AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-3: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 6/6 · 31/10/2026
Moat50
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 2/4 · The sole operating Dominican LNG import terminal and substantial existing generation establish a localized infrastructure advantage. Replication economics and portfolio-wide superiority remain unproven.
durability · 2/4 · Operating infrastructure and 575 MW of contracted generation support persistence, but contract duration, terminal exclusivity rights and competitive expansion constraints are undisclosed.
customer dependency · 2/4 · National supply significance, the sole import terminal and contracted generation indicate dependency indirectly. They do not demonstrate customer-specific switching costs or renewal rates.
erosion resilience · 2/4 · Existing infrastructure and contracts provide protection, while competitive generation and international contract-enforcement exposure limit it. Generic risks are not treated as realized competitive losses.
Pricing power44
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 2/4 · Indiana and Ohio obtained concrete annual basic-rate authorizations, demonstrating regulatory pricing progress. Some new rates remain refundable, and the passages do not establish incremental billed revenue or collections.
retention · 2/4 · Contracted Dominican capacity and long-term Puerto Rico PPAs demonstrate committed demand and contractual persistence indirectly. Renewal rates are absent, and Puerto Rico counterparty financial challenges weaken the economic security of that demand.
margin resilience · 2/4 · International inflation indexation and regulated utility O&M recovery provide contractual cost protection. Generally unindexed U.S. generation contracts and recovery timing make resilience mixed; actual margin stability is not demonstrated.
contractual freedom · 1/4 · Regulatory rate approvals and existing contract indexation limit unilateral repricing. Management seeks to incorporate financing costs into new PPAs, but that intention does not demonstrate successful pass-through or freedom to reset existing contracts.
Predictability45
5 consecutive published annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 50.00
- Revenue growth volatility (pp)
- 6.31
- Positive FCF years (%)
- 0.00
- FCF margin volatility (pp)
- 14.17
- observedAnnualPeriods
- 5.00
Financial strength0
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, an original issuer-reported unadjusted EBIT reconciled to net income, income tax and signed net interest, or reported pretax profit plus reported gross interest expense. Reported EBIT is distinct from GAAP operating income and gross interest. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 0.00
- netDebtEbitGrade
- 0.00
- interestCoverageGrade
- 0.48
- currentRatioGrade
- 1.25
- Net debt / operating income (x)
- 19.24
- Current ratio (x)
- 0.77
Capital allocation44
Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income, an original issuer-reported unadjusted EBIT reconciled to net income, income tax and signed net interest, or EBIT calculated from reported pretax profit plus reported gross interest expense; the issuer-reported EBIT is distinct from GAAP operating income and gross interest; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. ROIC remains undefined for nonpositive invested capital; the explicit asset-return alternative does not change the ROIC chart. Missing financial inputs alone never trigger an alternative. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 5.37
- 3-year average dilution (%)
- 2.18
- 3-year average SBC / revenue (%)
- 0.08
- cashConversionGrade
- 0.00
Management56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Subsidiaries delivered $1.4 billion of cash dividends in 2025 without dividends derived from business-interest sales. Historical divestitures show portfolio simplification, but rising parent debt, substantial contingent commitments and increased capital spending temper the assessment. Project returns and spending outcomes are incomplete.
incentive alignment · 3/4 · The disclosed 2025 compensation structure links substantial variable pay to financial performance, parent free cash flow and relative shareholder returns, with three-year cliff vesting for performance units. This is strong evidence of alignment in plan design, not exceptional realized alignment; ownership levels, goal difficulty and complete payout outcomes are missing.
execution · 2/4 · Actual national energy supply, subsidiary cash distributions and execution of the Ventanas compliance program support operating execution indirectly. A separately upheld environmental sanction is realized adverse evidence. Project completion against budget and schedule is not supplied, and the pending Monrovia plan is not counted as delivered capacity.
governance · 2/4 · Independent board leadership, independent key committees, annual elections and high actual attendance support governance. Disclosed impermissible auditor services temper the assessment, although the audit committee concluded impartiality was unimpaired. These disclosures establish mixed oversight evidence rather than exceptional governance effectiveness.
