Item 1. FINANCIAL STATEMENTS

Condensed Consolidated Balance Sheets (Unaudited)

			March 31, 2024						December 31, 2023
			(in millions, except share and per share amounts)
ASSETS
CURRENT ASSETS
Cash and cash equivalents			$	1,994					$	1,426
Restricted cash			362						370
Short-term investments			394						395
Accounts receivable, net of allowance of $19 and $15, respectively			1,624						1,420
Inventory			639						712
Prepaid expenses			198						177
Other current assets, net of allowance of $15 and $14, respectively			1,404						1,387
Current held-for-sale assets			555						762
Total current assets			7,170						6,649
NONCURRENT ASSETS
Property, Plant and Equipment:
Land			556						522
Electric generation, distribution assets and other			31,352						30,190
Accumulated depreciation			(8,804)						(8,602)
Construction in progress			8,802						7,848
Property, plant and equipment, net			31,906						29,958
Other Assets:
Investments in and advances to affiliates			1,029						941
Debt service reserves and other deposits			199						194
Goodwill			348						348
Other intangible assets, net of accumulated amortization of $514 and $498, respectively			2,258						2,243
Deferred income taxes			395						396
Other noncurrent assets, net of allowance of $9 and $9, respectively			2,992						3,259
Noncurrent held-for-sale assets			748						811
Total other assets			7,969						8,192
TOTAL ASSETS			$	47,045					$	44,799
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable			$	2,064					$	2,199
Accrued interest			312						315
Accrued non-income taxes			268						278
Supplier financing arrangements			875						974
Accrued and other liabilities			1,273						1,334
Recourse debt			200						200
Non-recourse debt, including $757 and $1,080, respectively, related to variable interest entities			4,033						3,932
Current held-for-sale liabilities			186						499
Total current liabilities			9,211						9,731
NONCURRENT LIABILITIES
Recourse debt			5,095						4,264
Non-recourse debt, including $1,617 and $1,715, respectively, related to variable interest entities			20,275						18,482
Deferred income taxes			1,507						1,245
Other noncurrent liabilities			2,661						3,114
Noncurrent held-for-sale liabilities			514						514
Total noncurrent liabilities			30,052						27,619
Commitments and Contingencies (see Note 9)
Redeemable stock of subsidiaries			1,502						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; 859,584,456 issued and 710,644,647 outstanding at March 31, 2024 and 819,051,591 issued and 669,693,234 outstanding at December 31, 2023)			9						8
Additional paid-in capital			7,068						6,355
Accumulated deficit			(954)						(1,386)
Accumulated other comprehensive loss			(1,414)						(1,514)
Treasury stock, at cost (148,939,809 and 149,358,357 shares at March 31, 2024 and December 31, 2023, respectively)			(1,809)						(1,813)
Total AES Corporation stockholders’ equity			2,900						2,488
NONCONTROLLING INTERESTS			3,380						3,497
Total equity			6,280						5,985
TOTAL LIABILITIES AND EQUITY			$	47,045					$	44,799

See Notes to Condensed Consolidated Financial Statements.

4 | The AES Corporation

Condensed Consolidated Statements of Operations

(Unaudited)

			Three Months Ended March 31,
			2024						2023
			(in millions, except share and per share amounts)
Revenue:
Non-Regulated			$	2,232					$	2,287
Regulated			853						952
Total revenue			3,085						3,239
Cost of Sales:
Non-Regulated			(1,733)						(1,797)
Regulated			(733)						(848)
Total cost of sales			(2,466)						(2,645)
Operating margin			619						594
General and administrative expenses			(75)						(55)
Interest expense			(357)						(330)
Interest income			105						123
Loss on extinguishment of debt			(1)						(1)
Other expense			(38)						(14)
Other income			35						10
Gain on disposal and sale of business interests			43						—
Asset impairment expense			(46)						(20)
Foreign currency transaction losses			(8)						(42)
INCOME FROM CONTINUING OPERATIONS BEFORE TAXES AND EQUITY IN EARNINGS OF AFFILIATES			277						265
Income tax benefit (expense)			16						(72)
Net equity in losses of affiliates			(15)						(4)
NET INCOME			278						189
Less: Net loss (income) attributable to noncontrolling interests and redeemable stock of subsidiaries			154						(38)
NET INCOME ATTRIBUTABLE TO THE AES CORPORATION			$	432					$	151
BASIC EARNINGS PER SHARE:
NET INCOME ATTRIBUTABLE TO THE AES CORPORATION COMMON STOCKHOLDERS			$	0.62					$	0.22
DILUTED EARNINGS PER SHARE:
NET INCOME ATTRIBUTABLE TO THE AES CORPORATION COMMON STOCKHOLDERS			$	0.60					$	0.21
DILUTED SHARES OUTSTANDING			712						712

See Notes to Condensed Consolidated Financial Statements.

5 | The AES Corporation

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)

			Three Months Ended March 31,
			2024						2023
			(in millions)
NET INCOME			$	278					$	189
Foreign currency translation activity:
Foreign currency translation adjustments, net of $0 income tax for all periods			(43)						40
Total foreign currency translation adjustments			(43)						40
Derivative activity:
Change in fair value of derivatives, net of income tax benefit (expense) of $(44) and $31, respectively			200						(122)
Reclassification to earnings, net of income tax benefit of $0 and $9, respectively			(2)						(41)
Total change in fair value of derivatives			198						(163)
Pension activity:
Change in pension adjustments due to net actuarial gain for the period, net of $0 income tax for all periods			—						1
Total pension adjustments			—						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						—
Total change in fair value option liabilities			3						—
OTHER COMPREHENSIVE INCOME (LOSS)			158						(122)
COMPREHENSIVE INCOME			436						67
Less: Comprehensive loss (income) attributable to noncontrolling interests and redeemable stock of subsidiaries			96						(18)
COMPREHENSIVE INCOME ATTRIBUTABLE TO THE AES CORPORATION			$	532					$	49

See Notes to Condensed Consolidated Financial Statements.

6 | The AES Corporation

Condensed Consolidated Statements of Changes in Equity

(Unaudited)

