XML 96 R52.htm IDEA: XBRL DOCUMENT v3.22.0.1
Fair Value (Tables)
 12 Months Ended
Dec. 31, 2021
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, 2021 (in millions, except range amounts):
Type of DerivativeFair ValueUnobservable Input
Amount or Range
(Weighted Average)
Interest rate$(6)Subsidiaries’ credit spreads
0.9% - 3.2% (2.3%)
Foreign currency:
Argentine peso108 Argentine peso to USD currency exchange rate after one year
105 - 478 (245)
Commodity:
Other(1)
Total$101 
Derivatives Level 3 Rollforward Table
The following tables present a reconciliation of net derivative assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the years ended December 31, 2021 and 2020 (presented net by type of derivative in millions). Transfers between Level 3 and Level 2 principally result from changes in the significance of unobservable inputs used to calculate the credit valuation adjustment.
Year Ended December 31, 2021Interest RateCross CurrencyForeign CurrencyCommodityTotal
Balance at January 1$(236)$(2)$146 $2 $(90)
Total realized and unrealized gains (losses):
Included in earnings13 (10)(7)(1)(5)
Included in other comprehensive income — derivative activity4 — (3)(5)(4)
Included in regulatory (assets) liabilities— — — 1 1 
Settlements216 3 (28)(1)190 
Transfers of assets/(liabilities), net into Level 3(3)— — 3 — 
Transfers of (assets)/liabilities, net out of Level 3— 9 — — 9 
Balance at December 31$(6)$— $108 $(1)$101 
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 $4 $(35)$— $(29)
Year Ended December 31, 2020Interest RateCross CurrencyForeign CurrencyCommodityTotal
Balance at January 1$(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 
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, 2021
Carrying
Amount
Fair Value
TotalLevel 1Level 2Level 3
Assets:
Accounts receivable — noncurrent (1)
$55 $117 $— $— $117 
Liabilities:Non-recourse debt14,811 16,091 — 16,065 26 
Recourse debt3,754 3,818 — 3,818 — 
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 — 
_____________________________
(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 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 $2 million and $4 million as of December 31, 2021 and 2020, 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, 2021 (in millions, except range amounts):
December 31, 2021Fair ValueValuation TechniqueUnobservable InputRange (Weighted Average)
Long-lived assets held and used:
Puerto Rico$73 Discounted cash flowAnnual revenue growth
(80)% to 8% (—%)
Annual variable margin
37% to 97% (—%)
Weighted-average cost of capital
18% to —%
Mountain View I & II11 Discounted cash flowAnnual revenue growth
(69)% to 54% (—%)
Annual variable margin
(10)% to 56% (46%)
Weighted-average cost of capital
8%
Ventanas 3 & 412 Discounted cash flowAnnual revenue growth
(18)% to 23% (2%)
Annual variable margin
(5)% to 21% (6%)
Weighted-average cost of capital
11%
Angamos86 Discounted cash flowAnnual revenue growth
(8)% to 58% (8%)
Annual variable margin
(8)% to 53% (11%)
Weighted-average cost of capital
11%
Buffalo Gap III— Discounted cash flowAnnual revenue growth
(12)% to 6% (—%)
Pre-tax operating margin
(18)% to 29% (2%)
Weighted-average cost of capital
11%
Buffalo Gap II— Discounted cash flowAnnual revenue growth
(10)% to 6% (—%)
Pre-tax operating margin
(26)% to 39% (-11%)
Weighted-average cost of capital
11%
Buffalo Gap I— Discounted cash flowAnnual revenue growth
(12)% to 6% (-1%)
Pre-tax operating margin
(45)% to 45% (-37%)
Weighted-average cost of capital
11%
Alto Maipo2,043 Discounted cash flowAnnual revenue growth
(14)% to 14% (2%)
Pre-tax operating margin
(18)% to 8% (2%)
Weighted-average cost of capital
7%
Total$2,225 