Evidence
Andres owns and operates a combined cycle natural gas turbine and an energy storage facility with combined generation capacity of 329 MW, as well as the only LNG import terminal in the country, with 160,000 cubic meters of storage capacity.
AES Dominicana business description: operating generation and sole LNG import terminal · Filed 02/03/2026
With a total of 679 MW of installed thermal capacity, AES provides 9% of the country's capacity and supplies approximately 16% of the country's energy demand via these generation facilities.
AES Dominicana business description: installed capacity and national energy supply · Filed 02/03/2026
575 MW are contracted with government-owned distribution companies.
AES Dominicana business description: contracted generation capacity · Filed 02/03/2026
Generation companies can earn revenue through short-term and long-term PPAs, ancillary services, and a competitive wholesale generation market.
Dominican Republic market framework: PPAs and competitive wholesale generation · Filed 02/03/2026
International operations, particularly the operation, financing, and development of projects in developing countries, entail significant risks and uncertainties, including, without limitation: •economic, social, and political instability in any particular country or region; •inability to economically hedge energy prices; •volatility in commodity prices; •adverse changes in currency exchange rates; •government restrictions on converting currencies or repatriating funds; •unexpected changes in foreign laws, regulatory framework, or in trade, monetary or fiscal policies; •high inflation and monetary fluctuations; •restrictions on imports of solar panels, wind turbines, coal, oil, gas, or other raw materials required by our generation businesses to operate; •threatened or consummated expropriation or nationalization of our assets by foreign governments; •unwillingness of governments, government agencies, similar organizations, or other counterparties to honor their commitments; •unwillingness of governments, government agencies, courts, or similar bodies to enforce contracts that are economically advantageous to subsidiaries of the Company and economically unfavorable to counterparties, against such counterparties, whether such counterparties are governments or private parties; •inability to obtain access to fair and equitable political, regulatory, administrative, and legal systems; •adverse changes in government tax policy; •potentially adverse tax consequences of operating in multiple jurisdictions; •difficulties in enforcing our contractual rights, enforcing judgments, or obtaining a just result in local jurisdictions; and •inability to obtain financing on expected terms.
International operations risk factors: contractual enforcement, political and financing risks · Filed 02/03/2026
EXHIBITS AND FINANCIAL STATEMENT SCHEDULE 207 SIGNATURES 210 1 | 2025 Annual Report Glossary of Terms The following is a list of frequently used terms and abbreviations that appear in the text of this report and have the definitions indicated below: 2024 Base Rate Order The order issued in April 2024 by the IURC authorizing AES Indiana to, among other things, increase its basic rates and charges by $71 million annually 2024 DRC Settlement The order issued in November 2025 by the PUCO authorizing AES Ohio to, among other things, increase its basic rates and charges by $168 million annually Adjusted EBITDA Adjusted earnings before interest income and expense, taxes, depreciation, amortization, and accretion of AROs, a non-GAAP measure of operating performance Adjusted EBITDA with Tax Attributes Adjusted earnings before interest income and expense, taxes, depreciation, amortization, and accretion of AROs, adding back the pre-tax effect of Production Tax Credits, Investment Tax Credits, and depreciation tax deductions allocated to tax equity investors, as well as the tax benefit recorded from tax credits retained or transferred to third parties, a non-GAAP measure Adjusted EPS Adjusted Earnings Per Share, a non-GAAP measure Adjusted PTC Adjusted Pre-tax Contribution, a non-GAAP measure of operating performance AES The Parent Company and its subsidiaries and affiliates AES Andes AES Andes S.A., formerly AES Gener AES Brasil AES Brasil Energia S.A.
Glossary: Indiana and Ohio authorized annual basic-rate increases · Filed 02/03/2026
While most of our contracts in our international businesses are indexed to inflation, in general, our U.S.-based generation contracts are not indexed to inflation.
Inflation discussion: international contract indexation and generally unindexed U.S. generation contracts · Filed 04/08/2026
Our utility businesses allow for recovery of O&M costs through the regulatory process, which may have timing impacts on recovery.
Inflation discussion: utility O&M recovery through regulatory proceedings · Filed 04/08/2026
New basic rates and charges are subject to refund pending resolution of the regulatory petitions and legal appeal processes.