			Three Months Ended March 31, 2024
			Preferred Stock												Common Stock												Treasury Stock												Additional Paid-In Capital						Accumulated Deficit						Accumulated Other Comprehensive Loss						Noncontrolling Interests (1)
			Shares						Amount						Shares						Amount						Shares						Amount
			(in millions)
Balance at January 1, 2024			1.0						$	838					819.1						$	8					149.4						$	(1,813)					$	6,355					$	(1,386)					$	(1,514)					$	3,497
Net income (loss)			—						—						—						—						—						—						—						432						—						(65)
Total foreign currency translation adjustments, net of income tax			—						—						—						—						—						—						—						—						(38)						(4)
Total change in fair value of derivatives, net of income tax			—						—						—						—						—						—						—						—						135						27
Total change in fair value option liabilities, net of income tax			—						—						—						—						—						—						—						—						3						—
Total other comprehensive income			—						—						—						—						—						—						—						—						100						23
Adjustments to redemption value of redeemable stock of subsidiaries (2)			—						—						—						—						—						—						(6)						—						—						—
Disposition of business interests			—						—						—						—						—						—						—						—						—						(111)
Distributions to noncontrolling interests			—						—						—						—						—						—						—						—						—						(13)
Contributions from noncontrolling interests			—						—						—						—						—						—						—						—						—						1
Sales to noncontrolling interests			—						—						—						—						—						—						1						—						—						48
Conversion of Corporate Units to shares of common stock			(1.0)						(838)						40.5						1						—						—						838						—						—						—
Dividends declared on common stock ($0.1725/share)			—						—						—						—						—						—						(116)						—						—						—
Purchase of treasury stock			—						—						—						—						0.1						(3)						3						—						—						—
Issuance and exercise of stock-based compensation benefit plans, net of income tax			—						—						—						—						(0.6)						7						(7)						—						—						—
Balance at March 31, 2024			—						$	—					859.6						$	9					148.9						$	(1,809)					$	7,068					$	(954)					$	(1,414)					$	3,380

			Three Months Ended March 31, 2023
			Preferred Stock												Common Stock												Treasury Stock												Additional Paid-In Capital						Accumulated Deficit						Accumulated Other Comprehensive Loss						Noncontrolling Interests (1)
			Shares						Amount						Shares						Amount						Shares						Amount
			(in millions)
Balance at January 1, 2023			1.0						$	838					818.8						$	8					150.0						$	(1,822)					$	6,688					$	(1,635)					$	(1,640)					$	2,067
Net income			—						—						—						—						—						—						—						151						—						52
Total foreign currency translation adjustments, net of income tax			—						—						—						—						—						—						—						—						33						7
Total change in fair value of derivatives, net of income tax			—						—						—						—						—						—						—						—						(135)						1
Total pension adjustments, net of income tax			—						—						—						—						—						—						—						—						—						1
Total other comprehensive income (loss)			—						—						—						—						—						—						—						—						(102)						9
Distributions to noncontrolling interests			—						—						—						—						—						—						—						—						—						(37)
Acquisitions of noncontrolling interests			—						—						—						—						—						—						(1)						—						—						1
Contributions from noncontrolling interests			—						—						—						—						—						—						—						—						—						2
Sales to noncontrolling interests			—						—						—						—						—						—						(7)						—						—						3
Issuance of preferred shares in subsidiaries			—						—						—						—						—						—						—						—						—						4
Dividends declared on common stock ($0.1659/share)			—						—						—						—						—						—						(111)						—						—						—
Issuance and exercise of stock-based compensation benefit plans, net of income tax			—						—						—						—						(0.5)						7						(12)						—						—						—
Balance at March 31, 2023			1.0						$	838					818.8						$	8					149.5						$	(1,815)					$	6,557					$	(1,484)					$	(1,742)					$	2,101

(1) Excludes redeemable stock of subsidiaries. See Note 11—Redeemable Stock of Subsidiaries.

(2) Adjustment to record the redeemable stock of a tax equity partnership at AES Clean Energy Development at redemption value.

See Notes to Condensed Consolidated Financial Statements.

7 | The AES Corporation

Condensed Consolidated Statements of Cash Flows

(Unaudited)

			Three Months Ended March 31,
			2024						2023
			(in millions)
OPERATING ACTIVITIES:
Net income			$	278					$	189
Adjustments to net income:
Depreciation and amortization			312						273
Emissions allowance expense			47						89
Gain on realized/unrealized derivatives			(73)						(33)
Gain on disposal and sale of business interests			(43)						—
Impairment expense			46						20
Deferred income tax expense (benefit)			222						(11)
Other			104						89
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable			(232)						(62)
(Increase) decrease in inventory			72						191
(Increase) decrease in prepaid expenses and other current assets			39						64
(Increase) decrease in other assets			(91)						50
Increase (decrease) in accounts payable and other current liabilities			(85)						(293)
Increase (decrease) in income tax payables, net and other tax payables			(327)						(7)
Increase (decrease) in deferred income			23						21
Increase (decrease) in other liabilities			(5)						45
Net cash provided by operating activities			287						625
INVESTING ACTIVITIES:
Capital expenditures			(2,148)						(1,551)
Acquisitions of business interests, net of cash and restricted cash acquired			(57)						—
Proceeds from the sale of business interests, net of cash and restricted cash sold			11						98
Sale of short-term investments			141						356
Purchase of short-term investments			(144)						(418)
Contributions and loans to equity affiliates			(21)						(20)
Purchase of emissions allowances			(56)						(78)
Other investing			(112)						(11)
Net cash used in investing activities			(2,386)						(1,624)
FINANCING ACTIVITIES:
Borrowings under the revolving credit facilities			1,741						1,415
Repayments under the revolving credit facilities			(1,037)						(1,055)
Commercial paper borrowings (repayments), net			719						350
Issuance of recourse debt			—						500
Issuance of non-recourse debt			2,131						690
Repayments of non-recourse debt			(915)						(660)
Payments for financing fees			(31)						(18)
Purchases under supplier financing arrangements			486						529
Repayments of obligations under supplier financing arrangements			(516)						(587)
Distributions to noncontrolling interests			(23)						(47)
Contributions from noncontrolling interests			26						18
Sales to noncontrolling interests			125						—
Dividends paid on AES common stock			(116)						(111)
Payments for financed capital expenditures			(7)						(4)
Other financing			23						(4)
Net cash provided by financing activities			2,606						1,016
Effect of exchange rate changes on cash, cash equivalents and restricted cash			(15)						(18)
(Increase) decrease in cash, cash equivalents and restricted cash of held-for-sale businesses			73						(9)
Total increase (decrease) in cash, cash equivalents and restricted cash			565						(10)
Cash, cash equivalents and restricted cash, beginning			1,990						2,087
Cash, cash equivalents and restricted cash, ending			$	2,555					$	2,077
SUPPLEMENTAL DISCLOSURES:
Cash payments for interest, net of amounts capitalized			$	354					$	252
Cash payments for income taxes, net of refunds			68						53
SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
Conversion of Corporate Units to shares of common stock (see Note 12)			838						—
Noncash recognition of new operating and financing leases			124						19
Dividends declared but not yet paid			116						111
Initial recognition of contingent consideration for acquisitions			9						—

See Notes to Condensed Consolidated Financial Statements.

8 | Notes to Condensed Consolidated Financial Statements | March 31, 2024 and 2023

Notes to Condensed Consolidated Financial Statements

For the Three Months Ended March 31, 2024 and 2023

(Unaudited)

1. FINANCIAL STATEMENT PRESENTATION

Consolidation — In this Quarterly Report, the terms “AES,” “the Company,” “us” or “we” refer to the consolidated entity, including its subsidiaries and affiliates. The terms “The AES Corporation” or “the Parent Company” refer only to the publicly held holding company, The AES Corporation, excluding its subsidiaries and affiliates. Furthermore, VIEs in which the Company has a variable interest have been consolidated where the Company is the primary beneficiary. Investments in which the Company has the ability to exercise significant influence, but not control, are accounted for using the equity method of accounting, except for our investment in Alto Maipo, for which we have elected the fair value option as permitted under ASC 825. All intercompany transactions and balances have been eliminated in consolidation.

