and affiliates
AES Andes			AES Andes S.A., formerly AES Gener
AES Brasil			AES Brasil Operações S.A., formerly branded as AES Tietê
AES Clean Energy Development			AES Clean Energy Development, LLC
AES Indiana			Indianapolis Power & Light Company, formerly branded as IPL. AES Indiana is wholly-owned by IPALCO
AES Ohio			The Dayton Power & Light Company, formerly branded as DP&L. AES Ohio is wholly-owned by DPL
AES Renewable Holdings			AES Renewable Holdings, LLC, formerly branded as AES Distributed Energy

AFUDC			Allowance for Funds Used During Construction



AOCL			Accumulated Other Comprehensive Loss

ASC			Accounting Standards Codification
ASU			Accounting Standards Update


BESS			Battery Energy Storage System





CAA			United States Clean Air Act
CAMMESA			Wholesale Electric Market Administrator in Argentina


CCR			Coal Combustion Residuals, which includes bottom ash, fly ash, and air pollution control wastes generated at coal-fired generation plant sites


CECL			Current Expected Credit Loss



CO2			Carbon Dioxide
COD			Commercial Operation Date

CSAPR			Cross-State Air Pollution Rule

CWA			U.S. Clean Water Act
DG Comp			Directorate-General for Competition



DPL			DPL Inc.


EBITDA			Earnings before interest income and expense, taxes, depreciation and amortization, a non-GAAP measure of operating performance
EPA			United States Environmental Protection Agency
EPC			Engineering, Procurement and Construction


ESP			Electric Security Plan
EU			European Union


FASB			Financial Accounting Standards Board

Fluence			Fluence Energy, Inc and its subsidiaries, including Fluence Energy, LLC, which was previously our joint venture with Siemens (NASDAQ: FLNC)



GAAP			Generally Accepted Accounting Principles in the United States
GHG			Greenhouse Gas



GILTI			Global Intangible Low Taxed Income

GW			Gigawatts
GWh			Gigawatt Hours
HLBV			Hypothetical Liquidation at Book Value


IPALCO			IPALCO Enterprises, Inc.



ITC			Investment Tax Credit
IURC			Indiana Utility Regulatory Commission

LIBOR			London Interbank Offered Rate
LNG			Liquid Natural Gas



MMBtu			Million British Thermal Units


MW			Megawatts
MWh			Megawatt Hours
NAAQS			National Ambient Air Quality Standards
NCI			Noncontrolling Interest
NEK			Natsionalna Elektricheska Kompania (state-owned electricity public supplier in Bulgaria)

NM			Not Meaningful
NOV			Notice of Violation
NOX			Nitrogen Oxide
NPDES			National Pollutant Discharge Elimination System







Parent Company			The AES Corporation

Pet Coke			Petroleum Coke


PPA			Power Purchase Agreement
PREPA			Puerto Rico Electric Power Authority


PUCO			The Public Utilities Commission of Ohio


RSU			Restricted Stock Unit

2 | The AES Corporation | June 30, 2023 Form 10-Q


SBU			Strategic Business Unit
SEC			United States Securities and Exchange Commission






SO2			Sulfur Dioxide




TDSIC			Transmission, Distribution, and Storage System Improvement Charge
U.S.			United States

USD			United States Dollar
VAT			Value-Added Tax
VIE			Variable Interest Entity

3 | The AES Corporation | June 30, 2023 Form 10-Q

PART I: FINANCIAL INFORMATION

Next: Item 1. FINANCIAL STATEMENTS