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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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Smaller reporting company ¨
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Emerging growth company ¨
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Non-accelerated filer ¨
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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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AFS
|
Available For Sale
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AOCI
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Accumulated Other Comprehensive Income
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AOCL
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Accumulated Other Comprehensive Loss
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ASC
|
Accounting Standards Codification
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ASU
|
Accounting Standards Update
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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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CHP
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Combined Heat and Power
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COFINS
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Contribution for the Financing of Social Security
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DG Comp
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Directorate-General for Competition
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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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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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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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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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GILTI
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Global Intangible Low Taxed Income
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GW
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Gigawatts
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HLBV
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Hypothetical Liquidation Book Value
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HPP
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Hydropower Plant
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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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ISO
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Independent System Operator
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LIBOR
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London Interbank Offered Rate
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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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NCI
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Noncontrolling Interest
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NEK
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Natsionalna Elektricheska Kompania (state-owned electricity public supplier in Bulgaria)
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NM
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Not Meaningful
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NOV
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Notice of Violation
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NOX
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Nitrogen Oxides
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OPGC
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Odisha Power Generation Corporation
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PIS
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Program of Social Integration
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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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RTO
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Regional Transmission Organization
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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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SO2
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Sulfur Dioxide
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TCJA
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Tax Cuts and Jobs Act
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U.S.
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United States
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USD
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United States Dollar
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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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September 30,
2018 |
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December 31,
2017 |
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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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1,187
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$
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949
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Restricted cash
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441
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274
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Short-term investments
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401
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424
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Accounts receivable, net of allowance for doubtful accounts of $16 and $10, respectively
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1,510
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1,463
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Inventory
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562
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562
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Prepaid expenses
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97
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62
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Other current assets
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706
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630
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Current held-for-sale assets
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111
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2,034
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Total current assets
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5,015
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6,398
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NONCURRENT ASSETS
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Property, Plant and Equipment:
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Land
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470
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502
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Electric generation, distribution assets and other
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25,055
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24,119
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Accumulated depreciation
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(8,033
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)
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(7,942
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)
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Construction in progress
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3,616
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3,617
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Property, plant and equipment, net
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21,108
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20,296
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Other Assets:
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Investments in and advances to affiliates
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1,277
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1,197
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Debt service reserves and other deposits
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494
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565
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Goodwill