Interim Financial Presentation — The accompanying unaudited condensed consolidated financial statements and footnotes have been prepared in accordance with GAAP, as contained in the FASB ASC, for interim financial information and Article 10 of Regulation S-X issued by the SEC. Accordingly, they do not include all the information and footnotes required by GAAP for annual fiscal reporting periods. In the opinion of management, the interim financial information includes all adjustments of a normal recurring nature necessary for a fair presentation of the results of operations, financial position, comprehensive income, changes in equity, and cash flows. The results of operations for the three months ended March 31, 2024 are not necessarily indicative of expected results for the year ending December 31, 2024. The accompanying condensed consolidated financial statements are unaudited and should be read in conjunction with the 2023 audited consolidated financial statements and notes thereto, which are included in the 2023 Form 10-K filed with the SEC on February 29, 2024 (the “2023 Form 10-K”).

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

			March 31, 2024						December 31, 2023
Cash and cash equivalents			$	1,994					$	1,426
Restricted cash			362						370
Debt service reserves and other deposits			199						194
Cash, Cash Equivalents, and Restricted Cash			$	2,555					$	1,990

ASC 450*—Liabilities—*Supplier Finance Programs — With some purchases, AES enters into supplier financing arrangements. The Company generally uses an intermediary entity between the supplier and the Company, but sometimes enters into these agreements directly with the supplier, with the goal of securing improved payment terms. These arrangements are included in Supplier financing arrangements on the Condensed Consolidated Balance Sheets as the amounts are all due in less than a year; the related interest expense is recorded on the Condensed Consolidated Statements of Operations within Interest expense. The company had 32 supplier financing arrangements with a total outstanding balance of $875 million as of March 31, 2024, and 46 supplier financing arrangements with a total outstanding balance of $974 million as of December 31, 2023. The agreements ranged from less than $1 million to $96 million with a weighted average interest rate of 7.60% as of March 31, 2024; as of December 31, 2023, the agreements ranged from less than $1 million to $69 million with a weighted average interest rate of 7.51%. Of the amounts outstanding under supplier financing arrangements, $725 million and $814 million were guaranteed by the Company as of March 31, 2024 and December 31, 2023, respectively.

New Accounting Pronouncements Adopted in 2024 — The following table provides a brief description of recent accounting pronouncements that had an impact on the Company’s condensed 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 condensed consolidated financial statements.

9 | Notes to Condensed Consolidated Financial Statements—(Continued) | March 31, 2024 and 2023

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 is effective for fiscal years beginning after December 15, 2023.			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 expects to adopt and present prospectively beginning in the 2024 annual financial statements.

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 condensed 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 condensed 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
2023-07 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.			The amendments in this Update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted.			This ASU only affects disclosures, which will be provided when the amendment becomes effective.
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 an 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			This ASU only affects disclosures, which will be provided when the amendment becomes effective.

10 | Notes to Condensed Consolidated Financial Statements—(Continued) | March 31, 2024 and 2023

2. INVENTORY

The following table summarizes the Company’s inventory balances as of the periods indicated (in millions):

			March 31, 2024						December 31, 2023
Fuel and other raw materials			$	337					$	424
Spare parts and supplies			302						288
Total			$	639					$	712

3. 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. For further information on our valuation techniques and policies, see Note 5—Fair Value in Item 8.—Financial Statements and Supplementary Data of our 2023 Form 10-K.

Recurring Measurements

The following table presents, by level within the fair value hierarchy, 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:

			March 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			$	—					$	338					$	—					$	338					$	—					$	360					$	—					$	360
Government debt securities			—						3						—						3						—						—						—						—
Total debt securities			—						341						—						341						—						360						—						360
EQUITY SECURITIES:
Mutual funds			49						—						—						49						46						—						—						46
Common stock			5						—						—						5						—						—						—						—
Total equity securities			54						—						—						54						46						—						—						46
DERIVATIVES:
Interest rate derivatives			—						268						—						268						—						182						2						184
Foreign currency derivatives			—						13						64						77						—						15						59						74
Commodity derivatives			—						253						—						253						—						127						1						128
Total derivatives — assets			—						534						64						598						—						324						62						386
TOTAL ASSETS			$	54					$	875					$	64					$	993					$	46					$	684					$	62					$	792
Liabilities
Contingent consideration			$	—					$	—					$	158					$	158					$	—					$	—					$	165					$	165
DERIVATIVES:
Interest rate derivatives			—						33						2						35						—						102						6						108
Cross-currency derivatives			—						54						—						54						—						63						—						63
Foreign currency derivatives			—						28						—						28						—						19						—						19
Commodity derivatives			—						191						79						270						—						145						111						256
Total derivatives — liabilities			—						306						81						387						—						329						117						446
TOTAL LIABILITIES			$	—					$	306					$	239					$	545					$	—					$	329					$	282					$	611

As of March 31, 2024, all available-for-sale debt securities had stated maturities within one year. There were no other-than-temporary impairments of marketable securities during the three months ended March 31, 2024. The level 3 contingent consideration relates mainly to the acquisition of Bellefield in June 2023. Credit-related impairments are recognized in earnings under ASC 326. Gains and losses on the sale of investments are determined using the specific-identification method. The following table presents gross proceeds from the sale of available-for-sale securities during the periods indicated (in millions):

												Three Months Ended March 31,
																		2024						2023
Gross proceeds from sale of available-for-sale securities																		$	119					$	369

The following tables present a reconciliation of assets and liabilities measured at fair value on a recurring basis

11 | Notes to Condensed Consolidated Financial Statements—(Continued) | March 31, 2024 and 2023

using significant unobservable inputs (Level 3) for the three months ended March 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
Three Months Ended March 31, 2024			Interest Rate												Foreign Currency						Commodity						Contingent Consideration						Total
Balance at January 1, 2024			$	(4)											$	59					$	(110)					$	(165)					$	(220)
Total realized and unrealized gains (losses):
Included in earnings			—												10						4						6						20
Included in other comprehensive income (loss) — derivative activity			8												4						28						—						40
Included in other comprehensive income (loss) — foreign currency translation activity			—												—						—						(1)						(1)
Acquisitions			—												—						—						(9)						(9)
Settlements			(1)												(9)						(1)						11						—
Transfers of assets, net out of Level 3			(5)												—						—						—						(5)
Balance at March 31, 2024			$	(2)											$	64					$	(79)					$	(158)					$	(175)
Total gains 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			$	—											$	3					$	6					$	6					$	15
			Derivative Assets and Liabilities
Three Months Ended March 31, 2023			Interest Rate												Foreign Currency						Commodity						Contingent Consideration						Total
Balance at January 1, 2023			$	—											$	64					$	(47)					$	(25)					$	(8)
Total realized and unrealized gains (losses):
Included in earnings			—												(2)						—						(6)						(8)
Included in other comprehensive income (loss) — derivative activity			(1)												—						(17)						—						(18)
Included in regulatory (assets) liabilities			—												—						(5)						—						(5)
Transfers of liabilities, net into Level 3			(4)												—						—						—						(4)
Balance at March 31, 2023			$	(5)											$	62					$	(69)					$	(31)					$	(43)
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			$	—											$	(1)					$	1					$	6					$	6