Utility ratemaking discussion: new basic rates subject to refund · Filed 04/08/2026
AES typically seeks to incorporate expected financing costs into our new PPA pricing such that we maintain our target investment returns, but higher financing costs may negatively impact our returns or the competitiveness of some of our development projects.
Interest-rate discussion: intended incorporation of financing costs into new PPA pricing · Filed 04/08/2026
Puerto Rico — As discussed in Item 7.—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Trends and Uncertainties of the 2025 Form 10-K, our subsidiaries in Puerto Rico have long-term PPAs with state-owned PREPA, which has been facing economic challenges that could result in a material adverse effect on our business in Puerto Rico.
Puerto Rico discussion: long-term PPAs and financially challenged state-owned offtaker · Filed 04/08/2026
The petition also includes AES Indiana's plan to develop and construct specific transmission network upgrades and enhancements required to serve the increasing demand, including seeking approval of a construction service agreement and an electric services agreement executed with the data center customer to provide high-voltage retail electric service to the new data center campus, which includes financial assurances, minimum demand commitments, and exit provisions as protections for existing customers.
Monrovia project petition: executed customer agreements submitted for regulatory approval · Filed 04/08/2026
•Capital expenditures increased $823 million, discussed further below.
Investing activities: increase in capital expenditures · Filed 04/08/2026
See Notes to Schedule I S-2 | 2025 Annual Report THE AES CORPORATION SCHEDULE I CONDENSED FINANCIAL INFORMATION OF PARENT BALANCE SHEETS DECEMBER 31, 2025 AND 2024 December 31, 2025 2024 (in millions) ASSETS Current Assets: Cash and cash equivalents $ 11 $ 265 Accounts and notes receivable from subsidiaries 266 446 Prepaid expenses and other current assets 81 95 Total current assets 358 806 Investment in and advances to subsidiaries and affiliates 11,520 9,786 Office Equipment: Cost 14 14 Accumulated depreciation (14) (13) Construction in progress 7 — Office equipment, net 7 1 Other Assets: Deferred financing costs, net of accumulated amortization of $14 and $12, respectively 3 5 Other assets 29 47 Total other assets 32 52 Total assets $ 11,917 $ 10,645 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable $ 9 $ 20 Accounts and notes payable to subsidiaries 208 190 Accrued and other liabilities 339 312 Debt—current portion 879 899 Total current liabilities 1,435 1,421 Long-term Liabilities: Debt 5,105 4,805 Accounts and notes payable to subsidiaries 754 307 Other long-term liabilities 560 468 Total long-term liabilities 6,419 5,580 Stockholders' equity: Common stock 9 9 Additional paid-in capital 5,904 5,913 Retained earnings 641 293 Accumulated other comprehensive loss (698) (766) Treasury stock (1,793) (1,805) Total stockholders' equity 4,063 3,644 Total liabilities and equity $ 11,917 $ 10,645 See Notes to Schedule I.
Schedule I: parent-only balance sheets for 2025 and 2024 · Filed 02/03/2026
Dividends from Subsidiaries and Affiliates Cash dividends received from consolidated subsidiaries were $1.4 billion, $1.6 billion, and $1.4 billion for the years ended December 31, 2025, 2024, and 2023, respectively.
Schedule I: cash dividends received from consolidated subsidiaries · Filed 02/03/2026
There were no dividends derived from the sale of business interests for the year ended December 31, 2025.
Schedule I: absence of subsidiary dividends derived from business-interest sales in 2025 · Filed 02/03/2026
These obligations and commitments, excluding those collateralized by letters of credit and other obligations discussed below, were limited as of December 31, 2025 by the terms of the agreements, to an aggregate of approximately $6.7 billion, representing 102 agreements with individual exposures ranging up to $1.1 billion.
