The Aes Corporation · NYSE:AES
The Aes — Q1 2024 Earnings Presentation
48 slides from The Aes's earnings presentation, May 3, 2024
Slide 1: The AES Corporation First Quarter 2024 Financial Review
The AES Corporation First Quarter 2024 Financial Review May 3, 2024
Slide 2: Safe Harbor Disclosure
CONTAINS FORWARD-LOOKING STATEMENTS Safe Harbor Disclosure Certain statements in the following presentation regarding AES’ business operations may constitute “forward-looking statements.” Such forward-looking statements include, but are not limited to, those related to future earnings, growth and fi
Slide 3: Results & Highlights
CONTAINS FORWARD-LOOKING STATEMENTS Results & Highlights Financial Results à Q1 2024 Adjusted EBITDA1 with Tax Attributes2 of $863 million à Q1 2024 Adjusted EBITDA1 of $635 million à Q1 2024 Adjusted EPS1 of $0.50 à Reaffirming 2024 guidance for all metrics and growth rates through 2027 Strategic H
Slide 4: 2 GW Bellefield: Largest Solar + Storage Project in the US
CONTAINS FORWARD-LOOKING STATEMENTS 2 GW Bellefield: Largest Solar + Storage Project in the US à 1 GW of solar + 1 GW of storage in California à 15-year contract with Amazon à Expected online in 2025- 2026 à Total of 3.1 GW of renewables under long- term contracts with Amazon AES is one of the Large
Slide 5: AES is One of the Largest Developers Providing Energy Solutions to Technology Companies
CONTAINS FORWARD-LOOKING STATEMENTS AES is One of the Largest Developers Providing Energy Solutions to Technology Companies 5.91 24/7 Carbon-Free Energy by 2030 0.8 à Matching 100% of electricity with renewables 1.7 100/100/0 Commitment by 2030 à Reaching 100% renewable energy by 2025 3.1 100% Renew
Slide 6: US Power Demand is Forecasted to Increase Substantially Through 2030
CONTAINS FORWARD-LOOKING STATEMENTS US Power Demand is Forecasted to Increase Substantially Through 2030 TWh Data Center Demand Growing 15% 2023-2030 400 4,640 250 4,270 150 4,000 80 3,780 2018 2023 2027 2030 Energy Demand from All Other Sources Energy Demand from Data Centers Source: McKinsey & Com
Slide 7: Renewables Offer the Lowest Levelized Cost of Energy of All Technologies
CONTAINS FORWARD-LOOKING STATEMENTS Renewables Offer the Lowest Levelized Cost of Energy (LCOE) of All Technologies1 $/MWh, Unsubsidized, Assuming Zero Tax Attributes2 Utility Scale Solar $24-$96 Utility Scale Solar + Storage $46-$102 Onshore Wind $24-$75 Gas Combined Cycle $39-$101 Nuclear $141-$22
Slide 8: Renewables Represent 95% of Capacity in Interconnection Queues in the US
CONTAINS FORWARD-LOOKING STATEMENTS Renewables Represent 95% of Capacity in Interconnection Queues in the US1 Capacity in GW Wind 14% Storage 40% Gas 3% 0.4% Nuclear 1% Other 42% Solar 1. Lawrence Berkeley National Laboratory, April 2024. 8
Slide 9: AES is Best Positioned to Serve Growing Demand for Renewables
CONTAINS FORWARD-LOOKING STATEMENTS AES is Best Positioned to Serve Growing Demand for Renewables AES’ Competitive Advantages Track Scale Innovation Record 24/7 CFE PJM Retail, 500 MW Delta, Mississippi, 185 MW Raceway 1, California, 205 MW 9
Slide 10: Clear & Growing Demand for US Renewables Led to Increasing Our Return Expectations
CONTAINS FORWARD-LOOKING STATEMENTS Clear & Growing Demand for US Renewables Led to Increasing Our Return1 Expectations to 12% to 15% AES’ Global Operating & Development Portfolio 66 GW 12.7 GW 34.9 GW Pipeline Backlog Operations à Includes at least partial à Signed contracts that are à 54% renewabl