The following table summarizes the significant unobservable inputs used for Level 3 derivative assets (liabilities) as of March 31, 2024 (in millions, except range amounts):

Type of Derivative						Fair Value						Unobservable Input									Amount or Range (Average)
Interest rate						$	(2)					Subsidiary credit spread									0.7% to 3.0% (2.1%)
Foreign currency:
Argentine peso						64						Argentine peso to U.S. dollar currency exchange rate after one year									1,339 to 1,657 (1,514)
Commodity:
CAISO Energy Swap						(79)						Forward energy prices per MWh after 2030									$11.58 to $121.53 ($62.03)
Total						$	(17)

For the Argentine peso foreign currency derivatives, increases in the estimate of the above exchange rate would increase the value of the derivative. For the CAISO Energy Swap, increases in the estimate above would decrease the value of the derivative.

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.

12 | Notes to Condensed Consolidated Financial Statements—(Continued) | March 31, 2024 and 2023

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 and is included in Asset impairment expense on the Condensed Consolidated Statements of Operations. 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):

			Measurement Date						Carrying Amount (1)						Fair Value																		Pre-tax Loss
Three Months Ended March 31, 2024						Level 1						Level 2						Level 3
Held-for-sale businesses: (2)
Mong Duong			3/31/2024						$	450					$	—					$	413					$	—					$	37
			Measurement Date						Carrying Amount (1)						Fair Value
Three Months Ended March 31, 2023						Level 1						Level 2						Level 3						Pre-tax Loss
Held-for-sale businesses: (2)
Jordan (3)			3/31/2023						$	179					$	—					$	170					$	—					$	14

---

(1)Represents the carrying values of the asset groups at the dates of measurement, before fair value adjustment.

(2)See Note 18—Held-for-Sale and Dispositions for further information.

(3)The pre-tax loss recognized was calculated using the $170 million fair value of the Jordan disposal group less costs to sell of $5 million.

Financial Instruments Not Measured at Fair Value in the Condensed 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 Condensed Consolidated Balance Sheets as of the periods indicated, but for which fair value is disclosed:

						March 31, 2024
						Carrying Amount						Fair Value
						Total						Level 1						Level 2						Level 3
Assets:			Accounts receivable — noncurrent (1)			$	91					$	148					$	—					$	—					$	148
Liabilities:			Non-recourse debt			23,924						23,695						—						22,165						1,530
			Recourse debt			5,295						4,995						—						4,995						—

						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 in the U.S. and the amounts impacted by the Stabilization Funds enacted by the Chilean government, and are included in Other noncurrent assets in the accompanying Condensed Consolidated Balance Sheets.

4. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

For further information on the Company’s derivative and hedge accounting policies, see Note 1—General and Summary of Significant Accounting Policies—Derivatives and Hedging Activities of Item 8.—Financial Statements and Supplementary Data in the 2023 Form 10-K.

13 | Notes to Condensed Consolidated Financial Statements—(Continued) | March 31, 2024 and 2023

Volume of Activity — The following tables present the Company’s maximum notional (in millions) over the remaining contractual period by type of derivative as of March 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
Interest rate						$	8,678					2059
Cross-currency swaps (Brazilian real)						404						2026
Foreign currency:
Chilean peso						177						2027
Euro						103						2026
Colombian peso						49						2026
Brazilian real						25						2026
Argentine peso						1						2026

Commodity Derivatives						Maximum Notional						Latest Maturity
Natural Gas (in MMBtu)						161						2029
Power (in MWhs)						19						2040
Coal (in Metric Tons)						6						2027

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

Fair Value			March 31, 2024																		December 31, 2023
Assets			Designated						Not Designated						Total						Designated						Not Designated						Total
Interest rate derivatives			$	268					$	—					$	268					$	184					$	—					$	184
Foreign currency derivatives			21						56						77						23						51						74
Commodity derivatives			—						253						253						—						128						128
Total assets			$	289					$	309					$	598					$	207					$	179					$	386
Liabilities
Interest rate derivatives			$	35					$	—					$	35					$	108					$	—					$	108
Cross-currency derivatives			54						—						54						63						—						63
Foreign currency derivatives			15						13						28						5						14						19
Commodity derivatives			79						191						270						107						149						256
Total liabilities			$	183					$	204					$	387					$	283					$	163					$	446

			March 31, 2024												December 31, 2023
Fair Value			Assets						Liabilities						Assets						Liabilities
Current			$	308					$	175					$	216					$	152
Noncurrent			290						212						170						294
Total			$	598					$	387					$	386					$	446

14 | Notes to Condensed Consolidated Financial Statements—(Continued) | March 31, 2024 and 2023

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

			Three Months Ended March 31,
2024						2023
Cash flow hedges
Gains (losses) recognized in AOCL
Interest rate derivatives			$	225					$	(138)
Foreign currency derivatives			(9)						8
Commodity derivatives			28						(23)
Total			$	244					$	(153)
Gains reclassified from AOCL into earnings
Interest rate derivatives			$	1					$	36
Foreign currency derivatives			1						—
Commodity derivatives			—						14
Total			$	2					$	50
Gains (losses) on fair value hedging relationship
Cross-currency derivatives			$	(56)					$	(53)
Hedged items			43						50
Total			$	(13)					$	(3)
Gains reclassified from AOCL to earnings due to discontinuance of hedge accounting			$	—					$	1
Gains (losses) recognized in earnings
Not designated as hedging instruments:
Foreign currency derivatives			$	13					$	(4)
Commodity derivatives and other			91						65
Total			$	104					$	61

Reclassifications from AOCL to earnings are forecasted to increase pre-tax income from continuing operations for the twelve months ended March 31, 2025 by $12 million.

5. FINANCING RECEIVABLES

Receivables with contractual maturities of greater than one year are considered financing receivables. The following table presents financing receivables by country as of the dates indicated (in millions):

			March 31, 2024																		December 31, 2023
			Gross Receivable						Allowance						Net Receivable						Gross Receivable						Allowance						Net Receivable
U.S.			$	46					$	—					$	46					$	149					$	—					$	149
Chile			36						—						36						33						—						33
Other			10						—						10						11						—						11
Total			$	92					$	—					$	92					$	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 March 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. As of March 31, 2024, the corresponding receivables met the held-for-sale criteria and were classified as Current held-for-sale assets on the Condensed Consolidated Balance Sheets*.* See Note 14—Revenue and Note 18—Held-For-Sale and Dispositions 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 and August 2022, 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 are accumulated and borne by generators. As of March 31, 2024, AES Andes aims to reduce its exposure through the sale of receivables.

