AES Reaffirms 2025 Guidance and Long-Term Growth Rate Targets
- Achieved full year 2025 asset sale target early through $450 million AGIC stake sale
- Maintains strong PPA backlog of 11.7 GW with 5.3 GW under construction
- Completed 643 MW of energy storage and solar projects
- Secured new PPAs for 443 MW of solar and energy storage
- Received approval for 170 MW Crossvine solar-plus-storage project
- Strategic sale of ~30% stake in AES Ohio led to credit rating upgrade
- Net Loss of $73 million compared to Net Income of $278 million in Q1 2024
- Adjusted EBITDA decreased to $591 million from $640 million YoY
- Adjusted EPS declined to $0.27 from $0.50 in Q1 2024
- One-time costs due to organizational restructuring impacted earnings
Insights
AES reports Q1 declines due to one-time factors but reaffirms 2025 guidance and long-term growth targets.
AES reported Q1 2025 results showing year-over-year declines but maintained its full-year guidance. The company posted a Net Loss of
The declines were primarily attributed to three specific factors: higher prior year revenues from the Warrior Run coal plant PPA monetization, one-time costs from an organizational restructuring, and a 2024 gain on dilution of the company's interest in Uplight. Importantly, the company saw growth in its core Renewables and Utilities segments.
Despite the Q1 performance, AES has already achieved its full-year 2025 asset sale target of
Management reaffirmed all key guidance metrics, including 2025 Adjusted EBITDA of
AES advances renewables portfolio with 11.7 GW backlog and minimal tariff exposure while seeing strong hyperscaler demand.
AES continues executing its clean energy transition with a substantial renewables backlog of 11.7 GW, including 5.3 GW already under construction. The company completed 643 MW of energy storage and solar projects in Q1 and remains on track to add a total of 3.2 GW to its operating portfolio by year-end 2025.
The company's growth pipeline continues to expand with newly signed or awarded PPAs for 443 MW of solar and energy storage capacity. AES Indiana received final regulatory approval for the 170 MW Crossvine solar-plus-storage project, expected online in 2027, demonstrating continued progress in utility-scale renewable development.
Notably, CEO Andrés Gluski directly addressed tariff concerns, stating the company's exposure to US import tariffs is "de minimis" with all major equipment either on site or contracted for domestic production through 2027. This insulates AES from potential supply chain disruptions or cost increases related to tariff policies.
The company highlighted particularly strong demand from hyperscalers, where AES claims to be the global market leader. This focus on serving data center operators positions the company well in a rapidly growing segment. Meanwhile, AES's utilities segment is showing meaningful year-over-year growth, attributed to new projects and higher rate base investments, reflecting the company's strategy of growing through both regulated utilities and commercial renewable contracts.
Reports First Quarter 2025 Results in Line with Expectations
Strategic Accomplishments
- PPA backlog of 11.7 GW, including 5.3 GW under construction
- Completed the construction of 643 MW of energy storage and solar; on track to add a total of 3.2 GW of new projects to operations in full year 2025
- Signed or awarded new long-term PPAs for 443 MW of solar and energy storage
- Received final regulatory approval for the 170 MW Crossvine solar-plus-storage project at AES Indiana
- With the sale of a minority stake in the AES Global Insurance Company (AGIC) for
$450 million $400 $500 million - To fund the substantial growth at AES Ohio, closed on the sale of an approximate
30% indirect equity interest to a wholly-owned subsidiary of Caisse de dépôt et placement duQuébec (CDPQ), with subsequent upgrade in credit ratings at AES Ohio
Q1 2025 Financial Highlights
- GAAP Financial Metrics
- Net Loss of
$73 million $278 million - Net Income Attributable to The AES Corporation of
$46 million $432 million - Diluted EPS of
$0.07 $0.60
- Net Loss of
- Non-GAAP Adjusted Financial Metrics
- Adjusted EBITDA1 of
$591 million $640 million - Adjusted EBITDA with Tax Attributes1,2 of
$777 million $868 million - Adjusted EPS3 of
$0.27 $0.50
- Adjusted EBITDA1 of
Financial Position and Outlook
- Reaffirming 2025 guidance for Adjusted EBITDA1 of
$2,650 $2,850 million - Reaffirming annualized growth target of
5% to7% through 2027, off a base of 2023 guidance - Reaffirming expectation for 2025 Adjusted EBITDA with Tax Attributes1,2 of
$3,950 $4,350 million
- Reaffirming annualized growth target of
- Reaffirming 2025 guidance for Adjusted EPS3 of
$2.10 $2.26 - Reaffirming annualized growth target of
7% to9% through 2025, off a base of 2020 and7% to9% through 2027, off a base of 2023 guidance
- Reaffirming annualized growth target of
"Our long-term contracted business model continues to demonstrate its resiliency to tariffs and economic policies, and we are reaffirming our 2025 guidance and long-term growth rate targets," said Andrés Gluski, AES President and Chief Executive Officer. "Our exposure to US import tariffs is de minimis, as we currently have all major equipment either on site, or contracted for domestic production, through 2027. We see demand from our key corporate customers as strong, especially among hyperscalers, where we are the global market leader."