Slide 11: Investment in US Utilities During Q1 2024 Increased ~100% Versus Q1 2023
CONTAINS FORWARD-LOOKING STATEMENTS Investment in US Utilities During Q1 2024 Increased ~100% Versus Q1 2023 à Received approval from the Indiana Utility Regulatory Commission (IURC) of rate case settlement à Closed acquisition of 106 MW Hoosier Wind project, providing long-term savings to customers
Slide 12: Q1 2024 Financial Review
CONTAINS FORWARD-LOOKING STATEMENTS Q1 2024 Financial Review à Q1 2024 results à 2024 guidance à 2024 Parent capital allocation à Our low-risk, highly efficient capital structure 12
Slide 13: Q1 2024 Financial Results
CONTAINS FORWARD-LOOKING STATEMENTS Q1 2024 Financial Results $ in Millions Adjusted EBITDA1 with Tax Attributes2 Ò Higher Adjusted EBITDA1 with Tax +$222 Attributes2 driven primarily by contributions from new businesses $863 $641 Q1 2023 Q1 2024 1. A non-GAAP financial measure. See Appendix for def
Slide 14: Q1 2024 Adjusted EPS Increased $0.28
CONTAINS FORWARD-LOOKING STATEMENTS Q1 2024 Adjusted EPS1 Increased $0.28 $ Per Share $0.07 $0.50 $0.22 ($0.01) Q1 2023: 23% Q1 2024: 8% $0.22 + New renewables Q1 2023 SBUs/Corp Parent Interest Tax 2 Q1 2024 1. A non-GAAP financial measure. See Appendix for definition and reconciliation to the neare
Slide 15: Q1 2024 Financial Results: Renewables
CONTAINS FORWARD-LOOKING STATEMENTS Q1 2024 Financial Results: Renewables $ in Millions Adjusted EBITDA1 with Tax Attributes2 Ò Higher Adjusted EBITDA1 with Tax Attributes2 driven primarily by +$191 contributions from new businesses $328 Ò Partially offset by lower renewable resource in Panama and B
Slide 16: Q1 2024 Financial Results: Utilities
CONTAINS FORWARD-LOOKING STATEMENTS Q1 2024 Financial Results: Utilities $ in Millions Adjusted PTC1 Ò Higher Adjusted PTC1 driven primarily by: +$3 • Favorable weather in the US; and $41 • Rate base growth $38 Ò Partially offset by interest expense on new borrowings to fund growth Q1 2023 Q1 2024 1
Slide 17: Q1 2024 Financial Results: Energy Infrastructure
CONTAINS FORWARD-LOOKING STATEMENTS Q1 2024 Financial Results: Energy Infrastructure $ in Millions Adjusted EBITDA1 Ò Relatively flat Adjusted EBITDA1 -$3 driven primarily by: • Prior-year favorable LNG transactions; and $363 $360 • Sell-down of gas and LNG businesses in Panama and the Dominican Rep
Slide 18: Q1 2024 Financial Results: New Energy Technologies
CONTAINS FORWARD-LOOKING STATEMENTS Q1 2024 Financial Results: New Energy Technologies $ in Millions Adjusted EBITDA1 Ò Higher Adjusted EBITDA1 driven primarily by improved results at Fluence ($17) ($26) $9 Q1 2023 Q1 2024 1. A non-GAAP financial measure. See Appendix for definition and reconciliati
Slide 19: Reaffirming 2024 Guidance
CONTAINS FORWARD-LOOKING STATEMENTS Reaffirming 2024 Guidance Adjusted EBITDA1 with Tax Attributes2 Adjusted EPS3 ($ in Millions) ($ Per Share) $3,550- $1.87- $3,950 $1.97 $3,423 $1.76 + New renewables + Adjusted + Utilities growth EBITDA1 with + Chile margins Tax Attributes2 − Prior year LNG driver
Slide 20: 2024 Parent Capital Allocation Plan
CONTAINS FORWARD-LOOKING STATEMENTS 2024 Parent Capital Allocation Plan: Expect 6% to 8% Parent Free Cash Flow1 Growth Through 20272 $ in Millions Discretionary Cash – Sources Discretionary Cash – Uses ($2,883-$3,283) ($2,883-$3,283) $900- $2,883- $10 Ending Cash Shareholder $1,100 $3,283 Dividend5
Slide 21: Substantial Majority of Outstanding Debt is Non-Recourse to AES Corp.