15 | Notes to Condensed Consolidated Financial Statements—(Continued) | March 31, 2024 and 2023

On August 14, 2023, AES Andes executed an agreement to sell up to $227 million of receivables pursuant to the Stabilization Funds, of which $135 million was sold and collected as of March 31, 2024. Through different agreements and programs, as of March 31, 2024, $20 million of current receivables and $7 million of noncurrent receivables were recorded in Accounts receivable and Other noncurrent assets, respectively. Additionally, $29 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 March 31, 2024.

6. ALLOWANCE FOR CREDIT LOSSES

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

Three Months Ended March 31, 2024			Accounts Receivable						Mong Duong Receivables						Argentina Receivables												Other						Total
CECL reserve balance at beginning of period			$	15					$	26					$	7											$	16					$	64
Current period provision			4						—						—												2						6
Write-offs charged against allowance			1						—						—												—						1
Recoveries collected			(1)						(1)						—												—						(2)
Foreign exchange			—						—						(1)												—						(1)
CECL reserve balance at end of period			$	19					$	25					$	6											$	18					$	68

Three Months Ended March 31, 2023			Accounts Receivable (1)						Mong Duong Receivables						Argentina Receivables						Lease Receivable (2)						Other						Total
CECL reserve balance at beginning of period			$	3					$	28					$	30					$	20					$	2					$	83
Current period provision			2						—						—						—						6						8
Write-offs charged against allowance			(3)						—						—						—						—						(3)
Recoveries collected			1						1						—						—						—						2
Foreign exchange			—						—						(5)						—						—						(5)
CECL reserve balance at end of period			$	3					$	29					$	25					$	20					$	8					$	85

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**(1)**Excludes operating lease receivable allowances and contractual dispute allowances of $1 million as of March 31, 2023. These reserves are not in scope under ASC 326.

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

7. INVESTMENTS IN AND ADVANCES TO AFFILIATES

Summarized Financial Information — The following table summarizes financial information of the Company’s 50%-or-less-owned affiliates that are accounted for using the equity method (in millions):

			50%-or-less Owned Affiliates
Three Months Ended March 31,			2024						2023
Revenue			$	517					$	461
Operating loss			(33)						(43)
Net loss			(103)						(62)
Net loss attributable to affiliates			(68)						(60)

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 18—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 (“VPP”) 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' 29.41% ownership interest in Uplight was diluted to 24.65%. The transaction was accounted for as a partial disposition in which AES recognized a gain of $52 million in Gain on disposal and sale of business interests. As the Company still

16 | Notes to Condensed Consolidated Financial Statements—(Continued) | March 31, 2024 and 2023

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.

sPower — In December 2022, the Company agreed to sell 49% of its indirect interest in a portfolio of sPower's operating assets ("OpCo B"). 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 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 and 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 does 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 March 31, 2024, the fair value is insignificant. Alto Maipo is reported in the Energy Infrastructure SBU reportable segment.

8. DEBT

Recourse Debt

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.

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 $1.5 billion revolving credit facility, and the Company cannot issue commercial paper in an aggregate amount exceeding the then available capacity under its revolving credit facilities. For the three months ended March 31, 2024, the Company borrowed approximately $10.1 billion and repaid approximately $9.3 billion under the commercial paper program, with average daily outstanding borrowings of $486 million. As of March 31, 2024, the Company had $110 million outstanding drawings under its revolving credit facility, and $719 million outstanding borrowings under the commercial paper program with a weighted average interest rate of 5.97%. The Notes are classified as noncurrent.

Non-Recourse Debt

During the three months ended March 31, 2024, the Company’s following subsidiaries had significant debt issuances (in millions):

Subsidiary												Issuances (1)
AES Indiana (2)												$	1,050
AES Andes												500

---

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

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

17 | Notes to Condensed Consolidated Financial Statements—(Continued) | March 31, 2024 and 2023

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 three months ended March 31, 2024 as a result of this transaction. As of March 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.

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.

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 in 3.70% senior secured notes due in September 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 senior unsecured notes due in 2079 and 2025, respectively, and repay other existing indebtedness.

Netherlands and Colon — In January 2023, AES Hispanola Holdings BV, a Netherlands-based company, 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 repay existing indebtedness. As a result of the transaction, the Company recognized a loss on extinguishment of debt of $1 million.

AES Clean Energy — 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 energy 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. In 2023, the Issuers sold an additional $246 million in 6.37% notes, resulting in aggregate principal amount of notes issued of $884 million. 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 of March 31, 2024, the aggregate carrying amount of the notes attributable to AES Clean Energy Development and AES Renewable Holdings was $252 million.

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 a 2023 amendment, the maturity date of one of the Credit Agreements was extended from December 2024 to May 2026. 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, AES Clean Energy Development and AES Renewable Holdings recorded, in aggregate, an increase in liabilities of $547 million in 2024, resulting in total commitments used under the revolving credit facilities, as of March 31, 2024, of $2.8 billion. As of March 31, 2024, the aggregate commitments used under the revolving credit facilities for the Co-Borrowers was $3.4 billion.

18 | Notes to Condensed Consolidated Financial Statements—(Continued) | March 31, 2024 and 2023

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 March 31, 2024 and December 31, 2023, approximately $363 million and $341 million, respectively, of restricted cash was maintained in accordance with certain covenants of the non-recourse debt agreements. These amounts were included within Restricted cash and Debt service reserves and other deposits in the accompanying Condensed Consolidated Balance Sheets. As of March 31, 2024 and December 31, 2023, approximately $90 million 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.

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 $1.1 billion at March 31, 2024.

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

Subsidiary						Primary Nature of Default						Debt in Default						Net Assets
AES Mexico Generation Holdings (TEG and TEP)						Covenant						$	143					$	29
AES Ilumina (Puerto Rico)						Covenant						24						29
AES Jordan Solar						Covenant						7						11
Total												$	174

None of the defaults are 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.

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 March 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 credit facility, 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.

9. COMMITMENTS AND CONTINGENCIES

Parent Guarantees, Letters of Credit, and Commitments — 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 33 years.

The following table summarizes the Parent Company’s contingent contractual obligations as of March 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. The maximum exposure is not reduced by the amounts, if any, that could be recovered under the recourse or collateralization provisions in the guarantees.

19 | Notes to Condensed Consolidated Financial Statements—(Continued) | March 31, 2024 and 2023

Contingent Contractual Obligations						Maximum Exposure (in millions)						Number of Agreements						Maximum Exposure Range for Each Agreement (in millions)
Guarantees and commitments						$	3,566					84						<$1 — 970
Letters of credit under bilateral agreements						234						4						$54 — 64
Letters of credit under the unsecured credit facilities						210						30						<$1 — 70
Letters of credit under the revolving credit facility						29						12						<$1 — 6
Surety bonds						2						2						<$1 — 1
Total						$	4,041					132

During the three months ended March 31, 2024, the 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 March 31, 2024, the maximum undiscounted potential exposure to guarantees issued by our subsidiaries was $2.6 billion, including $1.6 billion of customary payment guarantees under EPC contracts and other agreements, and $995 million of tax equity financing related guarantees. In addition, as of March 31, 2024, our subsidiaries had $643 million of letters of credit outstanding.