Schedule I: parent contingent obligations and commitments · Filed 02/03/2026
Element CEO Other NEOs (Average) Purpose Key Characteristics Fixed 12% 22% Base Salary Maintain market competitiveness and retain our NEOs Reflects the NEOs’ scope of responsibility, experience and expertise Variable 88% 78% Annual Incentive Awards Provide performance-based compensation tied to the Company’s annual objectives Metrics •Safety (10%) •Financials (70%) •Green Growth (15%) •New Business Models (5%) Restricted Stock Units (“RSUs”) Recognize and reward NEOs’ contributions to the company's growth and success; settles in shares •30% of annual LTC grant for the NEOs (other than the CEO) •CEO’s 2025 grant did not include any RSUs •Three-year ratable vest Performance Stock Units (“PSUs”) Directly link NEOs’ interests with those of Stockholders and AES’ long-term financial performance; settles in shares •35% of annual LTC grant for the NEOs (other than the CEO) •50% of annual LTC grant for the CEO •Tied to Parent FCF metric •Three-year cliff vest Performance Cash Units (“PCUs”) Directly link NEOs’ interests with those of Stockholders and AES’ long-term share price performance; settles in cash •35% of annual LTC grant for the NEOs (other than the CEO) •50% of annual LTC grant for the CEO •Tied to Relative TSR metric –S&P 500 Index –S&P Utilities Index –Clean Energy Peer Group •Three-year cliff vest 2026 Proxy Statement | 46 Our CEO’s compensation is higher and more performance-based than the compensation paid to our other NEOs largely due to the scope of the position and his overall responsibility for the Company’s strategy and direction, as well as his overall influence on AES’ short and long-term performance.
Executive compensation: 2025 incentive allocation, performance metrics and vesting terms · Filed 20/03/2026
If properly presented, to vote on a non-binding stockholder proposal regarding stockholder ability to call a special meeting AGAINST 2026 Proxy Statement | 6 Corporate Governance Our Corporate Governance Policies Reflect Best Practices Annual Election of All Directors 96% Average Attendance of Directors at Board Meetings and 97% at Committee Meetings Non-Executive, Independent Chair Since 2003 Financial Audit, Compensation, Finance, and Governance Committee Members Are All Independent Supermajority of Our Director Nominees Are Independent Directors Are Subject to Rigorous Stock Ownership Requirements Annual Board and Committee Self-Evaluations and Review of Director Qualifications Director Compensation Reviewed Annually Executive Sessions of Independent Directors Directors Subject to Term Limits; Average Tenure of Director Nominees is 7.1 Years Board Oversight of Cybersecurity Programs, Policies, and Practices Governance Committee Oversight of Environmental and Safety Programs, Policies, and Practices Compensation Committee Oversight of Human Capital Management Matters Overboarding Policy: Non-Employee Directors should not Serve on More Than Four Public Boards and Executive Officers of Public Companies should not Serve on More Than Two Public Company Boards Director Nominee Statistics.
Corporate governance summary: independent leadership, committee independence and annual elections · Filed 20/03/2026
In 2025, overall Board attendance averaged 96%, and committee meeting attendance averaged 97%.
Board governance: actual 2025 board and committee attendance · Filed 20/03/2026
In 2011, he initiated an asset divestiture program that generated over $8 billion in proceeds and streamlined AES’ operations from 28 to 12 countries, enabling the Company to concentrate on markets where it holds a competitive advantage.
Director biography: reported historical divestiture proceeds and geographic simplification · Filed 20/03/2026
AES Andes has completed the execution of the Compliance Program and filed a request for final compliance report in late 2025.
Ventanas environmental proceedings: execution of compliance program and submission of final report · Filed 04/08/2026
The appellate hearing occurred on April 3, 2025 and the Environmental Court subsequently upheld the sanction imposed by the SMA, confirming the fine.
Separate Ventanas environmental proceeding: court confirmation of sanction · Filed 04/08/2026
After taking into consideration the facts and circumstances of the above matters and KPMG’s determination, the Company’s Audit Committee also concluded that KPMG’s objectivity and ability to exercise impartial judgment has not been impaired.
Auditor independence disclosure: audit committee conclusion concerning KPMG · Filed 04/08/2026
Additionally, these services were limited to foreign affiliates, the subject matters to which the services relate are not expected to be in-scope for the consolidated group audit of the Company, and the fees associated with the Impermissible Services are immaterial to each of the Company and KPMG.
Auditor independence disclosure: impermissible services to foreign affiliates · Filed 04/08/2026
Approval by the stockholders of the Company was obtained on June 26, 2026.
Merger update: stockholder approval obtained June 26, 2026 · Filed 04/08/2026