"This quarter, we saw meaningful year-over-year growth in our Renewables and Utilities SBUs, directly attributable to new projects brought online and higher rate base investment," said Stephen Coughlin, AES Executive Vice President and Chief Financial Officer. "With the sale of a minority interest in our captive insurance company, AGIC, we have already achieved our full year 2025 asset sale proceeds target of
Q1 2025 Financial Results
First quarter 2025 Net Income decreased by
First quarter 2025 Adjusted EBITDA4 (a non-GAAP financial measure) was
First quarter 2025 Adjusted EBITDA with Tax Attributes4,5 was
First quarter 2025 Diluted Earnings Per Share from Continuing Operations (Diluted EPS) was
First quarter 2025 Adjusted Earnings Per Share6 (Adjusted EPS, a non-GAAP financial measure) was
Strategic Accomplishments
- The Company's backlog, which consists of projects with signed contracts, but which are not yet operational, is 11.7 GW, including 5.3 GW under construction. Since the Company's fourth quarter 2024 earnings call in February 2025, the Company:
- Completed the construction of 643 MW of energy storage and solar, and is on track to add a total of 3.2 GW to its operating portfolio by year-end 2025; and
- Signed or was awarded new long-term PPAs for 443 MW of solar and energy storage.
- In April 2025, AES Indiana received final regulatory approval for the 170 MW Crossvine solar-plus-storage project, which the Company expects to come online in 2027.
- With the sale of a minority interest in AGIC for
$450 million $400 $500 million - In April 2025, to fund the substantial growth at AES Ohio, the Company closed on the sale of an approximate
30% indirect equity interest to a wholly-owned subsidiary of CDPQ, with subsequent upgrade in credit ratings at AES Ohio.
Guidance and Expectations7,8
The Company is reaffirming its 2025 guidance for Adjusted EBITDA7 of
The Company is reaffirming its expectation for annualized growth in Adjusted EBITDA7 of
The Company is reaffirming its expectation that 2025 Adjusted EBITDA with Tax Attributes7,9 of
The Company is reaffirming its 2025 Adjusted EPS8 guidance of
The Company is reaffirming its annualized growth target for Adjusted EPS10 of
The Company's 2025 guidance is based on foreign currency and commodity forward curves as of March 31, 2025.
The Company expects to maintain its current quarterly dividend payment of
Non-GAAP Financial Measures
See Non-GAAP Measures for definitions of Adjusted EBITDA, Adjusted EBITDA with Tax Attributes, Tax Attributes, Adjusted Earnings Per Share, and Adjusted Pre-Tax Contribution, as well as reconciliations to the most comparable GAAP financial measures.
Attachments
Condensed Consolidated Statements of Operations, Segment Information, Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Cash Flows, Non-GAAP Financial Measures and Parent Financial Information.
Conference Call Information
AES will host a conference call on Friday, May 2, 2025 at 10:00 a.m. Eastern Time (ET). Interested parties may listen to the teleconference by dialing 1-833-470-1428 at least ten minutes before the start of the call. International callers should dial +1-404-975-4839. The Participant Access Code for this call is 861065. Internet access to the conference call and presentation materials will be available on the AES website at www.aes.com by selecting "Investors" and then "Presentations and Webcasts."
A webcast replay will be accessible at www.aes.com beginning shortly after the completion of the call.