Contingencies

Environmental — The Company periodically reviews its obligations as they relate to compliance with environmental laws, including site restoration and remediation. For the periods ended March 31, 2024 and December 31, 2023, the Company recognized liabilities of $8 million and $9 million for projected environmental remediation costs, respectively. 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 March 31, 2024. 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 $16 million and $17 million as of March 31, 2024 and December 31, 2023, respectively. These amounts are reported on the Condensed 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 March 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 $55 million and $91 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.

20 | Notes to Condensed Consolidated Financial Statements—(Continued) | March 31, 2024 and 2023

10. LEASES

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 obligations 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 receipts from such contracts are recognized as lease revenue on a straight-line basis over the lease term, whereas variable lease receipts 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 Condensed Consolidated Statements of Operations for the periods indicated (in millions):

			Three Months Ended March 31,
Operating Lease Revenue			2024						2023
Total lease revenue			$	115					$	121
Less: Variable lease revenue			(13)						(8)
Total Non-variable lease revenue			$	102					$	113

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

Property, Plant and Equipment, Net						March 31, 2024						December 31, 2023
Gross assets						$	1,178					$	1,227
Less: Accumulated depreciation						(190)						(182)
Net assets						$	988					$	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, and lack of performance on energy delivery. The Company has not recognized any early terminations as of March 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 March 31, 2024 for the remainder of 2024 through 2028 and thereafter (in millions):

			Future Cash Receipts for
			Sales-Type Leases						Operating Leases
2024			$	25					$	292
2025			33						390
2026			33						279
2027			33						183
2028			33						60
Thereafter			461						490
Total			$	618					$	1,694
Less: Imputed interest			(307)
Present value of total lease receipts			$	311

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 Company recognized lease revenue on sales-type leases through interest income of $4 million for both the three months ended March 31, 2024 and March 31, 2023.

The Company recorded a gain at commencement of sales-type leases of $5 million for the three months ended March 31, 2024. No gains were recorded for the three months ended March 31, 2023. This amount is recognized in Other income in the Condensed Consolidated Statement of Operations. See Note 15—Other Income and Expense for further information.

21 | Notes to Condensed Consolidated Financial Statements—(Continued) | March 31, 2024 and 2023

11. REDEEMABLE STOCK OF SUBSIDIARIES

Equity securities with redemption features that are not solely within the control of the issuer are classified as temporary equity and recorded in Redeemable stock of subsidiaries on the Condensed Consolidated Balance Sheets. Generally, these instruments are initially measured at fair value and are subsequently adjusted for income and dividends allocated to the noncontrolling interest. Subsequent measurement and classification may 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, any changes from the carrying value to redemption value are recognized in temporary equity against Additional paid-in capital. When the instrument is not probable of becoming redeemable, no adjustment to the carrying value is recognized.

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

			March 31, 2024						December 31, 2023
IPALCO common stock			$	772					$	773
AES Clean Energy Development common stock			583						544
AES Clean Energy tax equity partnerships			129						129
Potengi common and preferred stock			18						18
Total redeemable stock of subsidiaries			$	1,502					$	1,464

12. EQUITY

Equity Units

In March 2021, the Company issued 10,430,500 Equity Units with a total notional value of $1,043 million. Each Equity Unit had a stated amount of $100 and was initially issued as a Corporate Unit, consisting of a forward stock purchase contract (“2024 Purchase Contracts”) and a 10% undivided beneficial ownership interest in one share of 0% Series A Cumulative Perpetual Convertible Preferred Stock, issued without par and with a liquidation preference of $1,000 per share (“Series A Preferred Stock”).

The Company concluded that the Equity Units should be accounted for as one unit of account based on the economic linkage between the 2024 Purchase Contracts and the Series A Preferred Stock, as well as the Company's assessment of the applicable accounting guidance relating to combining freestanding instruments. The Equity Units represent mandatorily convertible preferred stock. Accordingly, the shares associated with the combined instrument were reflected in diluted earnings per share using the if-converted method.

In conjunction with the issuance of the Equity Units, the Company received approximately $1 billion in proceeds, net of underwriting costs and commissions, before offering expenses. The proceeds for the issuance of 1,043,050 shares were attributed to the Series A Preferred Stock for $838 million and $205 million for the present value of the quarterly payments due to holders of the 2024 Purchase Contracts ("Contract Adjustment Payments"). The proceeds were used for the development of the AES renewables businesses, U.S. utility businesses, LNG infrastructure, and for other developments determined by management.

The Series A Preferred Stock did not bear any dividends and the liquidation preference of the convertible preferred stock did not accrete. The Series A Preferred Stock had no maturity date and would remain outstanding unless converted by holders or redeemed by the Company. Holders of the preferred shares had limited voting rights. The Series A Preferred Stock was pledged as collateral to support holders’ purchase obligations under the 2024 Purchase Contracts, which obligated the holders to purchase, on February 15, 2024, for a price of $100 in cash, a maximum number of 57,467,883 shares of the Company’s common stock (subject to customary anti-dilution adjustments). The initial settlement rate determining the number of shares that each holder must purchase could not exceed the maximum settlement rate and was determined over a market value averaging period preceding February 15, 2024. The initial maximum settlement rate of 3.864 was calculated using an initial reference price of $25.88, equal to the last reported sale price of the Company’s common stock on March 4, 2021. On February 15, 2024, the Series A Preferred Stock was tendered to satisfy the 2024 Purchase Contract’s settlement price and the Corporate Units were converted into shares of the Company’s common stock at the maximum settlement rate of 3.8859, equivalent to a reference price of $25.73. The Series A Preferred Stock was canceled and 40,531,845 shares of AES common stock were issued upon conversion.

22 | Notes to Condensed Consolidated Financial Statements—(Continued) | March 31, 2024 and 2023

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

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. In February 2024, AES Andes completed the sale of Mesamávida to Chile Renovables for $40 million, resulting in an increase to NCI of $53 million and a decrease to additional paid-in capital of $13 million. As the Company maintained control after this transaction, Chile Renovables continues to be consolidated by the Company within the Energy Infrastructure SBU reportable segment.

Accumulated Other Comprehensive Loss — The following table summarizes the changes in AOCL by component, net of tax and NCI, for the three months ended March 31, 2024 (in millions):

			Foreign currency translation adjustments, net						Unrealized derivative gains (losses), net						Unfunded pension obligations, net						Change in fair value option liabilities due to credit risk, net						Total
Balance at the beginning of the period			$	(1,692)					$	204					$	(26)					$	—					$	(1,514)
Other comprehensive income (loss) before reclassifications			(38)						137						—						3						102
Amount reclassified to earnings			—						(2)						—						—						(2)
Other comprehensive income (loss)			(38)						135						—						3						100
Balance at the end of the period			$	(1,730)					$	339					$	(26)					$	3					$	(1,414)

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

AOCL Components												Three Months Ended March 31,
			2024						2023
Derivative gains (losses), net
						Non-regulated cost of sales						$	(1)					$	(1)
						Interest expense						1						3
						Gain on disposal and sale of business interests						—						33
						Foreign currency transaction losses						1						—
						Income from continuing operations before taxes and equity in earnings of affiliates						1						35
						Income tax benefit (expense)						—						(9)
						Net equity in losses of affiliates						1						15
						Net income (loss)						2						41
						Less: Net loss (income) attributable to noncontrolling interests and redeemable stock of subsidiaries						—						(1)
						Net income (loss) attributable to The AES Corporation						$	2					$	40

Common Stock Dividends — The Parent Company paid dividends of $0.1725 per outstanding share to its common stockholders during the first quarter of 2024 for dividends declared in December 2023.