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1,059
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1,059
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Other intangible assets, net of accumulated amortization of $472 and $441, respectively
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400
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366
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Deferred income taxes
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88
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130
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Service concession assets, net of accumulated amortization of $0 and $206, respectively
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—
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1,360
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Loan receivable
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1,441
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—
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Other noncurrent assets
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1,607
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1,741
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Total other assets
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6,366
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6,418
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TOTAL ASSETS
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$
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32,489
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$
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33,112
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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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1,299
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$
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1,371
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Accrued interest
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272
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228
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Accrued and other liabilities
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1,151
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1,232
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Non-recourse debt, includes $368 and $1,012, respectively, related to variable interest entities
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1,308
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2,164
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Current held-for-sale liabilities
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17
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1,033
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Total current liabilities
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4,047
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6,028
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NONCURRENT LIABILITIES
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Recourse debt
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3,815
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4,625
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Non-recourse debt, includes $2,832 and $1,358, respectively, related to variable interest entities
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14,273
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13,176
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Deferred income taxes
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1,214
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1,006
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Other noncurrent liabilities
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2,552
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2,595
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Total noncurrent liabilities
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21,854
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21,402
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Commitments and Contingencies (see Note 8)
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Redeemable stock of subsidiaries
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879
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837
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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; 817,203,691 issued and 662,297,479 outstanding at September 30, 2018 and 816,312,913 issued and 660,388,128 outstanding at December 31, 2017)
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8
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8
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Additional paid-in capital
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8,328
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8,501
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Accumulated deficit
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(1,133
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)
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(2,276
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)
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Accumulated other comprehensive loss
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(2,020
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)
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(1,876
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)
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Treasury stock, at cost (154,906,212 and 155,924,785 shares at September 30, 2018 and December 31, 2017, respectively)
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(1,878
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)
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(1,892
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)
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Total AES Corporation stockholders’ equity
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3,305
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2,465
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NONCONTROLLING INTERESTS
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2,404
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2,380
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Total equity
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5,709
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4,845
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TOTAL LIABILITIES AND EQUITY
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$
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32,489
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$
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33,112
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Three Months Ended September 30,
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Nine Months Ended September 30,
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2018
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2017
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2018
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2017
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(in millions)
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NET INCOME
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$
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191
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$
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261
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$
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1,384
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$
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509
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Foreign currency translation activity:
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Foreign currency translation adjustments, net of income tax benefit of $2, $1, $3 and $0, respectively
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(42
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)
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80
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|
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(159
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)
|
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29
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Reclassification to earnings, net of $0 income tax
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(3
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)
