AES CORP

Review of Consolidated Results of Operations (Unaudited)

Components of Revenue, Cost of Sales, and Operating Margin —Revenue includes revenue earned from the sale of energy from our utilities and the production and sale of energy from our generation plants, which are

51 | The AES Corporation | September 30, 2025 Form 10-Q

classified as regulated and non-regulated, respectively, on the Condensed Consolidated Statements of Operations. Revenue also includes the gains or losses on derivatives associated with the sale of electricity.

Cost of sales includes costs incurred directly by the businesses in the ordinary course of business. Examples include electricity and fuel purchases, operations and maintenance costs, depreciation and amortization expenses, bad debt expense and recoveries, and general administrative and support costs (including employee-related costs directly associated with the operations of the business). Cost of sales also includes the gains or losses on derivatives associated with the purchase of electricity or fuel.

Operating margin is defined as revenue less cost of sales.

Consolidated Revenue and Operating Margin

Three Months Ended September 30, 2025

Revenue

Consolidated Revenue — Revenue increased $62 million, or 2%, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, driven by:

•$144 million at Utilities mainly driven by a $131 million increase in transmission, distribution, rider, and wholesale revenues mainly due to higher rates and $20 million due to higher net retail demand mainly driven by favorable weather; and

•$63 million at Renewables mainly driven by a $241 million increase due to the results of AES Andes moving to Renewables in 2025 as described below, net of a current year increase in contracted sales in Chile, and $112 million due to new projects in service; partially offset by a $201 million negative impact from the sale of AES Brasil and $85 million net lower spot sales and prices, mainly at Colombia.

This favorable impact was partially offset by decreases of:

•$131 million at Energy Infrastructure driven by $225 million of prior year revenue related to the AES Andes portfolio, which is reported in the Renewables SBU beginning in 2025 following the sale and expiration of certain coal-related assets and contracts and $21 million due to prior year unrealized and realized derivative gains; partially offset by $90 million higher fuel prices and transportation costs passed through to the offtaker, net of foreign exchange impact, and $21 million due to higher availability in 2025; and

•$13 million at Corporate, Other and Eliminations mainly driven by higher eliminations of inter-segment revenue.

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Operating Margin

Consolidated Operating Margin — Operating margin increased $13 million, or 2%, for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, driven by:

•$32 million at Utilities primarily driven by an increase of $47 million due to transmission and rider revenues and deferral of cost in the current year; partially offset by a $9 million increase in depreciation expense from additional assets placed in service, and a $9 million increase in fixed cost mainly driven by higher property taxes;

•$24 million at Renewables mainly driven by an $80 million positive impact from new businesses and a $20 million impact from AES Andes moving to Renewables in 2025, as described below; partially offset by a $66 million impact from the sale of AES Brasil and a $14 million increase in fixed costs primarily due to an accelerated growth plan; and

•$15 million at Corporate, Other and Eliminations mainly driven by higher charge-outs of IT and other costs to the businesses and higher premiums earned by AGIC.

These favorable impacts were partially offset by a decrease of $57 million at Energy Infrastructure mainly driven by $29 million of lower generation due to dispatch, $20 million of prior year operating margin at AES Andes, which is reported in the Renewables SBU beginning in 2025, and $9 million driven by lower LNG sales; partially offset by $12 million of higher contract margin driven by lower fuel costs.

Nine Months Ended September 30, 2025

Revenue

Consolidated Revenue — Revenue decreased $184 million, or 2%, for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, driven by:

•$576 million at Energy Infrastructure primarily driven by $697 million of prior year revenue related to the AES Andes portfolio, which is reported in the Renewables SBU beginning in 2025 following the sale and expiration of certain coal-related assets and contracts; $171 million of prior year revenues from the monetization of the Warrior Run coal plant PPA, and $145 million due to prior year unrealized and realized derivative gains; partially offset by $272 million higher fuel prices and transportation costs passed through to the offtaker, $126 million higher CO 2 purchases passed through due to higher production, $24 million due to higher availability, and $16 million of higher LNG sales and terminal fees; and

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•$56 million at Corporate, Other and Eliminations mainly driven by higher eliminations of inter-segment revenue.