1 | Adjusted EBITDA is a non-GAAP financial measure. See attached "Non-GAAP Measures" for definition of Adjusted EBITDA and a description of the adjustments to reconcile Adjusted EBITDA to Net Income (Loss) for the quarter ended March 31, 2025. The Company is not able to provide a corresponding GAAP equivalent or reconciliation for its Adjusted EBITDA guidance without unreasonable effort. |
2 | Pre-tax effect of Production Tax Credits, Investment Tax Credits, and depreciation tax deductions allocated to tax equity investors, as well as the tax benefit recorded from tax credits retained or transferred to third parties. |
3 | Adjusted EPS is a non-GAAP financial measure. See attached "Non-GAAP Measures" for definition of Adjusted EPS and a description of the adjustments to reconcile Adjusted EPS to Diluted EPS for the quarter ended March 31, 2025. The Company is not able to provide a corresponding GAAP equivalent or reconciliation for its Adjusted EPS guidance without unreasonable effort. |
4 | Adjusted EBITDA is a non-GAAP financial measure. See attached "Non-GAAP Measures" for definition of Adjusted EBITDA and a description of the adjustments to reconcile Adjusted EBITDA to Net Income for the quarter ended March 31, 2025. The Company is not able to provide a corresponding GAAP equivalent or reconciliation for its Adjusted EBITDA guidance without unreasonable effort. |
5 | Pre-tax effect of Production Tax Credits, Investment Tax Credits, and depreciation tax deductions allocated to tax equity investors, as well as the tax benefit recorded from tax credits retained or transferred to third parties. |
6 | Adjusted EPS is a non-GAAP financial measure. See attached "Non-GAAP Measures" for definition of Adjusted EPS and a description of the adjustments to reconcile Adjusted EPS to Diluted EPS for the quarter ended March 31, 2025. The Company is not able to provide a corresponding GAAP equivalent or reconciliation for its Adjusted EPS guidance without unreasonable effort. |
7 | Adjusted EBITDA is a non-GAAP financial measure. See attached "Non-GAAP Measures" for definition of Adjusted EBITDA and a description of the adjustments to reconcile Adjusted EBITDA to Net Income for the quarter ended March 31, 2025. The Company is not able to provide a corresponding GAAP equivalent or reconciliation for its Adjusted EBITDA guidance without unreasonable effort. |
8 | Adjusted EPS is a non-GAAP financial measure. See attached "Non-GAAP Measures" for definition of Adjusted EPS and a description of the adjustments to reconcile Adjusted EPS to Diluted EPS for the quarter ended March 31, 2025. The Company is not able to provide a corresponding GAAP equivalent or reconciliation for its Adjusted EPS guidance without unreasonable effort. |
9 | Pre-tax effect of Production Tax Credits, Investment Tax Credits, and depreciation tax deductions allocated to tax equity investors, as well as the tax benefit recorded from tax credits retained or transferred to third parties. |
10 | Adjusted EPS is a non-GAAP financial measure. See attached "Non-GAAP Measures" for definition of Adjusted EPS and a description of the adjustments to reconcile Adjusted EPS to Diluted EPS for the quarter ended March 31, 2025. The Company is not able to provide a corresponding GAAP equivalent or reconciliation for its Adjusted EPS guidance without unreasonable effort. |
About AES
The AES Corporation (NYSE: AES) is a Fortune 500 global energy company accelerating the future of energy. Together with our many stakeholders, we're improving lives by delivering the greener, smarter energy solutions the world needs. Our diverse workforce is committed to continuous innovation and operational excellence, while partnering with our customers on their strategic energy transitions and continuing to meet their energy needs today. For more information, visit www.aes.com.
Safe Harbor Disclosure
This news release contains forward-looking statements within the meaning of the Securities Act of 1933 and of the Securities Exchange Act of 1934. Such forward-looking statements include, but are not limited to, those related to future earnings, growth and financial and operating performance. Forward-looking statements are not intended to be a guarantee of future results, but instead constitute AES' current expectations based on reasonable assumptions. Forecasted financial information is based on certain material assumptions. These assumptions include, but are not limited to, our expectations regarding accurate projections of future interest rates, commodity price and foreign currency pricing, continued normal levels of operating performance and electricity volume at our distribution companies and operational performance at our generation businesses consistent with historical levels, as well as the execution of PPAs, conversion of our backlog and growth investments at normalized investment levels, and rates of return consistent with prior experience.
Actual results could differ materially from those projected in our forward-looking statements due to risks, uncertainties and other factors. Important factors that could affect actual results are discussed in AES' filings with the Securities and Exchange Commission (the "SEC"), including, but not limited to, the risks discussed under Item 1A: "Risk Factors" and Item 7: "Management's Discussion & Analysis" in AES' 2024 Annual Report on Form 10-K and in subsequent reports filed with the SEC. Readers are encouraged to read AES' filings to learn more about the risk factors associated with AES' business. AES undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except where required by law.