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—
|
|
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(1
|
)
|
|
98
|
|
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Total foreign currency translation adjustments
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(45
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)
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80
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|
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(160
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)
|
|
127
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Derivative activity:
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Change in derivative fair value, net of income tax benefit (expense) of $(3), $(6), $(3) and $15, respectively
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15
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5
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32
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(42
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)
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Reclassification to earnings, net of income tax benefit (expense) of $(7), $5, $(15) and $(6), respectively
|
21
|
|
|
1
|
|
|
67
|
|
|
50
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Total change in fair value of derivatives
|
36
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6
|
|
|
99
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|
|
8
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Pension activity:
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Reclassification to earnings, net of income tax expense of $0, $4, $2 and $10, respectively
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1
|
|
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7
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|
|
5
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20
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Total pension adjustments
|
1
|
|
|
7
|
|
|
5
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20
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OTHER COMPREHENSIVE INCOME (LOSS)
|
(8
|
)
|
|
93
|
|
|
(56
|
)
|
|
155
|
|
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COMPREHENSIVE INCOME
|
183
|
|
|
354
|
|
|
1,328
|
|
|
664
|
|
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Less: Comprehensive income attributable to noncontrolling interests
|
(114
|
)
|
|
(127
|
)
|
|
(416
|
)
|
|
(360
|
)
|
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COMPREHENSIVE INCOME ATTRIBUTABLE TO THE AES CORPORATION
|
$
|
69
|
|
|
$
|
227
|
|
|
$
|
912
|
|
|
$
|
304
|
|
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Nine Months Ended September 30,
|
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2018
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2017
|
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(in millions)
|
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OPERATING ACTIVITIES:
|
|
|
|
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Net income
|
$
|
1,384
|
|
|
$
|
509
|
|
Adjustments to net income:
|
|
|
|
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Depreciation and amortization
|
770
|
|
|
884
|
|
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Loss (gain) on disposal and sale of businesses
|
(856
|
)
|
|
49
|
|
||
Impairment expenses
|
172
|
|
|
260
|
|
||
Deferred income taxes
|
221
|
|
|
(3
|
)
|
||
Provisions for contingencies
|
1
|
|
|
30
|
|
||
Loss on extinguishment of debt
|
187
|
|
|
44
|
|
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Net loss on sales of assets
|
23
|
|
|
34
|
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Gain on sale of discontinued operations
|
(243
|
)
|
|
—
|
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Other
|
206
|
|
|
73
|
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Changes in operating assets and liabilities
|
|
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|
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(Increase) decrease in accounts receivable
|
(125
|
)
|
|
(279
|
)
|
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(Increase) decrease in inventory
|
(13
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)
|
|
(66
|
)
|
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(Increase) decrease in prepaid expenses and other current assets
|
15
|
|
|
140
|
|
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(Increase) decrease in other assets
|
(22
|
)
|
|
(266
|
)
|
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Increase (decrease) in accounts payable and other current liabilities
|
(29
|
)
|
|
162
|
|
||
Increase (decrease) in income taxes payable, net and other taxes payable
|
(61
|
)
|
|
(4
|
)
|
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Increase (decrease) in other liabilities
|
51
|
|
|
134
|
|
||
Net cash provided by operating activities
|
1,681
|
|
|
1,701
|
|
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INVESTING ACTIVITIES:
|
|
|
|
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Capital expenditures
|
(1,592
|
)
|
|
(1,587
|
)
|
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Acquisitions of businesses, net of cash and restricted cash acquired, and equity method investments
|
(66
|
)
|
|
(590
|
)
|
||
Proceeds from the sale of businesses, net of cash and restricted cash sold, and equity method investments
|
1,796
|
|
|
39
|
|
||
Proceeds from the sale of assets
|
15
|
|
|
—
|
|
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Sale of short-term investments
|
1,010
|
|
|
2,942
|
|
||
Purchase of short-term investments
|
(1,215
|
)
|
|
(2,673
|
)
|
||
Contributions to equity affiliates
|
(101
|
)
|
|
(49
|
)
|
||
Other investing
|
(37
|
)
|
|
(37
|
)
|
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Net cash used in investing activities
|
(190
|
)
|
|
(1,955
|
)
|
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FINANCING ACTIVITIES:
|
|
|
|
||||
Borrowings under the revolving credit facilities
|
1,434
|
|
|
1,489
|
|
||
Repayments under the revolving credit facilities
|
(1,595
|
)
|
|
(851
|
)
|
||
Issuance of recourse debt
|
1,000
|
|
|
1,025
|
|
||
Repayments of recourse debt
|
(1,781
|
)
|
|
(1,353
|
)
|
||
Issuance of non-recourse debt
|
1,509
|
|
|
2,703
|
|
||
Repayments of non-recourse debt
|
(1,139
|
)
|
|
(1,731
|
)
|
||
Payments for financing fees
|
(32
|
)
|
|
(96
|
)
|
||
Distributions to noncontrolling interests
|
(199
|
)
|
|
(263
|
)
|
||
Contributions from noncontrolling interests and redeemable security holders
|
40
|
|
|
59
|
|
||
Dividends paid on AES common stock
|
(258
|
)
|
|
(238
|
)
|
||
Payments for financed capital expenditures
|
(186
|
)
|
|
(100
|
)
|
||
Proceeds from sales to noncontrolling interests
|
—
|
|
|
60
|
|
||
Other financing
|
44
|
|
|
(26
|
)
|
||
Net cash provided by (used in) financing activities
|
(1,163
|
)
|
|
678
|
|
||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(50
|
)
|
|
21
|
|
||
(Increase) decrease in cash, cash equivalents and restricted cash of discontinued operations and held-for-sale businesses
|
56
|
|
|
(107
|
)
|
||
Total increase in cash, cash equivalents and restricted cash
|
334
|
|
|
338
|
|
||
Cash, cash equivalents and restricted cash, beginning
|
1,788
|
|
|
1,960
|
|
||
Cash, cash equivalents and restricted cash, ending
|
$
|
2,122
|
|
|
$
|
2,298
|
|
SUPPLEMENTAL DISCLOSURES:
|
|
|
|
||||
Cash payments for interest, net of amounts capitalized
|
$
|
683
|
|
|
$
|
797
|
|
Cash payments for income taxes, net of refunds
|
313
|
|
|
291
|
|
||
SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
|
|
|
|
||||
Non-cash acquisition of intangible assets
|
$
|
14
|
|
|
$
|
—
|
|
Non-cash contributions of assets and liabilities for Fluence acquisition
|
20
|
|
|
—
|
|
||
Non-cash exchange of debentures for the acquisition of the Guaimbê Solar Complex (see Note 18—Acquisitions)
|
119
|
|
|
—
|
|
||
Conversion of Alto Maipo loans and accounts payable into equity (see Note 10—Equity)
|
—
|
|
|
279
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Cash and cash equivalents
|
$
|
1,187
|
|
|
$
|
949
|
|
Restricted cash
|
441
|
|
|
274
|
|
||
Debt service reserves and other deposits
|
494
|
|
|
565
|
|
||
Cash, Cash Equivalents, and Restricted Cash
|
$
|
2,122
|
|
|
$
|
1,788
|
|
New Accounting Standards Adopted
|
|||
ASU Number and Name
|
Description
|
Date of Adoption
|
Effect on the financial statements upon adoption
|
2017-07, Compensation — Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost
|
This standard changes the presentation of non-service costs associated with defined benefit plans and updates the guidance so that only the service cost component will be eligible for capitalization.
