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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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54 1163725
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer Identification No.)
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4300 Wilson Boulevard Arlington, Virginia
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22203
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
x
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Accelerated filer
¨
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Non-accelerated filer
¨
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Smaller reporting company
¨
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(Do not check if a smaller reporting company)
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ITEM 1.
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ITEM 2.
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ITEM 3.
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ITEM 4.
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ITEM 1.
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ITEM 1A.
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ITEM 2.
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ITEM 3.
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ITEM 4.
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ITEM 5.
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ITEM 6.
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Adjusted EPS
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Adjusted Earnings Per Share, a non-GAAP measure
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Adjusted PTC
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Adjusted Pretax Contribution, a non-GAAP measure of operating performance
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AES
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The Parent Company and its subsidiaries and affiliates
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AFS
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Available For Sale
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AFUDC
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Allowance for Funds Used During Construction
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ANEEL
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Brazilian National Electric Energy Agency
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AOCL
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Accumulated Other Comprehensive Loss
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ASC
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Accounting Standards Codification
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ASU
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Accounting Standards Update
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BNDES
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Brazilian Development Bank
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CA
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Commercial Availability
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CAA
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United States Clean Air Act
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CAMMESA
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Wholesale Electric Market Administrator in Argentina
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CCR
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Coal Combustion Residuals
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CDPQ
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La Caisse de depot et placement du Quebec
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CEEE
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Companhia Estadual de Energia
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CESCO
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Central Electricity Supply Company of Orissa Ltd.
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CFE
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Federal Commission of Electricity
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CO
2
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Carbon Dioxide
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COSO
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Committee of Sponsoring Organizations of the Treadway Commission
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CPCN
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Certificate of Public Convenience and Necessity
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DP&L
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The Dayton Power & Light Company
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DPL
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DPL Inc.
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DPLER
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DPL Energy Resources, Inc.
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EPA
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United States Environmental Protection Agency
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EPC
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Engineering, Procurement, and Construction
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ERC
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Energy Regulatory Commission
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EURIBOR
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Euro Interbank Offered Rate
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FASB
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Financial Accounting Standards Board
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FCA
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Federal Court of Appeals
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FX
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Foreign Exchange
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GAAP
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Generally Accepted Accounting Principles in the United States
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GHG
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Greenhouse Gas
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GSA
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Gas Supply Agreement
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GWh
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Gigawatt Hours
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HTA
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Heads of Terms Agreement
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ICC
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International Chamber of Commerce
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IPALCO
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IPALCO Enterprises, Inc.
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IPL
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Indianapolis Power & Light Company
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IURC
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Indiana Utility Regulatory Commission
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KPI
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Key Performance Indicator
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kWh
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Kilowatt Hours
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LIBOR
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London Interbank Offered Rate
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LNG
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Liquefied Natural Gas
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MATS
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Mercury and Air Toxics Standards
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MRE
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Energy Reallocation Mechanism
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MW
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Megawatts
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MWh
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Megawatt Hours
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NEK
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Natsionalna Elektricheska Kompania (state-owned electricity public supplier in Bulgaria)
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NOV
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Notice of Violation
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NO
X
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Nitrogen Dioxide
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NPDES
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National Pollutant Discharge Elimination System
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OCI
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Other Comprehensive Income
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O&M
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Operations and Maintenance
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OPGC
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Odisha Power Generation Corporation
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Parent Company
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The AES Corporation
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PIS
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Partially Integrated System
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PM
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Particulate Matter
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PPA
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Power Purchase Agreement
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PREPA
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Puerto Rico Electric Power Authority
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RSU
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Restricted Stock Unit
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SAIDI
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System Average Interruption Duration Index
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SAIFI
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System Average Interruption Frequency Index
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SBU
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Strategic Business Unit
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SEC
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United States Securities and Exchange Commission
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SO
2
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Sulfur Dioxide
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SSR
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Service Stability Rider
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TA
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Transportation Agreement
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VAT
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Value-added tax
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VIE
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Variable Interest Entity
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June 30,
2015 |
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December 31,
2014 |
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(in millions, except share and per share data)
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ASSETS
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CURRENT ASSETS
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Cash and cash equivalents
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$
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1,022
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$
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1,539
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Restricted cash
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308
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283
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Short-term investments
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439
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709
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Accounts receivable, net of allowance for doubtful accounts of $94 and $96, respectively
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2,877
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2,709
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Inventory
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734
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702
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Deferred income taxes
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213
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275
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Prepaid expenses
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115
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175
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Other current assets
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1,799
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1,434
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Current assets of held-for-sale businesses
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8
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—
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Total current assets
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7,515
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7,826
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NONCURRENT ASSETS
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Property, Plant and Equipment:
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Land
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801
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870
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Electric generation, distribution assets and other
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30,136
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30,459
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Accumulated depreciation
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(9,996
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(9,962
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Construction in progress
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2,499
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3,784
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Property, plant and equipment, net
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23,440
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25,151
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Other Assets:
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Investments in and advances to affiliates
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562
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537
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Debt service reserves and other deposits
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403
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411
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Goodwill
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1,473
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1,458
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Other intangible assets, net of accumulated amortization of $130 and $158, respectively
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241
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281
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Deferred income taxes
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571
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662
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Service concession assets
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1,538
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—
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Other noncurrent assets
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2,691
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2,640
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Noncurrent assets of held-for-sale businesses
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150
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—
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Total other assets
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7,629
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5,989
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TOTAL ASSETS
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$
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38,584
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$
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38,966
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LIABILITIES AND EQUITY
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CURRENT LIABILITIES
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Accounts payable
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$
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1,994
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$
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2,278
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Accrued interest
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244
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260
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Accrued and other liabilities
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2,317
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2,326
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Non-recourse debt, including $220 and $240, respectively, related to variable interest entities
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1,999
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1,982
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Recourse debt
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—
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151
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Current liabilities of held-for-sale businesses
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9
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—
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Total current liabilities
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6,563
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6,997
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NONCURRENT LIABILITIES
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Non-recourse debt, including $1,058 and $1,030, respectively, related to variable interest entities
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13,750
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13,618
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Recourse debt
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5,014
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5,107
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Deferred income taxes
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1,281
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1,277
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Pension and other post-retirement liabilities
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1,183
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1,342
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Other noncurrent liabilities
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3,110
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3,222
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Noncurrent liabilities of held-for-sale businesses
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61
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—
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Total noncurrent liabilities
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24,399
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24,566
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Contingencies and Commitments (see Note 9)
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Redeemable stock of subsidiaries
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538
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78
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EQUITY
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THE AES CORPORATION STOCKHOLDERS’ EQUITY
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Common stock ($0.01 par value, 1,200,000,000 shares authorized; 815,558,389 issued and 682,607,128 outstanding at June 30, 2015 and 814,539,146 issued and 703,851,297 outstanding at December 31, 2014)
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8
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8
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Additional paid-in capital
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8,705
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8,409
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Retained earnings
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258
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512
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Accumulated other comprehensive loss
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(3,445
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)
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(3,286
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)
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Treasury stock, at cost (132,951,261 shares at June 30, 2015 and 110,687,849 shares at December 31, 2014)
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(1,662
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(1,371
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)
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Total AES Corporation stockholders’ equity
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3,864
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4,272
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NONCONTROLLING INTERESTS
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3,220
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3,053
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Total equity
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7,084
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7,325
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TOTAL LIABILITIES AND EQUITY
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$
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38,584
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$
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38,966
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Three Months Ended
June 30, |
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Six Months Ended
June 30, |
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2015
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2014
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2015
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2014
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(in millions)
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NET INCOME
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$
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264
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$
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275
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$
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518
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$
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341
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Foreign currency translation activity:
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Foreign currency translation adjustments, net of income tax (expense) benefit of $0, $(7), $0 and $(8), respectively
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77
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24
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(344
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)
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29
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Reclassification to earnings, net of income tax (expense) benefit of $0 for all periods
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—
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(53
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)
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—
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(47
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)
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Total foreign currency translation adjustments
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77
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(29
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)
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(344
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)
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(18
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)
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Derivative activity:
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Change in derivative fair value, net of income tax (expense) benefit of $(20), $22, $(3) and $46, respectively
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82
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(105
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)
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10
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(225
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)
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Reclassification to earnings, net of income tax (expense) benefit of $(1), $(10), $(3) and $(13), respectively
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7
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13
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19
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32
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Total change in fair value of derivatives
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89
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(92
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)
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29
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(193
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)
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Pension activity:
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Change in pension adjustments due to prior service cost, net of income tax (expense) benefit of $0, $(1), $0, and $(1), respectively
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—
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1
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—
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1
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Change in pension adjustments due to disposal of discontinued operations for the period, net of income tax (expense) benefit of $0, $(9), $0 and $(9), respectively
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—
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14
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—
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14
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Reclassification to earnings due to amortization of net actuarial loss, net of income tax (expense) benefit of $(2), $2, $(5) and $(1), respectively
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4
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10
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9
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16
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Total pension adjustments
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4
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|
25
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|
9
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31
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OTHER COMPREHENSIVE INCOME (LOSS)
|
170
|
|
|
(96
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)
|
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(306
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)
|
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(180
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)
|
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COMPREHENSIVE INCOME
|
434
|
|
|
179
|
|
|
212
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|
|
161
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Less: Comprehensive (income) attributable to noncontrolling interests
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(261
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)
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(102
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)
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(173
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)
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(227
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)
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COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO THE AES CORPORATION
|
$
|
173
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$
|
77
|
|
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$
|
39
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|
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$
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(66
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)
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Six Months Ended June 30,
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||||||
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2015
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|
2014
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(in millions)
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||||||
OPERATING ACTIVITIES:
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Net income
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$
|
518
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$
|
341
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Adjustments to net income:
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Depreciation and amortization
|
597
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|
625
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Impairment expenses
|
45
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|
273
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Deferred income taxes
|
17
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|
52
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Releases of contingencies
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(134
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)
|
|
(48
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)
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Loss on the extinguishment of debt
|
145
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|
|
149
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Loss on sale of assets
|
12
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|
|
8
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Loss on disposals and impairments — discontinued operations
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—
|
|
|
51
|
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Other
|
70
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|
|
45
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Changes in operating assets and liabilities
|
|
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|
||||
(Increase) decrease in accounts receivable
|
(444
|
)
|
|
(312
|
)
|
||
(Increase) decrease in inventory
|
(54
|
)
|
|
(39
|
)
|
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(Increase) decrease in prepaid expenses and other current assets
|
132
|
|
|
(72
|
)
|
||
(Increase) decrease in other assets
|
(815
|
)
|
|
(316
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)
|
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Increase (decrease) in accounts payable and other current liabilities
|
179
|
|
|
(194
|
)
|
||
Increase (decrease) in income tax payables, net and other tax payables
|
(131
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)
|
|
(176
|
)
|
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Increase (decrease) in other liabilities
|
453
|
|
|
66
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|
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Net cash provided by operating activities
|
590
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|
|
453
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INVESTING ACTIVITIES:
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Capital expenditures
|
(1,168
|
)
|
|
(908
|
)
|
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Acquisitions, net of cash acquired
|
(18
|
)
|
|
(728
|
)
|
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Proceeds from the sale of businesses, net of cash sold
|
2
|
|
|
890
|
|
||
Proceeds from the sale of assets
|
1
|
|
|
16
|
|
||
Sale of short-term investments
|
2,460
|
|
|
2,198
|
|
||
Purchase of short-term investments
|
(2,270
|
)
|
|
(1,925
|
)
|
||
(Increase) decrease in restricted cash, debt service reserves and other assets
|
(51
|
)
|
|
127
|
|
||
Other investing
|
(26
|
)
|
|
(61
|
)
|
||
Net cash used in investing activities
|
(1,070
|
)
|
|
(391
|
)
|
||
FINANCING ACTIVITIES:
|
|
|
|
||||
Borrowings under the revolving credit facilities
|
361
|
|
|
737
|
|
||
Issuance of recourse debt
|
575
|
|
|
1,525
|
|
||
Issuance of non-recourse debt
|
1,940
|
|
|
1,710
|
|
||
Repayments under the revolving credit facilities
|
(359
|
)
|
|
(607
|
)
|
||
Repayments of recourse debt
|
(915
|
)
|
|
(1,663
|
)
|
||
Repayments of non-recourse debt
|
(1,457
|
)
|
|
(1,349
|
)
|
||
Payments for financing fees
|
(40
|
)
|
|
(105
|
)
|
||
Distributions to noncontrolling interests
|
(113
|
)
|
|
(197
|
)
|
||
Contributions from noncontrolling interests
|
97
|
|
|
110
|
|
||
Proceeds from the sale of redeemable stock of subsidiaries
|
461
|
|
|
—
|
|
||
Dividends paid on AES common stock
|
(141
|
)
|
|
(72
|
)
|
||
Payments for financed capital expenditures
|
(84
|
)
|
|
(312
|
)
|
||
Purchase of treasury stock
|
(307
|
)
|
|
(32
|
)
|
||
Other financing
|
(29
|
)
|
|
5
|
|
||
Net cash used in financing activities
|
(11
|
)
|
|
(250
|
)
|
||
Effect of exchange rate changes on cash
|
(19
|
)
|
|
(14
|
)
|
||
(Decrease) increase in cash of discontinued and held-for-sale businesses
|
(7
|
)
|
|
75
|
|
||
Total decrease in cash and cash equivalents
|
(517
|
)
|
|
(127
|
)
|
||
Cash and cash equivalents, beginning
|
1,539
|
|
|
1,642
|
|
||
Cash and cash equivalents, ending
|
$
|
1,022
|
|
|
$
|
1,515
|
|
SUPPLEMENTAL DISCLOSURES:
|
|
|
|
||||
Cash payments for interest, net of amounts capitalized
|
$
|
665
|
|
|
$
|
676
|
|
Cash payments for income taxes, net of refunds
|
$
|
247
|
|
|
$
|
332
|
|
SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
|
|
|
|
||||
Assets received upon sale of subsidiaries
|
$
|
—
|
|
|
$
|
44
|
|
Assets acquired through capital lease
|
$
|
10
|
|
|
$
|
13
|
|
|
June 30, 2015
|
|
December 31, 2014
|
||||
|
(in millions)
|
||||||
Fuel and other raw materials
|
$
|
391
|
|
|
$
|
357
|
|
Spare parts and supplies
|
343
|
|
|
345
|
|
||
Total
|
$
|
734
|
|
|
$
|
702
|
|
|
June 30, 2015
|
|
December 31, 2014
|
||||||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
|
(in millions)
|
||||||||||||||||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
AVAILABLE FOR SALE:
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Unsecured debentures
|
$
|
—
|
|
|
$
|
332
|
|
|
$
|
—
|
|
|
$
|
332
|
|
|
$
|
—
|
|
|
$
|
501
|
|
|
$
|
—
|
|
|
$
|
501
|
|
Certificates of deposit
|
—
|
|
|
79
|
|
|
—
|
|
|
79
|
|
|
—
|
|
|
151
|
|
|
—
|
|
|
151
|
|
||||||||
Government debt securities
|
—
|
|
|
33
|
|
|
—
|
|
|
33
|
|
|
—
|
|
|
57
|
|
|
—
|
|
|
57
|
|
||||||||
Subtotal
|
—
|
|
|
444
|
|
|
—
|
|
|
444
|
|
|
—
|
|
|
709
|
|
|
—
|
|
|
709
|
|
||||||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Mutual funds
|
—
|
|
|
18
|
|
|
—
|
|
|
18
|
|
|
—
|
|
|
25
|
|
|
—
|
|
|
25
|
|
||||||||
Subtotal
|
—
|
|
|
18
|
|
|
—
|
|
|
18
|
|
|
—
|
|
|
25
|
|
|
—
|
|
|
25
|
|
||||||||
Total available for sale
|
—
|
|
|
462
|
|
|
—
|
|
|
462
|
|
|
—
|
|
|
734
|
|
|
—
|
|
|
734
|
|
||||||||
TRADING:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Mutual funds
|
15
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|
15
|
|
|
—
|
|
|
—
|
|
|
15
|
|
||||||||
Total trading
|
15
|
|
|
—
|
|
|
—
|
|
|
15
|
|
|
15
|
|
|
—
|
|
|
—
|
|
|
15
|
|
||||||||
DERIVATIVES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Foreign currency derivatives
|
—
|
|
|
14
|
|
|
237
|
|
|
251
|
|
|
—
|
|
|
18
|
|
|
218
|
|
|
236
|
|
||||||||
Commodity derivatives
|
—
|
|
|
44
|
|
|
18
|
|
|
62
|
|
|
—
|
|
|
37
|
|
|
7
|
|
|
44
|
|
||||||||
Total derivatives
|
—
|
|
|
58
|
|
|
255
|
|
|
313
|
|
|
—
|
|
|
55
|
|
|
225
|
|
|
280
|
|
||||||||
TOTAL ASSETS
|
$
|
15
|
|
|
$
|
520
|
|
|
$
|
255
|
|
|
$
|
790
|
|
|
$
|
15
|
|
|
$
|
789
|
|
|
$
|
225
|
|
|
$
|
1,029
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
DERIVATIVES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rate derivatives
|
$
|
—
|
|
|
$
|
178
|
|
|
$
|
191
|
|
|
$
|
369
|
|
|
$
|
—
|
|
|
$
|
206
|
|
|
$
|
210
|
|
|
$
|
416
|
|
Cross-currency derivatives
|
—
|
|
|
32
|
|
|
—
|
|
|
32
|
|
|
—
|
|
|
29
|
|
|
—
|
|
|
29
|
|
||||||||
Foreign currency derivatives
|
—
|
|
|
38
|
|
|
15
|
|
|
53
|
|
|
—
|
|
|
43
|
|
|
9
|
|
|
52
|
|
||||||||
Commodity derivatives
|
—
|
|
|
23
|
|
|
1
|
|
|
24
|
|
|
—
|
|
|
16
|
|
|
1
|
|
|
17
|
|
||||||||
Total derivatives
|
—
|
|
|
271
|
|
|
207
|
|
|
478
|
|
|
—
|
|
|
294
|
|
|
220
|
|
|
514
|
|
||||||||
TOTAL LIABILITIES
|
$
|
—
|
|
|
$
|
271
|
|
|
$
|
207
|
|
|
$
|
478
|
|
|
$
|
—
|
|
|
$
|
294
|
|
|
$
|
220
|
|
|
$
|
514
|
|
(1)
|
Amortized cost approximated fair value at
June 30, 2015
and
December 31, 2014
.
|
|
Three Months Ended June 30, 2015
|
||||||||||||||||||
|
Interest Rate
|
|
Foreign Currency
|
|
Commodity
|
|
Cross Currency
|
|
Total
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Balance at the beginning of the period
|
$
|
(302
|
)
|
|
$
|
223
|
|
|
$
|
4
|
|
|
$
|
(33
|
)
|
|
$
|
(108
|
)
|
Total gains (losses) (realized and unrealized):
|
|
|
|
|
|
|
|
|
|
||||||||||
Included in earnings
|
—
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|||||
Included in other comprehensive income
—
derivative activity
|
57
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
57
|
|
|||||
Included in other comprehensive income
—
foreign currency translation activity
|
(4
|
)
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
(10
|
)
|
|||||
Included in regulatory (assets) liabilities
|
—
|
|
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
|||||
Settlements
|
5
|
|
|
(2
|
)
|
|
5
|
|
|
1
|
|
|
9
|
|
|||||
Transfers of (assets) liabilities out of Level 3
|
53
|
|
|
—
|
|
|
—
|
|
|
32
|
|
|
85
|
|
|||||
Balance at the end of the period
|
$
|
(191
|
)
|
|
$
|
222
|
|
|
$
|
17
|
|
|
$
|
—
|
|
|
$
|
48
|
|
Total gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities held at the end of the period
|
$
|
—
|
|
|
$
|
5
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
4
|
|
|
Three Months Ended June 30, 2014
|
||||||||||||||
|
Interest Rate
|
|
Foreign Currency
|
|
Commodity
|
|
Total
|
||||||||
|
(in millions)
|
||||||||||||||
Balance at the beginning of the period
|
$
|
(87
|
)
|
|
$
|
101
|
|
|
$
|
—
|
|
|
$
|
14
|
|
Total gains (losses) (realized and unrealized):
|
|
|
|
|
|
|
|
||||||||
Included in earnings
|
—
|
|
|
10
|
|
|
3
|
|
|
13
|
|
||||
Included in other comprehensive income
—
derivative activity
|
(30
|
)
|
|
—
|
|
|
—
|
|
|
(30
|
)
|
||||
Included in other comprehensive income
—
foreign currency translation activity
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
||||
Included in regulatory (assets) liabilities
|
—
|
|
|
—
|
|
|
15
|
|
|
15
|
|
||||
Settlements
|
3
|
|
|
(2
|
)
|
|
(2
|
)
|
|
(1
|
)
|
||||
Transfers of assets (liabilities) into Level 3
|
(69
|
)
|
|
—
|
|
|
—
|
|
|
(69
|
)
|
||||
Balance at the end of the period
|
$
|
(183
|
)
|
|
$
|
107
|
|
|
$
|
16
|
|
|
$
|
(60
|
)
|
Total gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities held at the end of the period
|
$
|
—
|
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
9
|
|
|
Six Months Ended June 30, 2015
|
||||||||||||||
|
Interest Rate
|
|
Foreign Currency
|
|
Commodity
|
|
Total
|
||||||||
|
(in millions)
|
||||||||||||||
Balance at the beginning of the period
|
$
|
(210
|
)
|
|
$
|
209
|
|
|
$
|
6
|
|
|
$
|
5
|
|
Total gains (losses) (realized and unrealized):
|
|
|
|
|
|
|
|
|
|||||||
Included in earnings
|
—
|
|
|
30
|
|
|
2
|
|
|
32
|
|
||||
Included in other comprehensive income
—
derivative activity
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
Included in other comprehensive income
—
foreign currency translation activity
|
7
|
|
|
(13
|
)
|
|
—
|
|
|
(6
|
)
|
||||
Included in regulatory (assets) liabilities
|
—
|
|
|
—
|
|
|
8
|
|
|
8
|
|
||||
Settlements
|
9
|
|
|
(4
|
)
|
|
1
|
|
|
6
|
|
||||
Balance at the end of the period
|
$
|
(191
|
)
|
|
$
|
222
|
|
|
$
|
17
|
|
|
$
|
48
|
|
Total gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities held at the end of the period
|
$
|
—
|
|
|
$
|
26
|
|
|
$
|
2
|
|
|
$
|
28
|
|
|
Six Months Ended June 30, 2014
|
||||||||||||||
|
Interest Rate
|
|
Foreign Currency
|
|
Commodity
|
|
Total
|
||||||||
|
(in millions)
|
||||||||||||||
Balance at the beginning of the period
|
$
|
(101
|
)
|
|
$
|
93
|
|
|
$
|
4
|
|
|
$
|
(4
|
)
|
Total gains (losses) (realized and unrealized):
|
|
|
|
|
|
|
|
||||||||
Included in earnings
|
1
|
|
|
37
|
|
|
1
|
|
|
39
|
|
||||
Included in other comprehensive income
—
derivative activity
|
(99
|
)
|
|
(1
|
)
|
|
—
|
|
|
(100
|
)
|
||||
Included in other comprehensive income
—
foreign currency translation activity
|
—
|
|
|
(20
|
)
|
|
—
|
|
|
(20
|
)
|
||||
Included in regulatory (assets) liabilities
|
—
|
|
|
—
|
|
|
12
|
|
|
12
|
|
||||
Settlements
|
16
|
|
|
(3
|
)
|
|
(1
|
)
|
|
12
|
|
||||
Transfers of (assets) liabilities out of Level 3
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
||||
Balance at the end of the period
|
$
|
(183
|
)
|
|
$
|
107
|
|
|
$
|
16
|
|
|
$
|
(60
|
)
|
Total gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities held at the end of the period
|
$
|
1
|
|
|
$
|
34
|
|
|
$
|
—
|
|
|
$
|
35
|
|
Type of Derivative
|
|
Fair Value
|
|
Unobservable Input
|
|
Amount or Range (Weighted Avg)
|
||
|
|
(in millions)
|
|
|
|
|
||
Interest rate
|
|
$
|
(191
|
)
|
|
Subsidiaries’ credit spreads
|
|
3.75% — 7.34% (5.17%)
|
Foreign currency:
|
|
|
|
|
|
|
||
Derivative — Argentine Peso
|
|
220
|
|
|
Argentine Peso to USD currency exchange rate after one year
|
|
13.71 — 36.10 (24.25)
|
|
Embedded derivative — Euro
|
|
2
|
|
|
Subsidiaries’ credit spreads
|
|
4.84% — 7.34% (6.09%)
|
|
Commodity:
|
|
|
|
|
|
|
||
Other
|
|
17
|
|
|
|
|
|
|
Total
|
|
$
|
48
|
|
|
|
|
|
|
Six Months Ended June 30, 2015
|
||||||||||||||||||
|
Carrying
Amount
(1)
|
|
Fair Value
(5)
|
|
Pretax
Loss
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|||||||||||||
|
(in millions)
|
||||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Equity method investment:
|
|
|
|
|
|
|
|
|
|
||||||||||
Solar Spain
|
$
|
29
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
29
|
|
|
$
|
—
|
|
Long-lived assets held and used:
(2)
|
|
|
|
|
|
|
|
|
|
||||||||||
UK Wind (Development Projects)
|
38
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
37
|
|
|||||
Other
|
29
|
|
|
—
|
|
|
21
|
|
|
—
|
|
|
8
|
|
|
Six Months Ended June 30, 2014
|
||||||||||||||||||
|
Carrying
Amount
(1)
|
|
Fair Value
(5)
|
|
Pretax
Loss
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|||||||||||||
|
(in millions)
|
||||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-lived assets held and used:
(2)
|
|
|
|
|
|
|
|
|
|
||||||||||
DPL (East Bend)
|
$
|
14
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
12
|
|
Ebute
|
99
|
|
|
—
|
|
|
—
|
|
|
47
|
|
|
52
|
|
|||||
UK Wind (Newfield)
|
11
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|||||
Discontinued operations and held-for-sale businesses:
(3)
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Cameroon
|
372
|
|
|
—
|
|
|
334
|
|
|
—
|
|
|
38
|
|
|||||
Equity method investments
|
|
|
|
|
|
|
|
|
|
||||||||||
Silver Ridge Power
|
317
|
|
|
—
|
|
|
—
|
|
|
273
|
|
|
44
|
|
|||||
Goodwill:
(4)
|
|
|
|
|
|
|
|
|
|
||||||||||
DPLER
|
136
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
136
|
|
|||||
Buffalo Gap
|
28
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
18
|
|
(1)
|
Represents the carrying value at the date of measurement, before fair value adjustment.
