Earnings Per Share

12 Months Ended

Dec. 31, 2023

Basic and diluted earnings per share are based on the weighted-average number of shares of common stock and potential common stock outstanding during the period. Potential common stock, for purposes of determining diluted earnings per share, includes the effects of dilutive RSUs, stock options, and equity units. The effect of such potential common stock is computed using the treasury stock method for RSUs and stock options, and is computed using the if-converted method for equity units.

The following table is a reconciliation of the numerator and denominator of the basic and diluted earnings per share computation for income from continuing operations for the years ended December 31, 2023, 2022 and 2021, where income represents the numerator and weighted-average shares represent the denominator.


Year Ended December 31,	2023					2022					2021
(in millions, except per share data)	Income		Shares	$ per Share		Loss		Shares	$ per Share		Loss		Shares	$ per Share
BASIC EARNINGS (LOSS) PER SHARE
Income (loss) from continuing operations attributable to The AES Corporation common stockholders	$	242	669	$	0.36	$	(546)	668	$	(0.82)	$	(413)	666	$	(0.62)
EFFECT OF DILUTIVE SECURITIES

Stock options	—		1	—		—		—	—		—		—	—
Restricted stock units	—		2	—		—		—	—		—		—	—
Equity units	1		40	(0.02)		—		—	—		—		—	—
DILUTED EARNINGS (LOSS) PER SHARE	$	243	712	$	0.34	$	(546)	668	$	(0.82)	$	(413)	666	$	(0.62)

The calculation of diluted earnings per share excluded 2 million outstanding stock awards for the year ended December 31, 2023, which would be anti-dilutive. These stock awards could potentially dilute basic earnings per share in the future.

For the years ended December 31, 2022 and December 31, 2021, the calculation of diluted earnings per share excluded 5 million outstanding stock awards and 40 million shares underlying our March 2021 Equity Units because their impact would be anti-dilutive given the loss from continuing operations. These shares could potentially dilute basic earnings per share in the future. Had the Company generated income, potential shares of common stock of 3 million and 4 million related to the stock awards and 40 million and 33 million related to the Equity Units, would have been included in diluted weighted-average shares outstanding for the years ended December 31, 2022 and December 31, 2021, respectively.

As described in Note 17—Equity, the Company issued 10,430,500 Equity Units in March 2021 with a total notional value of $1,043 million. Each Equity Unit has a stated amount of $100 and was initially issued as a Corporate Unit, consisting of a 2024 Purchase Contract and a 10% undivided beneficial ownership interest in one share of Series A Preferred Stock. The conversion rate was initially 31.5428 shares of common stock per one share of Series A Preferred Stock, which was equivalent to an initial conversion price of approximately $31.70 per share of common stock. As of December 31, 2023, due to customary anti-dilution provisions, the conversion rate was 31.6795, equivalent to a conversion price of approximately $31.57 per share of common stock. The Series A Preferred Stock and the 2024 Purchase Contracts are being accounted for as one unit of account. In calculating diluted EPS, the Company has applied the if-converted method to determine the impact of the forward purchase feature and considered if there are incremental shares that should be included related to the Series A Preferred conversion value. On February 15, 2024, the Series A Preferred Stock was tendered to satisfy the Purchase Contract's settlement price and the Corporate Units were converted into shares of the Company's common stock at a settlement rate of 3.8859, equivalent to a reference price of $25.73. The Series A Preferred Stock was cancelled upon conversion.