XML 96 R52.htm IDEA: XBRL DOCUMENT v3.20.4
Fair Value (Tables)
 12 Months Ended
Dec. 31, 2020
Fair Value Disclosures [Abstract]  
Significant unobservable inputs, recurring
The following table summarizes the significant unobservable inputs used for the Level 3 derivative assets (liabilities) as of December 31, 2020 (in millions, except range amounts):
Type of DerivativeFair ValueUnobservable Input
Amount or Range
(Weighted Average)
Interest rate$(236)Subsidiaries’ credit spreads
0.6% - 3.6% (3.5%)
Cross-currency(2)Subsidiaries’ credit spreads
3.6% - 3.6% (3.6%)
Foreign currency:
Argentine peso146 Argentine peso to USD currency exchange rate after one year
86 - 1,027 (405)
Commodity:
Other2 
Total$(90)
Derivatives Level 3 Rollforward Table The following tables present a reconciliation of net derivative assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the years ended December 31, 2020 and 2019 (presented net by type of derivative in millions). Transfers between Level 3 and Level 2 principally result from changes in the significance of unobservable inputs used to calculate the credit valuation adjustment.
Year Ended December 31, 2020Interest RateCross CurrencyForeign CurrencyCommodityTotal
Balance at January 1$(184)$(11)$94 $(1)$(102)
Total realized and unrealized gains (losses):
Included in earnings3 (2)67 2 70 
Included in other comprehensive income — derivative activity(84)(10)23 — (71)
Settlements34 21 (39)1 17 
Transfers of assets/(liabilities), net into Level 3(6)— — — (6)
Transfers of (assets)/liabilities, net out of Level 31 — 1 — 2 
Balance at December 31$(236)$(2)$146 $2 $(90)
Total gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities held at the end of the period$— $(2)$35 $2 $35 
Year Ended December 31, 2019Interest RateCross CurrencyForeign CurrencyCommodityTotal
Balance at January 1$(140)$— $199 $4 $63 
Total realized and unrealized gains (losses):
Included in earnings(1)— (65)(2)(68)
Included in other comprehensive income — derivative activity(97)— (17)— (114)
Included in regulatory (assets) liabilities— — — (5)(5)
Settlements8 — (23)2 (13)
Transfers of assets/(liabilities), net into Level 3(2)(11)— — (13)
Transfers of (assets)/liabilities, net out of Level 348 — — — 48 
Balance at December 31$(184)$(11)$94 $(1)$(102)
Total gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities held at the end of the period$— $— $(67)$(2)$(69)
Financial instruments not measured at fair value in the condensed consolidated balance sheets
The following table presents (in millions) the carrying amount, fair value, and fair value hierarchy of the Company's financial assets and liabilities that are not measured at fair value in the Consolidated Balance Sheets as of the periods indicated, but for which fair value is disclosed:
December 31, 2020
Carrying
Amount
Fair Value
TotalLevel 1Level 2Level 3
Assets:
Accounts receivable — noncurrent (1)
$97 $197 $— $— $197 
Liabilities:Non-recourse debt16,354 18,403 5 15,301 3,097 
Recourse debt3,446 3,677 — 3,677 — 
December 31, 2019
Carrying
Amount
Fair Value
TotalLevel 1Level 2Level 3
Assets:
Accounts receivable — noncurrent (1)
$98 $145 $— $— $145 
Liabilities:Non-recourse debt16,712 16,579 — 15,804 775 
Recourse debt3,396 3,529 — 3,529 — 
_____________________________
(1)These amounts primarily relate to amounts due from CAMMESA, the administrator of the wholesale electricity market in Argentina, and amounts related to green blend and extend agreements in Chile and are included in Other noncurrent assets in the accompanying Consolidated Balance Sheets. The fair value and carrying amount of the Argentina receivables exclude VAT of $4 million and $11 million as of December 31, 2020 and 2019, respectively.
