Schedule I - Condensed Financial Information of Parent

12 Months Ended

Dec. 31, 2020

Condensed Financial Information Disclosure [Abstract]

SCHEDULE I CONDENSED FINANCIAL INFORMATION OF PARENT

THE AES CORPORATION

SCHEDULE I CONDENSED FINANCIAL INFORMATION OF PARENT

BALANCE SHEETS

DECEMBER 31, 2020 AND 2019

	December 31,
	2020		2019
	(in millions)
ASSETS
Current Assets:
Cash and cash equivalents	$	70	$	11
Accounts and notes receivable from subsidiaries	188		238
Prepaid expenses and other current assets	55		35
Total current assets	313		284
Investment in and advances to subsidiaries and affiliates	6,426		6,782
Office Equipment:
Cost	29		27
Accumulated depreciation	(22)		(20)
Office equipment, net	7		7
Other Assets:
Other intangible assets, net of accumulated amortization	—		1
Deferred financing costs, net of accumulated amortization of $6 and $5, respectively	4		5
Deferred income taxes	25		14
Other assets	20		16
Total other assets	49		36
Total assets	$	6,795	$	7,109
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable	$	15	$	20
Accounts and notes payable to subsidiaries	184		339
Accrued and other liabilities	344		221
Senior notes payable—current portion	—		5
Total current liabilities	543		585
Long-term Liabilities:
Senior notes payable	3,430		3,391
Accounts and notes payable to subsidiaries	28		28
Other long-term liabilities	160		109
Total long-term liabilities	3,618		3,528
Stockholders' equity:
Common stock	8		8
Additional paid-in capital	7,561		7,776
Accumulated deficit	(680)		(692)
Accumulated other comprehensive loss	(2,397)		(2,229)
Treasury stock	(1,858)		(1,867)
Total stockholders' equity	2,634		2,996
Total liabilities and equity	$	6,795	$	7,109

See Notes to Schedule I.

THE AES CORPORATION

SCHEDULE I CONDENSED FINANCIAL INFORMATION OF PARENT

STATEMENTS OF OPERATIONS

YEARS ENDED DECEMBER 31, 2020, 2019, AND 2018

For the Years Ended December 31,	2020		2019		2018
	(in millions)
Revenue from subsidiaries and affiliates	$	29	$	30	$	36
Equity in earnings of subsidiaries and affiliates	383		674		1,909
Interest income	31		53		39
General and administrative expenses	(125)		(148)		(142)
Other income	26		1		25
Other expense	(6)		(103)		—
Loss on extinguishment of debt	(146)		(5)		(171)
Interest expense	(163)		(197)		(220)
Income (loss) before income taxes	29		305		1,476
Income tax benefit (expense)	17		(2)		(273)
Net income (loss)	$	46	$	303	$	1,203

See Notes to Schedule I.

THE AES CORPORATION

SCHEDULE I CONDENSED FINANCIAL INFORMATION OF PARENT

STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

YEARS ENDED DECEMBER 31, 2020, 2019, AND 2018

	2020		2019		2018
	(in millions)
NET INCOME	$	46	$	303	$	1,203
Foreign currency translation activity:
Foreign currency translation adjustments, net of income tax (expense) benefit of $(8), $1 and $2, respectively	—		(23)		(214)
Reclassification to earnings, net of $0 income tax for all periods	192		23		(21)
Total foreign currency translation adjustments, net of tax	192		—		(235)
Derivative activity:
Change in derivative fair value, net of income tax benefit of $90, $53 and $16, respectively	(309)		(202)		(64)
Reclassification to earnings, net of income tax expense of $19, $4 and $13, respectively	72		36		78
Total change in fair value of derivatives, net of tax	(237)		(166)		14
Pension activity:
Prior service cost for the period, net of income tax expense of $1, $0 and $1, respectively	—		1		(2)
Change in pension adjustments due to net actuarial gain (loss) for the period, net of income tax benefit (expense) of $4, $6 and $(1), respectively	(12)		(16)		2
Reclassification of earnings, net of income tax expense of $0, $13 and $2, respectively	—		27		7
Total change in unfunded pension obligation	(12)		12		7
OTHER COMPREHENSIVE LOSS	(57)		(154)		(214)
COMPREHENSIVE INCOME (LOSS)	$	(11)	$	149	$	989

See Notes to Schedule I.