Transition method: retrospective for presentation of non-service cost and prospective for the change in capitalization.
|
January 1, 2018
|
For the three and nine months ended September 30, 2017, $2 million and $1 million of gains primarily related to the expected return on plan assets were reclassified from Costs of Sales to Other Expense, respectively.
|
2017-05, Other Income — Gains and Losses from the Derecognition of Nonfinancial Assets (Topic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets
|
This standard clarifies the scope and application of ASC 610-20 on the sale, transfer, and derecognition of nonfinancial assets and in substance nonfinancial assets to non-customers, including partial sales. It also provides guidance on how gains and losses on transfers of nonfinancial assets and in substance nonfinancial assets to non-customers are recognized. The standard also clarifies that the derecognition of businesses is under the scope of ASC 810. The standard must be adopted concurrently with ASC 606, however an entity will not have to apply the same transition method as ASC 606.
Transition method: modified retrospective.
|
January 1, 2018
|
As more transactions will not meet the definition of a business due to the adoption of ASU 2017-01, more dispositions or partial sales will be out of the scope of ASC 810 and will be under this standard.
|
2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business
|
The standard requires an entity to first evaluate whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, and if that threshold is met, the set is not a business. As a second step, at least one substantive process should exist to be considered a business.
Transition method: prospective.
|
January 1, 2018
|
Some acquisitions and dispositions will now fall under a different accounting model. This will reduce the number of transactions that are accounted for as business combinations and therefore future acquired goodwill.
|
2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (a consensus of the FASB Emerging Issues Task Force)
|
This standard requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows.
Transition method: retrospective. |
January 1, 2018
|
For the nine months ended September 30, 2017, cash provided by operating activities increased by $12 million, cash used in investing activities decreased by $327 million, and cash provided by financing activities was unchanged.
|
2016-01, Financial Instruments — Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities
|
The standard significantly revises an entity’s accounting related to (1) classification and measurement of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. It also amends certain disclosures of financial instruments.
Transition method: modified retrospective. Prospective for equity investments without readily determinable fair value.
|
January 1, 2018
|
No material impact upon adoption of the standard.
|
2014-09, 2015-14, 2016-08, 2016-10, 2016-12, 2016-20, 2017-10, 2017-13, Revenue from Contracts with Customers (Topic 606)
|
See discussion of the ASU below.
|
January 1, 2018
|
See impact upon adoption of the standard below.