|
(2)
|
See Note
15
—Asset Impairment Expense
for further information.
|
(3)
|
See Note
17
—Discontinued Operations and Held-For-Sale Businesses
for further information. Fair value of long-lived assets held-for-sale excludes costs to sell.
|
(4)
|
See Note
14
—Goodwill Impairment
for further information.
|
(5)
|
Fair value measurements were estimated at various dates within the applicable reporting period and not necessarily as of the period’s end date.
|
|
Fair Value
|
|
Valuation Technique
|
|
Unobservable Input
|
|
Range (Weighted Average)
|
|||
|
(in millions)
|
|
|
|
|
|
|
|||
Equity method investment:
|
|
|
|
|
|
|
|
|||
Solar Spain
|
$
|
29
|
|
|
Discounted cash flow
|
|
Annual revenue growth
|
|
-3% to 0% (0%)
|
|
|
|
|
|
|
Annual pretax operating margin
|
|
-13% to 56% (24%)
|
|
||
|
|
|
|
|
Cost of equity
|
|
12
|
%
|
|
Carrying
Amount
|
|
Fair Value
|
||||||||||||||||
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||
|
(in millions)
|
||||||||||||||||||
June 30, 2015
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts receivable — noncurrent
(1)
|
$
|
260
|
|
|
$
|
247
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
247
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-recourse debt
|
15,749
|
|
|
16,101
|
|
|
—
|
|
|
12,644
|
|
|
3,457
|
|
|||||
Recourse debt
|
5,014
|
|
|
5,150
|
|
|
—
|
|
|
5,150
|
|
|
—
|
|
|||||
December 31, 2014
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts receivable — noncurrent
(1)
|
$
|
301
|
|
|
$
|
290
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
290
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-recourse debt
|
15,600
|
|
|
16,008
|
|
|
—
|
|
|
12,538
|
|
|
3,470
|
|
|||||
Recourse debt
|
5,258
|
|
|
5,552
|
|
|
—
|
|
|
5,552
|
|
|
—
|
|
(1)
|
These accounts receivable principally relate to amounts due from CAMMESA, and are included in
Noncurrent assets—Other
in the accompanying Condensed Consolidated Balance Sheets. The fair value and carrying amount of these receivables exclude VAT of
$31 million
and
$36 million
at
June 30, 2015
and
December 31, 2014
, respectively.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
(in millions)
|
||||||||||||||
Gross proceeds from sales of AFS securities
|
$
|
1,395
|
|
|
$
|
1,158
|
|
|
$
|
2,481
|
|
|
$
|
2,218
|
|
|
|
Current
|
|
Maximum
|
|
|
|
|
|||||||||||
Interest Rate and Cross-Currency
(1)
|
|
Derivative
Notional
|
|
Derivative Notional Translated to USD
|
|
Derivative
Notional
|
|
Derivative Notional Translated to USD
|
|
Weighted Average Remaining Term
|
|
% of Debt Currently Hedged by Index
(2)
|
|||||||
|
|
(in millions)
|
|
(in years)
|
|
|
|||||||||||||
Interest Rate Derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
LIBOR (U.S. Dollar)
|
|
2,689
|
|
|
$
|
2,689
|
|
|
3,061
|
|
|
$
|
3,061
|
|
|
11
|
|
55
|
%
|
EURIBOR (Euro)
|
|
506
|
|
|
564
|
|
|
506
|
|
|
564
|
|
|
7
|
|
75
|
%
|
||
Cross-Currency Swaps:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Chilean Unidad de Fomento
|
|
4
|
|
|
172
|
|
|
4
|
|
|
172
|
|
|
13
|
|
82
|
%
|
(1)
|
The Company’s interest rate derivative instruments primarily include accreting and amortizing notionals. The maximum derivative notional represents the largest notional at any point between
June 30, 2015
and the maturity of the derivative instrument, which includes forward-starting derivative instruments. The interest rate and cross-currency derivatives range in maturity through
2033
and
2028
, respectively.
|
(2)
|
The percentage of variable-rate debt currently hedged is based on the related index and excludes forecasted issuances of debt and variable-rate debt tied to other indices where the Company has no interest rate derivatives.
|
Foreign Currency Derivatives
|
|
Notional
(1)
|
|
Notional Translated to USD
|
|
Weighted Average Remaining Term
(2)
|
|||
|
|
(in millions)
|
|
(in years)
|
|||||
Foreign Currency Options and Forwards:
|
|
|
|
|
|
|
|||
Chilean Unidad de Fomento
|
|
8
|
|
|
$
|
311
|
|
|
<1
|
Chilean Peso
|
|
80,373
|
|
|
126
|
|
|
<1
|
|
Brazilian Real
|
|
103
|
|
|
33
|
|
|
<1
|
|
Euro
|
|
107
|
|
|
119
|
|
|
<1
|
|
Colombian Peso
|
|
145,874
|
|
|
56
|
|
|
<1
|
|
Argentine Peso
|
|
2,032
|
|
|
224
|
|
|
10
|
|
British Pound
|
|
16
|
|
|
24
|
|
|
<1
|
|
Philippine Peso
|
|
751
|
|
|
17
|
|
|
<1
|
|
Embedded Foreign Currency Derivatives:
|
|
|
|
|
|
|
|||
Kazakhstani Tenge
|
|
3,761
|
|
|
20
|
|
|
1
|
(1)
|
Represents contractual notionals. The notionals for options have not been probability adjusted, which generally would decrease them.
|
(2)
|
Represents the remaining tenor of our foreign currency derivatives weighted by the corresponding notional. These options and forwards and these embedded derivatives range in maturity through
2025
and
2017
, respectively.
|
Commodity Derivatives
|
|
Notional
|
|
Weighted-Average Remaining Term
(1)
|
|
|
|
(in millions)
|
|
(in years)
|
|
Power (MWh)
|
|
9
|
|
|
2
|
Coal (Metric tons)
|
|
1
|
|
|
2
|
(1)
|
Represents the remaining tenor of our commodity derivatives weighted by the corresponding volume. These derivatives range in maturity through
2017
.
|
|
June 30, 2015
|
|
December 31, 2014
|
||||||||||||||||||||
|
Designated
|
|
Not Designated
|
|
Total
|
|
Designated
|
|
Not Designated
|
|
Total
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Foreign currency derivatives
|
$
|
7
|
|
|
$
|
244
|
|
|
$
|
251
|
|
|
$
|
6
|
|
|
$
|
230
|
|
|
$
|
236
|
|
Commodity derivatives
|
31
|
|
|
31
|
|
|
62
|
|
|
25
|
|
|
19
|
|
|
44
|
|
||||||
Total assets
|
$
|
38
|
|
|
$
|
275
|
|
|
$
|
313
|
|
|
$
|
31
|
|
|
$
|
249
|
|
|
$
|
280
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate derivatives
|
$
|
369
|
|
|
$
|
—
|
|
|
$
|
369
|
|
|
$
|
416
|
|
|
$
|
—
|
|
|
$
|
416
|
|
Cross-currency derivatives
|
32
|
|
|
—
|
|
|
32
|
|
|
29
|
|
|
—
|
|
|
29
|
|
||||||
Foreign currency derivatives
|
32
|
|
|
21
|
|
|
53
|
|
|
38
|
|
|
14
|
|
|
52
|
|
||||||
Commodity derivatives
|
11
|
|
|
13
|
|
|
24
|
|
|
7
|
|
|
10
|
|
|
17
|
|
||||||
Total liabilities
|
$
|
444
|
|
|
$
|
34
|
|
|
$
|
478
|
|
|
$
|
490
|
|
|
$
|
24
|
|
|
$
|
514
|
|
|
June 30, 2015
|
|
December 31, 2014
|
||||||||||||
|
Assets
|
|
Liabilities
|
|
Assets
|
|
Liabilities
|
||||||||
|
(in millions)
|
||||||||||||||
Current
|
$
|
91
|
|
|
$
|
151
|
|
|
$
|
77
|
|
|
$
|
148
|
|
Noncurrent
|
222
|
|
|
327
|
|
|
203
|
|
|
366
|
|
||||
Total
|
$
|
313
|
|
|
$
|
478
|
|
|
$
|
280
|
|
|
$
|
514
|
|
Derivatives subject to master netting agreement or similar agreement:
|
|
|
|
|
|
|
|
||||||||
Gross amounts recognized in the balance sheet
|
$
|
36
|
|
|
$
|
425
|
|
|
$
|
53
|
|
|
$
|
507
|
|
Gross amounts of derivative instruments not offset
|
(11
|
)
|
|
(11
|
)
|
|
(10
|
)
|
|
(10
|
)
|
||||
Gross amounts of collateral received/pledged not offset
|
—
|
|
|
(31
|
)
|
|
—
|
|
|
(26
|
)
|
||||
Net amount
|
$
|
25
|
|
|
$
|
383
|
|
|
$
|
43
|
|
|
$
|
471
|
|
Other balances that had been, but are no longer, accounted for as derivatives that are to be amortized to earnings over the remaining term of the associated PPA
|
$
|
153
|
|
|
$
|
173
|
|
|
$
|
161
|
|
|
$
|
180
|
|
|
|
Gains (Losses) Recognized in AOCL
|
|
|
|
Gains (Losses) Reclassified from AOCL into Earnings
|
||||||||||||
|
|
Three Months Ended June 30,
|
|
Classification in Condensed Consolidated Statements of Operations
|
|
Three Months Ended June 30,
|
||||||||||||
Type of Derivative
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||||
|
|
(in millions)
|
|
|
|
(in millions)
|
||||||||||||
Interest rate derivatives
|
|
$
|
94
|
|
|
$
|
(124
|
)
|
|
Interest expense
|
|
$
|
(15
|
)
|
|
$
|
(33
|
)
|
|
|
|
|
|
|
Non-regulated cost of sales
|
|
(1
|
)
|
|
—
|
|
||||||
|
|
|
|
|
|
Net equity in earnings of affiliates
|
|
—
|
|
|
(2
|
)
|
||||||
Cross-currency derivatives
|
|
1
|
|
|
—
|
|
|
Interest expense
|
|
—
|
|
|
2
|
|
||||
|
|
|
|
|
|
Foreign currency transaction gains
|
|
—
|
|
|
4
|
|
||||||
Foreign currency derivatives
|
|
(1
|
)
|
|
3
|
|
|
Foreign currency transaction gains
|
|
2
|
|
|
3
|
|
||||
Commodity derivatives
|
|
8
|
|
|
(6
|
)
|
|
Non-regulated revenue
|
|
10
|
|
|
6
|
|
||||
|
|
|
|
|
|
|
|
Non-regulated cost of sales
|
|
(4
|
)
|
|
(3
|
)
|
||||
Total
|
|
$
|
102
|
|
|
$
|
(127
|
)
|
|
|
|
$
|
(8
|
)
|
|
$
|
(23
|
)
|
|
|
Gains (Losses) Recognized in AOCL
|
|
|
|
Gains (Losses) Reclassified from AOCL into Earnings
|
||||||||||||
|
|
Six Months Ended June 30,
|
|
Classification in Condensed Consolidated Statements of Operations
|
|
Six Months Ended June 30,
|
||||||||||||
Type of Derivative
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||||
|
|
(in millions)
|
|
|
|
(in millions)
|
||||||||||||
Interest rate derivatives
|
|
$
|
(4
|
)
|
|
$
|
(274
|
)
|
|
Interest expense
|
|
$
|
(39
|
)
|
|
$
|
(64
|
)
|
|
|
|
|
|
|
Non-regulated cost of sales
|
|
(1
|
)
|
|
(1
|
)
|
||||||
|
|
|
|
|
|
Net equity in earnings of affiliates
|
|
—
|
|
|
(3
|
)
|
||||||
Cross-currency derivatives
|
|
1
|
|
|
(3
|
)
|
|
Interest expense
|
|
(1
|
)
|
|
1
|
|
||||
|
|
|
|
|
|
Foreign currency transaction losses
|
|
—
|
|
|
(6
|
)
|
||||||
Foreign currency derivatives
|
|
1
|
|
|
(12
|
)
|
|
Foreign currency transaction gains
|
|
8
|
|
|
10
|
|
||||
Commodity derivatives
|
|
15
|
|
|
18
|
|
|
Non-regulated revenue
|
|
15
|
|
|
19
|
|
||||
|
|
|
|
|
|
Non-regulated cost of sales
|
|
(4
|
)
|
|
(1
|
)
|
||||||
Total
|
|
$
|
13
|
|
|
$
|
(271
|
)
|
|
|
|
$
|
(22
|
)
|
|
$
|
(45
|
)
|
|
|
Classification in Condensed Consolidated Statements of Operations
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
Type of Derivative
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||||
|
|
|
|
(in millions)
|
||||||||||||||
Interest rate derivatives
|
|
Interest expense
|
|
$
|
(1
|
)
|
|
$
|
1
|
|
|
$
|
(1
|
)
|
|
$
|
1
|
|
Foreign currency derivatives
|
|
Foreign currency transaction losses
|
|
—
|
|
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
—
|
|
||
Cross-currency derivatives
|
|
Interest expense
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
||||
Total
|
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
(3
|
)
|
|
$
|
—
|
|
|
|
Classification in Condensed Consolidated Statements of Operations
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
Type of Derivative
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||||
|
|
|
|
(in millions)
|
||||||||||||||
Foreign currency derivatives
|
|
Foreign currency transaction gains
|
|
$
|
7
|
|
|
$
|
6
|
|
|
39
|
|
|
29
|
|
||
|
|
Net equity in earnings of affiliates
|
|
—
|
|
|
9
|
|
|
—
|
|
|
5
|
|
||||
Commodity and other derivatives
|
|
Non-regulated revenue
|
|
1
|
|
|
1
|
|
|
(4
|
)
|
|
4
|
|
||||
|
|
Regulated revenue
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
|
Non-regulated cost of sales
|
|
—
|
|
|
2
|
|
|
1
|
|
|
2
|
|
||||
|
|
Regulated cost of sales
|
|
(1
|
)
|
|
2
|
|
|
(5
|
)
|
|
(6
|
)
|
||||
|
|
Income (loss) from operations of discontinued businesses
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(7
|
)
|
||||
|
|
Net loss from disposal and impairments of discontinued businesses
|
|
—
|
|
|
72
|
|
|
—
|
|
|
72
|
|
||||
Total
|
|
|
|
$
|
7
|
|
|
$
|
90
|
|
|
$
|
31
|
|
|
$
|
99
|
|
|
June 30, 2015
|
|
December 31, 2014
|
||||
|
(in millions)
|
||||||
Argentina
|
$
|
256
|
|
|
$
|
278
|
|
Cameroon sale
(1)
|
—
|
|
|
44
|
|
||
United States
|
20
|
|
|
—
|
|
||
Brazil
|
15
|
|
|
15
|
|
||
Total long-term financing receivables
|
$
|
291
|
|
|
$
|
337
|
|
(1)
|
Represents non-contingent consideration to be received in 2016 from the sale of the Cameroon businesses in 2014. Balance is classified as short-term as of
June 30, 2015
. See Note
17
—Discontinued Operations and Held-For-Sale Businesses
.
|
|
Six Months Ended June 30,
|
||||||
50%-or-less-Owned Affiliates
|
2015
|
|
2014
|
||||
|
(in millions)
|
||||||
Revenue
|
$
|
357
|
|
|
$
|
568
|
|
Operating margin
|
86
|
|
|
150
|
|
||
Net income
|
35
|
|
|
107
|
|
•
|
Sul issued new debt of
$499 million
, partially offset by repayments of
$468 million
;
|
•
|
IPALCO issued new debt of
$405 million
, partially offset by repayments of
$384 million
;
|
•
|
Panama issued new debt of
$300 million
, partially offset by repayments of
$287 million
;
|
•
|
Cochrane drew
$297 million
under its existing construction loans;
|
•
|
Gener drew
$150 million
on an existing credit facility;
|
•
|
Eletropaulo issued new debt of
$118 million
; and
|
•
|
Mong Duong drew
$104 million
under its construction loan facility.
|
|
|
Primary Nature of Default
|
|
June 30, 2015
|
||||||
Subsidiary
|
|
Debt in Default
|
|
Net Assets
|
||||||
|
|
|
|
(in millions)
|
||||||
Maritza (Bulgaria)
|
|
Covenant
|
|
$
|
605
|
|
|
$
|
612
|
|
Kavarna (Bulgaria)
|
|
Covenant
|
|
147
|
|
|
78
|
|
||
Altai (Kazakhstan)
|
|
Covenant
|
|
$
|
12
|
|
|
16
|
|
|
|
|
|
|
$
|
764
|
|
|
|
Contingent Contractual Obligations
|
|
Amount
|
|
Number of
Agreements
|
|
Maximum Exposure Range for
Each Agreement
|
|||
Guarantees and commitments
|
|
$
|
359
|
|
|
14
|
|
|
$1 — 53
|
Asset sale related indemnities
(1)
|
|
27
|
|
|
1
|
|
|
$27
|
|
Cash collateralized letters of credit
|
|
49
|
|
|
6
|
|
|
<$1 — 30
|
|
Letters of credit under the senior secured credit facility
|
|
61
|
|
|
7
|
|
|
<$1 — 29
|
|
Total
|
|
$
|
496
|
|
|
28
|
|
|
|
(1)
|
Excludes normal and customary representations and warranties in agreements for the sale of assets (including ownership in associated legal entities) where the associated risk is considered to be nominal.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||||||||||||||||||
|
U.S.
|
|
Foreign
|
|
U.S.
|
|
Foreign
|
|
U.S.
|
|
Foreign
|
|
U.S.
|
|
Foreign
|
||||||||||||||||
|
(in millions)
|
||||||||||||||||||||||||||||||
Service cost
|
$
|
4
|
|
|
$
|
4
|
|
|
$
|
4
|
|
|
$
|
4
|
|
|
$
|
8
|
|
|
$
|
8
|
|
|
$
|
7
|
|
|
$
|
8
|
|
Interest cost
|
11
|
|
|
95
|
|
|
12
|
|
|
129
|
|
|
23
|
|
|
197
|
|
|
24
|
|
|
251
|
|
||||||||
Expected return on plan assets
|
(17
|
)
|
|
(66
|
)
|
|
(16
|
)
|
|
(96
|
)
|
|
(34
|
)
|
|
(138
|
)
|
|
(32
|
)
|
|
(186
|
)
|
||||||||
Amortization of prior service cost
|
2
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|
4
|
|
|
—
|
|
|
3
|
|
|
2
|
|
||||||||
Amortization of net loss
|
5
|
|
|
7
|
|
|
3
|
|
|
9
|
|
|
10
|
|
|
15
|
|
|
6
|
|
|
17
|
|
||||||||
Total pension cost
|
$
|
5
|
|
|
$
|
40
|
|
|
$
|
4
|
|
|
$
|
47
|
|
|
$
|
11
|
|
|
$
|
82
|
|
|
$
|
8
|
|
|
$
|
92
|
|
|
Six Months Ended June 30, 2015
|
|
Six Months Ended June 30, 2014
|
||||||||||||||||||||
|
The AES Corporation Stockholders’ Equity
|
|
Noncontrolling Interests
|
|
Total Equity
|
|
The AES Corporation Stockholders’ Equity
|
|
Noncontrolling Interests
|
|
Total Equity
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
Balance at the beginning of the period
|
$
|
4,272
|
|
|
$
|
3,053
|
|
|
$
|
7,325
|
|
|
$
|
4,330
|
|
|
$
|
3,321
|
|
|
$
|
7,651
|
|
Net income
|
211
|
|
|
307
|
|
|
518
|
|
|
75
|
|
|
266
|
|
|
341
|
|
||||||
Total foreign currency translation adjustment, net of income tax
|
(204
|
)
|
|
(140
|
)
|
|
(344
|
)
|
|
(56
|
)
|
|
38
|
|
|
(18
|
)
|
||||||
Total change in derivative fair value, net of income tax
|
30
|
|
|
(1
|
)
|
|
29
|
|
|
(99
|
)
|
|
(94
|
)
|
|
(193
|
)
|
||||||
Total pension adjustments, net of income tax
|
2
|
|
|
7
|
|
|
9
|
|
|
14
|
|
|
17
|
|
|
31
|
|
||||||
Cumulative effect of a change in accounting principle
|
(5
|
)
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Capital contributions from noncontrolling interests
|
—
|
|
|
97
|
|
|
97
|
|
|
—
|
|
|
113
|
|
|
113
|
|
||||||
Distributions to noncontrolling interests
|
—
|
|
|
(119
|
)
|
|
(119
|
)
|
|
—
|
|
|
(215
|
)
|
|
(215
|
)
|
||||||
Acquisition of business
(1)
|
—
|
|
|
16
|
|
|
16
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Disposition of businesses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(151
|
)
|
|
(151
|
)
|
||||||
Acquisition of treasury stock
|
(307
|
)
|
|
—
|
|
|
(307
|
)
|
|
(32
|
)
|
|
—
|
|
|
(32
|
)
|
||||||
Issuance and exercise of stock-based compensation benefit plans, net of income tax
|
17
|
|
|
—
|
|
|
17
|
|
|
16
|
|
|
—
|
|
|
16
|
|
||||||
Dividends declared on common stock
|
(70
|
)
|
|
—
|
|
|
(70
|
)
|
|
(36
|
)
|
|
—
|
|
|
(36
|
)
|
||||||
Sale of subsidiary shares to noncontrolling interests
|
(82
|
)
|
|
—
|
|
|
(82
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Transaction between entities under common control
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
2
|
|
|
7
|
|
||||||
Acquisition of subsidiary shares from noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
(6
|
)
|
||||||
Balance at the end of the period
|
$
|
3,864
|
|
|
$
|
3,220
|
|
|
$
|
7,084
|
|
|
$
|
4,211
|
|
|
$
|
3,297
|
|
|
$
|
7,508
|
|
|
Unrealized derivative gains (losses), net
|
|
Unfunded pension obligations, net
|
|
Foreign currency translation adjustment, net
|
|
Total
|
||||||||
|
(in millions)
|
||||||||||||||
Balance at the beginning of the period
|
$
|
(396
|
)
|
|
$
|
(295
|
)
|
|
$
|
(2,595
|
)
|
|
$
|
(3,286
|
)
|
Other comprehensive income (loss) before reclassifications
|
18
|
|
|
—
|
|
|
(204
|
)
|
|
(186
|
)
|
||||
Amount reclassified to earnings
|
12
|
|
|
2
|
|
|
—
|
|
|
14
|
|
||||
Other comprehensive income (loss)
|
30
|
|
|
2
|
|
|
(204
|
)
|
|
(172
|
)
|
||||
Cumulative effect of a change in accounting principle
|
—
|
|
|
—
|
|
|
13
|
|
|
13
|
|
||||
Balance at the end of the period
|
$
|
(366
|
)
|
|
$
|
(293
|
)
|
|
$
|
(2,786
|
)
|
|
$
|
(3,445
|
)
|
Details About
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
AOCL Components
|
|
Affected Line Item in the Condensed Consolidated Statements of Operations
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Foreign currency translation adjustment, net
|
|
(in millions)
(1)
|
||||||||||||||||
|
|
Net loss from disposal and impairments of discontinued businesses
|
|
—
|
|
|
53
|
|
|
—
|
|
|
$
|
47
|
|
|||
|
|
Net income attributable to The AES Corporation
|
|
$
|
—
|
|
|
$
|
53
|
|
|
$
|
—
|
|
|
$
|
47
|
|
Unrealized derivative gains (losses), net
|
|
|
||||||||||||||||
|
|
Non-regulated revenue
|
|
$
|
10
|
|
|
$
|
6
|
|
|
$
|
15
|
|
|
$
|
19
|
|
|
|
Non-regulated cost of sales
|
|
(5
|
)
|
|
(3
|
)
|
|
(5
|
)
|
|
$
|
(2
|
)
|
|||
|
|
Interest expense
|
|
(15
|
)
|
|
(31
|
)
|
|
(40
|
)
|
|
(63
|
)
|
||||
|
|
Foreign currency transaction gains (losses)
|
|
2
|
|
|
7
|
|
|
8
|
|
|
4
|
|
||||
|
|
Income from continuing operations before taxes and equity in earnings of affiliates
|
|
(8
|
)
|
|
(21
|
)
|
|
(22
|
)
|
|
(42
|
)
|
||||
|
|
Income tax expense
|
|
1
|
|
|
10
|
|
|
3
|
|
|
13
|
|
||||
|
|
Net equity in earnings of affiliates
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(3
|
)
|
||||
|
|
Income from continuing operations
|
|
(7
|
)
|
|
(13
|
)
|
|
(19
|
)
|
|
(32
|
)
|
||||
|
|
Income from continuing operations attributable to noncontrolling interests
|
|
4
|
|
|
15
|
|
|
7
|
|
|
15
|
|
||||
|
|
Net income attributable to The AES Corporation
|
|
$
|
(3
|
)
|
|
$
|
2
|
|
|
$
|
(12
|
)
|
|
$
|
(17
|
)
|
Amortization of defined benefit pension actuarial loss, net
|
|
|
||||||||||||||||
|
|
Regulated cost of sales
|
|
$
|
(6
|
)
|
|
$
|
(9
|
)
|
|
$
|
(14
|
)
|
|
$
|
(17
|
)
|
|
|
Non-regulated cost of sales
|
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
||||
|
|
Other income
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
(2
|
)
|
||||
|
|
Income from continuing operations before taxes and equity in earnings of affiliates
|
|
(6
|
)
|
|
(10
|
)
|
|
(14
|
)
|
|
(19
|
)
|
||||
|
|
Income tax expense
|
|
2
|
|
|
(2
|
)
|
|
5
|
|
|
1
|
|
||||
|
|
Income from continuing operations
|
|
(4
|
)
|
|
(12
|
)
|
|
(9
|
)
|
|
(18
|
)
|
||||
|
|
Net loss from disposal and impairments of discontinued businesses
|
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
||||
|
|
Net income
|
|
(4
|
)
|
|
(10
|
)
|
|
(9
|
)
|
|
(16
|
)
|
||||
|
|
Income from continuing operations attributable to noncontrolling interests
|
|
3
|
|
|
7
|
|
|
7
|
|
|
11
|
|
||||
|
|
Net income attributable to The AES Corporation
|
|
$
|
(1
|
)
|
|
$
|
(3
|
)
|
|
$
|
(2
|
)
|
|
$
|
(5
|
)
|
Total reclassifications for the period, net of income tax and noncontrolling interests
|
|
$
|
(4
|
)
|
|
$
|
52
|
|
|
$
|
(14
|
)
|
|
$
|
25
|
|
(1)
|
Amounts in parentheses indicate debits to the Condensed Consolidated Statements of Operations.