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, 2021Measurement Date
Carrying Amount (1)
Fair Value
Pre-tax
Loss
AssetsLevel 1Level 2Level 3
Dispositions: (2)
Estrella del Mar I9/30/2021$17 $— $6 $— $11 
Alto Maipo (3)
11/30/20212,339 — — 2,043 — 
Long-lived assets held and used: (4)
Puerto Rico3/31/2021548 — — 73 475 
Mountain View I & II4/30/202178 — — 11 67 
Ventanas 3 & 46/30/2021661 — — 12 649 
Angamos6/30/2021241 — — 86 155 
Buffalo Gap III12/31/202191 — — — 91 
Buffalo Gap II12/31/202173 — — — 73 
Buffalo Gap I12/31/202129 — — — 29 
Year Ended December 31, 2020Measurement Date
Carrying Amount (1)
Fair Value
Pre-tax
Loss
AssetsLevel 1Level 2Level 3
Long-lived assets held and used: (4)
Angamos8/1/2020$870 $— $— $306 $564 
Ventanas 1 & 28/1/2020213 — — — 213 
Hawaii8/31/2020114 — — 76 38 
Estrella del Mar I9/30/202044 — — 14 30 
Equity method investments:
OPGC (5)
3/31/2020195 — — 152 43 
OPGC (5)
6/30/2020272 — 104 — 158 
_____________________________
(1)Represents the carrying values at the dates of initial measurement, before fair value adjustment.
(2)See Note 24—Held-for-Sale and Dispositions for further information.
(3)Fair value measurement performed for purposes of allocating $224 million of goodwill to the carrying amount of Alto Maipo in determining the loss on disposal. The goodwill allocation was determined based on the relative fair value of Alto Maipo, which was included in the AES Andes reporting unit. Note that the Pre-
tax Loss column excludes the loss on disposal as this fair value measurement is only one component of such loss. See Note 24—Held-for-Sale and Dispositions for further information.
(4)See Note 22—Asset Impairment Expense for further information.
(5)See Note 8—Investments In and Advances to Affiliates for further information.
Fair value hierarchy for recurring measurements table The following table presents, by level within the fair value hierarchy as described in Note 1—General and Summary of Significant Accounting Policies, the Company's financial assets and liabilities that were measured at fair value on a recurring basis as of the dates indicated (in millions). For the Company's investments in marketable debt securities, the security classes presented were determined based on the nature and risk of the security and are consistent with how the Company manages, monitors, and measures its marketable securities:
 December 31, 2021December 31, 2020
 Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
Assets
DEBT SECURITIES:
Available-for-sale:
Unsecured debentures$— $— $— $— $— $21 $— $21 
Certificates of deposit— 199 — 199 — 238 — 238 
Total debt securities— 199 — 199 — 259 — 259 
EQUITY SECURITIES:
Mutual funds31 13 — 44 28 51 — 79 
Total equity securities31 13 — 44 28 51 — 79 
DERIVATIVES:
Interest rate derivatives— 51 2 53 — 13 — 13 
Cross-currency derivatives— 5 — 5 — 5 — 5 
Foreign currency derivatives— 29 108 137 — 15 146 161 
Commodity derivatives— 32 6 38 — 8 2 10 
Total derivatives — assets— 117 116 233 — 41 148 189 
TOTAL ASSETS$31 $329 $116 $476 $28 $351 $148 $527 
Liabilities
DERIVATIVES:
Interest rate derivatives$— $286 $8 $294 $— $374 $236 $610 
Cross-currency derivatives— 11 — 11 — 2 2 4 
Foreign currency derivatives— 35 — 35 — 43 — 43 
Commodity derivatives— 37 7 44 — 22 — 22 
Total derivatives — liabilities— 369 15 384 — 441 238 679 
TOTAL LIABILITIES$— $369 $15 $384 $— $441 $238 $679 
Schedule of Realized Gain (Loss) The following table presents gross proceeds from sale of available-for-sale securities for the periods indicated (in millions):
Year Ended December 31,202120202019
Gross proceeds from sale of available-for-sale securities
$578 $582 $663