Any Stockholder who desires a copy of the Company's 2024 Annual Report on Form 10-K filed March 11, 2025 with the SEC may obtain a copy (excluding the exhibits thereto) without charge by addressing a request to the Office of the Corporate Secretary, The AES Corporation, 4300 Wilson Boulevard,
Website Disclosure
AES uses its website, including its quarterly updates, as channels of distribution of Company information. The information AES posts through these channels may be deemed material. Accordingly, investors should monitor our website, in addition to following AES' press releases, quarterly SEC filings and public conference calls and webcasts. In addition, you may automatically receive e-mail alerts and other information about AES when you enroll your e-mail address by visiting the "Subscribe to Alerts" page of AES' Investors website. The contents of AES' website, including its quarterly updates, are not, however, incorporated by reference into this release.
THE AES CORPORATION Condensed Consolidated Statements of Operations (Unaudited) | |||
Three Months Ended March 31, | |||
2025 | 2024 | ||
(in millions, except per share amounts) | |||
Revenue: | |||
Non-Regulated | $ 1,941 | $ 2,232 | |
Regulated | 985 | 853 | |
Total revenue | 2,926 | 3,085 | |
Cost of Sales: | |||
Non-Regulated | (1,661) | (1,733) | |
Regulated | (824) | (733) | |
Total cost of sales | (2,485) | (2,466) | |
Operating margin | 441 | 619 | |
General and administrative expenses | (77) | (75) | |
Interest expense | (342) | (357) | |
Interest income | 69 | 105 | |
Loss on extinguishment of debt | (8) | (1) | |
Other expense | (52) | (38) | |
Other income | 7 | 35 | |
Gain (loss) on disposal and sale of business interests | (1) | 43 | |
Asset impairment expense | (49) | (46) | |
Foreign currency transaction losses | (10) | (8) | |
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE TAXES AND EQUITY IN EARNINGS OF AFFILIATES | (22) | 277 | |
Income tax benefit (expense) | (17) | 16 | |
Net equity in losses of affiliates | (34) | (15) | |
NET INCOME (LOSS) | (73) | 278 | |
Less: Net loss attributable to noncontrolling interests and redeemable stock of subsidiaries | 119 | 154 | |
NET INCOME ATTRIBUTABLE TO THE AES CORPORATION | $ 46 | $ 432 | |
BASIC EARNINGS PER SHARE: | |||
NET INCOME ATTRIBUTABLE TO THE AES CORPORATION COMMON STOCKHOLDERS | $ 0.07 | $ 0.62 | |
DILUTED EARNINGS PER SHARE: | |||
NET INCOME ATTRIBUTABLE TO THE AES CORPORATION COMMON STOCKHOLDERS | $ 0.07 | $ 0.60 | |
DILUTED SHARES OUTSTANDING | 713 | 712 | |
THE AES CORPORATION | |||
Strategic Business Unit (SBU) Information | |||
(Unaudited) | |||
Three Months Ended March 31, | |||
(in millions) | 2025 | 2024 | |
REVENUE | |||
Renewables SBU | $ 666 | $ 643 | |
Utilities SBU | 1,009 | 873 | |
Energy Infrastructure SBU | 1,320 | 1,609 | |
New Energy Technologies SBU | — | — | |
Corporate and Other | 36 | 33 | |
Eliminations | (105) | (73) | |
Total Revenue | $ 2,926 | $ 3,085 | |
THE AES CORPORATION Condensed Consolidated Balance Sheets (Unaudited) | |||
March 31, 2025 | December 31, | ||
(in millions, except share and per share data) | |||
ASSETS | |||
CURRENT ASSETS | |||
Cash and cash equivalents | $ 1,753 | $ 1,524 | |
Restricted cash | 735 | 437 | |
Short-term investments | 64 | 79 | |
Accounts receivable, net of allowance of | 1,719 | 1,646 | |
Inventory | 624 | 593 | |
Prepaid expenses | 168 | 157 | |
Other current assets, net of | 1,341 | 1,533 | |
Current held-for-sale assets | 1,474 | 862 | |
Total current assets | 7,878 | 6,831 | |
NONCURRENT ASSETS | |||
Property, plant and equipment, net of accumulated depreciation of | 33,995 | 33,166 | |
Investments in and advances to affiliates | 1,129 | 1,124 | |
Debt service reserves and other deposits | 78 | 78 | |
Goodwill | 345 | 345 | |
Other intangible assets, net of accumulated amortization of | 1,943 | 1,947 | |
Deferred income taxes | 371 | 365 | |
