AES CORP

12. OBLIGATIONS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The AES Corporation's recourse debt agreements include cross-default clauses that will trigger if a subsidiary provides 20% or more of the Parent Company's total cash distributions from businesses for the four most recently completed fiscal quarters and has an outstanding principal in excess of $200 million in default. As of December 31, 2024, the Company's subsidiaries hadno 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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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13. COMMITMENTS

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

14. CONTINGENCIES

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

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

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

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

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

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

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

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

15. LEASES

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

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

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

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

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

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

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

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

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

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

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

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

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

16. BENEFIT PLANS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

17. REDEEMABLE STOCK OF SUBSIDIARIES

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

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

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

AES Clean Energy Tax Equity Partnerships— The majority of solar projects in the U.S. have been financed with tax equity structures, in which tax equity investors receive a portion of the economic attributes of the facilities, including tax attributes, that vary over the life of the projects. The substance of such arrangements is that of a preferred structure, whereby tax equity investors are granted preferential returns in the form of significant earnings and tax allocations from the partnership, until a specified internal rate of return is achieved.

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

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

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

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

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

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

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

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

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

18. EQUITY

Equity Units

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

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

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

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

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

The Company paid Contract Adjustment Payments to the holders of the 2024 Purchase Contracts at a rate of 6.875% per annum, payable quarterly in arrears on February 15, May 15, August 15, and November 15, commencing on May 15, 2021. The $205 million present value of the Contract Adjustment Payments at inception reduced the Series A Preferred Stock. As each quarterly Contract Adjustment Payment was made, the related liability was reduced and the difference between the cash payment and the present value accreted to interest expense, approximately $5 million over the three-year term. The final Contract Adjustment Payments were made on February 15, 2024.

Equity Transactions with Noncontrolling Interests

AES Clean Energy Tax Equity Partnerships— The majority of solar projects in the U.S. have been financed with tax equity structures, in which tax equity investors receive a portion of the economic attributes of the facilities, including tax attributes, that vary over the life of the projects. The substance of such arrangements is that of a preferred structure, whereby tax equity investors are granted preferential returns in the form of significant earnings and tax allocations from the partnership, until a specified internal rate of return is achieved.

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

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

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

Chile Renovables— Under its renewables partnership agreement with Global Infrastructure Management, LLC (“GIP”), AES Andes will contribute a specified pipeline of renewables development projects to Chile Renovables as the projects reach commercial operations, and GIP may make additional contributions to maintain its 49% ownership interest. During 2024, 2023, and 2022, AES Andes completed the sale of the following projects to Chile Renovables (in millions):

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

In December 2023, Chile Renovables issued$275 million of preferred shares to GIP, the proceeds of which will be used to fund the development of an additional pipeline of renewables projects. Under the terms of the operating agreement, GIP will receive an escalating specified internal rate of return up until the point the projects reach commercial operations. As each project reaches commercial operations, the preferred shares will convert to common stock and GIP may make additional contributions to maintain its 49% ownership interest. In the fourth quarter of 2024, the San Matias, Andes Solar IV, and Andes Solar 2b Expansion projects reached commercial operations. The preferred shares were converted to common stock and GIP made additional contributions of$77 million, resulting in an increase to NCI of$74 million and an increase to additional paid-in capital of$3 million.

As the Company maintained control after each of these transactions, Chile Renovables continues to be consolidated by the Company within the Energy Infrastructure SBU reportable segment.

AES Puerto Rico Solar —In May 2024, AES CFE Holding II entered into an agreement for the sale of a 30% ownership interest in the Marahu project for $35 million, resulting in an increase to NCI. As the Company maintained control after this transaction, AES Puerto Rico Solar continues to be consolidated by the Company within the Renewables SBU reportable segment.

Hardy Hills Solar —In December 2023, AES Indiana sold a noncontrolling interest in the Hardy Hills solar project to a tax equity investor, resulting in a $79 million increase to NCI. In May 2024, the project reached commercial operations and AES Indiana received an additional $47 million from the tax equity investor. AES Indiana is reported in the Utilities SBU reportable segment.