|
Condensed Consolidated Balance Sheet
|
Balance at
December 31, 2017
|
|
Adjustments Due to ASC 606
|
|
Balance at
January 1, 2018
|
||||||
Assets
|
|
|
|
|
|
||||||
Other current assets
|
$
|
630
|
|
|
$
|
61
|
|
|
$
|
691
|
|
Deferred income taxes
|
130
|
|
|
(24
|
)
|
|
106
|
|
|||
Service concession assets, net
|
1,360
|
|
|
(1,360
|
)
|
|
—
|
|
|||
Loan receivable
|
—
|
|
|
1,490
|
|
|
1,490
|
|
|||
Equity
|
|
|
|
|
|
||||||
Accumulated deficit
|
(2,276
|
)
|
|
67
|
|
|
(2,209
|
)
|
|||
Accumulated other comprehensive loss
|
(1,876
|
)
|
|
19
|
|
|
(1,857
|
)
|
|||
Noncontrolling interest
|
2,380
|
|
|
81
|
|
|
2,461
|
|
|
September 30, 2018
|
||||||||||
Condensed Consolidated Balance Sheet
|
As Reported
|
|
Balances Without Adoption of ASC 606
|
|
Adoption Impact
|
||||||
Assets
|
|
|
|
|
|
||||||
Other current assets
|
$
|
706
|
|
|
$
|
641
|
|
|
$
|
65
|
|
Deferred income taxes
|
88
|
|
|
112
|
|
|
(24
|
)
|
|||
Service concession assets, net
|
—
|
|
|
1,287
|
|
|
(1,287
|
)
|
|||
Loan receivable
|
1,441
|
|
|
—
|
|
|
1,441
|
|
|||
TOTAL ASSETS
|
32,489
|
|
|
32,294
|
|
|
195
|
|
|||
Equity
|
|
|
|
|
|
||||||
Accumulated deficit
|
(1,133
|
)
|
|
(1,231
|
)
|
|
98
|
|
|||
Accumulated other comprehensive loss
|
(2,020
|
)
|
|
(2,038
|
)
|
|
18
|
|
|||
Noncontrolling interest
|
2,404
|
|
|
2,325
|
|
|
79
|
|
|||
TOTAL LIABILITIES AND EQUITY
|
32,489
|
|
|
32,294
|
|
|
195
|
|
|
Three Months Ended September 30, 2018
|
||||||||||
Condensed Consolidated Statement of Operations
|
As Reported
|
|
Balances Without Adoption of ASC 606
|
|
Adoption Impact
|
||||||
Total revenue
|
$
|
2,837
|
|
|
$
|
2,855
|
|
|
$
|
(18
|
)
|
Total cost of sales
|
(2,166
|
)
|
|
(2,180
|
)
|
|
14
|
|
|||
Operating margin
|
671
|
|
|
675
|
|
|
(4
|
)
|
|||
Interest income
|
79
|
|
|
64
|
|
|
15
|
|
|||
Income from continuing operations before taxes and equity in earnings of affiliates
|
332
|
|
|
321
|
|
|
11
|
|
|||
Income tax expense
|
(146
|
)
|
|
(147
|
)
|
|
1
|
|
|||
INCOME FROM CONTINUING OPERATIONS
|
192
|
|
|
180
|
|
|
12
|
|
|||
NET INCOME
|
191
|
|
|
179
|
|
|
12
|
|
|||
NET INCOME ATTRIBUTABLE TO THE AES CORPORATION
|
101
|
|
|
89
|
|
|
12
|
|
|
Nine Months Ended September 30, 2018
|
||||||||||
Condensed Consolidated Statement of Operations
|
As Reported
|
|
Balances Without Adoption of ASC 606
|
|
Adoption Impact
|
||||||
Total revenue
|
$
|
8,114
|
|
|
$
|
8,168
|
|
|
$
|
(54
|
)
|
Total cost of sales
|
(6,187
|
)
|
|
(6,227
|
)
|
|
40
|
|
|||
Operating margin
|
1,927
|
|
|
1,941
|
|
|
(14
|
)
|
|||
Interest income
|
231
|
|
|
186
|
|
|
45
|
|
|||
Income from continuing operations before taxes and equity in earnings of affiliates
|
1,672
|
|
|
1,641
|
|
|
31
|
|
|||
Income tax expense
|
(509
|
)
|
|
(509
|
)
|
|
—
|
|
|||
INCOME FROM CONTINUING OPERATIONS
|
1,194
|
|
|
1,163
|
|
|
31
|
|
|||
NET INCOME
|
1,384
|
|
|
1,353
|
|
|
31
|
|
|||