Other noncurrent assets, net of allowance of | 2,876 | 2,917 | |
Noncurrent held-for-sale assets | — | 633 | |
Total noncurrent assets | 40,737 | 40,575 | |
TOTAL ASSETS | $ 48,615 | $ 47,406 | |
LIABILITIES, REDEEMABLE STOCK OF SUBSIDIARIES, AND EQUITY | |||
CURRENT LIABILITIES | |||
Accounts payable | $ 1,655 | $ 1,654 | |
Accrued interest | 310 | 256 | |
Accrued non-income taxes | 288 | 249 | |
Supplier financing arrangements | 605 | 917 | |
Accrued and other liabilities | 1,315 | 1,246 | |
Recourse debt | 1,177 | 899 | |
Non-recourse debt | 2,990 | 2,688 | |
Current held-for-sale liabilities | 1,004 | 662 | |
Total current liabilities | 9,344 | 8,571 | |
NONCURRENT LIABILITIES | |||
Recourse debt | 4,801 | 4,805 | |
Non-recourse debt | 21,608 | 20,626 | |
Deferred income taxes | 1,475 | 1,490 | |
Other noncurrent liabilities | 2,763 | 2,881 | |
Noncurrent held-for-sale liabilities | — | 391 | |
Total noncurrent liabilities | 30,647 | 30,193 | |
Commitments and Contingencies | |||
Redeemable stock of subsidiaries | 899 | 938 | |
EQUITY | |||
THE AES CORPORATION STOCKHOLDERS' EQUITY | |||
Common stock ( 711,908,057 outstanding at March 31, 2025 and 859,709,987 issued and 711,074,269 outstanding at December 31, 2024) | 9 | 9 | |
Additional paid-in capital | 5,888 | 5,913 | |
Retained earnings | 214 | 293 | |
Accumulated other comprehensive loss | (848) | (766) | |
Treasury stock, at cost (147,802,950 and 148,635,718 shares at March 31, 2025 and December 31, 2024, respectively) | (1,795) | (1,805) | |
Total AES Corporation stockholders' equity | 3,468 | 3,644 | |
NONCONTROLLING INTERESTS | 4,257 | 4,060 | |
Total equity | 7,725 | 7,704 | |
TOTAL LIABILITIES, REDEEMABLE STOCK OF SUBSIDIARIES, AND EQUITY | $ 48,615 | $ 47,406 | |
THE AES CORPORATION Condensed Consolidated Statements of Cash Flows (Unaudited) | |||
Three Months Ended March 31, | |||
2025 | 2024 | ||
(in millions) | |||
OPERATING ACTIVITIES: | |||
Net income (loss) | $ (73) | $ 278 | |
Adjustments to net income (loss): | |||
Depreciation, amortization, and accretion of AROs | 337 | 318 | |
Emissions allowance expense | 102 | 47 | |
Gain on realized/unrealized derivatives | (15) | (73) | |
Loss (gain) on disposal and sale of business interests | 1 | (43) | |
Impairment expense | 49 | 46 | |
Deferred income tax expense | 10 | 222 | |
Other | 129 | 98 | |
Changes in operating assets and liabilities: | |||
(Increase) decrease in accounts receivable | (99) | (232) | |
(Increase) decrease in inventory | (28) | 72 | |
(Increase) decrease in prepaid expenses and other current assets | 169 | 39 | |
(Increase) decrease in other assets | 18 | (91) | |
Increase (decrease) in accounts payable and other current liabilities | 3 | (85) | |
Increase (decrease) in income tax payables, net and other tax payables | (83) | (327) | |
Increase (decrease) in other liabilities | 25 | 18 | |
Net cash provided by operating activities | 545 | 287 | |
INVESTING ACTIVITIES: | |||
Capital expenditures | (1,254) | (2,148) | |
Acquisitions of business interests, net of cash and restricted cash acquired | (4) | (57) | |
Proceeds from the sale of business interests, net of cash and restricted cash sold | 5 | 11 | |
Sale of short-term investments | 33 | 141 | |
Purchase of short-term investments | (18) | (144) | |
Contributions and loans to equity affiliates | (1) | (21) | |
Purchase of emissions allowances | (39) | (56) | |
Other investing | (4) | (112) | |
Net cash used in investing activities | (1,282) | (2,386) | |
FINANCING ACTIVITIES: | |||
Borrowings under the revolving credit facilities | 1,187 | 1,741 | |
Repayments under the revolving credit facilities | (451) | (1,037) | |
Commercial paper borrowings (repayments), net | 255 | 719 | |
Issuance of recourse debt | 800 | — | |
Repayments of recourse debt | (774) | — | |
Issuance of non-recourse debt | 1,293 | 2,131 | |
Repayments of non-recourse debt | (759) | (915) | |
Payments for financing fees | (21) | (31) | |