These unfavorable impacts were partially offset by increases of:

•$338 million at Utilities mainly driven by a $306 million increase in transmission, distribution, rider, and wholesale revenues mainly due to higher rates and $42 million due to higher net retail demand mainly driven by favorable weather; partially offset by $6 million of lower Fuel Adjustment Charge rider revenue; and

•$111 million at Renewables mainly driven by a $623 million increase due to the results of AES Andes moving to Renewables in 2025 as described above, net of a current year decrease in regulated contract sales, and $234 million due to new projects in service; partially offset by a $540 million negative impact from the sale of AES Brasil, $174 million net lower spot sales and prices, mainly at Colombia, and a $48 million negative impact related to changes in mark-to-market of energy derivatives.

Operating Margin

Consolidated Operating Margin — Operating margin decreased $265 million, or 14%, for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, driven by:

•$344 million at Energy Infrastructure mainly driven by $160 million higher prior year revenues from the monetization of the Warrior Run coal plant PPA, $117 million due to prior year net derivative gains as part of our commercial hedging strategy, $42 million of prior year operating margin related to the AES Andes portfolio, which is reported in the Renewables SBU beginning in 2025 following the sale and expiration of certain coal-related assets and contracts, $28 million of lower generation mainly driven by dispatch, $20 million of one-time costs due to restructuring, and $17 million due to the prior year selldown of Amman East and IPP4 in Jordan; partially offset by $45 million driven by higher availability in 2025 due to lower maintenance.

These unfavorable impacts were partially offset by increases of:

•$47 million at Utilities mainly driven by $126 million due to higher retail rates as a result of the 2024 Base Rate Order, higher transmission and rider revenues, and higher demand due to the impact of weather; partially offset by a $32 million increase in depreciation expense from additional assets placed in service, a $17 million impact of planned outages, a $16 million increase in fixed cost mainly driven by higher property taxes, and $15 million higher credit losses;

•$19 million at Renewables mainly driven by a $147 million impact from new businesses, $42 million impact of the results of AES Andes moving to Renewables in 2025, as described above, $36 million due to higher generation in Panama as a result of better hydrological conditions during the first quarter of 2025, and a $26 million increase in Colombia due to increased availability and lower spot prices on energy purchases in the second quarter of 2025. These positive impacts were partially offset by a $150 million negative impact from the sale of AES Brasil, a $46 million negative impact related to changes in mark-to-market of energy derivatives, a $33 million increase in fixed costs primarily related to an accelerated growth plan, and $17 million of one-time costs due to restructuring; and

•$14 million at Corporate, Other and Eliminations mainly driven by higher premiums earned by AGIC.

See Item 2.—Management’s Discussion and Analysis of Financial Condition and Results of Operations—SBU Performance Analysis of this Form 10-Q for additional discussion and analysis of operating results for each SBU.

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Consolidated Results of Operations — Other

General and administrative expenses

General and administrative expenses decreased $11 million, or 19%, to $46 million for the three months ended September 30, 2025, compared to $57 million for the three months ended September 30, 2024, primarily reflecting a $7 million decrease in people costs driven by the Company’s restructuring program, and $1 million lower IT related costs.

General and administrative expenses decreased $26 million, or 13%, to $172 million for the nine months ended September 30, 2025, compared to $198 million for the nine months ended September 30, 2024, primarily reflecting a $25 million decrease in business development costs and $8 million decrease in people costs, both driven by the Company’s restructuring program, and $3 million lower IT related costs, partially offset by $14 million of one-time restructuring-related charges.

Interest expense

Interest expense decreased $31 million, or 8%, to $348 million for the three months ended September 30, 2025, compared to $379 million for the three months ended September 30, 2024. This decrease is primarily due to a $53 million impact from the sale of AES Brasil in October 2024; partially offset by lower capitalized interest at the Renewables SBU due to fewer projects under construction.