|
•
|
US SBU;
|
•
|
Andes SBU;
|
•
|
Brazil SBU;
|
•
|
MCAC SBU;
|
•
|
Europe SBU; and
|
•
|
Asia SBU
|
Revenue
|
Total Revenue
|
|
Intersegment
|
|
External Revenue
|
||||||||||||||||||
Three Months Ended June 30,
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
US SBU
|
$
|
831
|
|
|
$
|
893
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
831
|
|
|
$
|
893
|
|
Andes SBU
|
630
|
|
|
724
|
|
|
(2
|
)
|
|
(1
|
)
|
|
628
|
|
|
723
|
|
||||||
Brazil SBU
|
1,315
|
|
|
1,533
|
|
|
—
|
|
|
—
|
|
|
1,315
|
|
|
1,533
|
|
||||||
MCAC SBU
|
601
|
|
|
692
|
|
|
(1
|
)
|
|
—
|
|
|
600
|
|
|
692
|
|
||||||
Europe SBU
|
299
|
|
|
305
|
|
|
(3
|
)
|
|
—
|
|
|
296
|
|
|
305
|
|
||||||
Asia SBU
|
187
|
|
|
163
|
|
|
—
|
|
|
—
|
|
|
187
|
|
|
163
|
|
||||||
Corporate and Other
|
6
|
|
|
5
|
|
|
(5
|
)
|
|
(3
|
)
|
|
1
|
|
|
2
|
|
||||||
Total Revenue
|
$
|
3,869
|
|
|
$
|
4,315
|
|
|
$
|
(11
|
)
|
|
$
|
(4
|
)
|
|
$
|
3,858
|
|
|
$
|
4,311
|
|
Revenue
|
Total Revenue
|
|
Intersegment
|
|
External Revenue
|
||||||||||||||||||
Six Months Ended June 30,
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
US SBU
|
$
|
1,828
|
|
|
$
|
1,894
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,828
|
|
|
$
|
1,894
|
|
Andes SBU
|
1,242
|
|
|
1,344
|
|
|
(4
|
)
|
|
(1
|
)
|
|
1,238
|
|
|
1,343
|
|
||||||
Brazil SBU
|
2,645
|
|
|
2,978
|
|
|
—
|
|
|
—
|
|
|
2,645
|
|
|
2,978
|
|
||||||
MCAC SBU
|
1,199
|
|
|
1,330
|
|
|
(2
|
)
|
|
(1
|
)
|
|
1,197
|
|
|
1,329
|
|
||||||
Europe SBU
|
629
|
|
|
696
|
|
|
(3
|
)
|
|
—
|
|
|
626
|
|
|
696
|
|
||||||
Asia SBU
|
306
|
|
|
331
|
|
|
—
|
|
|
—
|
|
|
306
|
|
|
331
|
|
||||||
Corporate and Other
|
10
|
|
|
7
|
|
|
(8
|
)
|
|
(5
|
)
|
|
2
|
|
|
2
|
|
||||||
Total Revenue
|
$
|
7,859
|
|
|
$
|
8,580
|
|
|
$
|
(17
|
)
|
|
$
|
(7
|
)
|
|
$
|
7,842
|
|
|
$
|
8,573
|
|
Adjusted PTC
(1)
|
Total Adjusted PTC
|
|
Intersegment
|
|
External Adjusted PTC
|
||||||||||||||||||
Three Months Ended June 30,
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
US SBU
|
$
|
56
|
|
|
$
|
80
|
|
|
$
|
3
|
|
|
$
|
3
|
|
|
$
|
59
|
|
|
$
|
83
|
|
Andes SBU
|
81
|
|
|
104
|
|
|
5
|
|
|
1
|
|
|
86
|
|
|
105
|
|
||||||
Brazil SBU
|
41
|
|
|
115
|
|
|
—
|
|
|
—
|
|
|
41
|
|
|
115
|
|
||||||
MCAC SBU
|
106
|
|
|
95
|
|
|
5
|
|
|
10
|
|
|
111
|
|
|
105
|
|
||||||
Europe SBU
|
41
|
|
|
73
|
|
|
(1
|
)
|
|
3
|
|
|
40
|
|
|
76
|
|
||||||
Asia SBU
|
30
|
|
|
23
|
|
|
1
|
|
|
—
|
|
|
31
|
|
|
23
|
|
||||||
Corporate and Other
|
(104
|
)
|
|
(150
|
)
|
|
(13
|
)
|
|
(17
|
)
|
|
(117
|
)
|
|
(167
|
)
|
||||||
Total Adjusted PTC
|
$
|
251
|
|
|
$
|
340
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
251
|
|
|
$
|
340
|
|
Reconciliation to Income from Continuing Operations before Taxes and Equity Earnings of Affiliates:
|
|||||||||||||||||||||||
Non-GAAP Adjustments:
|
|
|
|
|
|||||||||||||||||||
Unrealized derivative gains
|
|
2
|
|
|
22
|
|
|||||||||||||||||
Unrealized foreign currency gains (losses)
|
|
3
|
|
|
(7
|
)
|
|||||||||||||||||
Disposition/acquisition gains (losses)
|
|
4
|
|
|
(2
|
)
|
|||||||||||||||||
Impairment losses
|
|
(30
|
)
|
|
(99
|
)
|
|||||||||||||||||
Loss on extinguishment of debt
|
|
(115
|
)
|
|
(13
|
)
|
|||||||||||||||||
Pretax contribution
|
|
115
|
|
|
241
|
|
|||||||||||||||||
Add: Income from continuing operations before taxes, attributable to noncontrolling interests
|
|
269
|
|
|
197
|
|
|||||||||||||||||
Less: Net equity in earnings of affiliates
|
|
—
|
|
|
20
|
|
|||||||||||||||||
Income from continuing operations before taxes and equity in earnings of affiliates
|
|
$
|
384
|
|
|
$
|
418
|
|
Adjusted PTC
(1)
|
Total Adjusted PTC
|
|
Intersegment
|
|
External Adjusted PTC
|
||||||||||||||||||
Six Months Ended June 30,
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
US SBU
|
$
|
162
|
|
|
$
|
155
|
|
|
$
|
6
|
|
|
$
|
6
|
|
|
$
|
168
|
|
|
$
|
161
|
|
Andes SBU
|
172
|
|
|
157
|
|
|
8
|
|
|
4
|
|
|
180
|
|
|
161
|
|
||||||
Brazil SBU
|
62
|
|
|
184
|
|
|
1
|
|
|
1
|
|
|
63
|
|
|
185
|
|
||||||
MCAC SBU
|
156
|
|
|
160
|
|
|
9
|
|
|
14
|
|
|
165
|
|
|
174
|
|
||||||
Europe SBU
|
126
|
|
|
188
|
|
|
2
|
|
|
6
|
|
|
128
|
|
|
194
|
|
||||||
Asia SBU
|
42
|
|
|
31
|
|
|
1
|
|
|
1
|
|
|
43
|
|
|
32
|
|
||||||
Corporate and Other
|
(217
|
)
|
|
(292
|
)
|
|
(27
|
)
|
|
(32
|
)
|
|
(244
|
)
|
|
(324
|
)
|
||||||
Total Adjusted PTC
|
$
|
503
|
|
|
$
|
583
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
503
|
|
|
$
|
583
|
|
Reconciliation to Income from Continuing Operations before Taxes and Equity Earnings of Affiliates:
|
|||||||||||||||||||||||
Non-GAAP Adjustments:
|
|
|
|
|
|||||||||||||||||||
Unrealized derivative gains
|
|
17
|
|
|
32
|
|
|||||||||||||||||
Unrealized foreign currency losses
|
|
(44
|
)
|
|
(33
|
)
|
|||||||||||||||||
Disposition/acquisition gains (losses)
|
|
9
|
|
|
(1
|
)
|
|||||||||||||||||
Impairment losses
|
|
(36
|
)
|
|
(265
|
)
|
|||||||||||||||||
Loss on extinguishment of debt
|
|
(142
|
)
|
|
(147
|
)
|
|||||||||||||||||
Pretax contribution
|
|
307
|
|
|
169
|
|
|||||||||||||||||
Add: Income from continuing operations before taxes, attributable to noncontrolling interests
|
|
427
|
|
|
412
|
|
|||||||||||||||||
Less: Net equity in earnings of affiliates
|
|
15
|
|
|
45
|
|
|||||||||||||||||
Income from continuing operations before taxes and equity in earnings of affiliates
|
|
$
|
719
|
|
|
$
|
536
|
|
(1)
|
Adjusted PTC in each segment before intersegment eliminations includes the effect of intercompany transactions with other segments except for interest, charges for certain management fees and the write-off of intercompany balances.
|
Total Assets
|
|
June 30, 2015
|
|
December 31, 2014
|
||||
|
|
(in millions)
|
||||||
US SBU
|
|
$
|
10,089
|
|
|
$
|
10,062
|
|
Andes SBU
|
|
8,349
|
|
|
7,888
|
|
||
Brazil SBU
|
|
7,790
|
|
|
8,439
|
|
||
MCAC SBU
|
|
5,031
|
|
|
4,948
|
|
||
Europe SBU
|
|
3,497
|
|
|
3,525
|
|
||
Asia SBU
|
|
3,127
|
|
|
2,972
|
|
||
Assets of held-for-sale businesses
|
|
158
|
|
|
—
|
|
||
Corporate and Other & eliminations
|
|
543
|
|
|
1,132
|
|
||
Total Assets
|
|
$
|
38,584
|
|
|
$
|
38,966
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
(in millions)
|
||||||||||||||
Contingency reversal (Kazakhstan)
|
$
|
—
|
|
|
$
|
18
|
|
|
$
|
—
|
|
|
$
|
18
|
|
Gain on sale of assets
|
6
|
|
|
8
|
|
|
11
|
|
|
10
|
|
||||
Allowance for Funds Used During Construction (IPL)
|
3
|
|
|
1
|
|
|
7
|
|
|
2
|
|
||||
Other
|
6
|
|
|
6
|
|
|
13
|
|
|
15
|
|
||||
Total other income
|
$
|
15
|
|
|
$
|
33
|
|
|
$
|
31
|
|
|
$
|
45
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
(in millions)
|
||||||||||||||
Loss on sale and disposal of assets
|
$
|
8
|
|
|
$
|
12
|
|
|
$
|
23
|
|
|
$
|
19
|
|
Legal settlement
|
5
|
|
|
—
|
|
|
8
|
|
|
—
|
|
||||
Other
|
1
|
|
|
5
|
|
|
3
|
|
|
6
|
|
||||
Total other expense
|
$
|
14
|
|
|
$
|
17
|
|
|
$
|
34
|
|
|
$
|
25
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
(in millions)
|
||||||||||||||
DP&L (East Bend)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12
|
|
Ebute
|
—
|
|
|
52
|
|
|
—
|
|
|
52
|
|
||||
UK Wind
|
37
|
|
|
11
|
|
|
37
|
|
|
11
|
|
||||
Other
|
—
|
|
|
—
|
|
|
8
|
|
|
$
|
—
|
|
|||
Total asset impairment expense
|
$
|
37
|
|
|
$
|
63
|
|
|
$
|
45
|
|
|
$
|
75
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
(in millions)
|
||||||||||||||
Revenue
|
$
|
—
|
|
|
$
|
104
|
|
|
$
|
—
|
|
|
$
|
233
|
|
Income from operations of discontinued businesses, before income tax
|
$
|
—
|
|
|
$
|
15
|
|
|
$
|
—
|
|
|
$
|
49
|
|
Income tax expense
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
(22
|
)
|
||||
Income from operations of discontinued businesses, after income tax
|
$
|
—
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
27
|
|
Net loss from disposal & impairments of discontinued businesses, after income tax
|
$
|
—
|
|
|
$
|
(13
|
)
|
|
$
|
—
|
|
|
$
|
(56
|
)
|
|
Three Months Ended June 30,
|
||||||||||||||||||||
|
2015
|
|
2014
|
||||||||||||||||||
|
Income
|
|
Shares
|
|
$ per Share
|
|
Income
|
|
Shares
|
|
$ per Share
|
||||||||||
|
(in millions except per share data)
|
||||||||||||||||||||
BASIC EARNINGS PER SHARE
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from continuing operations attributable to The AES Corporation common stockholders
|
$
|
69
|
|
|
693
|
|
|
$
|
0.10
|
|
|
$
|
142
|
|
|
725
|
|
|
$
|
0.20
|
|
EFFECT OF DILUTIVE SECURITIES
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Stock options
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Restricted stock units
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||
DILUTED EARNINGS PER SHARE
|
$
|
69
|
|
|
695
|
|
|
$
|
0.10
|
|
|
$
|
142
|
|
|
728
|
|
|
$
|
0.20
|
|
|
Six Months Ended June 30,
|
||||||||||||||||||||
|
2015
|
|
2014
|
||||||||||||||||||
|
Income
|
|
Shares
|
|
$ per Share
|
|
Income
|
|
Shares
|
|
$ per Share
|
||||||||||
|
(in millions except per share data)
|
||||||||||||||||||||
BASIC EARNINGS PER SHARE
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from continuing operations attributable to The AES Corporation common stockholders
|
$
|
211
|
|
|
698
|
|
|
$
|
0.30
|
|
|
$
|
95
|
|
|
725
|
|
|
$
|
0.13
|
|
EFFECT OF DILUTIVE SECURITIES
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Stock options
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
||||
Restricted stock units
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||
DILUTED EARNINGS PER SHARE
|
$
|
211
|
|
|
701
|
|
|
$
|
0.30
|
|
|
$
|
95
|
|
|
728
|
|
|
$
|
0.13
|
|
•
|
US (United States),
|
•
|
Andes (Chile, Colombia, and Argentina),
|
•
|
Brazil,
|
•
|
MCAC (Mexico, Central America and the Caribbean),
|
•
|
Europe (Europe and Middle East), and
|
•
|
Asia.
|
•
|
Overview of
Q2 2015
Results and Strategic Performance
|
•
|
Review of Consolidated Results of Operations
|
•
|
Non-GAAP Measures and SBU Analysis
|
•
|
Key Trends and Uncertainties
|
•
|
Capital Resources and Liquidity
|
•
|
Reducing complexity:
By exiting businesses and markets where we do not have a competitive advantage, we are simplifying our portfolio and reducing risk.
|
•
|
Leveraging our platforms:
Focusing our growth on platform expansions, including adjacencies, in markets where we already operate and have a competitive advantage to realize attractive risk-adjusted returns. We currently have 5,859 MW under construction. These projects represent $7 billion in total capital expenditures, with the majority of AES’ $1.3 billion in equity already funded and are on track to come online from 2015 through 2018.
|
◦
|
During the second quarter, we brought on-line the 1,240 MW coal-fired Mong Duong 2 project in Vietnam, which has a 25-year PPA with EVN, the state-owned utility.
|
•
|
Performance excellence:
We strive to be the low-cost manager of a portfolio of assets and to derive synergies and scale
|
•
|
Expanding access to capital:
By building strategic partnerships at the project and business level. Through these partnerships, we aim to optimize our risk-adjusted returns in our existing businesses and growth projects. By selling down portions of certain businesses, we can adjust our global exposure to commodity, fuel, country and other macroeconomic risks. Partial sell-downs of our assets can also serve to highlight or enhance the value of businesses in our portfolio.
|
◦
|
During the second quarter, CDPQ invested
$214 million
in IPALCO, the Parent Company of IPL in Indiana. We expect CDPQ to invest an additional
$135 million
in IPALCO by 2016. After completion of this investment, CDPQ’s direct and indirect interests in IPALCO will total 30%. There will be no change in management or operational control of IPALCO as a result of these transactions.
|
•
|
Allocating capital in a disciplined manner:
Our top priority is to maximize risk-adjusted returns to our shareholders, which we achieve by investing our discretionary cash and recycling the capital we receive from asset sales and strategic partnerships.
|
◦
|
In the second quarter of 2015, we invested
$271 million
by repurchasing
21 million
shares, including repurchasing 20 million shares from China Investment Corporation in May 2015.
|
◦
|
In the first six months of 2015, we repurchased
24 million
shares for
$306 million
and in July and August 2015, we repurchased
2.2 million
shares for
$29 million
. We currently have
$88 million
of authorization available for further buybacks.
|
◦
|
In the first six months of 2015, we paid
$141 million
in shareholder dividends and made $279 million of investments in our subsidiaries.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||
|
2015
|
|
2014
|
|
Change
|
|
% Change
|
|
2015
|
|
2014
|
|
Change
|
|
% Change
|
||||||||||||||
Diluted earnings per share from continuing operations
|
$
|
0.10
|
|
|
$
|
0.20
|
|
|
$
|
(0.10
|
)
|
|
-50
|
%
|
|
$
|
0.30
|
|
|
$
|
0.13
|
|
|
$
|
0.17
|
|
|
131
|
%
|
Adjusted EPS (a non-GAAP measure)
(1)
|
$
|
0.25
|
|
|
$
|
0.28
|
|
|
$
|
(0.03
|
)
|
|
-11
|
%
|
|
$
|
0.50
|
|
|
$
|
0.53
|
|
|
$
|
(0.03
|
)
|
|
-6
|
%
|
(1)
|
See reconciliation and definition under Non-GAAP Measures.
|
|
For the Six Months Ended June 30,
|
|||||||
KPIs
|
2015
|
|
2014
|
|
Variance
|
|||
Safety: Employee Lost-Time Incident Case Rate
|
0.134
|
|
|
0.120
|
|
|
-12
|
%
|
Safety: Operational Contractor Lost-Time Incident Case Rate
|
0.127
|
|
|
0.051
|
|
|
-149
|
%
|
Generation
|
|
|
|
|
|
|||
Commercial Availability (CA, %)
|
87.9
|
%
|
|
91.3
|
%
|
|
-3.4
|
%
|
Equivalent Forced Outage Factor (EFOF, %)
|
3.3
|
%
|
|
3.9
|
%
|
|
0.6
|
%
|
Heat Rate (BTU/kWh)
|
10,058
|
|
|
9,796
|
|
|
-262
|
|
Utility
|
|
|
|
|
|
|||
System Average Interruption Duration Index (SAIDI, hours)
|
5.8
|
|
|
5.8
|
|
|
—
|
|
System Average Interruption Frequency Index (SAIFI, number of interruptions)
|
3.3
|
|
|
3.7
|
|
|
0.4
|
|
Non-Technical Losses (%)
|
1.8
|
%
|
|
2.0
|
%
|
|
0.2
|
%
|
•
|
Lost-Time Incident Case Rate: Number of lost-time cases per number of full-time employees or contractors.
|
•
|
CA: Actual variable margin, as a percentage of potential variable margin if the unit had been available at full capacity during outages.
|
•
|
EFOF: The percentage of the time that a plant is not capable of producing energy due to unplanned operational reductions in production.
|
•
|
Heat Rate: The amount of energy used by an electrical generator or power plant to generate one kWh.
|
•
|
SAIDI: The total hours of interruption the average customer experiences annually. Trailing 12-month average.
|
•
|
SAIFI: The average number of interruptions the average customer experiences annually. Trailing 12-month average.
|
•
|
Non-Technical Losses: Delivered energy that was not billed due to measurement error, theft or other reasons. Trailing 12-month average.
|
•
|
US — An overall
decrease
of
$62 million
driven by:
|
◦
|
Lower wholesale volumes at IPL in Indiana due to a decrease in demand as a result of milder temperatures during 2015 compared to 2014 and lower pass-through costs;
|
◦
|
The sale of the MC
2
business in April 2015, which reduced volumes at DPL in Ohio;
|
◦
|
Increased customer switching at DPL, milder temperatures during 2015 compared to 2014 and lower retail prices, which were partially offset by higher capacity prices;
|
◦
|
Higher outages and lower dispatch at Hawaii; and
|
◦
|
Lower production and prices at Wind businesses.
|
•
|
Andes — An overall
decrease
of
$94 million
driven by:
|
◦
|
Unfavorable foreign exchange impacts of
$52 million
, primarily at Chivor in Colombia; and
|
◦
|
Lower spot and contract sales at Gener in Chile.
|
•
|
Brazil — An overall
decrease
of
$218 million
driven by:
|
◦
|
Unfavorable foreign exchange impacts of
$570 million
; and
|
◦
|
Higher contracted volumes sold by Tietê to Eletropaulo in 2015 compared to sales in the spot market in 2014.
|
◦
|
The results above were partially offset at Eletropaulo, driven by the reversal of a contingent regulatory liability and a higher tariff. See
Key Trends and Uncertainties—Regulatory
of this Form 10-Q for further information.
|
•
|
MCAC — An overall
decrease
of
$91 million
driven by:
|
◦
|
Lower LNG sales to third parties and lower PPA and spot prices in the Dominican Republic;
|
◦
|
Lower pass-through costs at El Salvador; and
|
◦
|
Lower availability, lower pass-through costs, and unfavorable foreign exchange impacts at Mexico.
|
•
|
Europe — An overall
decrease
of
$6 million
driven by:
|
◦
|
Unfavorable foreign exchange impacts of
$31 million
(primarily at Maritza in Bulgaria and Northern Ireland in the UK);
|
◦
|
Lower dispatch, the timing of outages, and lower prices at Kilroot in the UK;
|
◦
|
The sales of UK Wind and Ebute in Nigeria in August and November 2014, respectively; and
|
◦
|
Lower pass-through costs at Amman East in Jordan.
|
◦
|
The results above were partially offset by new operations at IPP4 in Jordan (commencing in July 2014), the timing of outages at Maritza, and higher generation and prices at Kazakhstan.
|
•
|
Asia — An overall
increase
of
$24 million
driven by:
|
◦
|
Contributions from Mong Duong in Vietnam, which commenced its principal operations in April 2015.
|
◦
|
The results above were partially offset by Kelanitissa in Sri Lanka which has not been dispatched in 2015, and Masinloc in the Philippines due to lower pass-through costs.
|
•
|
US — An overall
decrease
of
$19 million
driven by:
|
◦
|
Higher outages and related fixed costs at Hawaii;
|
◦
|
Lower production and prices at Wind businesses; and
|
◦
|
Lower wholesale margins at IPL.
|
◦
|
The results above were partially offset at DPL, primarily due to the impact of increased net capacity prices and lower fixed costs.
|
•
|
Andes — An overall
decrease
of
$29 million
driven by:
|
◦
|
Unfavorable
foreign exchange impacts of
$17 million
(primarily at Chivor);
|
◦
|
The timing of planned outages and related costs at Gener;
|
◦
|
Lower contract prices in Chile and higher gas prices at TermoAndes; and
|
◦
|
The timing of planned maintenance and higher fixed costs due to inflation at Argentina.
|
◦
|
The results above were partially offset by higher generation at Chivor.
|
•
|
Brazil — An overall
decrease
of
$47 million
driven by:
|
◦
|
Unfavorable foreign exchange impacts of
$88 million
;
|
◦
|
Higher contracted volumes at Tietê sold to Eletropaulo in the second quarter of 2015 compared to sales in the spot market in the second quarter of 2014; and
|
◦
|
Higher fixed costs, lower volumes, and a favorable 2014 true-up of subsidies at Sul.
|
◦
|
The results above were partially offset at Eletropaulo, driven by the reversal of a contingent regulatory liability and a higher tariff.
|
•
|
MCAC — An overall
increase
of
$19 million
driven by:
|
◦
|
Improved hydrological conditions and the commencement of power barge operations at Panama, which resulted in higher generation and lower energy purchases.
|
◦
|
The results above were partially offset at the Dominican Republic, driven by lower availability arising from higher outages, and at Mexico due to higher fuel costs and lower availability.