NET INCOME ATTRIBUTABLE TO THE AES CORPORATION
|
1,075
|
|
|
1,044
|
|
|
31
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Fuel and other raw materials
|
$
|
278
|
|
|
$
|
284
|
|
Spare parts and supplies
|
284
|
|
|
278
|
|
||
Total
|
$
|
562
|
|
|
$
|
562
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
DEBT SECURITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Unsecured debentures
|
$
|
—
|
|
|
$
|
60
|
|
|
$
|
—
|
|
|
$
|
60
|
|
|
$
|
—
|
|
|
$
|
207
|
|
|
$
|
—
|
|
|
$
|
207
|
|
Certificates of deposit
|
—
|
|
|
270
|
|
|
—
|
|
|
270
|
|
|
—
|
|
|
153
|
|
|
—
|
|
|
153
|
|
||||||||
Total debt securities
|
—
|
|
|
330
|
|
|
—
|
|
|
330
|
|
|
—
|
|
|
360
|
|
|
—
|
|
|
360
|
|
||||||||
EQUITY SECURITIES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Mutual funds
|
21
|
|
|
45
|
|
|
—
|
|
|
66
|
|
|
20
|
|
|
52
|
|
|
—
|
|
|
72
|
|
||||||||
Other equity securities
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Total equity securities
|
21
|
|
|
48
|
|
|
—
|
|
|
69
|
|
|
20
|
|
|
52
|
|
|
—
|
|
|
72
|
|
||||||||
DERIVATIVES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rate derivatives
|
—
|
|
|
65
|
|
|
5
|
|
|
70
|
|
|
—
|
|
|
15
|
|
|
—
|
|
|
15
|
|
||||||||
Cross-currency derivatives
|
—
|
|
|
26
|
|
|
—
|
|
|
26
|
|
|
—
|
|
|
29
|
|
|
—
|
|
|
29
|
|
||||||||
Foreign currency derivatives
|
—
|
|
|
22
|
|
|
221
|
|
|
243
|
|
|
—
|
|
|
29
|
|
|
240
|
|
|
269
|
|
||||||||
Commodity derivatives
|
—
|
|
|
9
|
|
|
8
|
|
|
17
|
|
|
—
|
|
|
30
|
|
|
5
|
|
|
35
|
|
||||||||
Total derivatives — assets
|
—
|
|
|
122
|
|
|
234
|
|
|
356
|
|
|
—
|
|
|
103
|
|
|
245
|
|
|
348
|
|
||||||||
TOTAL ASSETS
|
$
|
21
|
|
|
$
|
500
|
|
|
$
|
234
|
|
|
$
|
755
|
|
|
$
|
20
|
|
|
$
|
515
|
|
|
$
|
245
|
|
|
$
|
780
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
DERIVATIVES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Interest rate derivatives
|
$
|
—
|
|
|
$
|
60
|
|
|
$
|
101
|
|
|
$
|
161
|
|
|
$
|
—
|
|
|
$
|
111
|
|
|
$
|
151
|
|
|
$
|
262
|
|
Cross-currency derivatives
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
3
|
|
||||||||
Foreign currency derivatives
|
—
|
|
|
54
|
|
|
—
|
|
|
54
|
|
|
—
|
|
|
30
|
|
|
—
|
|
|
30
|
|
||||||||
Commodity derivatives
|
—
|
|
|
4
|
|
|
—
|
|
|
4
|
|
|
—
|
|
|
19
|
|
|
1
|
|
|
20
|
|
||||||||
Total derivatives — liabilities
|
—
|
|
|
120
|
|
|
101
|
|
|
221
|
|
|
—
|
|
|
163
|
|
|
152
|
|
|
315
|
|
||||||||
TOTAL LIABILITIES
|
$
|
—
|
|
|
$
|
120
|
|
|
$
|
101
|
|
|
$
|
221
|
|
|
$
|
—
|
|
|
$
|
163
|
|
|
$
|
152
|
|
|
$
|
315
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Gross proceeds from sale of AFS securities (1)
|
$
|
713
|
|
|
$
|
365
|
|
|
$
|
1,127
|
|
|
$
|
1,158
|
|
(1)
|
Three and nine months ended September 30, 2018 include $119 million non-cash proceeds from non-convertible debentures at Guaimbê Solar Complex. See Note 18—Acquisitions for further information.