Interest expense decreased $83 million, or 7%, to $1,042 million for the nine months ended September 30, 2025, compared to $1,125 million for the nine months ended September 30, 2024. This decrease is primarily due to a $177 million impact from the sale of AES Brasil in October 2024 and lower debt balances at the Energy Infrastructure SBU; partially offset by lower capitalized interest at the Renewables SBU due to fewer projects under construction, and a higher weighted average interest rate and debt balance at the Parent Company.

Interest income

Interest income decreased $43 million, or 36%, to $76 million for the three months ended September 30, 2025, compared to $119 million for the three months ended September 30, 2024, primarily due to prior year interest recognized of $33 million on the Stabilization Fund receivables in Chile and a $14 million impact from the sale of AES Brasil in October 2024.

Interest income decreased $97 million, or 31%, to $215 million for the nine months ended September 30, 2025, compared to $312 million for the nine months ended September 30, 2024, primarily due to a $42 million impact from the sale of AES Brasil in October 2024, prior year interest recognized of $34 million on the Stabilization Fund receivables in Chile, and a $20 million decrease at Argentina due to lower short-term investments at lower rates.

Loss on extinguishment of debt

Loss on extinguishment of debt increased $4 million, or 36%, to $15 million for the nine months ended September 30, 2025, compared to $11 million for the nine months ended September 30, 2024 primarily driven by a $5 million loss due to prepayment of senior notes at Mercury Chile, a $5 million loss related to a revolver amendment at AES Clean Energy, and a $4 million loss related to a prepayment at AES Andes in the current year; partially offset by a prior year loss of $8 million due to a prepayment at AES Andes.

See Note 8—Obligations included in Item 1.—Financial Statements of this Form 10-Q for further information.

Other income and expense

Other income decreased $45 million, or 70%, to $19 million for the three months ended September 30, 2025, compared to $64 million for the three months ended September 30, 2024, mainly due to a $13 million decrease in gains on remeasurement of contingent consideration primarily on projects acquired at AES Clean Energy and a $12 million impact from an indexation adjustment of Stabilization Fund receivables at AES Andes in prior year, partially offset by a $10 million gain at AES Andes corresponding to the write-off of contingent consideration for a renewables development project determined to be no longer viable.

Other income decreased $63 million, or 53%, to $57 million for the nine months ended September 30, 2025, compared to $120 million for the nine months ended September 30, 2024, mainly due to a $12 million impact from an indexation adjustment of Stabilization Fund receivables at AES Andes in prior year, a $7 million decrease in AFUDC at our U.S. utilities in the current year, and the prior year impacts of a $5 million gain on commencement of a sales-type lease on land, $5 million in insurance proceeds primarily related to property damage at AES Andes,

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and a $5 million gain on contract termination, partially offset by a $10 million gain at AES Andes corresponding to the write-off of contingent consideration for a renewables development project determined to be no longer viable.

Other expense decreased $5 million, or 16%, to $26 million for the three months ended September 30, 2025, compared to $31 million for the three months ended September 30, 2024, mainly due to a $16 million decrease in losses on remeasurement of contingent consideration primarily on projects acquired at AES Clean Energy; partially offset by $13 million in current period losses on commencement of sales-type leases at AES Clean Energy and AES Renewable Holdings.

Other expense increased $220 million to $373 million for the nine months ended September 30, 2025, compared to $153 million for the nine months ended September 30, 2024, mainly due to an increase of $149 million in losses on commencement of sales-type leases at AES Clean Energy and AES Renewable Holdings, a $48 million loss on remeasurement of our investment in 5B, accounted for using the measurement alternative, and a $20 million increase in losses on remeasurement of contingent consideration primarily on projects acquired at AES Clean Energy; partially offset by a $20 million loss recognized in the prior year related to legal expenses and other direct costs associated with the troubled debt restructuring at AES Puerto Rico.

See Note 15—Other Income and Expense included in Item 1.—Financial Statements of this Form 10-Q for further information.