THE AES CORPORATION

SCHEDULE I CONDENSED FINANCIAL INFORMATION OF PARENT

STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2020, 2019, AND 2018

For the Years Ended December 31,	2020		2019		2018
	(in millions)
Net cash provided by operating activities	$	434	$	583	$	409
Investing Activities:
Proceeds from the sale of business interests, net of expenses	412		196		1,222
Investment in and net advances to subsidiaries	(652)		(596)		(216)
Return of capital	346		411		242
Additions to property, plant and equipment	(8)		(8)		(13)
Purchase of short term investments, net	(1)		—		—
Net cash provided by (used in) investing activities	97		3		1,235
Financing Activities:
(Repayments) Borrowings under the revolver, net	(110)		180		(207)
Borrowings of notes payable and other coupon bearing securities	3,397		—		1,000
Repayments of notes payable and other coupon bearing securities	(3,366)		(450)		(1,933)
Loans from (Repayments to) subsidiaries	25		40		(143)
Proceeds from issuance of common stock	4		6		7
Common stock dividends paid	(381)		(362)		(344)
Payments for deferred financing costs	(38)		(3)		(11)
Other financing	(3)		(4)		(5)
Net cash used in financing activities	(472)		(593)		(1,636)
Effect of exchange rate changes on cash	—		(1)		1
Increase (Decrease) in cash and cash equivalents	59		(8)		9
Cash and cash equivalents, beginning	11		19		10
Cash and cash equivalents, ending	$	70	$	11	$	19
Supplemental Disclosures:
Cash payments for interest, net of amounts capitalized	$	156	$	192	$	232
Cash payments (refunds) for income taxes	$	(8)	$	(5)	$	10

See Notes to Schedule I

SCHEDULE I

NOTES TO SCHEDULE I

1. Application of Significant Accounting Principles

The Schedule I Condensed Financial Information of the Parent includes the accounts of The AES Corporation (the “Parent Company”) and certain holding companies.

ACCOUNTING FOR SUBSIDIARIES AND AFFILIATES — The Parent Company has accounted for the earnings of its subsidiaries on the equity method in the financial information.

INCOME TAXES — Positions taken on the Parent Company's income tax return which satisfy a more-likely-than-not threshold will be recognized in the financial statements. The income tax expense or benefit computed for the Parent Company reflects the tax assets and liabilities on a stand-alone basis and the effect of filing a consolidated U.S. income tax return with certain other affiliated companies as well as effects of U.S. tax law reform enacted in 2017.

ACCOUNTS AND NOTES RECEIVABLE FROM SUBSIDIARIES — Amounts have been shown in current or long-term assets based on terms in agreements with subsidiaries, but payment is dependent upon meeting conditions precedent in the subsidiary loan agreements.

2. Debt

Senior and Unsecured Notes and Loans Payable ($ in millions)

			December 31,
	Interest Rate	Maturity	2020		2019
Senior Unsecured Note	4.00%	2021	—		500
Senior Secured Term Loan	LIBOR + 1.75%	2022	—		18
Senior Unsecured Note	4.875%	2023	—		613
Senior Unsecured Note	4.50%	2023	—		500
Drawings on revolving credit facility	LIBOR + 1.75%	2024	70		180
Senior Unsecured Note	5.50%	2024	—		63
Senior Unsecured Note	5.50%	2025	—		544
Senior Unsecured Note	3.30%	2025	900		—
Senior Unsecured Note	6.00%	2026	—		500
Senior Unsecured Note	1.375%	2026	800		—
Senior Unsecured Note	5.125%	2027	—		500
Senior Unsecured Note	3.95%	2030	700		—
Senior Unsecured Note	2.45%	2031	1,000		—
Unamortized (discounts)/premiums & debt issuance (costs)			(40)		(22)
Subtotal			$	3,430	$	3,396
Less: Current maturities			—		(5)
Total			$	3,430	$	3,391

FUTURE MATURITIES OF RECOURSE DEBT — As of December 31, 2020 scheduled maturities are presented in the following table (in millions):

December 31,	Annual Maturities
2021	$	—
2022	—
2023	—
2024	70
2025	900
Thereafter	2,500
Unamortized (discount)/premium & debt issuance (costs)	(40)
Total debt	$	3,430

3. Dividends from Subsidiaries and Affiliates

Cash dividends received from consolidated subsidiaries were $1.0 billion, $1.0 billion and $1.9 billion for the years ended December 31, 2020, 2019, and 2018, respectively. For the years ended December 31, 2020 and 2019, $302 million and $200 million, respectively, of the dividends paid to the Parent Company are derived from the sale of business interests and are classified as an investing activity for cash flow purposes. All other dividends are

classified as operating activities. There were no cash dividends received from affiliates accounted for by the equity method for the years ended December 31, 2020, 2019, and 2018.

4. Guarantees and Letters of Credit

GUARANTEES — In connection with certain project financing, acquisitions and dispositions, power purchases 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. These obligations and commitments, excluding those collateralized by letter of credit and other obligations discussed below, were limited as of December 31, 2020 by the terms of the agreements, to an aggregate of approximately $1.4 billion, representing 69 agreements with individual exposures ranging up to $157 million. These amounts exclude normal and customary representations and warranties in agreements for the sale of assets (including ownership in associated legal entities) where the associated risk is considered to be nominal.

LETTERS OF CREDIT — At December 31, 2020, the Parent Company had $77 million in letters of credit outstanding under the revolving credit facility, representing 17 agreements with individual exposures up to $62 million, and $110 million in letters of credit outstanding under the unsecured credit facilities, representing 25 agreements with individual exposures ranging up to $56 million. During the year ended December 31, 2020, the Parent Company paid letter of credit fees ranging from 1% to 3% per annum on the outstanding amounts.