AES CORP

Restatement Background

In this Annual Report on Form 10-K for the year ended December 31, 2024 (the "2024 Form 10-K"), The AES Corporation is restating its previously issued (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statements of Comprehensive Income, and (iv) Condensed Consolidated Statements of Changes in Equity as of and for the three and six months ended June 30, 2024, and as of and for the three and nine months ended September 30, 2024.

During the normal course of the preparation of its audited consolidated financial statements for the year ended December 31, 2024, and not related to the Form 12(b)-25 that was filed, the Company determined that we used incomplete data in the estimation of fair value of the net assets of AES Brasil, which was used in the calculation of impairment expense after AES Brasil was classified as held-for-sale in Q2 2024. The result of which caused an overstatement of impairment expense that was calculated in Q2 2024 and Q3 2024. The Company evaluated the adjustments to impairment expense recorded in Q2 and Q3 2024, and after assessing the materiality of such adjustments, is restating its financial statements for each of the quarterly periods ended June 30, 2024 and September 30, 2024 in this 2024 Form 10-K for the year ended December 31, 2024. The correct held-for-sale value was used in the calculation of the gain on the AES Brasil disposal group recorded in Q4 2024.

Due to the discovery of this error, the Company's management identified a material weakness in the Company's internal control over financial reporting that existed at December 31, 2024. The company did not design effective controls over management's review of the disposition of AES Brasil, a complex non-routine transaction; specifically, due to the use of incomplete data used in the impairment calculation of the AES Brasil disposal group.

We have not filed, and do not intend to file, any amendments to our previously filed Quarterly Reports on Form 10-Q for the restated periods. Accordingly, investors should rely only on the financial information and other disclosures regarding the restated periods in this Form 10-K or in our future filings with the SEC as applicable, and not any previously issued or filed reports, earnings releases, or investor presentations. See Note 30—Restatement (unaudited) in the notes to the audited consolidated financial statements included in Item 8.—Financial Statements of this Form 10-K.

Restatement Overview

In connection with the restatement of the prior quarterly financial statements, the Company, in the 2024 Form 10-K:

(i) restated its unaudited Condensed Consolidated Balance Sheets as of June 30, 2024 and September 30, 2024; Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2024 and for the three and nine months ended September 30, 2024; Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2024 and for the three and nine months ended September 30, 2024; and Condensed Consolidated Statements of Changes in Equity for the six months ended June 30, 2024 and for the nine months ended September 30, 2024, in Note 30—Restatement (unaudited) to the unaudited consolidated financial statements, in Item 8.—Financial Statementsof this Form 10-K;

(ii) added a risk factor relating to its material weakness in its internal control over financial reporting in Item 1A of this Form 10-K; and

(iii) updated its disclosures regarding its controls and procedures in Item 9A.—Controls and Procedures of this Form 10-K.

The financial information that has been previously filed or otherwise reported for the prior quarterly financial statements is superseded by the information in this Annual Report on Form 10-K. See Note 30—Restatement (unaudited) in the notes to the audited consolidated financial statements in Item 8.—Financial Statements of this Form 10-K for additional information on the restatement and the related financial statement impact.

Internal Control Considerations

In connection with the restatement described above, management has determined that the overstatement of impairment expense and related impact on the gain on disposition of the AES Brasil disposal group resulted in a material weakness in internal control over financial reporting as of December 31, 2024. For a discussion of management's considerations of the Company's disclosure controls and procedures, internal control over financial reporting, and material weakness identified, refer to Item 9A.—Controls and Procedures of this Form 10-K.