AES CORP

In 2025, AES delivered on its strategic and financial objectives. We completed construction of 3.2 GW of renewables and energy storage, and signed long-term PPAs for an additional 4.0 GW of new renewable energy. See Overview of our Strategy included in Item 1.—Business of this Form 10-K for further information.

Compared with last year, net income decreased $640 million, from $802 million to $162 million. This decrease is mainly driven by the prior year gain on sale of AES Brasil, lower earnings at the Energy Infrastructure SBU primarily due to higher prior year revenues from the monetization of the Warrior Run coal plant PPA and lower net derivative gains, higher day-one losses on the commencement of sales-type leases at AES Clean Energy, and higher unrealized foreign currency losses; partially offset by income tax benefit mainly driven by tax credit transfers compared to prior year income tax expense, higher contributions from new projects and better hydrology in the Renewables SBU, and higher retail margin at the Utilities SBU under the 2024 Base Rate Order at AES Indiana and the 2024 DRC Settlement at AES Ohio.

Adjusted EBITDA, a non-GAAP measure, increased $232 million, from $2,639 million to $2,871 million, mainly driven by higher contributions from new projects and better hydrology in the Renewables SBU, and higher retail margin at the Utilities SBU; partially offset by higher prior year revenues from the monetization of the Warrior Run coal plant PPA in the Energy Infrastructure SBU, the sale of AES Brasil in the prior year, and the impact of the AES Ohio and AGIC sell-downs.

Adjusted EBITDA with Tax Attributes, a non-GAAP measure, increased $459 million, from $3,952 million to $4,411 million, primarily due to the drivers above as well as higher realized tax attributes driven by higher income from tax credit transfers.

Compared with last year, diluted earnings per share from continuing operations decreased $1.06, from $2.37 to $1.31. This decrease is mainly driven by the prior-year gain on sale of AES Brasil, lower earnings at the Energy Infrastructure SBU primarily due to higher prior year revenues from the monetization of the Warrior Run coal plant PPA and lower net derivative gains, higher day-one losses on commencement of sales-type leases at AES Clean Energy, higher unrealized foreign currency losses, and impairments related to Uplight. These were partially offset by higher income tax benefit mainly driven by tax credit transfers compared to prior year income tax expense, and contributions from new projects and better hydrology in the Renewables SBU.

Adjusted EPS, a non-GAAP measure, increased $0.20 from $2.14 to $2.34, mainly driven by a lower adjusted tax rate, including the impact of tax credit transfers, and higher realized tax attributes and retail margin at the Utilities SBU; partially offset by lower realized tax attributes at the Renewables SBU due to timing of tax attribute recognition and lower contributions from the Energy Infrastructure SBU primarily due to higher prior year revenues from the monetization of the Warrior Run coal plant PPA.