Segments

3 Months Ended

Mar. 31, 2021

Segment Reporting [Abstract]

SEGMENTS

SEGMENTS

The segment reporting structure uses the Company’s management reporting structure as its foundation to reflect how the Company manages the businesses internally and is mainly organized by geographic regions, which provides a socio-political-economic understanding of our business. The management reporting structure is organized by four SBUs led by our President and Chief Executive Officer: US and Utilities, South America, MCAC, and Eurasia SBUs. 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.

Corporate and Other — Included in “Corporate and Other” are the results of the AES self-insurance company and certain equity affiliates, 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 PTC as its primary segment performance measure. Adjusted PTC, a non-GAAP measure, is defined by the Company 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 related to derivative transactions and equity securities; (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; and (f) net gains at Angamos, one of our businesses in the South America SBU, associated with the early contract terminations with Minera Escondida and Minera Spence. 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. The Company has concluded that Adjusted PTC 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 complexity, the Company concluded that Adjusted PTC is a more transparent measure that better assists investors in determining which businesses have the greatest impact on the Company’s results.

Revenue and Adjusted PTC are presented before inter-segment eliminations, which includes the effect of intercompany transactions with other segments except for interest, charges for certain management fees, and the

write-off of intercompany balances, as applicable. All intra-segment activity has been eliminated within the segment. Inter-segment activity has been eliminated within the total consolidated results.

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

	Three Months Ended March 31,
Total Revenue	2021		2020
US and Utilities SBU	$	949	$	971
South America SBU	884		712
MCAC SBU	535		432
Eurasia SBU	270		225
Corporate and Other	24		28
Eliminations	(27)		(30)
Total Revenue	$	2,635	$	2,338

	Three Months Ended March 31,
Total Adjusted PTC	2021		2020
Income from continuing operations before taxes and equity in earnings of affiliates	$	9	$	320
Add: Net equity in earnings (losses) of affiliates	(30)		(2)
Less: Income from continuing operations before taxes, attributable to noncontrolling interests	(163)		(119)
Pre-tax contribution	(184)		199
Unrealized derivative and equity securities losses (gains)	69		(16)
Unrealized foreign currency losses (gains)	6		9
Disposition/acquisition losses (gains)	(15)		1
Impairment losses	475		53
Loss on extinguishment of debt	6		4
Net gains from early contract terminations at Angamos	(110)		—
Total Adjusted PTC	$	247	$	250

	Three Months Ended March 31,
Total Adjusted PTC	2021		2020
US and Utilities SBU	$	44	$	71
South America SBU	88		119
MCAC SBU	61		78
Eurasia SBU	51		44
Corporate and Other	(7)		(58)
Eliminations	10		(4)
Total Adjusted PTC	$	247	$	250

Total Assets	March 31, 2021		December 31, 2020
US and Utilities SBU	$	14,483	$	14,464
South America SBU	11,343		11,329
MCAC SBU	4,934		4,847
Eurasia SBU	3,603		3,621
Corporate and Other	840		342
Total Assets	$	35,203	$	34,603