On February 22, 2024, the Board of Directors declared a quarterly common stock dividend of $0.1725 per share payable on May 15, 2024, to shareholders of record at the close of business on May 1, 2024.

23 | Notes to Condensed Consolidated Financial Statements—(Continued) | March 31, 2024 and 2023

13. SEGMENTS

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. 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 — Green hydrogen initiatives and investments in Fluence, Uplight, 5B, 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 and amortization, adjusted for the impact of NCI and interest, taxes, depreciation and amortization 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.

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.

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):

			Three Months Ended March 31,
Total Revenue			2024						2023
Renewables SBU			$	619					$	495
Utilities SBU			873						971
Energy Infrastructure SBU			1,614						1,724
New Energy Technologies SBU			—						74
Corporate and Other			33						27
Eliminations			(54)						(52)
Total Revenue			$	3,085					$	3,239

24 | Notes to Condensed Consolidated Financial Statements—(Continued) | March 31, 2024 and 2023

			Three Months Ended March 31,
Reconciliation of Adjusted EBITDA (in millions)			2024						2023
Net income			$	278					$	189
Income tax expense (benefit)			(16)						72
Interest expense			357						330
Interest income			(105)						(123)
Depreciation and amortization			312						273
EBITDA			$	826					$	741
Less: Adjustment for noncontrolling interests and redeemable stock of subsidiaries (1)			(162)						(170)
Less: Income tax expense (benefit), interest expense (income) and depreciation and amortization from equity affiliates			33						39
Interest income recognized under service concession arrangements			17						18
Unrealized derivatives, equity securities, and financial assets and liabilities gains			(85)						(39)
Unrealized foreign currency losses (gains)			(9)						32
Disposition/acquisition gains			(43)						(3)
Impairment losses			26						9
Loss on extinguishment of debt and troubled debt restructuring			32						1
Adjusted EBITDA			$	635					$	628

---

(1)The allocation of earnings and losses to tax equity investors from both consolidated entities and equity affiliates is removed from Adjusted EBITDA.

			Three Months Ended March 31,
Adjusted EBITDA			2024						2023
Renewables SBU			$	102					$	124
Utilities SBU			182						162
Energy Infrastructure SBU			360						363
New Energy Technologies SBU			(17)						(26)
Corporate and Other			8						(1)
Eliminations			—						6
Adjusted EBITDA			$	635					$	628

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

Long-Lived Assets			March 31, 2024						December 31, 2023
Renewables SBU			$	17,021					$	15,735
Utilities SBU			7,694						7,166
Energy Infrastructure SBU			7,536						7,414
New Energy Technologies SBU			15						14
Corporate and Other			26						9
Long-Lived Assets			32,292						30,338
Current assets			7,170						6,649
Investments in and advances to affiliates			1,029						941
Debt service reserves and other deposits			199						194
Goodwill			348						348
Other intangible assets			2,258						2,243
Deferred income taxes			395						396
Other noncurrent assets, excluding right-of-use assets for operating leases			2,606						2,879
Noncurrent held-for-sale assets			748						811
Total Assets			$	47,045					$	44,799

25 | Notes to Condensed Consolidated Financial Statements—(Continued) | March 31, 2024 and 2023

14. REVENUE

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

			Three Months Ended March 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			$	570					$	19					$	1,407					$	—					$	(21)					$	1,975
Other non-regulated revenue (1)			49						1						207						—						—						257
Total non-regulated revenue			619						20						1,614						—						(21)						2,232
Regulated Revenue
Revenue from contracts with customers			—						847						—						—						—						847
Other regulated revenue			—						6						—						—						—						6
Total regulated revenue			—						853						—						—						—						853
Total revenue			$	619					$	873					$	1,614					$	—					$	(21)					$	3,085
			Three Months Ended March 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			$	477					$	17					$	1,572					$	74					$	(25)					$	2,115
Other non-regulated revenue (1)			18						2						152						—						—						172
Total non-regulated revenue			495						19						1,724						74						(25)						2,287
Regulated Revenue
Revenue from contracts with customers			—						944						—						—						—						944
Other regulated revenue			—						8						—						—						—						8
Total regulated revenue			—						952						—						—						—						952
Total revenue			$	495					$	971					$	1,724					$	74					$	(25)					$	3,239

---

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

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 $335 million and $328 million as of March 31, 2024 and December 31, 2023, respectively.

During the three months ended March 31, 2024 and 2023, we recognized revenue of $46 million and $7 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 will continue providing capacity through May 2024. The termination represents a contract modification under which the discounted termination payments, as well as a pre-existing contract liability, will be 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*.* As of March 31, 2024, $267 million remains outstanding and is recorded in the current portion of Non-recourse debt on the Condensed Consolidated Balance Sheets. As of March 31, 2024, the corresponding receivables met the held-for-sale criteria and the receivable balance of $214 million, net of valuation allowance of $6 million, was classified as Current held-for-sale assets on the Condensed Consolidated Balance Sheets. See Note 18—Held-For-Sale and Dispositions for further information.

A significant financing arrangement exists for our Mong Duong plant in Vietnam. The plant was constructed under a build, operate, and transfer 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 Condensed Consolidated Balance Sheet. As of March 31, 2024 and December 31, 2023, Mong Duong met the held-for-sale criteria and the loan receivable balance of $1 billion and $1.1 billion, net of CECL reserves of $25 million and $26 million, respectively, was classified as held-for-sale assets. Of the loan receivable balance, $111 million and $108 million, respectively, was classified as Current held-for-sale assets, and $934 million

26 | Notes to Condensed Consolidated Financial Statements—(Continued) | March 31, 2024 and 2023

and $962 million, respectively, was classified as Noncurrent held-for-sale assets on the Condensed 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. As of March 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 in long-term contracts in the U.S. We expect to recognize revenue of approximately $1 million per year between 2024 and 2028 and the remainder thereafter.

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

						Three Months Ended March 31,
						2024						2023
Other Income			Gain on remeasurement of contingent consideration (1)			$	11					$	—
			Gain on commencement of sales-type leases			5						—
			Contract termination			5						—
			Insurance proceeds			5						—
			AFUDC (US Utilities)			3						3
			Gain on sale and disposal of assets			2						2
			Legal settlements			—						3
			Other			4						2
			Total other income			$	35					$	10
Other Expense			Costs related to troubled debt restructuring (2)			$	19					$	—
			Allowance for other receivables (3)			6						—
			Loss on remeasurement of contingent consideration (1)			5						7
			Loss on sale and disposal of assets			4						2
			Other			4						5
			Total other expense			$	38					$	14

---

(1) Primarily related to certain remeasurements of contingent consideration on projects acquired at AES Clean Energy.