|
Three Months Ended September 30, 2018
|
Interest Rate
|
|
Foreign Currency
|
|
Commodity
|
|
Total
|
||||||||
Balance at July 1
|
$
|
(111
|
)
|
|
$
|
219
|
|
|
$
|
10
|
|
|
$
|
118
|
|
Total realized and unrealized gains (losses):
|
|
|
|
|
|
|
|
||||||||
Included in other comprehensive income — derivative activity
|
12
|
|
|
—
|
|
|
—
|
|
|
12
|
|
||||
Included in regulatory liabilities
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
||||
Settlements
|
3
|
|
|
2
|
|
|
—
|
|
|
5
|
|
||||
Balance at September 30
|
$
|
(96
|
)
|
|
$
|
221
|
|
|
$
|
8
|
|
|
$
|
133
|
|
Total gains 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
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
3
|
|
Three Months Ended September 30, 2017
|
Interest Rate
|
|
Foreign Currency
|
|
Commodity
|
|
Total
|
||||||||
Balance at July 1
|
$
|
(195
|
)
|
|
$
|
239
|
|
|
$
|
9
|
|
|
$
|
53
|
|
Total realized and unrealized gains (losses):
|
|
|
|
|
|
|
|
||||||||
Included in earnings
|
(5
|
)
|
|
12
|
|
|
—
|
|
|
7
|
|
||||
Included in other comprehensive income — derivative activity
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
||||
Settlements
|
10
|
|
|
(9
|
)
|
|
(3
|
)
|
|
(2
|
)
|
||||
Balance at September 30
|
$
|
(192
|
)
|
|
$
|
242
|
|
|
$
|
6
|
|
|
$
|
56
|
|
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
|
)
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
2
|
|
Nine Months Ended September 30, 2018
|
Interest Rate
|
|
Foreign Currency
|
|
Commodity
|
|
Total
|
||||||||
Balance at January 1
|
$
|
(151
|
)
|
|
$
|
240
|
|
|
$
|
4
|
|
|
$
|
93
|
|
Total realized and unrealized gains (losses):
|
|
|
|
|
|
|
|
||||||||
Included in earnings
|
28
|
|
|
(3
|
)
|
|
1
|
|
|
26
|
|
||||
Included in other comprehensive income — derivative activity
|
48
|
|
|
—
|
|
|
—
|
|
|
48
|
|
||||
Included in regulatory liabilities
|
—
|
|
|
—
|
|
|
6
|
|
|
6
|
|
||||
Settlements
|
12
|
|
|
(16
|
)
|
|
(3
|
)
|
|
(7
|
)
|
||||
Transfers of assets/(liabilities), net into Level 3
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Transfers of (assets)/liabilities, net out of Level 3
|
(34
|
)
|
|
—
|
|
|
—
|
|
|
(34
|
)
|
||||
Balance at September 30
|
$
|
(96
|
)
|
|
$
|
221
|
|
|
$
|
8
|
|
|
$
|
133
|
|
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
|
$
|
32
|
|
|
$
|
(19
|
)
|
|
$
|
1
|
|
|
$
|
14
|
|
Nine Months Ended September 30, 2017
|
Interest Rate
|
|
Foreign Currency
|
|
Commodity
|
|
Total
|
||||||||
Balance at January 1
|
$
|
(179
|
)
|
|
$
|
255
|
|
|
$
|
5
|
|
|
$
|
81
|
|
Total realized and unrealized gains (losses):
|
|
|
|
|
|
|
|
||||||||
Included in earnings
|
(5
|
)
|
|
12
|
|
|
(1
|
)
|
|
6
|
|
||||
Included in other comprehensive income — derivative activity
|
(29
|
)
|
|
—
|
|
|
—
|
|
|
(29
|
)
|
||||
Included in regulatory liabilities
|
—
|
|
|
—
|
|
|
10
|
|
|
10
|
|
||||
Settlements
|
28
|
|
|
(25
|
)
|
|
(8
|
)
|
|
(5
|