Purchases under supplier financing arrangements | 317 | 486 | |
Repayments of obligations under supplier financing arrangements | (628) | (516) | |
Distributions to noncontrolling interests | (84) | (23) | |
Contributions from noncontrolling interests | 73 | 26 | |
Sales to noncontrolling interests | 245 | 125 | |
Dividends paid on AES common stock | (125) | (116) | |
Payments for financed capital expenditures | (7) | (7) | |
Other financing | (4) | 23 | |
Net cash provided by financing activities | 1,317 | 2,606 | |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (1) | (15) | |
(Increase) decrease in cash, cash equivalents and restricted cash of held-for-sale businesses | (52) | 73 | |
Total increase in cash, cash equivalents and restricted cash | 527 | 565 | |
Cash, cash equivalents and restricted cash, beginning | 2,039 | 1,990 | |
Cash, cash equivalents and restricted cash, ending | $ 2,566 | $ 2,555 | |
SUPPLEMENTAL DISCLOSURES: | |||
Cash payments for interest, net of amounts capitalized | $ 267 | $ 354 | |
Cash payments for income taxes, net of refunds | 60 | 68 | |
SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES: | |||
Dividends declared but not yet paid | 125 | 116 | |
Noncash recognition of new operating and financing leases | 60 | 124 | |
Noncash contributions from noncontrolling interests | 42 | $ — | |
Conversion of Corporate Units to shares of common stock | $ — | $ 838 | |
Initial recognition of contingent consideration for acquisitions | — | 9 | |
THE AES CORPORATION
NON-GAAP FINANCIAL MEASURES
(Unaudited)
RECONCILIATION OF ADJUSTED EBITDA, ADJUSTED PTC AND ADJUSTED EPS
We define EBITDA as earnings before interest income and expense, taxes, depreciation, amortization, and accretion of AROs. We define Adjusted EBITDA as EBITDA adjusted for the impact of NCI and interest, taxes, depreciation, amortization, and accretion of AROs of our equity affiliates, adding back interest income recognized under service concession arrangements, and 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; (e) gains, losses, and costs due to the early retirement of debt or troubled debt restructuring, and (f) costs directly associated with a major restructuring program, including, but not limited to, workforce reduction efforts. We define Adjusted EBITDA with Tax Attributes as Adjusted EBITDA, adding back the pre-tax effect of Production Tax Credits ("PTCs"), Investment Tax Credits ("ITCs"), and depreciation tax deductions allocated to tax equity investors, as well as the tax benefit recorded from tax credits retained or transferred to third parties.
The GAAP measure most comparable to EBITDA, Adjusted EBITDA, and Adjusted EBITDA with Tax Attributes is net income. We believe that EBITDA, Adjusted EBITDA, and Adjusted EBITDA with Tax Attributes better reflect the underlying business performance of the Company. Adjusted EBITDA is the most relevant measure considered in the Company's internal evaluation of the financial performance of its segments. Factors in this determination include the variability due to unrealized gains or losses pertaining to derivative transactions, equity securities, or financial assets and liabilities remeasurement, unrealized foreign currency gains or losses, losses due to impairments, strategic decisions to dispose of or acquire business interests, retire debt, or implement restructuring initiatives, and the variability of allocations of earnings to tax equity investors, which affect results in a given period or periods. In addition, each of these metrics represent the business performance of the Company before the application of statutory income tax rates and tax adjustments, including the effects of tax planning, corresponding to the various jurisdictions in which the Company operates. EBITDA, Adjusted EBITDA, and Adjusted EBITDA with Tax Attributes should not be construed as alternatives to net income, which is determined in accordance with GAAP.
