Item 2.06 Material Impairments.

On August 10, 2020, The AES Corporation ("AES") announced that its subsidiary, AES Gener, had reached an agreement for the early termination of two tolling agreements ("PPAs") with the 558 MW Angamos coal-fired plant in Chile ("Angamos") in exchange for a net $720 million payment. AES Gener expects that Angamos will be fully merchant from 2022. In addition, AES Gener has announced it intends to further accelerate the retirement of the Ventanas 1 (114 MW) and Ventanas 2 (208 MW) coal plants in Chile, built in 1964 and 1977, respectively. This acceleration is in line with AES Gener's decarbonization strategy.

In connection with these strategic developments, on September 23, 2020, AES concluded that a pre-tax impairment charge in the range of approximately $475 million to $525 million, associated primarily with Angamos, Ventanas 1 and Ventanas 2, is required to be recognized as of September 30, 2020 in accordance with U.S. generally accepted accounting principles ("GAAP") related to the accounting for property, plant and equipment, which will reduce the carrying value of these assets to their fair value. The impairment charge will not impact the Company's cash flows or cash balances and is not expected to result in any material future cash expenditures. Additionally, AES has concluded that an additional pre-tax impairment of approximately $80 million from Guacolda, our equity method investee, is required to be recognized as of September 30, 2020 in accordance with U.S. GAAP.

Management expects to conclude its assessment and finalize the estimation of the impairment charges along with the assessment of the potential impact to income tax expense with the submission of its Form 10-Q for the quarter ending on September 30, 2020.




Safe Harbor Disclosure

This news release contains forward-looking statements within the meaning of the Securities Act of 1933 and of the Securities Exchange Act of 1934. Such forward-looking statements include, but are not limited to, those related to future earnings, growth and financial and operating performance. Forward-looking statements are not intended to be a guarantee of future results, but instead constitute AES' current expectations based on reasonable assumptions. Forecasted financial information is based on certain material assumptions. These assumptions include, but are not limited to, our expectations regarding the COVID-19 pandemic, accurate projections of future interest rates, commodity price and foreign currency pricing, continued normal levels of operating performance and electricity volume at our distribution companies and operational performance at our generation businesses consistent with historical levels, as well as the execution of PPAs, conversion of our backlog and growth investments at normalized investment levels and rates of return consistent with prior experience.

Actual results could differ materially from those projected in our forward-looking statements due to risks, uncertainties and other factors. Important factors that could affect actual results are discussed in AES' filings with the Securities and Exchange Commission (the "SEC"), including, but not limited to, the risks discussed under Item 1A "Risk Factors" and Item 7: Management's Discussion & Analysis in AES' 2019 Annual Report on Form 10-K and in subsequent reports filed with the SEC. Readers are encouraged to read AES' filings to learn more about the risk factors associated with AES' business. AES undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Any Stockholder who desires a copy of the Company's 2019 Annual Report on Form 10-K filed February 28, 2020 with the SEC may obtain a copy (excluding Exhibits) without charge by addressing a request to the Office of the Corporate Secretary, The AES Corporation, 4300 Wilson Boulevard, Arlington, Virginia 22203. Exhibits also may be requested, but a charge equal to the reproduction cost thereof will be made. A copy of the Form 10-K may also be obtained by visiting AES' website at www.aes.com.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

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Exhibit No.                   Description
101                           Inline XBRL Document Set for the Cover Page from this Current Report
                              on Form 8-K, formatted as Inline XBRL
104                           Cover Page Interactive Data File (embedded within the Inline XBRL
                              document)

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