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

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

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

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

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

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

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

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

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

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

The following table summarizes the net income (loss) attributable to The AES Corporation and all transfers (to) from noncontrolling interests for the periods indicated (in millions):

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

Accumulated Other Comprehensive Loss —The changes in AOCL by component, net of tax and NCI, for the periods indicated were as follows (in millions):

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

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

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

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

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

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

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

19. SEGMENTS AND GEOGRAPHIC INFORMATION

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

20. SHARE-BASED COMPENSATION

RESTRICTED STOCK

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

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

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

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

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

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

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

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

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

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

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

OTHER SHARE BASED COMPENSATION

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

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

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

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

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

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

21. REVENUE

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

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

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

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

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

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

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

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

22. OTHER INCOME AND EXPENSE

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

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

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

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

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

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

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

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

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

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

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

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

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

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

23. ASSET IMPAIRMENT EXPENSE

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

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

In 2024, 2023, and 2022, the Company recognized pre-tax asset impairment expense related to the write-off of projects that were determined to be no longer viable totaling $95 million, $151 million, and $18 million, respectively. The impairment expense recognized in 2023 primarily related to the write-off of project development intangibles which were recognized at fair value when the Company acquired sPower's development platform as part of the formation of AES Clean Energy Development. See Note 26—Acquisitions for further information. AES Clean Energy Development is reported in the Renewables SBU reportable segment.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

24. INCOME TAXES

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

25. HELD-FOR-SALE AND DISPOSITIONS

Held-for-Sale

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

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

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

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

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

Dispositions

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

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

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

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

26. ACQUISITIONS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

27. EARNINGS PER SHARE

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

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

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

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

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

28. RISKS AND UNCERTAINTIES

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

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

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

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

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

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

•inability to economically hedge energy prices;

•volatility in commodity prices;

•adverse changes in currency exchange rates;

•government restrictions on converting currencies or repatriating funds;

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

•high inflation and monetary fluctuations;

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

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

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

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

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

•adverse changes in government tax policy;

•potentially adverse tax consequences of operating in multiple jurisdictions;

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

•inability to obtain financing on expected terms.

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

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

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

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

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

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

•adverse changes in tax law;

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

•changes in the timing of tariff increases;

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

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

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

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

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

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

29. RELATED PARTY TRANSACTIONS

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

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

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

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

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

30. RESTATEMENT (UNAUDITED)

We restated the unaudited quarterly financial information as of and for the three and six months ended June 30, 2024, and as of and for the three and nine months ended September 30, 2024, to correct misstatements associated with the calculation of asset impairment expense for the AES Brasil disposal group. The misstatements were primarily due to the use of incomplete data in the estimation of the fair value of net assets of AES Brasil, which was used in the calculation of the impairment expense after AES Brasil was classified as held-for-sale in the second quarter of 2024. The impairment expense previously reported was overstated by $192 million for the three and six months ended June 30, 2024 and overstated by $5 million for the three months ended September 30, 2024.

Description of Restatement Tables — See below for a reconciliation from the previously reported amounts in the Company's Quarterly Reports on Form 10-Q to the restated amounts as of and for the three and six months ended June 30, 2024, and as of and for the three and nine months ended September 30, 2024. These amounts are labeled as "Previously Reported" in the table below. The amounts labeled "Adjustments" represent the effects of this restatement.

Effects of the Restatement on Quarterly Results (Unaudited) — The tables below illustrate the impact of the restatement on the historical unaudited Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Operations, Condensed Consolidated Statements of Comprehensive Income, and Condensed Consolidated Statements of Changes in Equity for the interim quarters impacted, each as compared with the amounts presented in the Form 10-Qs previously filed with the SEC.

Since the restatement is associated with the calculation of asset impairment expense, a non-cash activity, there was no impact to net cash provided by (used in) operating, investing, or financing activities on the Condensed Consolidated Statements of Cash Flows. The restatement resulted in an increase to Net incomeand an offsetting decrease to Impairment expense of $192 million for the six months ended June 30, 2024, and an increase to Net incomeand an offsetting decrease to Impairment expenseof $197 million for the nine months ended September 30, 2024.

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

(1)The adjustments to current held-for-sale assets for the overstatement of impairment expense of the AES Brasil disposal group include the impact of foreign currency translation adjustments at the balance sheet date.

(2)As the Company had a 47.3% ownership interest in the AES Brasil disposal group, the noncontrolling interests adjustments reflect the allocation of the overstatement of impairment expense to noncontrolling interest holders, inclusive of the impact of foreign currency translation adjustments at the balance sheet date.

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

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

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

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

Condensed Consolidated Statements of Changes in Equity (Unaudited)

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

31. SUBSEQUENT EVENTS

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

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

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