AES CORPAES
AES CORP Goodwill & Intangibles Disclosure
GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill — The following table summarizes the carrying amount of goodwill by reportable segment for the years ended December 31, 2025 and 2024 (in millions):
Renewables SBU | Utilities SBU | Energy Infrastructure SBU | New Energy Technologies SBU | Total | |||||||||||||||||||||||||
| Balance as of December 31, 2024 | |||||||||||||||||||||||||||||
| Goodwill | $ | 353 | $ | 2,709 | $ | 683 | $ | — | $ | 3,745 | |||||||||||||||||||
| Accumulated impairment losses | (35) | (2,709) | (656) | — | (3,400) | ||||||||||||||||||||||||
| Net balance | 318 | — | 27 | — | 345 | ||||||||||||||||||||||||
| Goodwill derecognized during the year | (3) | — | — | — | (3) | ||||||||||||||||||||||||
| Balance as of December 31, 2025 | |||||||||||||||||||||||||||||
| Goodwill | 350 | 2,709 | 683 | — | 3,742 | ||||||||||||||||||||||||
| Accumulated impairment losses | (35) | (2,709) | (656) | — | (3,400) | ||||||||||||||||||||||||
| Net balance | $ | 315 | $ | — | $ | 27 | $ | — | $ | 342 | |||||||||||||||||||
TEG TEP — During the fourth quarter of 2023, the Company performed the goodwill impairment test for the TEG TEP reporting unit. The fair value of the reporting unit was determined under the income approach using a discounted cash flow valuation model. The estimated fair value was less than its carrying amount and as a result the Company recognized impairment expense of $12 million, reducing the goodwill balance of TEG TEP to zero. The decrease in fair value since the date of our last impairment test on July 31, 2023 was primarily driven by an
increase in the discount rate due to increasing risk of non-renewal of operating permits required to operate after March 31, 2024. In 2024, TEG and TEP successfully migrated to the new energy regime and currently operate according to ISO instructions. TEG and TEP are reported in the Energy Infrastructure SBU reportable segment.
Other Intangible Assets — The following table summarizes the balances comprising Other intangible assets in the accompanying Consolidated Balance Sheets (in millions) as of the dates indicated:
| December 31, 2025 | December 31, 2024 | ||||||||||||||||||||||||||||||||||
| Gross Balance | Accumulated Amortization | Net Balance | Gross Balance | Accumulated Amortization | Net Balance | ||||||||||||||||||||||||||||||
| Subject to Amortization | |||||||||||||||||||||||||||||||||||
| Internal-use software | $ | 824 | $ | (379) | $ | 445 | $ | 794 | $ | (333) | $ | 461 | |||||||||||||||||||||||
| Contracts | 39 | (15) | 24 | 68 | (29) | 39 | |||||||||||||||||||||||||||||
Project development (1) | 1,398 | (53) | 1,345 | 1,328 | (37) | 1,291 | |||||||||||||||||||||||||||||
Emissions allowances (2) | 83 | — | 83 | 1 | — | 1 | |||||||||||||||||||||||||||||
| Concession rights | 19 | (19) | — | 19 | (19) | — | |||||||||||||||||||||||||||||
| Land use rights | 119 | (4) | 115 | 108 | (3) | 105 | |||||||||||||||||||||||||||||
Other (3) | 28 | (9) | 19 | 28 | (5) | 23 | |||||||||||||||||||||||||||||
| Subtotal | 2,510 | (479) | 2,031 | 2,346 | (426) | 1,920 | |||||||||||||||||||||||||||||
| Indefinite-Lived Intangible Assets | |||||||||||||||||||||||||||||||||||
| Land use rights | 7 | — | 7 | 8 | — | 8 | |||||||||||||||||||||||||||||
| Transmission rights | — | — | — | 17 | — | 17 | |||||||||||||||||||||||||||||
| Other | 2 | — | 2 | 2 | — | 2 | |||||||||||||||||||||||||||||
| Subtotal | 9 | — | 9 | 27 | — | 27 | |||||||||||||||||||||||||||||
| Total | $ | 2,519 | $ | (479) | $ | 2,040 | $ | 2,373 | $ | (426) | $ | 1,947 | |||||||||||||||||||||||
_____________________________
(1)Includes emission offset fee to the Air Quality Management District in order to transfer emission offsets from retired legacy Southland units to the new CCGT.
(2)Acquired or purchased emissions allowances are finite-lived intangible assets that are expensed when utilized and included in net income for the year.
(3)Includes management rights, renewable energy credits and incentives, and other individually insignificant intangible assets.
The following tables summarize other intangible assets acquired during the periods indicated (in millions):
| December 31, 2025 | Amount | Subject to Amortization/Indefinite-Lived | Weighted Average Amortization Period (in years) | Amortization Method | |||||||||||||||||||
| Project development | $ | 129 | Subject to amortization | 20 | Straight-line | ||||||||||||||||||
| Emissions allowances | 99 | Subject to amortization | Various | As utilized | |||||||||||||||||||
| Internal-use software | 40 | Subject to amortization | 9 | Straight-line | |||||||||||||||||||
| Land use rights | 11 | Subject to amortization | 14 | Straight-line | |||||||||||||||||||
| Other | 1 | Various | N/A | N/A | |||||||||||||||||||
| Total | $ | 280 | |||||||||||||||||||||
| December 31, 2024 | Amount | Subject to Amortization/Indefinite-Lived | Weighted Average Amortization Period (in years) | Amortization Method | |||||||||||||||||||
| Project development | $ | 134 | Subject to Amortization | 40 | Straight-line | ||||||||||||||||||
| Internal-use software | 114 | Subject to Amortization | 11 | Straight-line | |||||||||||||||||||
| Emissions allowances | 8 | Subject to Amortization | Various | As utilized | |||||||||||||||||||
| Land use rights | 2 | Various | N/A | Various | |||||||||||||||||||
| Other | 8 | Various | N/A | N/A | |||||||||||||||||||
| Total | $ | 266 | |||||||||||||||||||||
The following table summarizes the estimated amortization expense by intangible asset category for 2026 through 2030:
| (in millions) | 2026 | 2027 | 2028 | 2029 | 2030 | ||||||||||||||||||||||||
| Internal-use software | $ | 71 | $ | 67 | $ | 63 | $ | 61 | $ | 56 | |||||||||||||||||||
| Contracts | 1 | 1 | 1 | 1 | 1 | ||||||||||||||||||||||||
| Project development | 19 | 19 | 19 | 19 | 19 | ||||||||||||||||||||||||
| Other | 2 | 2 | 2 | 1 | 1 | ||||||||||||||||||||||||
| Total | $ | 93 | $ | 89 | $ | 85 | $ | 82 | $ | 77 | |||||||||||||||||||
Intangible asset amortization expense was $94 million, $88 million, and $82 million for the years ended December 31, 2025, 2024, and 2023, respectively.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 2, 2026 | Showing above |
| 2024 | Mar 11, 2025 | |
| 2023 | Feb 26, 2024 | |
| 2022 | Mar 1, 2023 | |
| 2021 | Feb 28, 2022 | |
| 2020 | Feb 25, 2021 | |
| 2019 | Feb 28, 2020 | |
| 2018 | Feb 27, 2019 | |
| 2017 | Feb 27, 2018 | |
| 2016 | Feb 27, 2017 | |
| 2015 | Feb 24, 2016 | |
About Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.