CONTAINS FORWARD-LOOKING STATEMENTS Substantial Majority of Outstanding Debt is Non- Recourse to AES Corp. Total Debt 18% Recourse Debt Construction to AES Corp. Debt1 13% 82% Non- Recourse Debt à Financing secured by underlying project(s) alone with no broader risk to AES Corp. Other Non-Recourse D
Slide 22: Capital-Efficient Renewables Funding Model
CONTAINS FORWARD-LOOKING STATEMENTS Capital-Efficient Renewables Funding Model Example of a US Renewables Project Sources & Uses (% of Project Capex) 100% 40% 40% 2.5% 10% 7.5% Total Project Capex Cash from Tax Amortizing DevCo Partner OpCo Partner AES Long-Term Attributes1 Non-Recourse Debt Equity
Slide 23: Key Takeaways
CONTAINS FORWARD-LOOKING STATEMENTS Key Takeaways Strong First Quarter Results, in Line with Expectations Resilient Business Model Strong & Accelerating Demand for Renewables 23
Slide 24: Appendix
CONTAINS FORWARD-LOOKING STATEMENTS Appendix Parent Only Cash Flow & Liquidity Slides 25-27 Recourse & Non-Recourse Debt Slides 28-31 Q1 Adjusted EPS1 Roll-Up Slide 32 Listed Subsidiaries & Public Filers Slides 33-34 AES Modeling Disclosures Slides 35-38 2024 SBU Modeling Ranges Slide 39 Currencies
Slide 25: Parent Sources and Uses of Liquidity
CONTAINS FORWARD-LOOKING STATEMENTS Parent Sources and Uses of Liquidity Q1 $ in Millions 2023 2024 Sources Total Subsidiary Distributions1 $356 $386 Proceeds from Asset Sales, Net $98 $15 Financing Proceeds, Net - - Increased/(Decreased) Credit Facility Commitments - - Total Returns of Capital Dist
Slide 26: Q1 FY 2024 Subsidiary Distributions
CONTAINS FORWARD-LOOKING STATEMENTS Q1 FY 2024 Subsidiary Distributions1 $ in Millions Subsidiary Distributions1 by SBU Q1 2024 Renewables $49 Utilities $19 Energy Infrastructure $318 New Energy Technologies - Corporate2 - Total $386 Top Subsidiary Distributions1 by Business Q1 2024 Business Amount
Slide 27: Reconciliation of Subsidiary Distributions and Parent Company Liquidity
CONTAINS FORWARD-LOOKING STATEMENTS Reconciliation of Subsidiary Distributions1 and Parent Company Liquidity1 $ in Millions Quarter Ended March 31, December 31, September 30, June 30, 2024 2023 2023 2023 Total Subsidiary Distributions1 to Parent & QHCs2 $386 $536 $311 $205 Total Return of Capital Di
Slide 28: Recourse Debt Summary
CONTAINS FORWARD-LOOKING STATEMENTS Recourse Debt Summary $ in Millions, Except Percentages; as of March 31, 2024 Principal Ratings SBU Balance Interest Rate Maturity Moody’s/S&P/Fitch Term SOFR + Parent Revolver Corporate $110 8/23/27 Baa3/BBB-/BBB- 1.750% Commercial Paper Corporate $720 Variable N
Slide 29: Q1 2024 Non-Recourse Debt Schedule
Q1 2024 Non-Recourse Debt1 Schedule $ in Millions, Except Percentages; as of March 31, 2024 Debt Maturity and Amortization Schedule March 31, March 31, 2024 Ownership 2024 Total 2029 and Total Balance SBU/Business Country/State Balance 2024 2025 2026 2027 2028 (Ownership- Percentage Thereafter Adjus
Slide 30: Q4 2023 Non-Recourse Debt Schedule
Q4 2023 Non-Recourse Debt1 Schedule $ in Millions, Except Percentages; as of March 31, 2024 Debt Maturity and Amortization Schedule March 31, March 31, 2024 Ownership 2024 Total 2029 And Total Balance SBU/Business Country/State Balance 2024 2025 2026 2027 2028 (Ownership- Percentage Thereafter Adjus
