Fair Value (Tables)

6 Months Ended

Jun. 30, 2023

Fair value hierarchy for recurring measurements table

The following table presents, by level within the fair value hierarchy, 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:


	June 30, 2023								December 31, 2022
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets
DEBT SECURITIES:
Available-for-sale:

Certificates of deposit	$	—	$	677	$	—	$	677	$	—	$	698	$	—	$	698
Government debt securities	—		3		—		3		—		3		—		3
Total debt securities	—		680		—		680		—		701		—		701
EQUITY SECURITIES:
Mutual funds	44		—		—		44		38		—		—		38

Total equity securities	44		6		—		50		38		—		—		38
DERIVATIVES:
Interest rate derivatives	—		273		—		273		—		314		—		314

Foreign currency derivatives	—		23		63		86		—		22		64		86
Commodity derivatives	—		233		7		240		—		232		13		245
Total derivatives — assets	—		529		70		599		—		568		77		645
TOTAL ASSETS	$	44	$	1,215	$	70	$	1,329	$	38	$	1,269	$	77	$	1,384
Liabilities
Contingent consideration	$	—	$	—	$	274	$	274	$	—	$	—	$	48	$	48
DERIVATIVES:
Interest rate derivatives	—		15		1		16		—		6		—		6
Cross-currency derivatives	—		76		—		76		—		42		—		42
Foreign currency derivatives	—		22		—		22		—		20		—		20
Commodity derivatives	—		212		85		297		—		346		60		406
Total derivatives — liabilities	—		325		86		411		—		414		60		474
TOTAL LIABILITIES	$	—	$	325	$	360	$	685	$	—	$	414	$	108	$	522

Marketable Securities [Table Text Block]

The following table presents gross proceeds from the sale of available-for-sale securities during the periods indicated (in millions):


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Gross proceeds from sale of available-for-sale securities	$	370	$	150	$	739	$	347

Fair Value, Net Derivative Assets (Liabilities) measured on a recurring basis, Unobservable Input Reconciliation Table

The following tables present a reconciliation of assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and six months ended June 30, 2023 and 2022 (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.


	Derivative Assets and Liabilities
Three Months Ended June 30, 2023	Interest Rate		Foreign Currency		Commodity		Contingent Consideration		Total
Balance at April 1	$	(5)	$	62	$	(69)	$	(55)	$	(67)
Total realized and unrealized gains (losses):
Included in earnings	—		7		(1)		(1)		5
Included in other comprehensive income (loss) — derivative activity	16		3		(10)		—		9
Included in other comprehensive income (loss) — foreign currency translation activity	—		—		—		—		—
Included in regulatory (assets) liabilities	—		—		3		—		3
Acquisitions	—		—		—		(218)		(218)
Settlements	(2)		(9)		(2)		—		(13)
Transfers of assets (liabilities), net into Level 3	—		—		—		—		—
Transfers of (assets) liabilities, net out of Level 3	(10)		—		1		—		(9)
Balance at June 30, 2023	$	(1)	$	63	$	(78)	$	(274)	$	(290)
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)	$	(1)	$	(3)

	Derivative Assets and Liabilities
Three Months Ended June 30, 2022	Interest Rate		Foreign Currency		Commodity		Contingent Consideration		Total
Balance at April 1	$	1	$	93	$	(13)	$	(69)	$	12
Total realized and unrealized gains (losses):
Included in earnings	1		(32)		(4)		—		(35)
Included in other comprehensive income (loss) — derivative activity	5		(11)		6		—		—
Included in other comprehensive income (loss) — foreign currency translation activity	—		—		—		2		2
Included in regulatory (assets) liabilities	—		—		15		—		15
Acquisitions	—		—		—		(15)		(15)
Settlements	—		—		2		5		7
Transfers of assets (liabilities), net into Level 3	—		—		31		—		31
Transfers of (assets) liabilities, net out of Level 3	(6)		—		—		—		(6)
Balance at June 30, 2022	$	1	$	50	$	37	$	(77)	$	11
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	$	1	$	(32)	$	—	$	2	$	(29)

Fair value schedule of Significant Unobservable Input Recurring

The following table summarizes the significant unobservable inputs used for Level 3 derivative assets (liabilities) as of June 30, 2023 (in millions, except range amounts):

Type of Derivative

Fair Value

Unobservable Input

Amount or Range (Weighted Average)

Interest rate

(1)

Subsidiary credit spread

0.4% to 2.5% (1.7%)

Foreign currency:

Argentine peso

Argentine peso to U.S. dollar currency exchange rate after one year

576 to 957 (854)

Commodity:

CAISO Energy Swap

(86)

Forward energy prices per MWh after 2030

$12 to $97 ($52)

Other

Total

(16)

Fair Value Measurement Inputs and Valuation Techniques [Table Text Block]

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 six months ended June 30, 2023 (in millions, except range amounts):

Fair Value

Valuation Technique

Unobservable Input

Range (Weighted Average)

Long-lived assets held and used:

Norgener (1)

Discounted cash flow

Annual revenue growth

(90)% to 994% (85%)

Annual variable margin

(75)% to 276% (16%)

GAF Projects (AES Renewable Holdings)

Discounted cash flow

Annual revenue growth

(42)% to 44% (1%)

Annual variable margin

(194)% to 77% (66%)

Discount rate

Total

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(1)The fair value of the Norgener asset group is mainly related to existing coal inventory not subject to impairment under ASC 360-10.

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 Condensed Consolidated Balance Sheets as of the periods indicated, but for which fair value is disclosed:


		June 30, 2023
		Carrying Amount		Fair Value
				Total		Level 1		Level 2		Level 3
Assets:	Accounts receivable — noncurrent (1)	$	295	$	338	$	—	$	—	$	338
Liabilities:	Non-recourse debt	20,872		20,540		—		19,084		1,456
	Recourse debt	5,476		5,093		—		5,093		—


		December 31, 2022
		Carrying Amount		Fair Value
				Total		Level 1		Level 2		Level 3
Assets:	Accounts receivable — noncurrent (1)	$	255	$	294	$	—	$	—	$	294
Liabilities:	Non-recourse debt	19,429		18,527		—		17,089		1,438
	Recourse debt	3,894		3,505		—		3,505		—

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(1)These amounts primarily relate to amounts impacted by the Stabilization Funds enacted by the Chilean government, and are included in Other noncurrent assets in the accompanying Condensed Consolidated Balance Sheets.