Gain (loss) on disposal and sale of business interests

Gain on disposal and sale of business interests increased $27 million, or 63%, to $70 million for the nine months ended September 30, 2025 compared to $43 million for nine months ended September 30, 2024. This was primarily due to a $70 million gain on the selldown of Dominican Republic Renewables and a $10 million loss in the prior year on the selldown of Amman East and IPP4 in Jordan, which are now accounted for as equity method investments. This was partially offset by a $52 million gain in the prior year on dilution of AES’ ownership interest in Uplight as a result of the AutoGrid acquisition.

See Note 7—Investments in and Advances to Affiliates and Note 18—Held-for-Sale and Dispositions for further information.

Asset impairment reversals (expense)

Asset impairment expense decreased $43 million, or 58%, to $31 million for the three months ended September 30, 2025, compared to $74 million for the three months ended September 30, 2024. This decrease was primarily the result of prior year impairment expense of $55 million and $11 million at AES Brasil and Mong Duong, respectively, associated with the held-for-sale classification. This was partially offset by higher impairment expense of $16 million and $8 million at AES Andes and AES Clean Energy Development, respectively, due to the write-off of project development intangibles and capitalized development costs for projects that were determined to be no longer viable.

Asset impairment expense decreased $232 million to a $74 million asset impairment reversal for the nine months ended September 30, 2025, compared to a $158 million expense for the nine months ended September 30, 2024. This decrease was primarily the result of a $243 million increase in the carrying value of the Mong Duong asset group due to the derecognition of a valuation allowance on the loan receivable accounted for under ASC 310 and the elimination of net estimated costs to sell upon reclassifying Mong Duong from held-for-sale to held and used, and lower impairment expense of $37 million and $80 million at Mong Duong and AES Brasil, respectively, associated with the held-for-sale classification. This was partially offset by higher impairment expense of $111 million and $16 million at AES Clean Energy Development and AES Andes, respectively, due to the write-off of project development intangibles and capitalized development costs for projects that were determined to be no longer viable, including $51 million at AES Clean Energy Development in the current year due to the right sizing of our development company as part of the restructuring program initiated in February 2025.

See Note 16—Asset Impairment Expense and Note 21—Restructuring included in Item 1.—Financial Statements of this Form 10-Q for further information.

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Foreign currency transaction gains (losses)

(1)Includes losses of $8 million and $15 million on foreign currency derivative contracts for the three months ended September 30, 2025, and 2024, respectively, and losses of $22 million and gains of $94 million on foreign currency derivative contracts for the nine months ended September 30, 2025,and 2024, respectively.

The Company recognized net foreign currency transaction losses of $19 million for the three months ended September 30, 2025, primarily driven by unrealized losses due to the depreciation of the Argentine peso and net unrealized losses in Chile due to the appreciation of the Colombian peso, which negatively impacted foreign currency forwards, partially offset by unrealized gains due to the depreciation of the Chilean peso.

The Company recognized net foreign currency transaction losses of $57 million for the nine months ended September 30, 2025, primarily driven by unrealized losses due to the depreciation of the Argentine peso and unrealized losses in Chile due to the appreciation of the Colombian peso, which negatively impacted foreign currency forwards, and the appreciation of the Chilean peso.

The Company recognized net foreign currency transaction losses of $28 million for the three months ended September 30, 2024, primarily driven by unrealized losses on swaps and options denominated in the Brazilian real and unrealized losses due to the depreciation of the Chilean peso.

The Company recognized net foreign currency transaction gains of $2 million for the nine months ended September 30, 2024, primarily driven by unrealized gains on swaps and options denominated in the Brazilian real; partially offset by unrealized losses due to the depreciation of the Chilean peso.

Other non-operating expense

Other non-operating expense was $32 million for the three months ended September 30, 2025 due to an impairment of the Uplight equity method investment and adjustments to the convertible notes and related embedded derivative feature included within the convertible notes for Uplight as a result of observable market factors.