|
•
|
Europe — An overall
decrease
of
$13 million
driven by:
|
◦
|
Unfavorable
foreign exchange impacts of
$9 million
;
|
◦
|
Lower dispatch, lower prices and the timing of planned outages in Kilroot; and
|
◦
|
The sales of UK Wind and Ebute as discussed above.
|
◦
|
The results above were partially offset by higher volumes and prices driven by improved hydrology at Kazakhstan, new operations at IPP4 in Jordan, and the timing of planned outages at Maritza.
|
•
|
Asia — An overall
increase
of
$20 million
driven by:
|
◦
|
Better availability at Masinloc; and
|
◦
|
Mong Duong due to the commencement of its principal operations in April 2015.
|
•
|
US — An overall
decrease
of
$66 million
driven by:
|
◦
|
Lower wholesale volumes at IPL due to higher outages, lower pass-through costs, and a decrease in demand as a result of milder temperatures during 2015 compared to 2014;
|
◦
|
The sale of the MC
2
business in April 2015, which reduced volumes at DPL;
|
◦
|
Increased customer switching at DPL; and
|
◦
|
Lower production and prices at Wind businesses.
|
◦
|
The results above were partially offset by higher capacity, wholesale and retail prices at DPL.
|
•
|
Andes — An overall
decrease
of
$102 million
driven by:
|
◦
|
Unfavorable foreign exchange impacts of
$85 million
, primarily at Chivor; and
|
◦
|
Lower spot sales and prices at Gener.
|
◦
|
The results above were partially offset by new contracts at Gener and higher generation at Chivor.
|
•
|
Brazil — An overall
decrease
of
$333 million
driven by:
|
◦
|
Unfavorable
foreign exchange impacts of
$898 million
; and
|
◦
|
Higher contracted volumes at Tietê sold to Eletropaulo in the first half of 2015 compared to sales in the spot market in the first half of 2014.
|
◦
|
The results above were partially offset at Eletropaulo, driven by the reversal of a contingent regulatory liability and a higher tariff. Additionally, Uruguaiana benefited from a longer period of operations and higher pass-through costs.
|
•
|
MCAC — An overall
decrease
of
$131 million
driven by:
|
◦
|
Lower prices in the Dominican Republic, primarily related to lower LNG sales to third parties, lower PPA and spot prices, and lower availability;
|
◦
|
A decrease in energy pass-through costs at El Salvador; and
|
◦
|
Lower availability, lower pass-through costs, and unfavorable foreign exchange impacts at Mexico.
|
•
|
Europe — An overall
decrease
of
$67 million
driven by:
|
◦
|
Unfavorable
foreign exchange impacts of
$66 million
(primarily at Maritza and Northern Ireland);
|
◦
|
Lower dispatch, the timing of planned outages, and prices at Kilroot;
|
◦
|
Lower pass-through costs at Amman East in Jordan; and
|
◦
|
The sale of the UK Wind business and Ebute in August and November 2014, respectively.
|
◦
|
The results above were partially offset by the commencement of operations at IPP4 in Jordan in July 2014.
|
•
|
Asia — An overall
decrease
of
$25 million
driven by:
|
◦
|
Kelanitissa not being dispatched in 2015; and
|
◦
|
Lower pass-through costs at Masinloc.
|
◦
|
The results above were partially offset by contributions from Mong Duong, which commenced its principal operations in April 2015.
|
•
|
US — An overall
increase
of
$20 million
driven by:
|
◦
|
Increased capacity prices, lower fixed costs, and higher margin at DPL, primarily due to outages and lower gas availability in the first quarter of 2014.
|
◦
|
The results above were partially offset by lower production at the US Wind businesses, lower availability and dispatch in Hawaii, and lower wholesale margin at IPL.
|
•
|
Andes — An overall
increase
of
$11 million
driven by:
|
◦
|
A new tolling agreement and higher capacity revenue in Gener related to a settlement occurring in the first quarter of 2014; and
|
◦
|
Higher prices in Argentina due to the impact of Resolution 482 in the second quarter 2015, which updated Resolution 529 passed in May 2014.
|
◦
|
The results above were partially offset by
unfavorable
foreign exchange impacts of
$27 million
(primarily at Chivor), and lower generation, higher planned outages, and higher fixed costs (driven by inflation) in Argentina.
|
•
|
Brazil — An overall
decrease
of
$191 million
driven by:
|
◦
|
Unfavorable
foreign exchange impacts of
$126 million
;
|
◦
|
Higher contracted volumes sold by Tietê to Eletropaulo in the first half of 2015 compared to sales in the spot market in the first half of 2014; and
|
◦
|
Higher fixed costs and lower volumes at Sul.
|
◦
|
The results above were partially offset at Eletropaulo, driven by the reversal of a contingent regulatory liability and a higher tariff.
|
•
|
MCAC — An overall
increase
of
$33 million
driven by:
|
◦
|
Improved hydrological conditions and the commencement of power barge operations at Panama, which resulted in higher generation and lower energy purchases; and
|
◦
|
A one-time unfavorable adjustment in 2014 to unbilled revenue in El Salvador.
|
◦
|
The results above were partially offset by lower PPA and spot sales in the Dominican Republic triggered by higher outages and higher purchases; and higher fuel costs, lower availability, and
unfavorable
foreign exchange impacts in Mexico.
|
•
|
Europe — An overall
decrease
of
$43 million
driven by:
|
◦
|
Unfavorable
foreign exchange impacts of
$23 million
;
|
◦
|
Lower dispatch, the timing of planned outages, and prices at Kilroot; and
|
◦
|
The sales of UK Wind and Ebute as discussed above.
|
◦
|
The results above were partially offset by higher volumes and prices due to improved hydrology in Kazakhstan, new operations at IPP4 in Jordan, and the timing of planned outages in Maritza.
|
•
|
Asia — An overall
increase
of
$34 million
driven by:
|
◦
|
Higher availability at Masinloc in 2015 and an unfavorable impact occurring in the first quarter of 2014 due to the market operator’s retrospective adjustment to energy prices calculated in November and December 2013; and
|
◦
|
Mong Duong due to the commencement of its principal operations in April 2015.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
(in millions)
|
||||||||||||||
Parent Company
|
$
|
14
|
|
|
$
|
(1
|
)
|
|
$
|
(19
|
)
|
|
$
|
(3
|
)
|
Argentina
|
2
|
|
|
1
|
|
|
17
|
|
|
(14
|
)
|
||||
Other
|
(1
|
)
|
|
7
|
|
|
(6
|
)
|
|
5
|
|
||||
Total
(1)
|
$
|
15
|
|
|
$
|
7
|
|
|
$
|
(8
|
)
|
|
$
|
(12
|
)
|
(1)
|
Includes
$10 million
and
$10 million
of gains on foreign currency derivative contracts for the three months ended June 30, 2015 and 2014, respectively, and
$46 million
and
$43 million
of gains on foreign currency derivative contracts for the
six months ended
June 30, 2015
and
2014
, respectively.
|
•
|
a gain of
$14 million
at the Parent Company resulting from net gains on remeasurement of intercompany notes, partially offset by losses on foreign currency options.
|
•
|
a loss of
$19 million
at the Parent Company, which was primarily due to net remeasurement losses on intercompany notes, partially offset by gains on foreign currency options; and
|
•
|
a gain of
$17 million
in Argentina, which was primarily related to the favorable impact of foreign currency derivatives associated with government receivables at AES Argentina (an Argentine Peso functional currency subsidiary), partially offset by losses from the remeasurement of U.S. Dollar denominated debt, and losses from the remeasurement of local currency asset balances at Termoandes (a U.S. Dollar functional currency subsidiary).
|
•
|
losses of
$14 million
in Argentina, primarily due to the devaluation of the Argentine Peso against the U.S. Dollar, resulting in remeasurement losses at AES Argentina (an Argentine Peso functional currency subsidiary) associated with its U.S. Dollar denominated debt, and losses at Termoandes (a U.S. Dollar functional currency subsidiary) from the remeasurement of local currency asset balances. These losses were partially offset by the favorable impact of foreign currency embedded derivatives associated with government receivables at AES Argentina.
|
•
|
The timing of planned maintenance at certain businesses;
|
•
|
Unfavorable foreign currency exchange;
|
•
|
Lower demand and contracting strategy in Brazil;
|
•
|
The net impact from the reversal of liabilities in Brazil and Europe; and
|
•
|
Increased losses from debt extinguishments.
|
•
|
Lower impairment expense;
|
•
|
Improved hydrology in Panama and Colombia;
|
•
|
Lower interest expense at the Parent; and
|
•
|
A lower effective tax rate.
|
•
|
Lower impairment expense;
|
•
|
Improved hydrology in Panama and Colombia;
|
•
|
Lower interest expense at the Parent Company; and
|
•
|
A lower effective tax rate.
|
•
|
Unfavorable foreign currency exchange;
|
•
|
Lower demand and contracting strategy in Brazil; and
|
•
|
The net impact from the reversal of liabilities in Brazil and Europe.
|
•
|
Electricity and fuel purchases,
|
•
|
O&M costs,
|
•
|
Depreciation and amortization expense,
|
•
|
Bad debt expense and recoveries,
|
•
|
General administrative and support costs at the businesses, and
|
•
|
Gains or losses on derivatives associated with the purchase and sale of electricity or fuel.
|
•
|
General and administrative expense in the corporate segment, as well as business development costs;
|
•
|
Interest expense and interest income;
|
•
|
Other expense and other income;
|
•
|
Realized foreign currency transaction gains and losses; and
|
•
|
Net equity in earnings of affiliates.
|
Adjusted Operating Margin
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
($’s in millions)
|
||||||||||||||
US
|
$
|
117
|
|
|
$
|
144
|
|
|
$
|
292
|
|
|
$
|
287
|
|
Andes
|
90
|
|
|
116
|
|
|
189
|
|
|
183
|
|
||||
Brazil
|
44
|
|
|
82
|
|
|
84
|
|
|
168
|
|
||||
MCAC
|
136
|
|
|
126
|
|
|
214
|
|
|
223
|
|
||||
Europe
|
57
|
|
|
68
|
|
|
154
|
|
|
195
|
|
||||
Asia
|
22
|
|
|
26
|
|
|
33
|
|
|
36
|
|
||||
Corp/Other
|
12
|
|
|
4
|
|
|
24
|
|
|
26
|
|
||||
Intersegment Eliminations
|
(1
|
)
|
|
3
|
|
|
(3
|
)
|
|
(3
|
)
|
||||
Total Adjusted Operating Margin
|
477
|
|
|
569
|
|
|
987
|
|
|
1,115
|
|
||||
Noncontrolling Interests Adjustment
|
276
|
|
|
243
|
|
|
491
|
|
|
501
|
|
||||
Derivatives Adjustment
|
1
|
|
|
7
|
|
|
(3
|
)
|
|
(3
|
)
|
||||
Operating Margin
|
$
|
754
|
|
|
$
|
819
|
|
|
$
|
1,475
|
|
|
$
|
1,613
|
|
Adjusted PTC
(1)
|
Total Adjusted PTC
|
|
Intersegment
|
|
External Adjusted PTC
|
||||||||||||||||||
Three Months Ended June 30,
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
US SBU
|
$
|
56
|
|
|
$
|
80
|
|
|
$
|
3
|
|
|
$
|
3
|
|
|
$
|
59
|
|
|
$
|
83
|
|
Andes SBU
|
81
|
|
|
104
|
|
|
5
|
|
|
1
|
|
|
86
|
|
|
105
|
|
||||||
Brazil SBU
|
41
|
|
|
115
|
|
|
—
|
|
|
—
|
|
|
41
|
|
|
115
|
|
||||||
MCAC SBU
|
106
|
|
|
95
|
|
|
5
|
|
|
10
|
|
|
111
|
|
|
105
|
|
||||||
Europe SBU
|
41
|
|
|
73
|
|
|
(1
|
)
|
|
3
|
|
|
40
|
|
|
76
|
|
||||||
Asia SBU
|
30
|
|
|
23
|
|
|
1
|
|
|
—
|
|
|
31
|
|
|
23
|
|
||||||
Corporate and Other
|
(104
|
)
|
|
(150
|
)
|
|
(13
|
)
|
|
(17
|
)
|
|
(117
|
)
|
|
(167
|
)
|
||||||
Total Adjusted PTC
|
$
|
251
|
|
|
$
|
340
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
251
|
|
|
$
|
340
|
|
Reconciliation to Income from continuing operations, net of tax, attributable to The AES Corporation:
|
|||||||||||||||||||||||
Non-GAAP Adjustments:
|
|
|
|
|
|||||||||||||||||||
Unrealized derivative gains
|
|
2
|
|
|
22
|
|
|||||||||||||||||
Unrealized foreign currency gains (losses)
|
|
3
|
|
|
(7
|
)
|
|||||||||||||||||
Disposition/acquisition gains (losses)
|
|
4
|
|
|
(2
|
)
|
|||||||||||||||||
Impairment losses
|
|
(30
|
)
|
|
(99
|
)
|
|||||||||||||||||
Loss on extinguishment of debt
|
|
(115
|
)
|
|
(13
|
)
|
|||||||||||||||||
Pretax contribution
|
|
115
|
|
|
241
|
|
|||||||||||||||||
Income tax expense attributable to The AES Corporation
|
|
(46
|
)
|
|
(99
|
)
|
|||||||||||||||||
Income from continuing operations, net of tax, attributable to The AES Corporation
|
|
$
|
69
|
|
|
$
|
142
|
|
Adjusted PTC
(1)
|
Total Adjusted PTC
|
|
Intersegment
|
|
External Adjusted PTC
|
||||||||||||||||||
Six Months Ended June 30,
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
US SBU
|
$
|
162
|
|
|
$
|
155
|
|
|
$
|
6
|
|
|
$
|
6
|
|
|
$
|
168
|
|
|
$
|
161
|
|
Andes SBU
|
172
|
|
|
157
|
|
|
8
|
|
|
4
|
|
|
180
|
|
|
161
|
|
||||||
Brazil SBU
|
62
|
|
|
184
|
|
|
1
|
|
|
1
|
|
|
63
|
|
|
185
|
|
||||||
MCAC SBU
|
156
|
|
|
160
|
|
|
9
|
|
|
14
|
|
|
165
|
|
|
174
|
|
||||||
Europe SBU
|
126
|
|
|
188
|
|
|
2
|
|
|
6
|
|
|
128
|
|
|
194
|
|
||||||
Asia SBU
|
42
|
|
|
31
|
|
|
1
|
|
|
1
|
|
|
43
|
|
|
32
|
|
||||||
Corporate and Other
|
(217
|
)
|
|
(292
|
)
|
|
(27
|
)
|
|
(32
|
)
|
|
(244
|
)
|
|
(324
|
)
|
||||||
Total Adjusted PTC
|
$
|
503
|
|
|
$
|
583
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
503
|
|
|
$
|
583
|
|
Reconciliation to Income from continuing operations, net of tax, attributable to The AES Corporation:
|
|||||||||||||||||||||||
Non-GAAP Adjustments:
|
|
|
|
||||||||||||||||||||
Unrealized derivative gains
|
17
|
|
|
32
|
|
||||||||||||||||||
Unrealized foreign currency losses
|
(44
|
)
|
|
(33
|
)
|
||||||||||||||||||
Disposition/acquisition gains (losses)
|
9
|
|
|
(1
|
)
|
||||||||||||||||||
Impairment losses
|
(36
|
)
|
|
(265
|
)
|
||||||||||||||||||
Loss on extinguishment of debt
|
(142
|
)
|
|
(147
|
)
|
||||||||||||||||||
Pretax contribution
|
307
|
|
|
169
|
|
||||||||||||||||||
Income tax expense attributable to The AES Corporation
|
(96
|
)
|
|
(74
|
)
|
||||||||||||||||||
Income from continuing operations, net of tax, attributable to The AES Corporation
|
$
|
211
|
|
|
$
|
95
|
|
(1)
|
Adjusted PTC in each segment before intersegment eliminations includes the effect of intercompany transactions with other segments except for interest, charges for certain management fees and the write-off of intercompany balances.
|
Adjusted EPS
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
|
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
||||||||
Diluted earnings per share from continuing operations
|
$
|
0.10
|
|
|
$
|
0.20
|
|
|
$
|
0.30
|
|
|
$
|
0.13
|
|
|
Unrealized derivative (gains) losses
(1)
|
—
|
|
|
(0.02
|
)
|
|
(0.02
|
)
|
|
(0.03
|
)
|
|
||||
Unrealized foreign currency transaction (gains) losses
(2)
|
—
|
|
|
—
|
|
|
0.04
|
|
|
0.03
|
|
|
||||
Disposition/acquisition (gains) losses
|
(0.01
|
)
|
|
—
|
|
|
(0.01
|
)
|
|
—
|
|
|
||||
Impairment losses
|
0.04
|
|
(3)
|
0.09
|
|
(4)
|
0.05
|
|
(3)
|
0.26
|
|
(5)
|
||||
Loss on extinguishment of debt
|
0.12
|
|
(6)
|
0.01
|
|
(7)
|
0.14
|
|
(8)
|
0.14
|
|
(9)
|
||||
Adjusted EPS
|
$
|
0.25
|
|
|
$
|
0.28
|
|
|
$
|
0.50
|
|
|
$
|
0.53
|
|
|
(1)
|
Unrealized derivative (gains) losses were net of income tax per share of $
0.00
and $
(0.01)
in the three months ended
June 30, 2015
and
2014
, and of $
(0.01)
and $
(0.01)
in the six months ended
June 30, 2015
and
2014
, respectively.
|
(2)
|
Unrealized foreign currency transaction (gains) losses were net of income tax per share of $
(0.01)
and $
0.00
in the three months ended
June 30, 2015
and
2014
, and of $
0.02
and $
0.01
in the six months ended
June 30, 2015
and
2014
, respectively.
|
(3)
|
Amount primarily relates to the asset impairment at
UK Wind
of $
37
million ($
30
million, or $
0.04
per share, net of income tax per share of $
0.00
).
|
(4)
|
Amount primarily relates to the asset impairment at
Ebute
of $
52
million ($
34
million, or $
0.05
per share, net of income tax per share of $
0.02
) and at
Newfield
of $
11
million ($
6
million, or $
0.00
per share, net of income tax per share of $
0.00
) and other-than-temporary impairment of our
Silver Ridge
equity method investment of $
44
million ($
30
million, or $
0.04
per share, net of income tax per share of
$0.02
).
|
(5)
|
Amount primarily relates to the goodwill impairments at
DPLER
of $
136
million ($
92
million, or $
0.13
per share, net of income tax per share of
0.06
), at
Buffalo Gap
of $
18
million ($
18
million, or $
0.03
per share, net of income tax per share of $
0.00
) and asset impairments at
Ebute
of $
52
million ($
34
million, or $
0.05
per share, net of income tax per share of $
0.02
), at
Newfield
of $
11
million ($
6
million, or $
0.00
per share, net of income tax per share of $
0.00
), at
DPL
of $
12
million ($
8
million, or $
0.01
per share, net of income tax per share of $
0.00
) and other-than-temporary impairment of our
Silver Ridge
equity method investment of $
44
million ($
30
million, or $
0.04
per share, net of income tax per share of $
0.02
).
|
(6)
|
Amount primarily relates to the loss on early retirement of debt at the
Parent Company
of $
85
million ($
58
million, or $
0.08
per share, net of income tax per share of $
0.04
), at
IPL
of $
19
million ($
10
million, or $
0.01
per share, net of income tax per share of $
0.01
), at
Panama
of $
16
million ($
5
million, or $
0.01
per share, net of income tax per share of $
0.00
) and at
Sul
of $
4
million ($
3
million, or $
0.00
per share, net of income tax per share of $
0.00
).
|
(7)
|
Amount primarily relates to the loss on early retirement of debt at the
Parent Company
of $
13
million ($
8
million, or $
0.01
per share, net of income tax per share of $
0.01
).
|
(8)
|
Amount primarily relates to the loss on early retirement of debt at the
Parent Company
of $
111
million ($
76
million, or $
0.11
per share, net of income tax per share of $
0.05
), at
IPL
of $
19
million ($
10
million, or $
0.01
per share, net of income tax per share of $
0.01
), at
Panama
of $
16
million ($
5
million, or $
0.01
per share, net of income tax per share of $
0.00
) and at
Sul
of $
4
million ($
3
million, or $
0.00
per share, net of income tax per share of $
0.00
).
|
(9)
|
Amount primarily relates to the loss on early retirement of debt at the
Parent Company
of $
145
million ($
99
million, or $
0.14
per share, net of income tax per share of $
0.06
).
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||
|
2015
|
|
2014
|
|
$ Change
|
|
% Change
|
|
2015
|
|
2014
|
|
$ Change
|
|
% Change
|
||||||||||||||
|
($ in millions)
|
||||||||||||||||||||||||||||
Operating Margin
|
$
|
125
|
|
|
$
|
144
|
|
|
$
|
(19
|
)
|
|
-13
|
%
|
|
$
|
298
|
|
|
$
|
278
|
|
|
$
|
20
|
|
|
7
|
%
|
Noncontrolling Interests Adjustment
|
(8
|
)
|
|
—
|
|
|
|
|
|
|
(10
|
)
|
|
—
|
|
|
|
|
|
||||||||||
Derivatives Adjustment
|
—
|
|
|
—
|
|
|
|
|
|
|
4
|
|
|
9
|
|
|
|
|
|
||||||||||
Adjusted Operating Margin
|
$
|
117
|
|
|
$
|
144
|
|
|
$
|
(27
|
)
|
|
-19
|
%
|
|
292
|
|
|
287
|
|
|
$
|
5
|
|
|
2
|
%
|
||
Adjusted PTC
|
$
|
56
|
|
|
$
|
80
|
|
|
$
|
(24
|
)
|
|
-30
|
%
|
|
$
|
162
|
|
|
$
|
155
|
|
|
$
|
7
|
|
|
5
|
%
|
•
|
US Generation decreased by $23 million, driven by a decrease of $10 million in Hawaii primarily due to higher outages and related fixed costs, and lower production and prices across the US Wind businesses of $8 million; and
|
•
|
IPL decreased by $10 million, driven by lower wholesale margin due to outages and lower market prices of electricity.
|
•
|
DPL increased by $13 million, driven by lower fixed costs of $8 million due to decreased marketing, employee benefit related costs, and depreciation expense. Additionally, $5 million of the increase was primarily driven by higher capacity prices and decreased transmission and congestion charges. These increases were partially offset by decreased margins as a result of more of DP&L's generation being sold in the wholesale market at lower prices compared to supplying DP&L retail customers in 2014 as required for DP&Ls transition to market.
|
•
|
DPL increased by $58 million, primarily driven by an increase of $38 million due to outages and lower gas availability that occurred in the first quarter of 2014, as well as increased capacity prices and decreased transmission and congestion charges. In addition, fixed costs decreased $20 million driven by decreases in marketing, storm restoration, employee benefit related costs, and depreciation expense.
|
•
|
US Generation decreased by $28 million, driven primarily by lower production and prices across the US Wind businesses of $19 million, and a decrease of $7 million in Hawaii primarily due to lower availability and dispatch; and
|
•
|
IPL decreased by $11 million driven by lower wholesale margin due to outages and lower market prices of electricity.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||
|
2015
|
|
2014
|
|
$ Change
|
|
% Change
|
|
2015
|
|
2014
|
|
$ Change
|
|
% Change
|
||||||||||||||
|
($ in millions)
|
||||||||||||||||||||||||||||
Operating Margin
|
$
|
119
|
|
|
$
|
148
|
|
|
$
|
(29
|
)
|
|
-20
|
%
|
|
$
|
250
|
|
|
$
|
239
|
|
|
$
|
11
|
|
|
5
|
%
|
Noncontrolling Interests Adjustment
|
(29
|
)
|
|
(32
|
)
|
|
|
|
|
|
(61
|
)
|
|
(56
|
)
|
|
|
|
|
||||||||||
Derivatives Adjustment
|
—
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|
|
|
|
||||||||||
Adjusted Operating Margin
|
$
|
90
|
|
|
$
|
116
|
|
|
$
|
(26
|
)
|
|
-22
|
%
|
|
$
|
189
|
|
|
$
|
183
|
|
|
$
|
6
|
|
|
3
|
%
|
Adjusted PTC
|
$
|
81
|
|
|
$
|
104
|
|
|
$
|
(23
|
)
|
|
-22
|
%
|
|
$
|
172
|
|
|
$
|
157
|
|
|
$
|
15
|
|
|
10
|
%
|
•
|
Argentina decreased by $17 million, driven by the timing of planned maintenance and related costs of $11 million, and higher fixed costs of $6 million primarily due to inflation; and
|
•
|
Gener decreased by $18 million, driven by the timing of planned outages and related costs of $18 million, lower contract prices in Chile and higher gas prices for Termoandes of $13 million, and higher depreciation expense of $5 million due to new capital investment. These results were partially offset by higher volumes of $19 million due to a new tolling agreement, net of lower hydro generation.
|
•
|
Chivor increased by $5 million, driven by higher generation of $15 million primarily due to higher inflows, and lower fixed costs of $7 million due to tunnel maintenance costs that were incurred in 2014. These results were partially offset by an unfavorable FX impact of $14 million.
|
•
|
Gener increased by $32 million, driven by a new tolling agreement of $26 million, higher capacity revenue of $5 million driven by a settlement occurring in the first quarter of 2014, and better prices of $8 million driven primarily by lower prices on purchased power. These results were partially offset by higher fixed and other costs of $13 million, primarily related to maintenance and depreciation.
