Segments

3 Months Ended

Mar. 31, 2022

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. In January 2022, we internally announced a reorganization as a part of our ongoing strategy to align our business to meet our customers' needs and deliver on our major strategic objectives. The Company performed an assessment in accordance with ASC 280 and determined there were no changes to its operating or reportable segments.

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	2022		2021
US and Utilities SBU	$	1,117	$	949
South America SBU	810		884
MCAC SBU	566		535
Eurasia SBU	368		270
Corporate and Other	23		24
Eliminations	(32)		(27)
Total Revenue	$	2,852	$	2,635

	Three Months Ended March 31,
Total Adjusted PTC	2022		2021
Income from continuing operations before taxes and equity in earnings of affiliates	$	264	$	9
Add: Net equity in losses of affiliates	(33)		(30)
Less: Income from continuing operations before taxes, attributable to noncontrolling interests and redeemable stock of subsidiaries	(66)		(163)
Pre-tax contribution	165		(184)
Unrealized derivative and equity securities losses	41		69
Unrealized foreign currency losses (gains)	(19)		6
Disposition/acquisition losses (gains)	9		(15)
Impairment losses	1		475
Loss on extinguishment of debt	10		6
Net gains from early contract terminations at Angamos	—		(110)
Total Adjusted PTC	$	207	$	247

	Three Months Ended March 31,
Total Adjusted PTC	2022		2021
US and Utilities SBU	$	57	$	44
South America SBU	128		88
MCAC SBU	37		61
Eurasia SBU	65		51
Corporate and Other	(75)		(7)
Eliminations	(5)		10
Total Adjusted PTC	$	207	$	247

Total Assets	March 31, 2022		December 31, 2021
US and Utilities SBU	$	17,305	$	16,512
South America SBU	8,544		7,728
MCAC SBU	4,609		4,545
Eurasia SBU	3,495		3,466
Corporate and Other	695		712
Total Assets	$	34,648	$	32,963