Other non-operating expense was $42 million for the nine months ended September 30, 2025 due to the $32 million impact from Uplight mentioned above and a $10 million other-than-temporary impairment of convertible notes for 5B as a result of an observable price change from a transaction between 5B and a third-party.

See Note 7—Investments in and Advances to Affiliates included in Item 1.—Financial Statements of this Form 10-Q for further information.

Income tax benefit (expense)

Income tax benefit was $226 million for the three months ended September 30, 2025, compared to income tax expense of $103 million for the three months ended September 30, 2024. The Company’s effective tax rates were (69)% and 31% for the three months ended September 30, 2025 and 2024, respectively. Both the current and prior year effective tax rates were impacted by the benefits associated with U.S. investment tax credits (“ITCs”), partially offset by tax expense resulting from allocations of losses to tax equity investors on renewables projects.

Income tax benefit was $42 million for the nine months ended September 30, 2025, compared to income tax expense of $52 million for the nine months ended September 30, 2024. The Company’s effective tax rates were (12)% and 7% for the nine months ended September 30, 2025 and 2024, respectively. Both rates were impacted by the ITC benefits and tax equity allocations described above. Additionally, the 2025 effective tax rate was impacted by the reclassification of Mong Duong from held-for-sale to held and used, while the 2024 effective tax rate reflected the restructuring of a foreign holding company, as well as the AES Brasil held-for-sale reclassification.

Our effective tax rate reflects the tax effect of significant operations outside the U.S., which are generally taxed at rates different than the U.S. statutory rate of 21%. Furthermore, our foreign earnings may be subjected to incremental U.S. taxation under the GILTI rules and incremental foreign taxation under Pillar 2. A future proportionate change in the composition of income before income taxes from foreign and domestic tax jurisdictions could impact our periodic effective tax rate.

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Net equity in earnings (losses) of affiliates

Net equity in earnings of affiliates increased $10 million to $1 million for the three months ended September 30, 2025, compared to losses of $9 million for the three months ended September 30, 2024. This increase was primarily driven by higher earnings from Fluence of $9 million, mainly due to an increase in the volume of BESS products fulfilled.

Net equity in losses of affiliates increased $34 million to $55 million for the nine months ended September 30, 2025, compared to $21 million for the nine months ended September 30, 2024. This increase was primarily driven by lower earnings from sPower of $35 million, mainly due to lower contributions from renewables projects that came online.

See Note 7—Investments in and Advances to Affiliates included in Item 1.—Financial Statements of this Form 10-Q for further information.

Loss from disposal of discontinued businesses

Net loss from disposal of discontinued businesses was $37 million for the nine months ended September 30, 2025, compared to $7 million for the nine months ended September 30, 2024, primarily related to alleged damages plus interest, as well as potential future damages, under a dispute related to representations and warranties in the 2016 share purchase agreement for Sul in the current year.

See Note 22—Discontinued Operations included in Item 1.—Financial Statementsof this Form 10-Q for further information.

Net loss attributable to noncontrolling interests and redeemable stock of subsidiaries

Net loss attributable to noncontrolling interests and redeemable stock of subsidiaries decreased $167 million, or 58%, to $122 million for the three months ended September 30, 2025, compared to $289 million for the three months ended September 30, 2024. This decrease was primarily due to a decrease of $165 million at AES Clean Energy Development and AES Renewable Holdings primarily attributable to lower allocation of losses to tax equity investors on projects placed in service.

Net loss attributable to noncontrolling interests and redeemable stock of subsidiaries decreased $270 million, or 48%, to $296 million for the nine months ended September 30, 2025, compared to $566 million for the nine months ended September 30, 2024. This decrease was primarily due to a decrease of $203 million at AES Clean Energy Development primarily attributable to lower allocation of losses to tax equity investors on projects placed in service, $135 million at Mong Duong mostly driven by the derecognition of a valuation allowance on the loan receivable accounted for under ASC 310 upon reclassifying Mong Duong from held-for-sale to held and used, and $39 million related to the sale of AES Brasil. This was partially offset by an increase of $54 million at AES Indiana primarily attributable to higher allocation of losses to tax equity investors on BESS projects placed in service, and $52 million due to day-one losses on the commencement of sales-type leases at AES Clean Energy Development.