Significant unobservable inputs, nonrecurring
The following table summarizes the significant unobservable inputs used in the Level 3 measurement of long-lived assets held and used measured on a nonrecurring basis during the year ended December 31, 2020 (in millions, except range amounts):
December 31, 2020Fair ValueValuation TechniqueUnobservable InputRange (Weighted Average)
Long-lived assets held and used:
AES Gener$306 Discounted cash flowAnnual revenue growth
(90)% to 10% (-2%)
Variable margin
(94)% to 24% (-3%)
Weighted-average cost of capital
7% to 10%
Hawaii76 Discounted cash flowMonthly revenue growth
(12)% to 13% (0%)
Pre-tax operating margin
24% to 35% (29%)
Weighted-average cost of capital
10% to 13%
Estrella del Mar I14 Comparable market transactionsSale price per kilowatt (USD)
$160 to $520 ($315)
Age of unit when sold (years)
15 to 25 (18)
Equity method investments:
OPGC (1)
152 Expected present valueAnnual dividend growth
(25)% to 40% (2%)
Weighted-average cost of equity12 %
Total$548 
Fair value hierarchy for nonrecurring measurements table The following table summarizes our major categories of assets measured at fair value on a nonrecurring basis and their level within the fair value hierarchy (in millions):
Year Ended December 31, 2020Measurement Date
Carrying Amount (1)
Fair Value
Pre-tax
Loss
AssetsLevel 1Level 2Level 3
Long-lived assets held and used:
AES Gener (2)
8/1/2020$1,087 $— $— $306 $781 
Hawaii (2)
8/31/2020114 — — 76 38 
Estrella del Mar I (2)
9/30/202044 — — 14 30 
Equity method investments:
OPGC (3)
03/31/2020195 — — 152 43 
OPGC (3)
06/30/2020272 — 104 — 158 
Year Ended December 31, 2019Measurement Date
Carrying Amount (1)
Fair Value
Pre-tax
Loss
AssetsLevel 1Level 2Level 3
Dispositions and held-for-sale businesses: (4)
Kilroot and Ballylumford04/12/2019$232 $— $118 $— $115 
Long-lived assets held and used:
Hawaii (2)
12/31/2019163 — — 103 60 
Equity method investments:
OPGC (3)
12/31/2019304 — — 212 92 
_____________________________
(1)Represents the carrying values at the dates of initial measurement, before fair value adjustment.
(2)See Note 22—Asset Impairment Expense for further information.
(3)See Note 8—Investments In and Advances to Affiliates for further information.
(4)Per the Company's policy, pre-tax loss is limited to the impairment of long-lived assets. Any additional loss will be recognized on completion of the sale. See Note 22—Asset Impairment Expense and Note 25—Held-for-Sale and Dispositions for further information.
Fair value hierarchy for recurring measurements table The following table presents, by level within the fair value hierarchy as described in Note 1—General and Summary of Significant Accounting Policies, the Company's financial assets and liabilities that were measured at fair value on a recurring basis as of the dates indicated (in millions). For the Company's investments in marketable debt securities, the security classes presented were determined based on the nature and risk of the security and are consistent with how the Company manages, monitors, and measures its marketable securities:
 December 31, 2020December 31, 2019
 Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
Assets
DEBT SECURITIES:
Available-for-sale:
Unsecured debentures$— $21 $— $21 $— $— $— $— 
Certificates of deposit— 238 — 238 — 326 — 326 
Total debt securities— 259 — 259 — 326 — 326 
EQUITY SECURITIES:
Mutual funds28 51 — 79 22 61 — 83 
Total equity securities28 51 — 79 22 61 — 83 
DERIVATIVES:
Interest rate derivatives— 13 — 13 — 31 — 31 
Cross-currency derivatives— 5 — 5 — — — — 
Foreign currency derivatives— 15 146 161 — 17 93 110 
Commodity derivatives— 8 2 10 — 28 2 30 
Total derivatives — assets— 41 148 189 — 76 95 171 
TOTAL ASSETS$28 $351 $148 $527 $22 $463 $95 $580 
Liabilities
DERIVATIVES:
Interest rate derivatives$— $374 $236 $610 $— $144 $184 $328 
Cross-currency derivatives— 2 2 4 — 10 11 21 
Foreign currency derivatives— 43 — 43 — 44 — 44 
Commodity derivatives— 22 — 22 — 29 2 31 
Total derivatives — liabilities— 441 238 679 — 227 197 424 
TOTAL LIABILITIES$— $441 $238 $679 $— $227 $197 $424 
Available-for-sale Securities [Table Text Block] The following table presents gross proceeds from sale of AFS securities for the periods indicated (in millions):
Year Ended December 31,202020192018
Gross proceeds from sale of AFS securities$582 $663 $1,403