|
•
|
Chivor decreased by $15 million, driven by unfavorable FX impacts of $25 million, partially offset by higher generation of $12 million; and
|
•
|
Argentina decreased by $7 million, driven by lower generation, higher planned outages and related costs of $12 million, and higher fixed costs of $10 million primarily due to inflation. These results were partially offset by higher prices of $16 million, primarily due to the impact of Resolution 482 in the second quarter of 2015, which updated Resolution 529 passed in May 2014.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||
|
2015
|
|
2014
|
|
$ Change
|
|
% Change
|
|
2015
|
|
2014
|
|
$ Change
|
|
% Change
|
||||||||||||||
|
($ in millions)
|
||||||||||||||||||||||||||||
Operating Margin
|
$
|
223
|
|
|
$
|
270
|
|
|
$
|
(47
|
)
|
|
-17
|
%
|
|
$
|
400
|
|
|
$
|
591
|
|
|
$
|
(191
|
)
|
|
-32
|
%
|
Noncontrolling Interests Adjustment
|
(179
|
)
|
|
(188
|
)
|
|
|
|
|
|
(316
|
)
|
|
(423
|
)
|
|
|
|
|
||||||||||
Derivatives Adjustment
|
—
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|
|
|
|
||||||||||
Adjusted Operating Margin
|
$
|
44
|
|
|
$
|
82
|
|
|
$
|
(38
|
)
|
|
-46
|
%
|
|
$
|
84
|
|
|
$
|
168
|
|
|
$
|
(84
|
)
|
|
-50
|
%
|
Adjusted PTC
|
$
|
41
|
|
|
$
|
115
|
|
|
$
|
(74
|
)
|
|
-64
|
%
|
|
$
|
62
|
|
|
$
|
184
|
|
|
$
|
(122
|
)
|
|
-66
|
%
|
•
|
Tietê decreased by $104 million, driven by unfavorable FX impacts of $29 million, the net impact of $71 million of higher contracted volumes sold to Eletropaulo in the second quarter of 2015 compared to sales in the spot market in the second quarter of 2014, and higher energy purchases due to lower hydrological production in the system
;
and
|
•
|
Sul decreased by $27 million, driven by higher fixed costs of $11 million, lower volumes of $8 million due to lower demand, and a $7 million favorable true-up of subsidies occurring in 2014.
|
•
|
Eletropaulo increased by $81 million, driven by a
$97 million
($135 million excluding FX) increase due to the reversal of a contingent regulatory liability, and a higher tariff of $36 million. These results were partially offset by unfavorable FX impacts of $55 million and higher fixed costs of $31 million, primarily due to higher bad debt expense, employee-related costs, and penalties.
|
•
|
Tietê decreased by $216 million, driven by unfavorable FX impacts of $55 million, the net impact of $161 million due to higher contracted volumes sold to Eletropaulo in the first half of 2015 compared to sales in the spot market in the first half of 2014, and higher energy purchases due to lower hydrological production in the system
;
and
|
•
|
Sul decreased by $45 million, driven by lower volumes of $22 million due to lower demand, and higher fixed costs of $17 million.
|
•
|
Eletropaulo increased by $63 million, driven by a
$97 million
($135 million excluding FX) increase due to the reversal of a contingent regulatory liability, and a higher tariff of $47 million. These results were partially offset by unfavorable FX impacts of $65 million and higher fixed costs of $60 million, primarily due to higher bad debt expense, employee-related costs, and penalties.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||
|
2015
|
|
2014
|
|
$ Change
|
|
% Change
|
|
2015
|
|
2014
|
|
$ Change
|
|
% Change
|
||||||||||||||
|
($ in millions)
|
||||||||||||||||||||||||||||
Operating Margin
|
$
|
165
|
|
|
$
|
146
|
|
|
$
|
19
|
|
|
13
|
%
|
|
$
|
268
|
|
|
$
|
235
|
|
|
$
|
33
|
|
|
14
|
%
|
Noncontrolling Interests Adjustment
|
(29
|
)
|
|
(17
|
)
|
|
|
|
|
|
(52
|
)
|
|
(10
|
)
|
|
|
|
|
||||||||||
Derivatives Adjustment
|
—
|
|
|
(3
|
)
|
|
|
|
|
|
(2
|
)
|
|
(2
|
)
|
|
|
|
|
||||||||||
Adjusted Operating Margin
|
$
|
136
|
|
|
$
|
126
|
|
|
$
|
10
|
|
|
8
|
%
|
|
$
|
214
|
|
|
$
|
223
|
|
|
$
|
(9
|
)
|
|
-4
|
%
|
Adjusted PTC
|
$
|
106
|
|
|
$
|
95
|
|
|
$
|
11
|
|
|
12
|
%
|
|
$
|
156
|
|
|
$
|
160
|
|
|
$
|
(4
|
)
|
|
-3
|
%
|
•
|
Panama increased by $34 million, mainly driven by better hydrological conditions which resulted in higher generation and lower energy purchases of $45 million, and $7 million due to the commencement of power barge operations at the end of March 2015. These results were partially offset by lower compensation from the government of Panama of $15 million due to lower volumes of energy purchased at lower spot prices.
|
•
|
Mexico decreased by $11 million, driven by higher fuel costs and lower availability; and
|
•
|
Dominican Republic decreased by $7 million, mainly related to a lower availability impact of $9 million. Results at Andres and Los Mina were essentially neutral, primarily related to lower LNG fuel costs of $32 million driven by lower commodity prices, which was offset by lower spot results of $18 million, lower frequency regulation of $6 million, and lower gas sales to third parties of $4 million.
|
•
|
Panama increased by $91 million, mainly driven by better hydrological conditions which resulted in higher generation and lower energy purchases of $114 million, and $7 million due to the commencement of power barge operations at the end of March 2015. These results were partially offset by lower compensation from the government of Panama of $20 million due to lower volumes of energy purchased at lower spot prices, and lower frequency regulation of $8 million; and
|
•
|
El Salvador increased by $18 million, primarily due to a 2014 one-time unfavorable adjustment to unbilled revenue of $12 million, as well as lower regulated fees and energy losses.
|
•
|
Dominican Republic decreased by $59 million, mainly related to lower PPA and spot sales of $36 million, lower availability of $22 million, lower gas sales to third parties of $14 million, lower frequency regulation of $12 million, and higher fixed costs of $9 million. These results were partially offset by lower LNG fuel costs of $35 million, driven by lower commodity prices; and
|
•
|
Mexico decreased $18 million, driven by higher fuel costs and lower availability.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||
|
2015
|
|
2014
|
|
$ Change
|
|
% Change
|
|
2015
|
|
2014
|
|
$ Change
|
|
% Change
|
||||||||||||||
|
($ in millions)
|
||||||||||||||||||||||||||||
Operating Margin
|
$
|
64
|
|
|
$
|
77
|
|
|
$
|
(13
|
)
|
|
-17
|
%
|
|
$
|
167
|
|
|
$
|
210
|
|
|
$
|
(43
|
)
|
|
-20
|
%
|
Noncontrolling Interests Adjustment
|
(6
|
)
|
|
(5
|
)
|
|
|
|
|
|
(14
|
)
|
|
(11
|
)
|
|
|
|
|
||||||||||
Derivatives Adjustment
|
(1
|
)
|
|
(4
|
)
|
|
|
|
|
|
1
|
|
|
(4
|
)
|
|
|
|
|
||||||||||
Adjusted Operating Margin
|
$
|
57
|
|
|
$
|
68
|
|
|
$
|
(11
|
)
|
|
-16
|
%
|
|
$
|
154
|
|
|
$
|
195
|
|
|
$
|
(41
|
)
|
|
-21
|
%
|
Adjusted PTC
|
$
|
41
|
|
|
$
|
73
|
|
|
$
|
(32
|
)
|
|
-44
|
%
|
|
$
|
126
|
|
|
$
|
188
|
|
|
$
|
(62
|
)
|
|
-33
|
%
|
•
|
Kilroot decreased by $29 million, driven by lower volumes and prices of $19 million primarily due to lower dispatch, and the timing of planned outages and related costs of $11 million; and
|
•
|
Loss of operations of $8 million from the sale of UK Wind assets and Ebute in August and November 2014, respectively.
|
•
|
Kazakhstan increased by $11 million, driven by higher volumes and prices of $13 million, primarily due to better hydrology;
|
•
|
New operations at IPP4 in Jordan of $9 million, which commenced operations in July 2014; and
|
•
|
Maritza increased by $7 million, driven by the timing of planned outages of $17 million. These results were partially offset by unfavorable FX impacts of $9 million.
|
•
|
Kilroot decreased by $37 million, primarily driven by lower volumes and prices of $25 million related to lower dispatch, and the timing of planned outages and related costs of $11 million;
|
•
|
Loss of operations of $23 million from the sale of UK Wind assets and Ebute in August and November 2014, respectively; and
|
•
|
Maritza decreased by $7 million, driven by unfavorable FX impacts of $17 million, partially offset by the timing of planned outages of $15 million.
|
•
|
New operations at IPP4 in Jordan of $19 million, which commenced operations in July 2014; and
|
•
|
Kazakhstan increased by $8 million, driven by higher volumes and prices of $13 million due primarily to better hydrology. These results were partially offset by unfavorable FX impacts of $3 million.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||
|
2015
|
|
2014
|
|
$ Change
|
|
% Change
|
|
2015
|
|
2014
|
|
$ Change
|
|
% Change
|
||||||||||||||
|
($ in millions)
|
||||||||||||||||||||||||||||
Operating Margin
|
$
|
47
|
|
|
$
|
27
|
|
|
$
|
20
|
|
|
74
|
%
|
|
$
|
71
|
|
|
$
|
37
|
|
|
$
|
34
|
|
|
92
|
%
|
Noncontrolling Interests Adjustment
|
(25
|
)
|
|
(1
|
)
|
|
|
|
|
|
(38
|
)
|
|
(1
|
)
|
|
|
|
|
||||||||||
Derivatives Adjustment
|
—
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|
|
|
|
||||||||||
Adjusted Operating Margin
|
$
|
22
|
|
|
$
|
26
|
|
|
$
|
(4
|
)
|
|
-15
|
%
|
|
$
|
33
|
|
|
$
|
36
|
|
|
$
|
(3
|
)
|
|
-8
|
%
|
Adjusted PTC
|
$
|
30
|
|
|
$
|
23
|
|
|
$
|
7
|
|
|
30
|
%
|
|
$
|
42
|
|
|
$
|
31
|
|
|
$
|
11
|
|
|
35
|
%
|
•
|
Mong Duong provided $10 million due to commencement of its principal operations in April 2015; and
|
•
|
Masinloc increased by $9 million, driven by better availability.
|
•
|
Masinloc increased by $20 million, primarily due to higher availability of $14 million and an unfavorable impact of $15 million occurring in the first quarter of 2014 due to the market operator’s retrospective adjustment to energy prices calculated in November and December 2013; and
|
•
|
Mong Duong increased by $11 million due to the commencement of its principal operations in April 2015.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||
|
2015
|
|
2014
|
|
$ Change
|
|
% Change
|
|
2015
|
|
2014
|
|
$ Change
|
|
% Change
|
||||||||||||||
Cash flows provided by (used in):
|
(in millions)
|
||||||||||||||||||||||||||||
Operating activities
|
$
|
153
|
|
|
$
|
232
|
|
|
$
|
(79
|
)
|
|
-34
|
%
|
|
$
|
590
|
|
|
$
|
453
|
|
|
$
|
137
|
|
|
30
|
%
|
Investing activities
|
(350
|
)
|
|
(65
|
)
|
|
(285
|
)
|
|
438
|
%
|
|
(1,070
|
)
|
|
(391
|
)
|
|
(679
|
)
|
|
174
|
%
|
||||||
Financing activities
|
(124
|
)
|
|
(118
|
)
|
|
(6
|
)
|
|
5
|
%
|
|
(11
|
)
|
|
(250
|
)
|
|
239
|
|
|
-96
|
%
|
||||||
Effect of exchange rate changes on cash
|
8
|
|
|
8
|
|
|
—
|
|
|
—
|
%
|
|
(19
|
)
|
|
(14
|
)
|
|
(5
|
)
|
|
36
|
%
|
||||||
Decrease in cash of discontinued and held-for sale businesses
|
(2
|
)
|
|
45
|
|
|
(47
|
)
|
|
-104
|
%
|
|
(7
|
)
|
|
75
|
|
|
(82
|
)
|
|
-109
|
%
|
||||||
Net (decrease) increase in cash and cash equivalents
|
(315
|
)
|
|
102
|
|
|
(417
|
)
|
|
-409
|
%
|
|
(517
|
)
|
|
(127
|
)
|
|
(390
|
)
|
|
307
|
%
|
||||||
Cash and cash equivalents at beginning of period
|
$
|
1,337
|
|
|
$
|
1,413
|
|
|
$
|
(76
|
)
|
|
-5
|
%
|
|
$
|
1,539
|
|
|
$
|
1,642
|
|
|
$
|
(103
|
)
|
|
-6
|
%
|
Cash and cash equivalents at end of period
|
$
|
1,022
|
|
|
$
|
1,515
|
|
|
$
|
(493
|
)
|
|
-33
|
%
|
|
$
|
1,022
|
|
|
$
|
1,515
|
|
|
$
|
(493
|
)
|
|
-33
|
%
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||
$ in millions
|
2015
|
|
2014
|
|
$ Change
|
|
% Change
|
|
2015
|
|
2014
|
|
$ Change
|
|
% Change
|
||||||||||||||
Net Income
|
$
|
264
|
|
|
$
|
275
|
|
|
$
|
(11
|
)
|
|
-4
|
%
|
|
$
|
518
|
|
|
$
|
341
|
|
|
$
|
177
|
|
|
52
|
%
|
Depreciation and amortization
|
299
|
|
|
319
|
|
|
(20
|
)
|
|
-6
|
%
|
|
597
|
|
|
625
|
|
|
(28
|
)
|
|
-4
|
%
|
||||||
Impairment expenses
|
37
|
|
|
107
|
|
|
(70
|
)
|
|
-65
|
%
|
|
45
|
|
|
273
|
|
|
(228
|
)
|
|
-84
|
%
|
||||||
Loss on the extinguishment of debt
|
122
|
|
|
15
|
|
|
107
|
|
|
713
|
%
|
|
145
|
|
|
149
|
|
|
(4
|
)
|
|
-3
|
%
|
||||||
Other non-cash adjustments
|
(101
|
)
|
|
(43
|
)
|
|
(58
|
)
|
|
-135
|
%
|
|
(35
|
)
|
|
108
|
|
|
(143
|
)
|
|
-132
|
%
|
||||||
Net income, adjusted for non-cash items
|
$
|
621
|
|
|
$
|
673
|
|
|
$
|
(52
|
)
|
|
-8
|
%
|
|
$
|
1,270
|
|
|
$
|
1,496
|
|
|
$
|
(226
|
)
|
|
-15
|
%
|
Net change in operating assets and liabilities
(1)
|
$
|
(468
|
)
|
|
$
|
(441
|
)
|
|
$
|
(27
|
)
|
|
-6
|
%
|
|
$
|
(680
|
)
|
|
$
|
(1,043
|
)
|
|
$
|
363
|
|
|
35
|
%
|
Net cash provided by operating activities
(2)
|
$
|
153
|
|
|
$
|
232
|
|
|
$
|
(79
|
)
|
|
-34
|
%
|
|
$
|
590
|
|
|
$
|
453
|
|
|
$
|
137
|
|
|
30
|
%
|
(1)
|
Refer to the first four tables below for explanations by operating assets and liabilities.
|
(2)
|
Refer to the last two tables below for drivers by business.
|
|
Three Months Ended June 30, 2015
|
||
Increase in other assets primarily regulatory assets at Eletropaulo and Sul, and service concession assets at Mong Duong
|
$
|
(525
|
)
|
Decrease in net income tax payable and other tax payables primarily at Chivor, Alicura, Maritza and in the US
|
(116
|
)
|
|
Increase in accounts receivable primarily at Eletropaulo, Mong Duong and Maritza, partially offset by a decrease at Uruguaiana
|
(107
|
)
|
|
Increase in other liabilities primarily regulatory liabilities at Eletropaulo and Sul
|
329
|
|
|
Other operating assets and liabilities
|
(49
|
)
|
|
Net change in operating assets and liabilities
|
$
|
(468
|
)
|
|
Three Months Ended June 30, 2014
|
||
Decrease in accounts payable and other current liabilities primarily at Eletropaulo, Sul and the Parent Company
|
$
|
(609
|
)
|
Increase in accounts receivable primarily at Sul and Alicura
|
(93
|
)
|
|
Decrease in other assets, primarily regulatory assets at Eletropaulo and Sul
|
128
|
|
|
Increase in other liabilities primarily regulatory liabilities at Eletropaulo and Sul
|
128
|
|
|
Other operating assets and liabilities
|
5
|
|
|
Net change in operating assets and liabilities
|
$
|
(441
|
)
|
|
Six Months Ended June 30, 2015
|
||
Increase in other assets, primarily regulatory assets at Eletropaulo and Sul, and service concession assets at Mong Duong
|
$
|
(815
|
)
|
Increase in accounts receivable primarily at Eletropaulo, Mong Duong, Sul, Alicura and Gener
|
(444
|
)
|
|
Decrease in net income tax payables and other tax payables primarily in the US and at Chivor
|
(131
|
)
|
|
Increase in inventory primarily at Mong Duong and IPALCO
|
(54
|
)
|
|
Increase in other liabilities primarily in regulatory liabilities at Eletropaulo and Sul, partially offset by IPALCO
|
453
|
|
|
Increase in accounts payable and other current liabilities primarily at Eletropaulo and Sul, partially offset by Tietê
|
179
|
|
|
Decrease in prepaid expense and other current assets primarily at Eletropaulo and DPL, partially offset by Sul
|
132
|
|
|
Net change in operating assets and liabilities
|
$
|
(680
|
)
|
|
Six Months Ended June 30, 2014
|
||
Increase in other assets primarily regulatory assets at Eletropaulo and Sul
|
$
|
(316
|
)
|
Increase in accounts receivable primarily at Sul, Alicura, Gener, Uruguaiana and Maritza
|
(312
|
)
|
|
Decrease in accounts payable and other current liabilities, primarily regulatory liabilities at Eletropaulo
|
(194
|
)
|
|
Decrease in net income tax and other tax payables primarily in the US and Brazil
|
(176
|
)
|
|
Other operating assets and liabilities
|
(45
|
)
|
|
Net change in operating assets and liabilities
|
$
|
(1,043
|
)
|
|
|
Amount
|
||
Brazil
—
decrease of $93 million primarily due to:
|
|
|
||
Decrease at Tietê primarily due to higher spot market energy purchases from unfavorable hydrology, higher transmission costs and lower collections
|
|
$
|
(160
|
)
|
Increase at Eletropaulo primarily due to higher collections mainly attributable to higher tariffs, partially offset by higher energy purchases resulting from unfavorable hydrology and higher transmission costs
|
|
59
|
|
|
Andes
—
decrease of $53 million primarily due to:
|
|
|
||
Decrease at Chivor in Colombia primarily due to higher current year tax payments resulting from higher taxable income in the prior year
|
|
(50
|
)
|
|
Corporate
— increase of $53 million primarily due to:
|
|
|
||
Increase primarily at the Parent Company driven by lower current year interest payments, swap termination payments made in the prior year upon refinance of debt, lower benefit requirements as well as the collection of realized gains resulting from the Company’s corporate hedging program
|
|
53
|
|
|
Other business drivers
|
|
19
|
|
|
|
|
$
|
(79
|
)
|
|
|
Amount
|
||
US
—
increase of $116 million primarily due to:
|
|
|
||
Increase at DPL primarily due to timing of collections, collection of deferred storm costs, lower interest paid and higher collateral deposits in the prior year as a result of outages
|
|
$
|
119
|
|
Asia
— decrease of $91 million primarily due to:
|
|
|
||
Decrease at Mong Duong primarily due to payment of service concession assets
|
|
(72
|
)
|
|
Decrease at Masinloc primarily attributable to timing of customer collections and payables to the wholesale market for replacement power during outages, partially offset by higher collections resulting from better plant availability in 2015
|
|
(18
|
)
|
|
MCAC
— increase of $85 million primarily due to:
|
|
|
||
Increase in Panama primarily due to lower energy purchases resulting from favorable hydrology
|
|
77
|
|
|
Increase in El Salvador primarily due to lower energy purchase costs resulting from a decrease in fuel prices
|
|
50
|
|
|
Increase in Puerto Rico primarily due to lower energy purchase costs resulting from a decrease in commodities prices and higher collections from the offtaker
|
|
29
|
|
|
Decrease in the Dominican Republic primarily due to lower collections from distribution companies and higher payments for energy in the spot market
|
|
(67
|
)
|
|
Corporate and other business drivers
|
|
19
|
|
|
|
|
$
|
137
|
|
|
Six Months Ended June 30,
|
|||||||||||||
|
2015
|
|
2014
|
|
$ Change
|
|
% Change
|
|||||||
|
($ in millions)
|
|||||||||||||
Capital expenditures
(1)
|
$
|
(1,168
|
)
|
|
$
|
(908
|
)
|
|
$
|
(260
|
)
|
|
-29
|
%
|
Acquisitions, net of cash acquired:
|
|
|
|
|
|
|
|
|||||||
Corporate
—
Main Street Power
|
$
|
(17
|
)
|
|
$
|
—
|
|
|
$
|
(17
|
)
|
|
NA
|
|
Andes
—
Gener — related to the purchase of 50% interest in our equity investment in Guacolda
|
—
|
|
|
(728
|
)
|
|
728
|
|
|
100
|
%
|
|||
Other businesses
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
NA
|
|
|||
Total acquisitions, net of cash acquired
|
$
|
(18
|
)
|
|
$
|
(728
|
)
|
|
$
|
710
|
|
|
100
|
%
|
Proceeds from the sale of businesses, net of cash sold:
|
|
|
|
|
|
|
|
|||||||
Andes
—
Gener — related to the sale of 50% less one share of our interest in Guacolda
|
$
|
—
|
|
|
$
|
730
|
|
|
$
|
(730
|
)
|
|
-100
|
%
|
Corporate
—
related to the sale of businesses in Cameroon
|
—
|
|
|
132
|
|
|
(132
|
)
|
|
-100
|
%
|
|||
Asia
—
related to the sale of wind projects in India
|
—
|
|
|
21
|
|
|
(21
|
)
|
|
-100
|
%
|
|||
US — related to the sale of US wind projects
|
—
|
|
|
7
|
|
|
(7
|
)
|
|
-100
|
%
|
|||
Other businesses
|
2
|
|
|
—
|
|
|
2
|
|
|
NA
|
|
|||
Total proceeds from the sale of businesses, net of cash sold
|
$
|
2
|
|
|
$
|
890
|
|
|
$
|
(888
|
)
|
|
-100
|
%
|
Sales of short-term investments, net of purchases:
|
|
|
|
|
|
|
|
|||||||
Brazil
—
primarily at Tietê, Sul and Eletropaulo
|
$
|
175
|
|
|
$
|
263
|
|
|
$
|
(88
|
)
|
|
-33
|
%
|
Other businesses
|
15
|
|
|
10
|
|
|
5
|
|
|
50
|
%
|
|||
Total sales of short-term investments, net of purchases
|
$
|
190
|
|
|
$
|
273
|
|
|
$
|
(83
|
)
|
|
-30
|
%
|
Other investing activities
|
$
|
(76
|
)
|
|
$
|
82
|
|
|
$
|
(158
|
)
|
|
-193
|
%
|
Net cash used in investing activities
|
$
|
(1,070
|
)
|
|
$
|
(391
|
)
|
|
$
|
(679
|
)
|
|
-174
|
%
|
(1)
|
Refer to table below for capital expenditures types and drivers by business.