Three Months Ended March 31, | |||
Reconciliation of Adjusted EBITDA (in millions) | 2025 | 2024 | |
Net income | $ (73) | $ 278 | |
Income tax expense (benefit) | 17 | (16) | |
Interest expense | 342 | 357 | |
Interest income | (69) | (105) | |
Depreciation, amortization, and accretion of AROs | 337 | 318 | |
EBITDA | $ 554 | $ 832 | |
Less: Adjustment for noncontrolling interests and redeemable stock of subsidiaries (1) | (134) | (164) | |
Less: Income tax expense (benefit), interest expense (income) and depreciation, amortization, and accretion from AROs from equity affiliates | 36 | 34 | |
Interest income recognized under service concession arrangements | 15 | 17 | |
Unrealized derivatives, equity securities, and financial assets and liabilities gains | (1) | (85) | |
Unrealized foreign currency gains | (7) | (9) | |
Disposition/acquisition losses (gains) | 41 | (43) | |
Impairment losses | 33 | 26 | |
Loss on extinguishment of debt and troubled debt restructuring | 8 | 32 | |
Restructuring costs | 46 | — | |
Adjusted EBITDA | $ 591 | $ 640 | |
Tax attributes | 186 | 228 | |
Adjusted EBITDA with Tax Attributes (2) | $ 777 | $ 868 | |
___________________________ | |
(1) | The allocation of earnings and losses to tax equity investors from both consolidated entities and equity affiliates is removed from Adjusted EBITDA. NCI also excludes amounts allocated to preferred shareholders during the construction phase before a project becomes operational, as this is akin to a financing arrangement. |
(2) | Adjusted EBITDA with Tax Attributes includes the impact of the share of the ITCs, PTCs, and depreciation deductions allocated to tax equity investors under the HLBV accounting method and recognized as Net loss (income) attributable to noncontrolling interests and redeemable stock of subsidiaries on the Condensed Consolidated Statements of Operations. It also includes the tax benefit recorded from tax credits retained or transferred to third parties. The tax attributes are related to the Renewables and Utilities SBUs. |
We define Adjusted PTC as pre-tax income from continuing operations attributable to The AES Corporation excluding gains or losses of the consolidated entity 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; (e) gains, losses, and costs due to the early retirement of debt or troubled debt restructuring; and (f) costs directly associated with a major restructuring program, including, but not limited to, workforce reduction efforts. Adjusted PTC also includes net equity in earnings of affiliates on an after-tax basis adjusted for the same gains or losses excluded from consolidated entities.
We define Adjusted EPS as diluted earnings per share from continuing operations 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 the tax impact from the repatriation of sales proceeds, and gains and losses recognized at commencement of sales-type leases; (d) losses due to impairments; (e) gains, losses, and costs due to the early retirement of debt or troubled debt restructuring; and (f) costs directly associated with a major restructuring program, including, but not limited to, workforce reduction efforts.
The GAAP measure most comparable to Adjusted PTC is income from continuing operations attributable to AES. The GAAP measure most comparable to Adjusted EPS is diluted earnings per share from continuing operations. We believe that Adjusted PTC and Adjusted EPS better reflect the underlying business performance of the Company and are considered in the Company's internal evaluation of financial performance. Factors in this determination include the variability due to unrealized gains or losses pertaining to derivative transactions, equity securities, or financial assets and liabilities remeasurement, unrealized foreign currency gains or losses, losses due to impairments, and strategic decisions to dispose of or acquire business interests, retire debt, or implement restructuring initiatives, which affect results in a given period or periods. In addition, for Adjusted PTC, earnings before tax represents the business performance of the Company before the application of statutory income tax rates and tax adjustments, including the effects of tax planning, corresponding to the various jurisdictions in which the Company operates. Adjusted PTC and Adjusted EPS should not be construed as alternatives to income from continuing operations attributable to AES and diluted earnings per share from continuing operations, which are determined in accordance with GAAP.
Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | |||||||
Net of NCI (1) | Per Share (Diluted) Net of NCI (1) | Net of NCI (1) | Per Share (Diluted) Net of NCI (1) | |||||
(in millions, except per share amounts) | ||||||||
Income from continuing operations, net of tax, attributable to AES and Diluted EPS | $ 46 | $ 0.07 | $ 432 | $ 0.61 | ||||
Add: Income tax expense (benefit) from continuing operations attributable to AES | (4) | (19) | ||||||
Pre-tax contribution | $ 42 | $ 413 | ||||||
Adjustments | ||||||||
Unrealized derivatives, equity securities, and financial assets and liabilities gains | $ (5) | $ (0.01) | $ (85) | $ (0.12) | (2) | |||
Unrealized foreign currency gains | (7) | (0.01) | (9) | (0.01) | ||||
Disposition/acquisition losses (gains) | 42 | 0.06 | (3) | (43) | (0.06) | (4) | ||
Impairment losses | 33 | 0.05 | (5) | 26 | 0.04 | (6) | ||
Loss on extinguishment of debt and troubled debt restructuring | 10 | 0.01 | 34 | 0.04 | (7) | |||