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

(3) Related to a valuation allowance on receivables classified as held-for-sale at Warrior Run. See Note 18—Held-for-Sale and Dispositions for further information.

16. ASSET IMPAIRMENT EXPENSE

The following table presents our asset impairment expense for the periods indicated (in millions):

									Three Months Ended March 31,
															2024						2023
Mong Duong															$	37					$	—
Jordan															—						14
Other															9						6
Total															$	46					$	20

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 March 31, 2024, Mong Duong continued to be classified as held-for-sale. The carrying amount of Mong Duong exceeded the expected sales proceeds and as a result, the Company recognized pre-tax impairment expense of $37 million. See Note 18—Held-for-Sale and Dispositions for further information. Mong Duong is 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 asset group in subsequent periods exceeded the agreed-upon sales price, and total pre-tax impairment expense of $14 million was

27 | Notes to Condensed Consolidated Financial Statements—(Continued) | March 31, 2024 and 2023

recorded during the three months ended March 31, 2023. See Note 18*—Held-for-Sale and Dispositions* for further information. Amman East and IPP4 are reported in the Energy Infrastructure SBU reportable segment.

17. INCOME TAXES

The Company’s provision for income taxes is based on the estimated annual effective tax rate, plus discrete items. The effective tax rates for the three months ended March 31, 2024 and March 31, 2023 were (6)% and 27%, respectively. The difference between the Company’s effective tax rates for the 2024 and 2023 periods and the U.S. statutory tax rate of 21% related primarily to U.S. taxes on foreign earnings, foreign tax rate differentials, the impacts of foreign currency fluctuations at certain foreign subsidiaries, nondeductible expenses, valuation allowance, and the impacts of U.S. investment tax credits (“ITCs”) and non-controlling interest in our U.S. subsidiaries.

For the three months ended March 31, 2024, the Company recorded discrete tax benefit of approximately $56 million related to U.S. capital losses associated with the restructuring of a foreign holding company. The Company also recognized approximately $15 million of discrete tax expense resulting from allocations of losses to tax equity investors on renewables projects.

18. HELD-FOR-SALE AND DISPOSITIONS

Held-for-Sale

Warrior Run — On February 1, 2024, Warrior Run executed a receivable sale agreement, in which the remaining future cash flows from the Warrior Run termination agreement were assigned to a third party. The proceeds were used primarily to repay existing indebtedness and for general corporate purposes. Under the requirements of the PPA termination agreement, Warrior Run must satisfy performance obligations which continue through May 31, 2024. As a result, Warrior Run reclassified the related financing receivable as held-for-sale given its intent and ability to sell the receivable once the performance period has concluded. As of March 31, 2024, the carrying value of the receivable classified as held-for-sale was $214 million, including a valuation allowance of $6 million. Warrior Run is reported in the Energy Infrastructure 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"). The sale is subject to regulatory approval and is expected to close in mid-2025. 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 March 31, 2024 was $410 million. Mong Duong is reported in the Energy Infrastructure SBU reportable segment.

Excluding any impairment charges, pre-tax income attributable to AES of businesses held-for-sale as of March 31, 2024 was as follows:

			Three Months Ended March 31,
(in millions)			2024						2023
Mong Duong			$	27					$	11

Management has recorded pre-tax asset impairment expense of $37 million at Mong Duong. As of March 31, 2024, the significant assets and liabilities of Mong Duong are a long-term financing receivable of $1 billion and debt of $638 million, respectively. See Notes 16*—Asset Impairment Expense* and 14*—Revenue* for further information.

Dispositions

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 on disposal and sale of business interests on the Condensed Consolidated Statement of Operations. After completion of the sale, the Company retained 10% ownership interest in each of the businesses, resulting in deconsolidation and recognition as equity method investments. Amman East and IPP4 are reported in the Energy Infrastructure SBU reportable segment.

28 | Notes to Condensed Consolidated Financial Statements—(Continued) | March 31, 2024 and 2023

19. ACQUISITIONS

Hoosier Wind — In August 2023, the Company, through its subsidiary AES Indiana, filed for IURC issuance of a Certificate of Public Convenience and Necessity (“CPCN”) 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 that did not meet the definition of a business. 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. Hoosier Wind is reported in the Utilities SBU reportable segment.

20. 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 three months ended March 31, 2024 and 2023, where income represents the numerator and weighted average shares represent the denominator.

Three Months Ended March 31,			2024																		2023
(in millions, except per share data)			Income						Shares						$ per Share						Income						Shares						$ per Share
BASIC EARNINGS PER SHARE
Income from continuing operations attributable to The AES Corporation common stockholders			$	432					690						$	0.63					$	151					669						$	0.22
Less: Increase in redemption value of redeemable stock of subsidiaries			(6)												(0.01)						$	—											—
Income available to The AES Corporation common stockholders			$	426					690						$	0.62					$	151					669						$	0.22
EFFECT OF DILUTIVE SECURITIES
Stock options			—						—						—						—						1						—
Restricted stock units			—						2						—						—						2						—
Equity units			—						20						(0.02)						—						40						(0.01)
DILUTED EARNINGS PER SHARE			$	426					712						$	0.60					$	151					712						$	0.21

For the three months ended March 31, 2024, income from continuing operations available to AES common stockholders included a $6 million adjustment related to the increase of the carrying value of redeemable stock of subsidiaries at AES Clean Energy Development, as a result of a non-fair value redemption feature. The Company has elected to administer the entire non-fair value redemption adjustment consistent with the treatment of dividends in the earnings per share calculation. While the adjustment reduced net income available to AES common stockholders and earnings per share, it did not impact Net income in the Condensed Consolidated Statement of Operations.

The calculation of diluted earnings per share excluded 2 million and 1 million outstanding stock awards for the three months ended March 31, 2024 and March 31, 2023, which would be anti-dilutive. These stock awards could potentially dilute basic earnings per share in the future.

29 | Notes to Condensed Consolidated Financial Statements—(Continued) | March 31, 2024 and 2023

As described in Note 12*—Equity*, the Company issued 10,430,500 Equity Units in March 2021 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 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 2024 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 canceled upon conversion.

21. RISKS AND UNCERTAINTIES

Puerto Rico — In 2023, AES Puerto Rico took certain measures to address identified liquidity challenges. On July 6, 2023, PREPA agreed to the release of funds in the escrow account guaranteeing AES Puerto Rico’s obligations under the Power Purchase and Operating Agreement (“PPOA”) in order to provide additional liquidity for the business. During the fourth quarter of 2023, a restructuring support agreement was executed by AES Puerto Rico and its noteholders and a PPOA amendment was approved by PREPA. The restructuring closed on March 5, 2024. See Note 8—Debt included in Item 1.—Financial Statements of this Form 10-Q for further information.

Considering the information available as of the filing date, management believes the carrying amount of our long-lived assets at AES Puerto Rico of $78 million is recoverable as of March 31, 2024.

30 | The AES Corporation | March 31, 2024 Form 10-Q