|
|
|
Six Months Ended June 30,
|
|||||||||||||
|
|
2015
|
|
2014
|
|
$ Change
|
|
% Change
|
|||||||
SBU
|
Growth capital expenditures:
|
($ in millions)
|
|||||||||||||
Andes
|
Gener
—
primarily related to Alto Maipo and Cochrane construction projects
|
$
|
(445
|
)
|
|
$
|
(250
|
)
|
|
$
|
(195
|
)
|
|
-78
|
%
|
US
|
IPALCO
—
primarily related to replacement generation projects
|
(116
|
)
|
|
(28
|
)
|
|
(88
|
)
|
|
-314
|
%
|
|||
Brazil
|
Eletropaulo
—
primarily related to customer connection and distribution grid projects
|
(53
|
)
|
|
(83
|
)
|
|
30
|
|
|
36
|
%
|
|||
MCAC
|
Dominican Republic
—
primarily at Los Mina
|
(39
|
)
|
|
(1
|
)
|
|
(38
|
)
|
|
NM
|
|
|||
Brazil
|
Sul
—
primarily related to distribution grid projects
|
(21
|
)
|
|
(25
|
)
|
|
4
|
|
|
16
|
%
|
|||
Europe
|
Jordan
—
IPP4 construction project
|
—
|
|
|
(38
|
)
|
|
38
|
|
|
100
|
%
|
|||
Asia
|
Mong Duong
—
2014 balance related to service concession assets
|
—
|
|
|
(45
|
)
|
|
45
|
|
|
100
|
%
|
|||
|
Other businesses
|
(68
|
)
|
|
(66
|
)
|
|
(2
|
)
|
|
-3
|
%
|
|||
|
Total growth capital expenditures
|
$
|
(742
|
)
|
|
$
|
(536
|
)
|
|
$
|
(206
|
)
|
|
-38
|
%
|
|
Maintenance and environmental capital expenditures:
|
|
|
|
|
|
|
|
|||||||
US
|
IPALCO
—
primarily related to MATS project and maintenance on equipment
|
$
|
(177
|
)
|
|
$
|
(105
|
)
|
|
$
|
(72
|
)
|
|
-69
|
%
|
US
|
DPL
—
related to maintenance on generating units and trans/distribution equipment
|
(41
|
)
|
|
(32
|
)
|
|
(9
|
)
|
|
-28
|
%
|
|||
Andes
|
Gener
—
primarily related to the SING and the Ventanas Unit 1 and 2 plants
|
(37
|
)
|
|
(33
|
)
|
|
(4
|
)
|
|
-12
|
%
|
|||
Brazil
|
Eletropaulo
—
primarily related to customer connection and distribution grid projects
|
(34
|
)
|
|
(42
|
)
|
|
8
|
|
|
19
|
%
|
|||
Brazil
|
Tietê
—
primarily related to modernization of generating units
|
(21
|
)
|
|
(40
|
)
|
|
19
|
|
|
48
|
%
|
|||
Brazil
|
Sul
—
primarily related to distribution grid projects
|
(19
|
)
|
|
(28
|
)
|
|
9
|
|
|
32
|
%
|
|||
|
Other businesses
|
(97
|
)
|
|
(92
|
)
|
|
(5
|
)
|
|
-5
|
%
|
|||
|
Total maintenance and environmental capital expenditures
|
$
|
(426
|
)
|
|
$
|
(372
|
)
|
|
$
|
(54
|
)
|
|
-15
|
%
|
|
Total capital expenditures
|
$
|
(1,168
|
)
|
|
$
|
(908
|
)
|
|
$
|
(260
|
)
|
|
-29
|
%
|
|
Six Months Ended June 30,
|
|||||||||||||
|
2015
|
|
2014
|
|
$ Change
|
|
% Change
|
|||||||
|
($ in millions)
|
|||||||||||||
Issuances of recourse and non-recourse debt:
|
|
|
|
|
|
|
|
|||||||
Corporate
—
Parent Company
|
$
|
575
|
|
|
$
|
1,525
|
|
|
$
|
(950
|
)
|
|
-62
|
%
|
Brazil
—
Sul
|
499
|
|
|
92
|
|
|
407
|
|
|
442
|
%
|
|||
Andes
—
Gener
|
485
|
|
|
926
|
|
|
(441
|
)
|
|
-48
|
%
|
|||
US
—
IPALCO
|
405
|
|
|
130
|
|
|
275
|
|
|
212
|
%
|
|||
MCAC
—
Panama
|
300
|
|
|
50
|
|
|
250
|
|
|
500
|
%
|
|||
Brazil
—
Eletropaulo
|
118
|
|
|
—
|
|
|
118
|
|
|
NA
|
|
|||
Asia
—
Mong Duong
|
104
|
|
|
271
|
|
|
(167
|
)
|
|
-62
|
%
|
|||
Brazil
—
Tietê
|
—
|
|
|
129
|
|
|
(129
|
)
|
|
-100
|
%
|
|||
Other businesses
|
29
|
|
|
112
|
|
|
(83
|
)
|
|
-74
|
%
|
|||
Total issuances of recourse and non-recourse debt
|
$
|
2,515
|
|
|
$
|
3,235
|
|
|
$
|
(720
|
)
|
|
-22
|
%
|
Repayments of recourse and non-recourse debt:
|
|
|
|
|
|
|
|
|||||||
Corporate
—
Parent Company
|
$
|
(915
|
)
|
|
$
|
(1,663
|
)
|
|
$
|
748
|
|
|
45
|
%
|
Brazil
—
Sul
|
(468
|
)
|
|
(6
|
)
|
|
(462
|
)
|
|
NM
|
|
|||
US
—
IPALCO
|
(384
|
)
|
|
—
|
|
|
(384
|
)
|
|
NA
|
|
|||
MCAC
—
Panama
|
(287
|
)
|
|
—
|
|
|
(287
|
)
|
|
NA
|
|
|||
Brazil
—
Tietê
|
(97
|
)
|
|
(132
|
)
|
|
35
|
|
|
27
|
%
|
|||
Brazil
—
Eletropaulo
|
(63
|
)
|
|
(12
|
)
|
|
(51
|
)
|
|
-425
|
%
|
|||
Europe
—
Maritza
|
(31
|
)
|
|
(31
|
)
|
|
—
|
|
|
—
|
%
|
|||
MCAC
—
Puerto Rico
|
(24
|
)
|
|
(42
|
)
|
|
18
|
|
|
43
|
%
|
|||
Andes
—
Gener
|
(15
|
)
|
|
(885
|
)
|
|
870
|
|
|
98
|
%
|
|||
US
—
Shady Point
|
—
|
|
|
(51
|
)
|
|
51
|
|
|
100
|
%
|
|||
Other businesses
|
(88
|
)
|
|
(190
|
)
|
|
102
|
|
|
54
|
%
|
|||
Total repayments of recourse and non-recourse debt
|
$
|
(2,372
|
)
|
|
$
|
(3,012
|
)
|
|
$
|
640
|
|
|
21
|
%
|
Proceeds from the sale of redeemable stock of subsidiaries:
|
|
|
|
|
|
|
|
|||||||
Corporate and US
—
IPALCO
|
$
|
461
|
|
|
$
|
—
|
|
|
$
|
461
|
|
|
NA
|
|
Total proceeds from the sale of redeemable stock of subsidiaries
|
$
|
461
|
|
|
$
|
—
|
|
|
$
|
461
|
|
|
NA
|
|
Dividends paid on The AES Corporation common stock
|
|
|
|
|
|
|
|
|||||||
Corporate
—
Parent Company
|
$
|
(141
|
)
|
|
$
|
(72
|
)
|
|
$
|
(69
|
)
|
|
-96
|
%
|
Total dividends paid on The AES Corporation common stock
|
$
|
(141
|
)
|
|
$
|
(72
|
)
|
|
$
|
(69
|
)
|
|
-96
|
%
|
Payments for financed capital expenditures:
|
|
|
|
|
|
|
|
|||||||
Andes
—
Gener
|
$
|
(81
|
)
|
|
$
|
(33
|
)
|
|
$
|
(48
|
)
|
|
-145
|
%
|
Asia
—
Mong Duong
|
—
|
|
|
(272
|
)
|
|
272
|
|
|
100
|
%
|
|||
Other businesses
|
(3
|
)
|
|
(7
|
)
|
|
4
|
|
|
57
|
%
|
|||
Total payments for financed capital expenditures
|
$
|
(84
|
)
|
|
$
|
(312
|
)
|
|
$
|
228
|
|
|
73
|
%
|
Purchase of treasury stock
|
|
|
|
|
|
|
|
|||||||
Corporate
—
Parent Company
|
$
|
(307
|
)
|
|
$
|
(32
|
)
|
|
$
|
(275
|
)
|
|
-859
|
%
|
Total purchase of treasury stock
|
$
|
(307
|
)
|
|
$
|
(32
|
)
|
|
$
|
(275
|
)
|
|
-859
|
%
|
Other financing activities
|
$
|
(83
|
)
|
|
$
|
(57
|
)
|
|
$
|
(26
|
)
|
|
-46
|
%
|
Net cash used in financing activities
|
$
|
(11
|
)
|
|
$
|
(250
|
)
|
|
$
|
239
|
|
|
96
|
%
|
Calculation of Proportional Free Cash Flow
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||
|
2015
|
|
2014
|
|
$ Change
|
|
% Change
|
|
2015
|
|
2014
|
|
$ Change
|
|
% Change
|
||||||||||||||
|
(in millions)
|
|
(in millions)
|
||||||||||||||||||||||||||
Net Cash provided by operating activities
|
$
|
153
|
|
|
232
|
|
|
$
|
(79
|
)
|
|
-34
|
%
|
|
$
|
590
|
|
|
$
|
453
|
|
|
$
|
137
|
|
|
30
|
%
|
|
Add: capital expenditures related to service concession assets
(1)
|
51
|
|
|
—
|
|
|
51
|
|
|
NA
|
|
|
71
|
|
|
—
|
|
|
71
|
|
|
NA
|
|
||||||
Adjusted Operating Cash Flow
|
$
|
204
|
|
|
$
|
232
|
|
|
$
|
(28
|
)
|
|
-12
|
%
|
|
$
|
661
|
|
|
$
|
453
|
|
|
$
|
208
|
|
|
46
|
%
|
Less: proportional adjustment factor on operating cash activities
(2) (3)
|
(13
|
)
|
|
(64
|
)
|
|
51
|
|
|
80
|
%
|
|
(85
|
)
|
|
(44
|
)
|
|
(41
|
)
|
|
-93
|
%
|
||||||
Proportional Adjusted Operating Cash Flow
|
$
|
191
|
|
|
$
|
168
|
|
|
$
|
23
|
|
|
14
|
%
|
|
$
|
576
|
|
|
$
|
409
|
|
|
$
|
167
|
|
|
41
|
%
|
Less: proportional maintenance capital expenditures, net of reinsurance proceeds
(2)
|
(117
|
)
|
|
(102
|
)
|
|
(15
|
)
|
|
-15
|
%
|
|
(230
|
)
|
|
(206
|
)
|
|
(24
|
)
|
|
-12
|
%
|
||||||
Less: proportional non-recoverable environmental capital expenditures
(2) (4)
|
(12
|
)
|
|
(19
|
)
|
|
7
|
|
|
37
|
%
|
|
(19
|
)
|
|
(27
|
)
|
|
8
|
|
|
30
|
%
|
||||||
Proportional Free Cash Flow
|
$
|
62
|
|
|
$
|
47
|
|
|
$
|
15
|
|
|
32
|
%
|
|
$
|
327
|
|
|
$
|
176
|
|
|
$
|
151
|
|
|
86
|
%
|
(1)
|
Service concession asset expenditures excluded from proportional free cash flow non-GAAP metric.
|
(2)
|
The proportional adjustment factor, proportional maintenance capital expenditures (net of reinsurance proceeds), and proportional non-recoverable environmental capital expenditures are calculated by multiplying the percentage owned by noncontrolling interests for each entity by its corresponding consolidated cash flow metric and adding up the resulting figures. For example, the Company owns approximately 71% of AES Gener, its subsidiary in Chile. Assuming a consolidated net cash flow from operating activities of $100 from AES Gener, the proportional adjustment factor for AES Gener would equal approximately $29 (or $100 x 29%). The Company calculates the proportional adjustment factor for each consolidated business in this manner and then adds these amounts together to determine the total proportional adjustment factor used in the reconciliation. The proportional adjustment factor may differ from the proportion of income attributable to noncontrolling interests as a result of (a) non-cash items which impact income but not cash and (b) AES’ ownership interest in the subsidiary where such items occur.
|
(3)
|
Includes proportional adjustment amount for service concession asset expenditures of
$26 million
and
$36 million
for the three and
six months ended
June 30, 2015
. The Company adopted service concession accounting effective January 1, 2015.
|
(4)
|
Excludes IPALCO’s proportional recoverable environmental capital expenditures of
$47 million
and
$52 million
for the three months ended
June 30, 2015
and
June 30, 2014
, as well as,
$86 million
and
$74 million
for the
six months ended
June 30, 2015
and
June 30, 2014
, respectively.
|
Proportional Free Cash Flow by SBU ($ in millions)
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||
|
2015
|
|
2014
|
|
$ Change
|
|
% Change
|
|
2015
|
|
2014
|
|
$ Change
|
|
% Change
|
||||||||||||||
US SBU
|
$
|
104
|
|
|
$
|
105
|
|
|
$
|
(1
|
)
|
|
-1
|
%
|
|
$
|
259
|
|
|
$
|
186
|
|
|
$
|
73
|
|
|
39
|
%
|
Andes SBU
|
(20
|
)
|
|
17
|
|
|
(37
|
)
|
|
-218
|
%
|
|
(3
|
)
|
|
40
|
|
|
(43
|
)
|
|
-108
|
%
|
||||||
Brazil SBU
|
(20
|
)
|
|
(2
|
)
|
|
(18
|
)
|
|
-900
|
%
|
|
(67
|
)
|
|
(64
|
)
|
|
(3
|
)
|
|
-5
|
%
|
||||||
MCAC SBU
|
18
|
|
|
6
|
|
|
12
|
|
|
200
|
%
|
|
132
|
|
|
80
|
|
|
52
|
|
|
65
|
%
|
||||||
Europe SBU
|
35
|
|
|
32
|
|
|
3
|
|
|
9
|
%
|
|
174
|
|
|
150
|
|
|
24
|
|
|
16
|
%
|
||||||
Asia SBU
|
5
|
|
|
7
|
|
|
(2
|
)
|
|
-29
|
%
|
|
9
|
|
|
48
|
|
|
(39
|
)
|
|
-81
|
%
|
||||||
Corporate SBU
|
(60
|
)
|
|
(118
|
)
|
|
58
|
|
|
49
|
%
|
|
(177
|
)
|
|
(264
|
)
|
|
87
|
|
|
33
|
%
|
||||||
Proportional Free Cash Flow
—
Total SBUs
|
$
|
62
|
|
|
$
|
47
|
|
|
$
|
15
|
|
|
32
|
%
|
|
$
|
327
|
|
|
$
|
176
|
|
|
$
|
151
|
|
|
86
|
%
|
US SBU
|
|
Amount
|
||
Increase at DPL primarily due to higher collections, collection of deferred storm costs and lower interest paid
|
|
$
|
61
|
|
Decrease at IPALCO primarily due to lower collections driven by lower wholesale margins resulting from outages and lower prices as well as an increase in maintenance capital expenditures
|
|
(31
|
)
|
|
Decrease at Shady Point primarily driven by increased inventory, lower collections during unit repairs and an increase in maintenance capital expenditures
|
|
(10
|
)
|
|
Decrease at Buffalo Gap primarily due to lower collections as a result of lower wind production
|
|
(6
|
)
|
|
Other business drivers
|
|
(15
|
)
|
|
Total
|
|
$
|
(1
|
)
|
Andes SBU
|
|
Amount
|
||
Decrease at Chivor in Colombia primarily due to higher current year tax payments resulting from higher taxable income in the prior year
|
|
$
|
(37
|
)
|
Total
|
|
$
|
(37
|
)
|
Brazil SBU
|
|
Amount
|
||
Decrease at Tietê primarily due to higher spot market energy purchases from unfavorable hydrology, higher transmission costs and lower collections
|
|
$
|
(36
|
)
|
Increase at Eletropaulo primarily due to higher collections mainly attributable to higher tariffs, partially offset by higher energy purchases resulting from unfavorable hydrology and higher transmission costs
|
|
12
|
|
|
Other business drivers
|
|
6
|
|
|
Total
|
|
$
|
(18
|
)
|
MCAC SBU
|
|
Amount
|
||
Increase in Panama primarily due to lower energy purchases resulting from favorable hydrology
|
|
$
|
22
|
|
Increase in El Salvador primarily due to lower energy purchase costs resulting from a decrease in fuel prices
|
|
12
|
|
|
Decrease in Puerto Rico primarily due to timing of coal payments partially offset by lower fuel purchase costs resulting from a decrease in commodities prices and higher collections from the offtaker
|
|
(18
|
)
|
|
Other business drivers
|
|
(4
|
)
|
|
Total
|
|
$
|
12
|
|
Europe SBU
|
|
Amount
|
||
Increase at Maritza primarily due to lower payments to fuel supplier
|
|
$
|
20
|
|
Increase due to operating cash provided by new operations at IPP4 in Jordan which commenced operations in July 2014
|
|
7
|
|
|
Decrease at Kilroot primarily due to lower collections resulting from lower volume, timing of outages and lower rates
|
|
(13
|
)
|
|
Decrease in operating cash at Ebute as a result of sale of business in 2014
|
|
(12
|
)
|
|
Other business drivers
|
|
1
|
|
|
Total
|
|
$
|
3
|
|
Asia SBU
|
|
Amount
|
||
Decrease in proportional operating cash flow at Masinloc resulting from 2014 business sell down as well as timing of customer collections, partially offset by higher collections resulting from better plant availability in 2015
|
|
$
|
(2
|
)
|
Other business drivers
|
|
—
|
|
|
Total
|
|
$
|
(2
|
)
|
Corporate SBU
|
|
Amount
|
||
Increase primarily at the Parent Company driven by lower current year interest payments, swap termination payments made in the prior year upon refinance of debt, lower benefit requirements as well as the collection of realized gains resulting from the Company’s corporate hedging program
|
|
$
|
58
|
|
Total
|
|
$
|
58
|
|
US SBU
|
|
Amount
|
||
Increase at DPL primarily due to higher collections, collection of deferred storm costs, lower interest paid and higher collateral deposits in the prior year as a result of outages
|
|
$
|
110
|
|
Decrease at Shady Point primarily driven by increases in inventory, lower collections during unit repairs, timing of collections as well as an increase in maintenance capital expenditures
|
|
(17
|
)
|
|
Decrease at Laurel Mountain primarily due to lower collections as a result of lower energy prices in the PJM market
|
|
(12
|
)
|
|
Decrease at IPALCO primarily due to lower collections driven by lower wholesale margins resulting from outages and lower prices as well as an increase in maintenance capital expenditures, partially offset by lower required pension contributions
|
|
(9
|
)
|
|
Other business drivers
|
|
1
|
|
|
Total
|
|
$
|
73
|
|
Andes SBU
|
|
Amount
|
||
Decrease at Chivor in Colombia primarily due to higher current year tax payments resulting from higher taxable income in the prior year
|
|
$
|
(44
|
)
|
Other business drivers
|
|
1
|
|
|
Total
|
|
$
|
(43
|
)
|
Brazil SBU
|
|
Amount
|
||
Decrease at Tietê primarily due to higher energy purchases in the spot market resulting from unfavorable hydrology, higher transmission costs, and decreased collections, partially offset by lower income tax payments
|
|
$
|
(48
|
)
|
Decrease at Cemig due to income tax refund received in the prior year
|
|
(14
|
)
|
|
Increase at Eletropaulo primarily due to higher collections mainly attributable to higher tariffs, partially offset by higher energy purchases resulting from unfavorable hydrology and higher transmission costs
|
|
32
|
|
|
Increase at Sul primarily due to higher collections mainly attributable to higher tariffs, partially offset by higher energy purchases resulting from unfavorable hydrology, higher transmission costs and higher interest on debt
|
|
21
|
|
|
Other business drivers
|
|
6
|
|
|
Total
|
|
$
|
(3
|
)
|
MCAC SBU
|
|
Amount
|
||
Increase in Panama primarily due to lower energy purchases resulting from favorable hydrology
|
|
$
|
43
|
|
Increase in El Salvador primarily due to lower energy purchase costs resulting from a decrease in fuel prices
|
|
37
|
|
|
Increase in Puerto Rico primarily due to lower fuel purchase costs from a decrease in commodities prices and higher collections from the offtaker
|
|
29
|
|
|
Decrease in the Dominican Republic due to lower collections from distribution companies, higher payments for energy in the spot market and higher maintenance capital expenditures due to higher planned outages
|
|
(53
|
)
|
|
Other business drivers
|
|
(4
|
)
|
|
Total
|
|
$
|
52
|
|
Europe SBU
|
|
Amount
|
||
Increase at Maritza primarily due to higher collections from the offtaker and lower payments to fuel supplier
|
|
$
|
61
|
|
Increase due to operating cash provided by new operations at IPP4 in Jordan which commenced operations in July 2014
|
|
13
|
|
|
Decrease at Kilroot primarily due to lower collections resulting from lower volume, timing of outages and lower rates
|
|
(24
|
)
|
|
Decrease in operating cash at Ebute as a result of sale of business in 2014
|
|
(18
|
)
|
|
Other business drivers
|
|
(8
|
)
|
|
Total
|
|
$
|
24
|
|
Asia SBU
|
|
Amount
|
||
Decrease in proportional operating cash flow at Masinloc resulting from 2014 business sell down as well as timing of customer collections and payables to the wholesale market for replacement power during outages, partially offset by higher collections resulting from better plant availability in 2015
|
|
$
|
(37
|
)
|
Other business drivers
|
|
(2
|
)
|
|
Total
|
|
$
|
(39
|
)
|
Corporate SBU
|
|
Amount
|
||
Increase primarily at the Parent Company driven by lower interest payments, the collection of realized gains resulting from the Company’s corporate hedging program, swap termination payments made in the prior year upon refinance of debt, as well as a reduction in capital expenditures and incentive payments
|
|
87
|
|
|
Total
|
|
$
|
87
|
|
•
|
dividends and other distributions from our subsidiaries, including refinancing proceeds;
|
•
|
proceeds from debt and equity financings at the Parent Company level, including availability under our credit facility; and
|
•
|
proceeds from asset sales.
|
•
|
interest;
|
•
|
principal repayments of debt;
|
•
|
acquisitions;
|
•
|
construction commitments;
|
•
|
other equity commitments;
|
•
|
common stock repurchases and dividends;
|
•
|
taxes; and
|
•
|
Parent Company overhead and development costs.
|
|
June 30, 2015
|
|
December 31, 2014
|
||||
|
(in millions)
|
||||||
Consolidated cash and cash equivalents
|
$
|
1,022
|
|
|
$
|
1,539
|
|
Less: Cash and cash equivalents at subsidiaries
|
(982
|
)
|
|
(1,032
|
)
|
||
Parent and qualified holding companies’ cash and cash equivalents
|
40
|
|
|
507
|
|
||
Commitments under Parent credit facility
|
800
|
|
|
800
|
|
||
Less: Letters of credit under the credit facility
|
(61
|
)
|
|
(61
|
)
|
||
Borrowings available under Parent credit facility
|
739
|
|
|
739
|
|
||
Total Parent Company Liquidity
|
$
|
779
|
|
|
$
|
1,246
|
|
•
|
limitations on other indebtedness, liens, investments and guarantees;
|
•
|
limitations on dividends, stock repurchases and other equity transactions;
|
•
|
restrictions and limitations on mergers and acquisitions, sales of assets, leases, transactions with affiliates and off-balance sheet and derivative arrangements;
|
•
|
maintenance of certain financial ratios; and
|
•
|
financial and other reporting requirements.
|
•
|
reducing our cash flows as the subsidiary will typically be prohibited from distributing cash to the Parent Company during the time period of any default;
|
•
|
triggering our obligation to make payments under any financial guarantee, letter of credit or other credit support we have provided to or on behalf of such subsidiary;
|
•
|
causing us to record a loss in the event the lender forecloses on the assets; and
|
•
|
triggering defaults in our outstanding debt at the Parent Company.
|
Repurchase Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid Per Share
|
|
Total Number of Shares Repurchased as part of a Publicly Announced Purchase Plan
(1)
|
|
Dollar Value of Maximum Number Of Shares To Be Purchased Under the Plan
(2)
|
||||||
4/1/2015 — 4/30/15
|
|
591,028
|
|
|
$
|
12.75
|
|
|
591,028
|
|
|
$
|
380,935,833
|
|
5/1/2015 — 5/30/15
|
|
20,000,000
|
|
|
13.07
|
|
|
20,000,000
|
|
|
119,535,833
|
|
||
6/1/2015 — 6/30/15
|
|
175,740
|
|
|
13.16
|
|
|
175,740
|
|
|
117,225,388
|
|
||
Total
|
|
20,766,768
|
|
|
|
|
20,766,768
|
|
|
|
(1)
|
See Note
11
—Equity—Stock Repurchase Program to the condensed consolidated financial statements in Item 1.—Financial Statements for further information.
|
(2)
|
The authorization permits the Company to repurchase stock through a variety of methods, including open market repurchases, purchases by contract (including, without limitation, accelerated stock repurchase programs or 10b5-1 plans) and/or privately negotiated transactions. There is no assurance as to the amount, timing or prices of repurchases, which may vary based on market conditions and other factors. The stock repurchase program may be modified, extended or terminated by the Board of Directors at any time.
|
4.1
|
|
Nineteenth Supplemental Indenture, dated April 6, 2015, between The AES Corporation and Wells Fargo Bank, N.A., as Trustee is incorporated herein by reference to Exhibit 4.1 to the Company’s Form 8-K filed on April 6, 2015.
|
10.1
|
|
Form of Performance Unit Award Agreement Pursuant to The AES Corporation 2003 Long Term Compensation Plan (filed herewith).
|
|
|
|
10.2
|
|
Form of Restricted Stock Unit Award Agreement Pursuant to The AES Corporation 2003 Long Term Compensation Plan (filed herewith).
|
|
|
|
|
|
|
10.3
|
|
Form of Performance Stock Unit Award Agreement Pursuant to The AES Corporation 2003 Long Term Compensation Plan (filed herewith).
|
|
|
|
10.4
|
|
Form of Nonqualified Stock Option Award Agreement Pursuant to The AES Corporation 2003 Long Term Compensation Plan (filed herewith).
|
|
|
|
10.5
|
|
The AES Corporation Amended and Restated Executive Severance Plan dated April 23, 2015 (filed herewith).
|
|
|
|
10.6
|
|
The AES Corporation Severance Plan, as amended and restated on April 23, 2015 (filed herewith).
|
|
|
|
10.7
|
|
Form of Retroactive Consent To Provide for Double-Trigger In Change-In-Control Transactions (filed herewith).
|
|
|
|
31.1
|
|
Rule13a-14(a)/15d-14(a) Certification of Andrés Gluski (filed herewith).
|
|
|
|
31.2
|
|
Rule 13a-14(a)/15d-14(a) Certification of Thomas M. O’Flynn (filed herewith).
|
|
|
|
32.1
|
|
Section 1350 Certification of Andrés Gluski (filed herewith).
|
|
|
|
32.2
|
|
Section 1350 Certification of Thomas M. O’Flynn (filed herewith).
|
|
|
|
101.INS
|
|
XBRL Instance Document (filed herewith).
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document (filed herewith).
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith).
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document (filed herewith).