Net income attributable to The AES Corporation

Net income attributable to The AES Corporation increased $135 million, or 27%, to $639 million for the three months ended September 30, 2025, compared to $504 million for the three months ended September 30, 2024. This increase was primarily due to:

•Higher income tax benefit of $334 million due to a lower effective tax rate, mainly driven by tax credit transfers;

•Higher margins from the Renewables SBU of $23 million primarily due to increased revenue from new projects;

•Higher margins from the Utilities SBU of $16 million due to higher retail rates;

•Lower general and administrative expenses of $13 million after implementation of the restructuring program;

•Lower foreign currency translation losses of $11 million primarily related to depreciation of the Argentine peso and appreciation of the Colombian peso; and

•Higher margins at AGIC of $10 million due to a decrease in reserve for losses and increase in insurance premiums earned.

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These increases were partially offset by:

•Lower contributions from renewables projects placed in service in the current year of $155 million;

•Lower other income of $34 million primarily related to decreased gains on remeasurement of contingent consideration primarily on projects acquired at AES Clean Energy and an indexation adjustment of Stabilization Fund receivables at AES Andes in the prior year, partially offset by a write-off of contingent consideration for a renewables project no longer viable at AES Andes;

•Lower interest income of $33 million primarily due to prior year interest recognized on Stabilization Fund receivables in Chile and the sale of AES Brasil;

•Other non-operating expense of $32 million due to an impairment of the Uplight equity method investment and adjustments to the convertible notes and related embedded derivative feature within the convertible notes for Uplight; and

•Higher loss from disposal of discontinued businesses of $30 million primarily due to a dispute in the current year related to representations and warranties in the 2016 share purchase agreement for Sul.

Net income attributable to The AES Corporation decreased $622 million, or 51%, to $590 million for the nine months ended September 30, 2025, compared to $1,212 million for the nine months ended September 30, 2024. This decrease was primarily due to:

•Lower margins from the Energy Infrastructure SBU of $298 million, excluding one-time restructuring costs, primarily due to higher prior year revenues from the monetization of the Warrior Run coal plant PPA and prior year net derivative gains as part of our commercial hedging strategy;

•Higher other expense of $164 million primarily related to day-one losses on commencement of sales-type leases at AES Clean Energy Development;

•Lower contributions from renewables projects placed in service in the current year of $162 million;

•Higher impairments of $81 million at AES Clean Energy Development due to the write-off of project development intangibles and capitalized development costs for projects that were determined to be no longer viable;

•Lower interest income of $56 million primarily due to the sale of AES Brasil, prior year interest recognized on Stabilization Fund receivables in Chile, and lower short-term investments at lower rates in Argentina;

•Higher foreign currency translation losses of $56 million primarily related to depreciation of the Argentine peso and appreciation of the Colombian peso;

•Lower other income of $51 million primarily related to a prior year indexation adjustment of Stabilization Fund receivables at AES Andes, a decrease in AFUDC at our U.S. utilities, and the prior year impacts of a gain on commencement of a sales-type lease on land, insurance proceeds, and a gain on contract termination, partially offset by a write-off of contingent consideration for a renewables project no longer viable at AES Andes;

•One-time restructuring costs of $50 million; and

•Other non-operating expense of $42 million due to an impairment of the Uplight equity method investment and adjustments to the convertible notes and related embedded derivative feature included within the convertible notes for Uplight, as well as an other-than-temporary impairment of convertible notes for 5B.

These decreases were partially offset by:

•Derecognition of a valuation allowance on the loan receivable accounted for under ASC 310 upon reclassifying Mong Duong from held-for-sale to held and used of $127 million;

•Higher income tax benefit of $105 million due to a lower effective tax rate, mainly driven by tax credit transfers; and

•Higher margins from the Renewables SBU of $74 million, excluding one-time restructuring costs, primarily due to increased revenue from new projects.