Restructuring costs | 46 | 0.06 | (8) | — | — | |||
Less: Net income tax expense (benefit) | 0.04 | (9) | — | |||||
Adjusted PTC and Adjusted EPS | $ 161 | $ 0.27 | $ 336 | $ 0.50 | ||||
___________________________________ | |
(1) | NCI is defined as Noncontrolling Interests. |
(2) | Amount primarily relates to net unrealized derivative gains at the Energy Infrastructure SBU of |
(3) | Amount primarily relates to losses on contingent consideration at AES Clean Energy of leases at AES Renewable Holdings of |
(4) | Amount primarily relates to gain on dilution of ownership in Uplight due to its acquisition of AutoGrid of of our ownership interest in Amman East and IPP4 in |
(5) | Amount primarily relates to impairments at AES Clean Energy Development projects of |
(6) | Amount primarily relates to impairment at Mong Duong of |
(7) | Amount primarily relates to costs incurred due to troubled debt restructuring at |
(8) | Amount primarily relates to severance costs associated with the Company-wide restructuring program. |
(9) | Amount primarily relates to income tax expense associated with severance costs related to the Company-wide restructuring program of on contingent consideration at AES Clean Energy of |
The AES Corporation | ||||
Parent Financial Information | ||||
Parent only data: last four quarters | ||||
(in millions) | 4 Quarters Ended | |||
Total subsidiary distributions & returns of capital to Parent | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 |
Actual | Actual | Actual | Actual | |
Subsidiary distributions(1) to Parent & QHCs | $ 1,447 | $ 1,603 | $ 1,424 | $ 1,531 |
Returns of capital distributions to Parent & QHCs | 32 | 30 | 80 | 140 |
Total subsidiary distributions & returns of capital to Parent | $ 1,479 | $ 1,633 | $ 1,504 | $ 1,671 |
Parent only data: quarterly | ||||
(in millions) | Quarter Ended | |||
Total subsidiary distributions & returns of capital to Parent | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 |
Actual | Actual | Actual | Actual | |
Subsidiary distributions1 to Parent & QHCs | $ 230 | $ 715 | $ 204 | $ 298 |
Returns of capital distributions to Parent & QHCs | 3 | 28 | — | 1 |
Total subsidiary distributions & returns of capital to Parent | $ 233 | $ 743 | $ 204 | $ 299 |
(in millions) | Balance at | |||
March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | |
Parent Company Liquidity(2) | Actual | Actual | Actual | Actual |
Cash at Parent & Cash at QHCs(3) | $ 151 | $ 265 | $ 6 | $ 53 |
Availability under credit facilities | 1,526 | 1,782 | 335 | 736 |
Ending liquidity | $ 1,677 | $ 2,047 | $ 341 | $ 789 |
__________________ | |
(1) | Subsidiary distributions received by Qualified Holding Companies ("QHCs") excluded from Schedule 1. Subsidiary Distributions should not be construed as an alternative to Consolidated Net Cash Provided by Operating Activities, which is determined in accordance with US GAAP. Subsidiary Distributions are important to the Parent Company because the Parent Company is a holding company that does not derive any significant direct revenues from its own activities but instead relies on its subsidiaries' business activities and the resultant distributions to fund the debt service, investment and other cash needs of the holding company. The reconciliation of the difference between the Subsidiary Distributions and Consolidated Net Cash Provided by Operating Activities consists of cash generated from operating activities that is retained at the subsidiaries for a variety of reasons which are both discretionary and non-discretionary in nature. These factors include, but are not limited to, retention of cash to fund capital expenditures at the subsidiary, cash retention associated with non-recourse debt covenant restrictions and related debt service requirements at the subsidiaries, retention of cash related to sufficiency of local GAAP statutory retained earnings at the subsidiaries, retention of cash for working capital needs at the subsidiaries, and other similar timing differences between when the cash is generated at the subsidiaries and when it reaches the Parent Company and related holding companies. |
(2) | Parent Company Liquidity is defined as cash available to the Parent Company, including cash at qualified holding companies (QHCs), plus available borrowings under our existing credit facility. AES believes that unconsolidated Parent Company liquidity is important to the liquidity position of AES as a Parent Company because of the non-recourse nature of most of AES' indebtedness. |
(3) | The cash held at QHCs represents cash sent to subsidiaries of the company domiciled outside of the US. Such subsidiaries have no contractual restrictions on their ability to send cash to AES, the Parent Company. Cash at those subsidiaries was used for investment and related activities outside of the US. These investments included equity investments and loans to other foreign subsidiaries as well as development and general costs and expenses incurred outside the US. Since the cash held by these QHCs is available to the Parent, AES uses the combined measure of subsidiary distributions to Parent and QHCs as a useful measure of cash available to the Parent to meet its international liquidity needs. |
Investor Contact: Susan Harcourt 703-682-1204, susan.harcourt@aes.com
Media Contact: Amy Ackerman 703-682-6399, amy.ackerman@aes.com
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SOURCE The AES Corporation
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