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document (filed herewith).
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document (filed herewith).
|
|
|
THE AES CORPORATION
(Registrant)
|
|||
|
|
|
|
|
|
Date:
|
August 7, 2015
|
By:
|
|
/s/ T
HOMAS
M. O’F
LYNN
|
|
|
|
|
|
Name:
|
Thomas M. O’Flynn
|
|
|
|
|
Title:
|
Executive Vice President and Chief Financial Officer (Principal Financial Officer)
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ F
ABIAN
E. S
OUZA
|
|
|
|
|
|
Name:
|
Fabian E. Souza
|
|
|
|
|
Title:
|
Vice President and Controller (Principal Accounting Officer)
|
1.
|
This Award of Performance Units is subject to all terms and conditions of this Agreement and the Plan, the terms of which are incorporated herein by reference:
|
Name of Employee:
|
|
|
|
Fidelity System ID:
|
|
|
|
Grant Date:
|
|
|
|
Total Number of Performance Units:
|
|
|
|
Target Value:
|
|
2.
|
The Employee is hereby granted an Award of the total number of Performance Units set forth above. The Performance Units will be reflected in a book account by the Company during the Performance Period (as defined below). Contingent upon achieving or exceeding 75% or more of the Performance Target, the value of vested Performance Units, will be paid in cash in calendar year following the completion of the Performance
|
3.
|
The “Performance Period” is the three calendar year period beginning on January 1st in the year of grant and ending on December 31st in the second year following the grant date.
|
4.
|
Except as otherwise provided in this Agreement, this Award of Performance Units will vest, in accordance with and subject to the terms of this Agreement, in three equal installments on December 31st in each year during the Performance Period (each a “Vesting Date”); provided, however, that if:
|
(A)
|
the Employee Separates from Service prior to the end of the Performance Period by reason of the Employee’s death or a Separation from Service on account of Disability, all Performance Units referenced in the chart above shall vest on such termination date and a cash amount equal to $1 for each Performance Unit shall be paid to the Employee on the date of Separation from Service; provided, however, any payment due to the Employee by reason of a Separation from Service on account of Disability shall be delayed to the extent required by Section 14(k)(i) of the Plan;
|
(B)
|
(i) the Employee Separates from Service prior to the Payment Date by reason of a Separation from Service by the Company for cause (as determined by the Committee in its sole discretion for all purposes of this Agreement) or (ii) the Employee Separates from Service prior to the final Vesting Date by reason of a voluntary Separation from Service by the Employee (including any retirement other than a Qualified Retirement), this Award of Performance Units (including any vested portion) will be forfeited in full and cancelled by the Company, and shall cease to be outstanding, upon such termination date; and
|
(C)
|
the Employee Separates from Service for any other reason, including on account of a Qualified Retirement, by reason of death or Disability subsequent to the end of the Performance Period, or by reason of a Separation from Service by the Company (other than for cause, voluntarily by the Employee not as part of a Qualified Retirement or by reason of death or Disability as provided in paragraphs 4(A) and 4(B)), the Employee will be eligible to receive the value of his or her vested Performance Units on the Payment Date in accordance with and subject to the terms set forth in paragraph 5 below. For purposes of this Agreement, “Qualified Retirement” means the Employee’s retirement at a time when such Employee is at least 60 years of age and has at least seven years of service as an employee of the Company and/or one or more of its Affiliates.
|
5.
|
Each Performance Unit represents a right to receive the applicable Performance Unit value in the chart below, in cash on the Payment Date, if and only if, such Performance Unit (i) has not been forfeited prior to its Vesting Date and (ii) has vested in accordance with the terms of this Agreement.
|
ACTUAL ADJUSTED EBITDA
OVER THE PERFORMANCE PERIOD |
PERFORMANCE
UNIT VALUE
|
Below 75% of Performance Target =
|
USD$0.00
|
Equal to 87.5% of Performance Target =
|
USD$0.50
|
Equal to 100% of Performance Target =
|
USD$1.00
|
Equal to or greater than 125% of Performance Target =
|
USD$2.00
|
6.
|
Notwithstanding the foregoing, in the event of a (i) Change in Control (as defined in Section 6(A) below) and (ii) a Qualifying Event (as defined in Section 6(B) below) prior to the end of the Performance Period, if the Performance Units described herein have not already been previously forfeited or cancelled, such Performance Units shall become
|
(A)
|
Change in Control means the occurrence of one or more of the following events: (i) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Company to any Person or group (as that term is used in Section 13(d) (3) of the Exchange Act) of Persons, (ii) a Person or group (as so defined) of Persons (other than Management of the Company on the date of the most recent adoption of the Plan by the Company's stockholders or their Affiliates) shall have become the beneficial owner (as defined below) of more than 35% of the outstanding voting stock of the Company, (iii) during any one-year period, individuals who at the beginning of such period constitute the Board (together with any new Director whose election or nomination was approved by a majority of the Directors then in office who were either Directors at the beginning of such period or who were previously so approved, but excluding under all circumstances any such new Director whose initial assumption of office occurs as a result of an actual or threatened election contest or other actual or threatened solicitation of proxies or consents by or on behalf of any individual, corporation, partnership or other entity or group, including through the use of proxy access procedures as may be provided in the Company’s bylaws) cease to constitute a majority of the Board, or (iv) the consummation of a merger, consolidation, business combination or similar transaction involving the Company unless securities representing 65% or more of the then outstanding voting stock of the corporation resulting from such transaction are held subsequent to such transaction by the Person or Persons who were the beneficial owners of the outstanding voting stock of the Company immediately prior to such transaction in substantially the same proportions as their ownership immediately prior to such transaction. Notwithstanding the foregoing or any provision to the contrary, if an Award is subject to Section 409A (and not excepted therefrom) and a Change in Control is a distribution event for purposes of an Award, the foregoing definition of Change in Control shall be interpreted, administered and construed in a manner necessary to ensure that the occurrence of any such event shall result in a Change in Control only if such event qualifies as a change in the ownership or effective control of a corporation, or a change in the ownership of a substantial portion of the assets of a corporation,
|
(B)
|
Qualifying Event means the occurrence of one or more of the following events: (i) immediately upon the consummation of a Change in Control event, failure of the successor company in a Change in Control event to provide Substitute Awards that are substantially similar in both nature and terms (including having an equivalent realizable pre-tax value to the Performance Units assuming vesting and delivery at the consummation of the Change in Control); (ii) within two years of the consummation of a Change in Control event, an involuntary termination without cause of the Employee; or (iii) within two years of the consummation of a Change in Control event, a Good Reason Termination (as defined in Section 6(C) below) by the Employee.
|
(C)
|
Good Reason Termination means, without an Employee’s written consent, the Separation from Service (for reasons other than death, Disability or cause) by an Employee due to any of the following events occurring within two years of the consummation of a Change in Control: (i) the relocation of an Employee’s principal place of employment to a location that is more than 50 miles from the principal place of employment in effect immediately prior to such Change in Control; (ii) a material diminution in the duties or responsibilities of an Employee from those in place immediately prior to such Change in Control; and (iii) a material reduction in the base salary or annual incentive opportunity of an Employee from what was in place immediately prior to such Change in Control.
|
7.
|
Notices hereunder and under the Plan, if to the Company, shall be delivered to the Plan Administrator (as so designated by the Company) or mailed to the Company’s principal office, 4300 Wilson Boulevard, Arlington, VA 22203 (or as subsequently designated by the Company), attention of the Plan Administrator, or, if to the Employee, shall be
|
8.
|
All decisions and interpretations made by the Board of Directors or the Committee with regard to any question arising hereunder or under the Plan shall be binding and conclusive on all persons. Unless otherwise specifically provided herein, in the event of any inconsistency between the terms of the Plan and this Agreement, the terms of the Plan will govern.
|
9.
|
By accepting this Award of Performance Units, the Employee acknowledges receipt of a copy of the Plan and the prospectus relating to this Award of Performance Units, and agrees to be bound by the terms and conditions set forth in the Plan and this Agreement, as in effect and/or amended from time to time.
The Employee further acknowledges that the Plan and related documents, which may include the Plan prospectus, may be delivered electronically. Such means of delivery may include the delivery of a link to a Company intranet site or the internet site of a third party involved in administering the Plan, the delivery of the documents via e-mail or CD-ROM or such other delivery determined at the Plan Administrator’s discretion. The Employee acknowledges that the Employee may receive from the Company a paper copy of any documents delivered electronically at no cost if the Employee contacts the Human Resources department of the Company by telephone at (703) 682-6553 or by mail to 4300 Wilson Boulevard, Suite 1100, Arlington, Virginia 22203. The Employee further acknowledges that the Employee will be provided with a paper copy of any documents delivered electronically if electronic delivery fails. |
10.
|
This Award is intended to satisfy the requirements of Section 409A of the Code (or an exception thereto) and shall be administered, interpreted and construed accordingly. A payment shall be treated as made on the specified date of payment if such payment is made at such date or a later date in the same calendar year or, if later, by the 15th day of the third calendar month following the specified date of payment, as provided and in accordance with Treas. Reg. § 1.409A-3(d). The Company may, in its sole discretion and without the Employee’s consent, modify or amend the terms and conditions of this Award, impose conditions on the timings and effectiveness of the payment of the Performance Units, or take any other action it deems necessary or advisable, to cause this Award to comply with Section 409A of the Code (or an exception thereto). Notwithstanding, the Employee recognizes and acknowledges that Section 409A of the Code may impose upon the Employee certain taxes or interest charges for which the Employee is and shall remain solely responsible.
|
11.
|
The Employee acknowledges that any income for federal, state or local income tax purposes that the Employee is required to recognize on account of the vesting of the Performance Units and/or payment in settlement of the Performance Units to the Employee shall be subject to withholding of tax by the Company. In accordance with administrative procedures established by the Company, the Company shall mandatorily satisfy the Employee’s minimum statutory withholding tax obligations, if any, by withholding from the payment in settlement of the Performance Units to be made to the Employee a sufficient amount equal to the applicable minimum statutory withholding tax obligation.
|
12.
|
Notwithstanding any other provisions in this Agreement, any Performance Units subject to recovery under any law, government regulation, stock exchange listing requirement, or Company policy, shall be subject to such deductions, recoupment and clawback as may be required to be made pursuant to such law, government regulation, stock exchange listing requirement or Company policy.
|
13.
|
This Agreement will be governed by the laws of the State of Delaware without giving effect to its choice of law provisions.
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1.
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This Award of RSUs is subject to all terms and conditions of this Agreement and the Plan, the terms of which are incorporated herein by reference:
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Name of Employee:
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Fidelity System ID:
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Grant Date:
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Grant Price:
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Total Number of RSUs Granted:
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2.
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Each RSU represents a right to receive one Share on the appropriate Vesting Date (as defined below) in accordance with the terms of this Agreement.
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3.
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Unless otherwise determined by the Committee, each RSU shall also represent a right to receive an additional amount, payable in cash, equal to the accumulated cash dividends paid by the Company on the RSU between the Grant Date and the Vesting Date (as defined below) for the RSU. The additional dividend amounts that are accumulated subject to an RSU will be subject to the same terms and conditions (including, without limitation, any applicable vesting requirements and forfeiture provisions) as the RSU to which they relate under the Award. Any payment due to the Employee under this Agreement shall be made promptly following the date the RSUs vest under paragraph 4
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4.
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An RSU (i) carries no voting rights and (ii) the holder will not have any stockholder rights, unless the vesting conditions of the RSU are met and the RSU is paid out with Shares.
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5.
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Except as otherwise provided in this Agreement, this Award of RSUs will vest, in accordance with and subject to the terms of this Agreement, in three equal installments on each of the first three anniversaries of the grant date (each a “Vesting Date”) provided, however, that if:
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(A)
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the Employee Separates from Service prior to the applicable Vesting Date by reason of the Employee’s death or a Separation from Service on account of Disability, all RSUs that have not previously vested shall vest and be paid to the Employee; and
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(B)
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if the Employee Separates from Service prior to the applicable Vesting Date
for any reason
, including, but not limited to, voluntarily by the Employee, on account of Qualified Retirement, or by reason of a Separation from Service by the Company with or without Cause (
other than by reason of death or Disability
), all RSUs that have not previously vested shall be immediately cancelled and forfeited without payment or further obligation by the Company or any Affiliate.
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6.
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In the event of a (i) Change in Control (as defined in Section 6(A) below) and (ii) a Qualifying Event (as defined in Section 6(B) below) prior to the applicable Vesting Date, if the RSUs described herein have not already been previously forfeited or cancelled, such RSUs will become fully vested contemporaneous with the Qualifying Event; provided, however, that in connection with a Change in Control, payment of any obligation payable pursuant to the preceding sentence may be made in cash of equivalent value and/or securities or other property in the Committee’s discretion.
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(A)
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Change in Control means the occurrence of one or more of the following events: (i) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Company to any Person or group (as that term is used in Section 13(d) (3) of the Exchange Act) of Persons, (ii) a Person or group (as so defined) of Persons (other than Management of the Company on the date of the most recent adoption of the Plan by the Company's stockholders or their Affiliates) shall have become the beneficial owner (as defined below) of more than 35% of the outstanding voting stock of the Company, (iii) during any one-year period, individuals who at the beginning of such period constitute the Board (together with any new Director whose election or nomination was approved by a majority of the Directors
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(B)
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Qualifying Event means the occurrence of one or more of the following events: (i) immediately upon the consummation of a Change in Control event, failure of the successor company in a Change in Control event to provide Substitute Awards that are substantially similar in both nature and terms (including having an equivalent realizable pre-tax value to RSUs assuming vesting and delivery at the consummation of the Change in Control); (ii) within two years of the consummation of a Change in Control event, an involuntary termination without Cause of the Employee; or (iii) within two years of the consummation of a Change in Control event, a Good Reason Termination (as defined in Section 6(C) below) by the Employee.
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(C)
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Good Reason Termination means, without an Employee’s written consent, the Separation from Service (for reasons other than death, Disability or Cause) by an Employee due to any of the following events occurring within two years of the consummation of a Change in Control: (i) the relocation of an Employee’s principal place of employment to a location that is more than 50 miles from the principal place of employment in effect immediately prior to such Change in Control; (ii) a material diminution in the duties or responsibilities of an Employee from those in place immediately prior to such Change in
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7.
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It is intended that under current U.S. federal income tax laws, the Employee will not be subject to income tax unless and until Shares and/or cash are delivered to the Employee on the Vesting Date, at which time the Fair Market Value of the Shares and/or cash will be reportable as ordinary income, and subject to income tax withholding as well as social security and Medicare (FICA) taxes. In accordance with administrative procedures established by the Company, any statutory withholding tax obligations of Employee on account of the issuance of Shares or settlement of this Award for Shares or cash shall be satisfied by the Company mandatorily withholding a sufficient number of Shares to be issued, or an amount of cash to be delivered, to the Employee hereunder equal to such applicable minimum statutory withholding tax obligation. The Employee should consult his or her personal advisor to determine the effect of this Award of RSUs on his or her own tax situation
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8.
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Notices hereunder and under the Plan, if to the Company, will be delivered to the Plan Administrator (as so designated by the Company) or mailed to the Company’s principal office, 4300 Wilson Boulevard, Arlington, VA 22203, attention of the Plan Administrator, or, if to the Employee, will be delivered to the Employee, which may include electronic delivery, or mailed to his or her address as the same appears on the records of the Company.
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9.
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All decisions and interpretations made by the Board of Directors or the Committee with regard to any question arising hereunder or under the Plan will be binding and conclusive on all persons. Unless otherwise specifically provided herein, in the event of any inconsistency between the terms of this Agreement and the Plan, the Plan will govern.
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10.
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By accepting this Award of RSUs, the Employee acknowledges receipt of a copy of the Plan and the prospectus relating to this Award of RSUs, and agrees to be bound by the terms and conditions set forth in this Agreement and the Plan, as in effect and/or amended
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11.
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This Award is intended to be excepted from coverage under Section 409A of the Code and shall be administered, interpreted and construed accordingly. The Employee shall have no right to designate the date of any payment under this Agreement. Each payment under this Agreement is intended to be excepted under the short-term deferral exception as specified in Treas. Reg. § 1.409A-1(b)(4). The Company may, in its sole discretion and without the Employee’s consent, modify or amend the terms and conditions of this Award, impose conditions on the timing and effectiveness of the issuance of the Shares, or take any other action it deems necessary or advisable, to cause this Award to comply with Section 409A of the Code (or an exception thereto). Notwithstanding, the Employee recognizes and acknowledges that Section 409A of the Code may impose upon the Employee certain taxes or interest charges for which the Employee is and shall remain solely responsible.
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12.
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Notwithstanding any other provisions in this Agreement, any RSUs subject to recovery under any law, government regulation, stock exchange listing requirement, or Company policy, shall be subject to such deductions, recoupment and clawback as may be required to be made pursuant to such law, government regulation, stock exchange listing requirement or Company policy.
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13.
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This Agreement will be governed by the laws of the State of Delaware without giving effect to its choice of law provisions.
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1.
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This Award of PSUs is subject to all terms and conditions of this Agreement and the Plan, the terms of which are incorporated herein by reference:
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Name of Employee:
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Fidelity System ID:
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Grant Date:
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Grant Price:
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Total Number of PSUs Granted:
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2.
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Each PSU represents a right to receive one Share on the Payment Date (as defined below) in accordance with the terms of this Agreement.
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3.
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Unless otherwise determined by the Committee, each PSU shall also represent a right to receive an additional amount, payable in cash, equal to the accumulated cash dividends paid by the Company on the PSU between the Grant Date and payout of the PSU (if any). The additional dividend amounts that are accumulated subject to a PSU will be subject to the same terms and conditions (including, without limitation, any applicable vesting requirements and forfeiture provisions) as the PSU to which they relate under the Award. Any payment due to the Employee under this Agreement shall be made promptly following the date vested PSUs become earned and payable under paragraph 5(a), paragraph 6 or paragraph 7 of this Agreement, as applicable (the “Payment Date”), but in no event later than March 15th of the calendar year following the calendar year containing the Payment Date.
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4.
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A PSU (i) carries no voting rights and (ii) the holder will not have an equity interest in the Company or any of such shareholder rights, unless the vesting and performance conditions of the PSU are met and the PSU is paid out.
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5.
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Except as otherwise provided in this Agreement, this Award of PSUs will vest, in accordance with and subject to the terms of this Agreement, in three equal installments on December 31st in each year during the Performance Period (each a “Vesting Date”), provided, however, that if:
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(a)
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the Employee Separates from Service prior to the end of the Performance Period by reason of the Employee’s death or a Separation from Service on account of Disability, all PSUs that have not previously vested shall vest and the Employee’s PSUs referenced in the chart above shall be paid to the Employee at the rate of one Share for each PSU;
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(b)
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if (i) the Employee Separates from Service prior to the Payment Date by reason of a Separation from Service by the Company for cause (as determined by the Committee in its sole discretion for all purposes of this Agreement) or (ii) the Employee Separates from Service prior to the final Vesting Date by reason of a voluntary Separation from Service by the Employee (including any retirement other than a Qualified Retirement (as defined below)), this Award of PSUs (including any time-vested portion) shall immediately upon such termination be cancelled and forfeited without payment or further obligation by the Company; and
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(c)
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if the Employee Separates from Service for any other reason, including, but not limited to, on account of a Qualified Retirement, by reason of a death or Disability subsequent to the end of the Performance Period, or by reason of a Separation from Service by the Company without cause (other than for cause, voluntarily by the Employee not as part of a Qualified Retirement or by reason of death or Disability as provided in paragraphs 5(a) and 5(b)), the Employee will be eligible to receive the value of his or her vested PSUs on the Payment Date in accordance with and subject to the terms set forth in paragraph 6 below. Any PSUs that have not vested prior to the date that an Employee Separates from Service for any reason (other than by reason of death or Disability), (i) will not subsequently vest; and (ii) will be immediately cancelled and forfeited without payment or further obligation by the Company or any Affiliate. In addition, the Employee’s right to receive Shares in respect of vested PSUs that have not been forfeited will be paid on the Payment Date if, and only if, all relevant performance conditions are met, in accordance with the terms and conditions of this Agreement and the Plan. For purposes of this Agreement, “Qualified Retirement” means the Employee’s retirement at a time when such Employee is at least 60 years of age and has had at least seven years of service as an employee of the Company and/or one or more of its Affiliates.
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6.
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The Company will issue and deliver Shares in satisfaction of vested PSUs subject to and conditioned upon the attainment of the performance conditions set forth below, as approved by the Committee at the time of grant; provided, however, notwithstanding the performance level achieved, the Committee may reduce the number of PSUs earned or terminate this Award of PSUs altogether, but in no event may the Committee increase the value of a PSU underlying this Award beyond the performance levels achieved. For purposes of this Agreement, the “Performance Period” is the three calendar year period beginning on January 1st in the year of grant and ending on December 31st in the second year following the grant date.
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ACTUAL AES-TSR COMPARED TO
S&P Utilities Index -TSR FOR THE
PERFORMANCE PERIOD
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SHARES EARNED
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Below 30
th
Percentile
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None (0%)
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Equal to the 30
th
Percentile
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50%
(0.5 x 50% of number of vested PSUs)
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Equal to the 50
th
Percentile
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100%
(1.0 x 50% of number of vested PSUs)
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Equal to or greater than 70
th
Percentile
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150%
(1.5 x 50% of number of vested PSUs)
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Equal to or greater than 90
th
Percentile
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200%
(2.0 x 50% of number of vested PSUs)
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ACTUAL ADJUSTED EBITDA OVER THE
PERFORMANCE PERIOD
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SHARES EARNED
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Below 75% of Performance Target =
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None (0%)
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Equal to 87.5% of Performance Target =
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50%
(0.5 x 50% of number of vested PSUs)
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Equal to 100% of Performance Target =
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100%
(1.0 x 50% of number of vested PSUs)
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Equal to or greater than 125% of
Performance Target =
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200%
(2.0 x 50% of number of vested PSUs)
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7.
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Notwithstanding the foregoing, in the event of a (i) Change in Control (as defined in Section 7(A) below) and (ii) a Qualifying Event (as defined in Section 7(B) below) prior to the end of the Performance Period, if the PSUs described herein have not already been previously forfeited or cancelled, such PSUs will become fully vested (for the total amount of PSUs set forth in paragraph 1) and the Payment Date will occur contemporaneous with the Qualifying Event; provided, however, that in connection with a Change in Control, payment of any obligation payable pursuant to the preceding sentence may be made in cash of equivalent value and/or securities or other property in the Committee’s discretion.
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(A)
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Change in Control means the occurrence of one or more of the following events: (i) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Company to any Person or group (as that term is used in Section 13(d) (3) of the Exchange Act) of Persons, (ii) a Person or group (as so defined) of Persons (other than Management of the Company on the date of the most recent adoption of the Plan by the Company's stockholders or their Affiliates) shall have become the beneficial owner (as defined below) of more than 35% of the outstanding voting stock of the Company, (iii) during any one-year period, individuals who at the beginning of such period constitute the Board (together with any new Director whose election or nomination was approved by a majority of the Directors then in office who were either Directors at the beginning of such period or who were previously so approved, but excluding under all circumstances any such new Director whose initial assumption of office occurs as a result of an actual or threatened election contest or other actual or threatened solicitation of proxies or consents by or on behalf of any individual, corporation, partnership or other entity or group, including through the use of proxy access procedures as may be provided in the Company’s bylaws) cease to constitute a majority of the Board, or (iv) the consummation of a merger, consolidation, business combination or similar transaction involving the Company unless securities representing 65% or more of the then outstanding voting stock of the corporation resulting from such transaction are held subsequent to such transaction by the Person or Persons who were the beneficial owners of the outstanding voting stock of the Company immediately prior to such transaction in substantially the same proportions as their ownership immediately prior to such transaction. Notwithstanding the foregoing or any provision to the contrary, if an Award is subject to Section 409A (and not excepted therefrom) and a Change in Control is a distribution event for purposes of an Award, the foregoing definition of Change in Control shall be interpreted, administered and construed in a manner necessary to ensure that the occurrence of any such event shall result in a Change in Control only if such event qualifies as a change in the ownership or effective control of a corporation, or a change in the ownership of a substantial portion of the assets of a corporation, as applicable, within the meaning of Treas. Reg. § 1.409A-3(i)(5). For purposes of this Agreement, “beneficial owner(s)” shall have the meaning set forth in Rule 13d-3 of the Exchange Act.
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(B)
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Qualifying Event means the occurrence of one or more of the following events: (i) immediately upon the consummation of a Change in Control event, failure of the successor company in a Change in Control event to provide Substitute Awards that are substantially similar in both nature and terms (including having an equivalent realizable pre-tax value to the PSUs assuming vesting and delivery at the consummation of the Change in Control); (ii) within two years of the consummation of a Change in Control event, an involuntary termination without cause of the Employee; or (iii) within two years of the consummation of a Change in Control event, a Good Reason Termination (as defined in Section 7(C) below) by the Employee.
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(C)
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Good Reason Termination means, without an Employee’s written consent, the Separation from Service (for reasons other than death, Disability or cause) by an Employee due to any of the following events occurring within two years of the consummation of a Change in Control: (i) the relocation of an Employee’s principal place of employment to a location that is more than 50 miles from the principal place of employment in effect immediately prior to such Change in Control; (ii) a material diminution in the duties or responsibilities of an Employee from those in place immediately prior to such Change in Control; and (iii) a material reduction in the base salary or annual incentive opportunity of an Employee from what was in place immediately prior to such Change in Control.
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8.