Slide 31: Substantial Majority of Interest Rate Exposure is Hedged
CONTAINS FORWARD-LOOKING STATEMENTS Substantial Majority of Interest Rate Exposure is Hedged Through Swaps or Contractual Arrangements $ in Millions, as of March 31, 2024 Recourse Debt Non-Recourse Recourse Debt Debt1 $5,330 Weighted Average 3.86% 5.80% 18% All-in Cost Weighted Average 3.8 years 8.0
Slide 32: Q1 Adjusted EPS Roll-Up
CONTAINS FORWARD-LOOKING STATEMENTS Q1 Adjusted EPS1 Roll-Up $ in Millions, Except Per Share Amounts Q1 2024 Q1 2023 Variance Adjusted PTC1 Renewables $135 $32 $103 Utilities $41 $38 $3 Energy Infrastructure $227 $211 $16 New Energy Technologies2 ($18) ($28) $10 Corporate ($49) ($49) - Total AES Adj
Slide 33: Q1 Adjusted PTC: Reconciliation to Public Financials of Listed Subsidiaries
CONTAINS FORWARD-LOOKING STATEMENTS Q1 Adjusted PTC1: Reconciliation to Public Financials of Listed Subsidiaries & Public Filers AES SBU/Reporting Country Utilities/US AES Company IPL DPL $ in Millions Q1 2024 Q1 2023 Q1 2024 Q1 2023 US GAAP Reconciliation AES Business Unit Adjusted Earnings1,2 $12
Slide 34: Q1 Adjusted EBITDA: Reconciliation to Public Financials of Listed Subsidiaries
CONTAINS FORWARD-LOOKING STATEMENTS Q1 Adjusted EBITDA1: Reconciliation to Public Financials of Listed Subsidiaries & Public Filers AES SBU/Reporting Country Renewables & Energy Infrastructure/Chile Renewables/Brazil AES Company AES Andes 2 AES Brasil2 $ in Millions Q1 2024 Q1 2023 Q1 2024 Q1 2023 U
Slide 35: Q1 2024 Modeling Disclosures
CONTAINS FORWARD-LOOKING STATEMENTS Q1 2024 Modeling Disclosures $ in Millions Interest Expense Interest Income Depreciation & Amortization Adjusted PTC 1 Consolidated Attributable Ownership- Consolidated Attributable Ownership- Consolidated Attributable Ownership- to NCI Adjusted to NCI Adjusted to
Slide 36: Q1 2024 Modeling Disclosures: Total Debt
CONTAINS FORWARD-LOOKING STATEMENTS Q1 2024 Modeling Disclosures $ in Millions Total Debt as of March 31, 2024 2027 Forecasted Total Debt Ownership- Ownership- Consolidated Attributable to NCI Consolidated Attributable to NCI Adjusted Adjusted Renewables* $9,269 ($2,374) $6,895 $16,200-$17,800 ($6,0
Slide 37: Q1 2024 Modeling Disclosures: Cash
CONTAINS FORWARD-LOOKING STATEMENTS Q1 2024 Modeling Disclosures $ in Millions Cash & Cash Equivalents, Restricted Cash, Short-Term Investments, Debt Service Reserves & Other Deposits Consolidated Attributable to NCI Ownership-Adjusted Renewables $1,244 ($404) $840 Utilities1 $503 ($137) $366 DPL $2
Slide 38: AES Modeling Disclosures
CONTAINS FORWARD-LOOKING STATEMENTS AES Modeling Disclosures $ in Millions 2024 Subsidiary Distributions (a) $1,500-$1,600 Cash Interest (b) ($195) Corporate / Parent-Funded SBU Overhead ($220) Business Development/Taxes ($35) Cash for Development, General & Administrative and Tax (c) ($255) Parent
Slide 39: 2024 SBU Modeling Ranges
CONTAINS FORWARD-LOOKING STATEMENTS 2024 SBU Modeling Ranges $ in Millions 2024 Adjusted EBITDA1 2023 Adjusted Modeling Ranges as of Drivers of Growth Versus 2023 EBITDA1 2/27/24 + New projects Renewables $645 $670-$750 − Colombia margins Utilities $678 $690-$770 + Rate base growth − Prior year LNG
Slide 40: Limited Exposure to Fluctuations in Foreign Currency
CONTAINS FORWARD-LOOKING STATEMENTS Limited Exposure to Fluctuations in Foreign Currency 2024-2026 Cumulative Exposure Annualized Impact1 of 10% USD Appreciation on Composition by Currency Adjusted PTC2,3 After Hedging Non-USD Currencies $ in Millions Argentine Peso (ARS) ($12) Euro (EUR) ($7) EUR,
Slide 41: 2024 Guidance Estimated Sensitivities
CONTAINS FORWARD-LOOKING STATEMENTS 2024 Guidance Estimated Sensitivities 10% appreciation of USD against following 2024 currencies is forecasted to have the following Adjusted EPS impacts: Average Rate Sensitivity 1 Argentine Peso (ARS) 1157.57 ~ ($0.02) Brazilian Real (BRL) 5.07 Less than ($0.005)
Slide 42: PPAs Signed in YTD 2024
CONTAINS FORWARD-LOOKING STATEMENTS PPAs Signed in YTD 2024 AES Equity PPA Length Project Location Technology Gross MW Expected COD1 Interest (Years) Solar 500 Bellefield 2 US-CA 75% 2H 2026 15 Energy Storage 500 West Camp Expansion US-AZ Wind 100 75% 2H 2025 20 Madison US-VA Solar 63 75% 2H 2024 15
Slide 43: Reconciliation of Q1 Adjusted PTC and Adjusted EPS
CONTAINS FORWARD-LOOKING STATEMENTS Reconciliation of Q1 Adjusted PTC and Adjusted EPS1 Q1 2024 Q1 2023 Per Share (Diluted) Net Per Share (Diluted) Net Net of NCI2 Net of NCI2 $ in Millions, Except Per Share Amounts of NCI2 of NCI2 Income from Continuing Operations, Net of Tax, Attributable to AES a
Slide 44: Reconciliation of Q1 Adjusted EBITDA
CONTAINS FORWARD-LOOKING STATEMENTS Reconciliation of Q1 Adjusted EBITDA1 $ in Millions Q1 2024 Q1 2023 Net Income $278 $189 Income Tax Expense (Benefit) ($16) $72 Interest Expense $357 $330 Interest Income ($105) ($123) Depreciation and Amortization $312 $273 EBITDA $826 $741 Less: Adjustment for N
Slide 45: Reconciliation of 2020 Adjusted PTC and Adjusted EPS
CONTAINS FORWARD-LOOKING STATEMENTS Reconciliation of 2020 Adjusted PTC1 and Adjusted EPS1 FY 2020 $ in Millions, Except Per Share Amounts Net of NCI2 Per Share (Diluted) Net of NCI2 Income (Loss) from Continuing Operations, Net of Tax, Attributable to AES and Diluted EPS $43 $0.06 Add: Income Tax E
Slide 46: Reconciliation of Parent Free Cash Flow
CONTAINS FORWARD-LOOKING STATEMENTS Reconciliation of Parent Free Cash Flow1 $ in Millions 2023 2022 2021 2020 Net Cash Provided by Operating Activities at the Parent Company2 $608 $434 $570 $434 Subsidiary Distributions to QHCs Excluded from Schedule 13 $247 $257 $47 $198 Subsidiary Distributions C
Slide 47: Assumptions
CONTAINS FORWARD-LOOKING STATEMENTS Assumptions Forecasted financial information is based on certain material assumptions. Such assumptions include, but are not limited to: (a) no unforeseen external events such as wars, depressions, or economic or political disruptions occur; (b) businesses continu
Slide 48: Definitions
CONTAINS FORWARD-LOOKING STATEMENTS Definitions Adjusted EBITDA, a non-GAAP measure, is defined by the Company as earnings before interest income and expense, taxes, depreciation and amortization, adjusted for the impact of NCI, interest, taxes, depreciation and amortization of our equity affiliates