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It is intended that under current U.S. federal income tax laws, the Employee will not be subject to income tax unless and until Shares are delivered to the Employee on the Payment Date, at which time the Fair Market Value of the Shares will be reportable as ordinary income, and subject to income tax withholding as well as social security and Medicare (FICA) taxes. In accordance with administrative procedures established by the Company, any statutory withholding tax obligations of Employee on account of the issuance of Shares or settlement of this Award for Shares or cash shall be satisfied by the Company mandatorily withholding a sufficient number of Shares to be issued, or an amount of cash to be delivered, to the Employee hereunder equal to such applicable minimum statutory withholding tax obligation. The Employee should consult his or her personal advisor to determine the effect of this Award of PSUs on his or her own tax situation.
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9.
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Notices hereunder and under the Plan, if to the Company, will be delivered to the Plan Administrator (as so designated by the Company) or mailed to the Company’s principal office, 4300 Wilson Boulevard, Arlington, VA 22203, attention of the Plan Administrator, or, if to the Employee, will be delivered to the Employee, which may include electronic delivery, or mailed to his or her address as the same appears on the records of the Company.
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10.
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All decisions and interpretations made by the Board of Directors or the Committee with regard to any question arising hereunder or under the Plan will be binding and conclusive on all persons. Unless otherwise specifically provided herein, in the event of any inconsistency between the terms of this Agreement and the Plan, the Plan will govern.
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11.
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By accepting this Award of PSUs, the Employee acknowledges receipt of a copy of the Plan and the prospectus relating to this Award of PSUs, and agrees to be bound by the terms and conditions set forth in this Agreement and the Plan, as in effect and/or amended from time to time.
The Employee further acknowledges that the Plan and related documents, which may include the Plan prospectus, may be delivered electronically. Such means of delivery may include the delivery of a link to a Company intranet site or the internet site of a third party involved in administering the Plan, the delivery of the documents via e-mail or CD-ROM or such other delivery determined at the Plan Administrator’s discretion. The Employee acknowledges that the Employee may receive from the Company a paper copy of any documents delivered electronically at no cost if the Employee contacts the Human Resources department of the Company by telephone at (703) 682-6553 or by mail to 4300 Wilson Boulevard, Suite 1100, Arlington, Virginia 22203. The Employee further acknowledges that the Employee will be provided with a paper copy of any documents delivered electronically if electronic delivery fails. |
12.
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This Award is intended to be excepted from coverage under Section 409A of the Code and shall be administered, interpreted and construed accordingly. The Employee shall have no right to designate the date of any payment under this Agreement. Each payment under this Agreement is intended to be excepted under the short-term deferral exception as specified in Treas. Reg. § 1.409A-1(b)(4). The Company may, in its sole discretion and without the Employee’s consent, modify or amend the terms and conditions of this Award, impose conditions on the timing and effectiveness of the issuance of the Shares, or take any other action it deems necessary or advisable, to cause this Award to comply with Section 409A of the Code (or an exception thereto).
Notwithstanding, the Employee recognizes and acknowledges that Section 409A of the Code may impose upon the Employee certain taxes or interest charges for which the Employee is and shall remain solely responsible. |
13.
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Notwithstanding any other provisions in this Agreement, any PSUs subject to recovery under any law, government regulation, stock exchange listing requirement, or Company policy, shall be subject to such deductions, recoupment and clawback as may be required to be made pursuant to such law, government regulation, stock exchange listing requirement or Company policy.
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14.
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This Agreement will be governed by the laws of the State of Delaware without giving effect to its choice of law provisions.
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The AES CORPORATION
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By:
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Tish Mendoza
|
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Senior Vice President and Chief Human Resources Officer
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1.
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The Award of this Option is subject to all terms and conditions of this Agreement and the Plan, the terms of which are herein incorporated by reference:
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Name of Employee:
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Fidelity System ID:
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Grant Date:
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Total Number of Shares Granted:
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|
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Option Price per Share:
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2.
|
The Employee referenced above is hereby granted an Option representing a right to purchase the number of Shares set forth above at the option price per Share set forth above (which option price is the Fair Market Value of a Share on the date hereof), upon the terms set forth herein and in the Plan, if and only to the extent, the relevant portion of such Option (i) has not been forfeited or canceled prior to its Vesting Date (as defined below) and (ii) has vested in accordance with this Agreement.
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3.
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This Option will expire no later than ten years from the grant date provided, however, that this Option may expire sooner pursuant to the terms set forth herein and in the Plan.
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4.
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Except as otherwise provided in this Agreement, this Option will vest, in accordance with and subject to the terms of this Agreement, in three equal installments on each of the first three anniversaries of the grant date, (each a "Vesting Date"); provided, however, that if:
|
(A)
|
the Employee Separates from Service prior to the applicable Vesting Date
by reason of the Employee's death or a Separation of Service on account of Disability
, the portion of this Option that has not previously vested will vest and will become immediately exercisable, and will expire one year after the date the Employee Separates from Service;
|
(B)
|
the Employee Separates from Service prior to the applicable Vesting Date by reason of
a Separation from Service by the Company for
cause
(as determined by the Committee in its sole discretion for all purposes of this Agreement), the portion of this Option that has previously vested will expire three months after the date the Employee Separates from Service, and the portion of this Option that has not previously vested will be immediately cancelled and forfeited without payment or further obligation by the Company or any Affiliate; and
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(C)
|
the Employee Separates from Service prior to the applicable Vesting Date for any other reason, including, but not limited to, voluntarily
by the Employee, on account of Qualified Retirement, or by reason of a Separation from Service by the Company (other than for cause or by reason of death or Disability)
, the portion of this Option that has previously vested will expire one hundred and eighty (180) days after the date the Employee Separates from Service, and any portion of this Option that has not previously vested will be immediately cancelled and forfeited without payment or further obligation by the Company or any Affiliate.
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5.
|
Subject to the terms and conditions of the Plan and this Agreement, the Employee may exercise any vested portion of this Option by giving appropriate notice to the Company’s plan administrator, together with provision for payment (i) of the full option price of the Shares for which such vested portion of this Option is exercised and (ii) applicable withholding taxes. The notice must specify the portion of this Option to be exercised (i.e., the number of Shares). The full option price of the Shares of common stock as to which such vested portion of this Option is exercised (including applicable withholding taxes) must be paid in cash to the plan administrator in full, as otherwise approved by the Committee, or alternative adequate provision for such payment must be made (including an irrevocable instruction to a broker to deliver the option price at a future date), at the time of exercise.
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6.
|
Notwithstanding the foregoing, in the event of a (i) Change in Control (as defined in Section 6(A) below) and (ii) a Qualifying Event (as defined in Section 6(B) below) prior to the applicable Vesting Date, to the extent that all or any portion of this Option has not already been previously forfeited or cancelled, such portion of this Option will become fully vested and exercisable contemporaneous with the Qualifying
|
(A)
|
Change in Control means the occurrence of one or more of the following events: (i) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Company to any Person or group (as that term is used in Section 13(d) (3) of the Exchange Act) of Persons, (ii) a Person or group (as so defined) of Persons (other than Management of the Company on the date of the most recent adoption of the Plan by the Company's stockholders or their Affiliates) shall have become the beneficial owner (as defined below) of more than 35% of the outstanding voting stock of the Company, (iii) during any one-year period, individuals who at the beginning of such period constitute the Board (together with any new Director whose election or nomination was approved by a majority of the Directors then in office who were either Directors at the beginning of such period or who were previously so approved, but excluding under all circumstances any such new Director whose initial assumption of office occurs as a result of an actual or threatened election contest or other actual or threatened solicitation of proxies or consents by or on behalf of any individual, corporation, partnership or other entity or group, including through the use of proxy access procedures as may be provided in the Company’s bylaws) cease to constitute a majority of the Board, or (iv) the consummation of a merger, consolidation, business combination or similar transaction involving the Company unless securities representing 65% or more of the then outstanding voting stock of the corporation resulting from such transaction are held subsequent to such transaction by the Person or Persons who were the beneficial owners of the outstanding voting stock of the Company immediately prior to such transaction in substantially the same proportions as their ownership immediately prior to such transaction. Notwithstanding the foregoing or any provision to the contrary, if an Award is subject to Section 409A (and not excepted therefrom) and a Change in Control is a distribution event for purposes of an Award, the foregoing definition of Change in Control shall be interpreted, administered and construed in a manner necessary to ensure that the occurrence of any such event shall result in a Change in Control only if such event qualifies as a change in the ownership or effective control of a corporation, or a change in the ownership of a substantial portion of the assets of a corporation, as applicable, within the meaning of Treas. Reg. § 1.409A-3(i)(5). For purposes of this Agreement, “beneficial owner(s)” shall have the meaning set forth in Rule 13d-3 of the Exchange Act.
|
(B)
|
Qualifying Event means the occurrence of one or more of the following events: (i) immediately upon the consummation of a Change in Control event, failure of the successor company in a Change in Control event to provide Substitute Awards that are substantially similar in both nature and terms (including having an equivalent realizable pre-tax value to the Option assuming vesting and delivery at the consummation of the Change in Control); (ii) within two years of the consummation of a Change in Control event, an involuntary termination without cause of the Employee; or (iii) within two years of the consummation of a Change in Control event, a Good Reason Termination (as defined in Section 6(C) below) by the Employee.
|
(C)
|
Good Reason Termination means, without an Employee’s written consent, the Separation from Service (for reasons other than death, Disability or cause) by an Employee due to any of the following events occurring within two years of the consummation of a Change in Control: (i) the relocation of an Employee’s principal place of employment to a location that is more than 50 miles from the principal place of employment in effect immediately prior to such Change in Control; (ii) a material diminution in the duties or responsibilities of an Employee from those in place immediately prior to such Change in Control; and (iii) a material reduction in the base salary or annual incentive opportunity of an Employee from what was in place immediately prior to such Change in Control.
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7.
|
The Company and its subsidiaries and Affiliates have the right to condition the Employee’s right to exercise any portion of this Option on the Employee making arrangements satisfactory to the Company or any of its subsidiaries or affiliates to enable any related tax obligation of the Employee to be satisfied. The Employee should consult his or her personal advisor to determine the effect of this Option on his or her own tax situation.
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8.
|
Notices hereunder and under the Plan, if to the Company, must be delivered to the Plan Administrator (as so designated by the Company) or mailed to the Company’s principal office, 4300 Wilson Boulevard, Arlington, VA 22203 (or as subsequently designated by the Company), to the attention of the Plan Administrator, or, if to the Employee, will be delivered to the Employee, which may include electronic delivery, or mailed to his or her address as the same appears on the records of the Company.
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9.
|
Subject to the terms and conditions of the Plan, unless the Committee determines otherwise, if an Employee is adjudicated to be mentally incompetent while in the
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10.
|
All decisions and interpretations made by the Board of Directors or the Committee with regard to any question arising hereunder or under the Plan will be binding and conclusive on all persons. Unless otherwise specifically provided herein, in the event of any inconsistency between the terms of the Plan and this Agreement, the Plan will govern.
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11.
|
By accepting the Award of this Option, the Employee acknowledges receipt of a copy of the Plan and the prospectus related to this Option and agrees to be bound by the terms and conditions set forth in this Agreement and the Plan, as in effect and/or amended from time to time.
The Employee further acknowledges that the Plan and related documents, which may include the Plan prospectus, may be delivered electronically. Such means of delivery may include the delivery of a link to a Company intranet site or the internet site of a third party involved in administering the Plan, the delivery of the documents via e-mail or CD-ROM or such other delivery determined at the plan administrator’s discretion. The Employee acknowledges that the Employee may receive from the Company a paper copy of any documents delivered electronically at no cost if the Employee contacts the Human Resources department of the Company by telephone at (703) 682-6553 or by mail to 4300 Wilson Boulevard, Suite 1100, Arlington, Virginia 22203. The Employee further acknowledges that the Employee will be provided with a paper copy of any documents delivered electronically if electronic delivery fails. |
12.
|
This Option is intended to be excepted from coverage under Section 409A and shall be administered, interpreted and construed accordingly. The Company may, in its sole discretion and without the Employee's consent, modify or amend the terms of this Agreement, impose conditions on the timing and effectiveness of the exercise of the Option by Employee, or take any other action it deems necessary or advisable, to cause the Option to be excepted from Section 409A (or to comply therewith to the extent the Company determines it is not excepted). Notwithstanding, Employee recognizes and acknowledges that Section 409A of the Code may impose upon the Employee certain taxes or interest charges for which the Employee is and shall remain solely responsible.
|
13.
|
Notwithstanding any other provisions in this Agreement, any Options subject to recovery under any law, government regulation, stock exchange listing requirement, or Company policy, shall be subject to such deductions, recoupment and clawback as may be required to be made pursuant to such law, government regulation, stock exchange listing requirement or Company policy.
|
14.
|
This Agreement will be governed by the laws of the State of Delaware without giving effect to its choice of law provisions.
|
•
|
The Eligible Employee's voluntary resignation, including but not limited to the Eligible Employee's unilateral Separation From Service at any time prior to the Termination Date established by the Employer;
|
•
|
Any Separation From Service that the Employer determines (either before or after the Separation From Service and whether or not any notice is given to the employee) the payment of benefits under the Plan in connection with such Separation From Service would be inconsistent with the intent and purposes of the Plan;
|
•
|
A Separation From Service in connection with an Eligible Employee's failure to return to work immediately following the conclusion of an approved leave-of-absence.
|
•
|
A Separation From Service for, or on account of, Cause;
|
•
|
A Disability Termination;
|
•
|
The Eligible Employee's death;
|
•
|
The Eligible Employee declines to accept a New Job Position offered by the Employer that is located within 50 miles of the Eligible Employee's then assigned work site of the Employer;
|
•
|
The Sale of Business Rule set forth in Section 2.3 herein; or
|
•
|
The voluntary transfer of employment from Eligible Employee's Employer to another AES related entity, irrespective of whether the Eligible Employee is required to relocate or whether the AES related entity qualifies as an Affiliated Employer.
|
•
|
Reduction-in-force that eliminates the Executive's existing job position;
|
•
|
Permanent job elimination of the Executive;
|
•
|
The restructuring or reorganization of a business unit, division, department or other segment, which directly affects the Executive;
|
•
|
Termination by Mutual Consent; or
|
•
|
Executive declines to accept a New Job Position offered by the Employer that requires the Executive to relocate to a work site location that is located
greater than
50 miles from the Executive's then assigned work site of the Employer; provided, however, that except as provided in Section 2.3 or in connection with a Separation From Service following a Change in Control, an Executive who functions at or above a Group Manager position (or its equivalent) shall not incur an Involuntary Termination if such Executive declines a New Job Position (regardless of its location) at a time when the Executive's existing job position is being eliminated.
|
•
|
The Eligible Employee is employed by the new organization immediately following the sale, transfer or lease or is so employed within a time period specified in an agreement between the Employer and the new organizations; or
|
•
|
The Employer terminates the employment of an Eligible Employee who did not accept an offer of employment from the new organization when the new organization offered a compensation and benefits package that was, in the aggregate, generally comparable to the compensation and benefits provided by the Employer; provided that such Eligible Employee was not required to relocate to a work site location that is located greater than 50 miles from the Employee's then assigned work site of the Employer.
|
The AES Corporation
|
|
|
|
By:
/s/ Brian A. Miller
|
Brian A. Miller, Executive Vice President, General Counsel and Corporate Secretary
|
|
•
|
The Eligible Employee's voluntary resignation, including but not limited to the Eligible Employee's unilateral Separation From Service at any time prior to the Termination Date established by the Employer;
|
•
|
Any Separation From Service that the Employer determines (either before or after the Separation From Service and whether or not any notice is given to the employee) the payment of benefits under the Plan in connection with such Separation From Service would be inconsistent with the intent and purposes of the Plan;
|
•
|
A Separation From Service in connection with an Eligible Employee's failure to return to work immediately following the conclusion of an approved leave-of-absence;
|
•
|
A Separation From Service for, or on account of, Cause;
|
•
|
A Disability Termination;
|
•
|
The Eligible Employee's death;
|
•
|
The Eligible Employee declines to accept a New Job Position offered by the Employer that is located within 50 miles of the Eligible Employee's then assigned work site of the Employer;
|
•
|
The Sale of Business Rule set forth in Section 2.4 herein; or
|
•
|
The voluntary transfer of employment from Eligible Employee's Employer to another AES related entity, irrespective of whether the Eligible Employee is required to relocate or whether the AES related entity qualifies as an Affiliated Employer.
|
•
|
Reduction-in-force;
|
•
|
Permanent job elimination;
|
•
|
The restructuring or reorganization of a business unit, division, department or other segment;
|
•
|
Termination by Mutual Consent; or
|
•
|
Eligible Employee declines to accept a New Job Position offered by the Employer that requires the Eligible Employee to relocate to a work site location that is located
greater than
50 miles from the Employee's then assigned work site of the Employer; provided, however, that except as provided in Section 2.4 or in connection with a Separation From Service following a Change in Control, an Employee who functions at or above a Group Manager position (or its equivalent) shall not incur an Involuntary Termination if such Eligible Employee declines a New Job Position (regardless of its location) at a time when the Employee's existing job position is being eliminated.
|
•
|
Any Employee who has been hired to work on a part-time, seasonal or temporary basis or who is classified as a part-time, seasonal or temporary Employee, or a student intern on the Employer’s records;
|
•
|
Any Employee who has been hired by the Employer to work in a job share position (provided that such Employee is not otherwise employed on a full-time basis);
|
•
|
An Employee who is member of a collective bargaining unit to which this Plan has not been specifically extended by a collective bargaining agreement;
|
•
|
An Employee entitled to a severance type payment pursuant to any other plan, policy, arrangement, agreement, letter or other communication sponsored by, or entered into with, or maintained by the Employer, including but not limited to an employment agreement;
|
•
|
Leased employees, including those within the meaning of section 414(n) of the Code;
|
•
|
Nonresident aliens (other than those nonresident aliens to whom the Employer has extended participation in the Plan with the written consent of the Company;
|
•
|
Any individual who has agreed in writing that he or she waives his or her eligibility to receive benefits under the Plan; and
|
•
|
Any Employee who has an enforceable right to resume employment or to be recalled to employment with the Employer.
|
•
|
The Eligible Employee is employed by the new organization immediately following the sale, transfer or lease or is so employed within a time period specified in an agreement between the Employer and the new organizations; or
|
•
|
The Employer terminates the employment of an Eligible Employee who did not accept an offer of employment from the new organization when the new organization offered a compensation and benefits package that was, in the aggregate, generally comparable to the compensation and benefits provided by the Employer; provided that such Eligible Employee was not required to relocate to a work site location that is located greater than 50 miles from the Employee's then assigned work site of the Employer.
|
The AES Corporation
|
|
|
|
By:
|
Brian A. Miller, Executive Vice President
General Counsel and Corporate Secretary
|
Title/Grade Classification
|
Severance Benefits
(Min. 1 Year-of-Service for Eligibility) |
Executive Officers (CFO excluded because of contract)
|
One (1) times (Annual Compensation + Bonus) (Section 4.1)
Health Benefits (Section 4.2)
Outplacement Benefits (Section 4.3)
Prorated Bonus (Section 4.4)
Special Enhanced Benefits (Section 4.5)
Excise Tax Reimbursement (see Appendix A for specific participant eligibility)
|
Grades 24 -27
|
One (1) times (Annual Compensation) (Section 4.1)
Health Benefits (Section 4.2)
Outplacement Benefits (Section 4.3)
Prorated Bonus (Section 4.4)
Special Enhanced Benefits (Section 4.5)
|
Grades 19 -23
|
Three (3) months prorated Annual Compensation plus two (2) Weeks' Compensation for each Year-of-Service up to a maximum of thirty-nine (39) Week's Compensation (Section 4.1)
Health Benefits (Section 4.2)
|
Grades 18 and below
|
Two (2) months prorated Annual Compensation plus two (2) Weeks’ Compensation for each Year-of-Service up to a maximum of twenty-six (26) Week's Compensation (Section 4.1)
Health Benefits (Section 4.2)
|
(A)
|
Qualifying Event means the occurrence of one or more of the following events: (i) immediately upon the consummation of a Change in Control Event, failure of the successor company in a Change in Control event to provide Substitute Awards that are substantially similar in both nature and terms (including having an equivalent realizable pre-tax value to outstanding awards assuming vesting and delivery at the consummation of the Change in Control); (ii) within two years of the consummation of a Change in Control event, an involuntary termination without Cause of the Employee; or (iii) within two years of the consummation of a Change in Control event, a Good Reason Termination (as defined in Section 7(B) below) by the Employee.
|
(B)
|
Good Reason Termination means, without an Employee’s written consent, the Separation From Service (for reasons other than death, Disability or Cause) by an Employee due to any of the following events occurring within two years of the consummation of a Change in Control: (i) the relocation of an Employee’s principal place of employment to a location that is more than 50 miles from the principal place of employment in effect immediately prior to such Change in Control; (ii) a material diminution in the duties or responsibilities of an Employee from those in place immediately prior to such Change in Control; and (iii) a material reduction in the base salary or annual incentive opportunity of an Employee from what was in place immediately prior to such Change in Control. In order for an Employee to terminate for a Good Reason Termination, (i) an Employee must notify the successor entity in writing, within ninety (90) days of the event constituting Good Reason of the Employee’s intent to terminate employment for Good Reason, that specifically identifies in reasonable detail the manner of the Good Reason event, (ii) the event must remain uncorrected for thirty (30) days following the date that an Employee notifies the successor entity in writing of the Employee’s intent to terminate employment for Good Reason (the “Notice Period”), and (iii) the termination date must occur within sixty (60) days after expiration of the Notice Period.
|
(A)
|
Qualifying Event means the occurrence of one or more of the following events: (i) immediately upon the consummation of a Change in Control Event, failure of the successor company in a Change in Control event to provide Substitute Awards that are substantially similar in both nature and terms (including having an equivalent realizable pre-tax value to outstanding awards assuming vesting and delivery at the consummation of the Change in Control); (ii) within two years of the consummation of a Change in Control event, an involuntary termination without Cause of the Employee; or (iii) within two years of the consummation of a Change in Control event, a Good Reason Termination (as defined in Section 6(B) below) by the Employee.
|
(B)
|
Good Reason Termination means, without an Employee’s written consent, the Separation From Service (for reasons other than death, Disability or Cause) by an Employee due to any of the following events occurring within two years of the consummation of a Change in Control: (i) the relocation of an Employee’s principal place of employment to a location that is more than 50 miles from the principal place of employment in effect immediately prior to such Change in Control; (ii) a material diminution in the duties or responsibilities of an Employee from those in place immediately prior to such Change in Control; and (iii) a material reduction in the base salary or annual incentive opportunity of an Employee from what was in place immediately prior to such Change in Control. In order for an Employee to terminate for a Good Reason Termination, (i) an Employee must notify the successor entity in writing, within ninety (90) days of the event constituting Good Reason of the Employee’s intent to terminate employment for Good Reason, that specifically identifies in reasonable detail the manner of the Good Reason event, (ii) the event must remain uncorrected for thirty (30) days following the date that an Employee notifies the successor entity in writing of the Employee’s intent to terminate employment for Good Reason (the “Notice Period”), and (iii) the termination date must occur within sixty (60) days after expiration of the Notice Period.
|
(A)
|
Qualifying Event means the occurrence of one or more of the following events: (i) immediately upon the consummation of a Change in Control Event, failure of the successor company in a Change in Control event to provide Substitute Awards that are substantially similar in both nature and terms (including having an equivalent realizable pre-tax value to outstanding awards assuming vesting and delivery at the consummation of the Change in Control); (ii) within two years of the consummation of a Change in Control event, an involuntary termination without Cause of the Employee; or (iii) within two years of the consummation of a Change in Control event, a Good Reason Termination (as defined in Section 6(B) below) by the Employee.
|
(B)
|
Good Reason Termination means, without an Employee’s written consent, the Separation From Service (for reasons other than death, Disability or Cause) by an Employee due to any of the following events occurring within two years of the consummation of a Change in Control: (i) the relocation of an Employee’s principal place of employment to a location that is more than 50 miles from the principal place of employment in effect immediately prior to such Change in Control; (ii) a material diminution in the duties or responsibilities of an Employee from those in place immediately prior to such Change in Control; and (iii) a material reduction in the base salary or annual incentive opportunity of an Employee from what was in place immediately prior to such Change in Control. In order for an Employee to terminate for a Good Reason Termination, (i) an Employee must notify the successor entity in writing, within ninety (90) days of the event constituting Good Reason of the Employee’s intent to terminate employment for Good Reason, that specifically identifies in reasonable detail the manner of the Good Reason event, (ii) the event must remain uncorrected for thirty (30) days following the date that an Employee notifies the successor entity in writing of the Employee’s intent to terminate employment for Good Reason (the “Notice Period”), and (iii) the termination date must occur within sixty (60) days after expiration of the Notice Period.
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of The AES Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/
s
/ A
NDRÉS
G
LUSKI
|
Name: Andrés Gluski
|
President and Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of The AES Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ T
HOMAS
M. O’F
LYNN
|
Name: Thomas M. O’Flynn
|
Executive Vice President and Chief Financial Officer
|
(1)
|
the Quarterly Report on Form 10-Q for the quarter ended
June 30, 2015
, (the “Periodic Report”) which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
|
(2)
|
information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of The AES Corporation.
|
/
S
/ A
NDRÉS
G
LUSKI
|
Name: Andrés Gluski
|
President and Chief Executive Officer
|
(1)
|
|
(1)
|
the Quarterly Report on Form 10-Q for the quarter ended
June 30, 2015
, (the “Periodic Report”) which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
|
(2)
|
information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of The AES Corporation.
|
/s/ T
HOMAS
M. O’F
LYNN
|
Name: Thomas M. O’Flynn
|
Executive Vice President and Chief Financial Officer
|