)
|
||||
Transfers of assets/(liabilities), net into Level 3
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
(7
|
)
|
||||
Balance at September 30
|
$
|
(192
|
)
|
|
$
|
242
|
|
|
$
|
6
|
|
|
$
|
56
|
|
Total 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
|
$
|
—
|
|
|
$
|
(12
|
)
|
|
$
|
—
|
|
|
$
|
(12
|
)
|
Type of Derivative
|
|
Fair Value
|
|
Unobservable Input
|
|
Amount or Range (Weighted Average)
|
||
Interest rate
|
|
$
|
(96
|
)
|
|
Subsidiaries’ credit spreads
|
|
1.78% to 4.38% (3.63%)
|
Foreign currency:
|
|
|
|
|
|
|
||
Argentine Peso
|
|
221
|
|
|
Argentine peso to USD currency exchange rate after one year
|
|
42.08 to 166.5 (99.21)
|
|
Commodity:
|
|
|
|
|
|
|
||
Other
|
|
8
|
|
|
|
|
|
|
Total
|
|
$
|
133
|
|
|
|
|
|
|
Measurement Date
|
|
Carrying Amount (1)
|
|
Fair Value
|
|
Pretax Loss
|
||||||||||||||
Nine months ended September 30, 2018
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
||||||||||||||
Equity Method Investments
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Elsta
|
09/30/2018
|
|
$
|
21
|
|
|
$
|
—
|
|
|
$
|
16
|
|
|
$
|
—
|
|
|
$
|
5
|
|
Long-lived assets held and used: (2)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. generation facility
|
09/30/2018
|
|
185
|
|
|
—
|
|
|
—
|
|
|
33
|
|
|
156
|
|
|
Measurement Date
|
|
Carrying Amount (1)
|
|
Fair Value
|
|
Pretax Loss
|
||||||||||||||
Nine Months Ended September 30, 2017
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
||||||||||||||
Long-lived assets held and used: (2)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
DPL
|
02/28/2017
|
|
$
|
77
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11
|
|
|
$
|
66
|
|
Other
|
02/28/2017
|
|
15
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
8
|
|
|||||
Held-for-sale businesses: (3)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Kazakhstan Hydroelectric
|
06/30/2017
|
|
190
|
|
|
—
|
|
|
92
|
|
|
—
|
|
|
92
|
|
|||||
Kazakhstan
|
03/31/2017
|
|
171
|
|
|
—
|
|
|
29
|
|
|
—
|
|
|
94
|
|
(1)
|
Represents the carrying values at the dates of initial measurement, before fair value adjustment.
|
(2)
|
See Note 14—Asset Impairment Expense for further information.
|
(3)
|
Per the Company’s policy, pretax loss is limited to the impairment of long-lived assets. Any additional loss will be recognized on completion of the sale. See Note 17—Held-for-Sale and Dispositions for further information.
|
|
|
September 30, 2018
|
||||||||||||||||||
|
|
Carrying
Amount
|
|
Fair Value
|
||||||||||||||||
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||
Assets:
|
Accounts receivable — noncurrent (1)
|
$
|
105
|
|
|
$
|
224
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
224
|
|
Liabilities:
|
Non-recourse debt
|
15,581
|
|
|
15,429
|
|
|
—
|
|
|
12,699
|
|
|
2,730
|
|
|||||
|
Recourse debt
|
3,820
|
|
|
3,901
|
|
|
—
|
|
|
3,901
|
|
|
—
|
|
|
|
December 31, 2017
|
||||||||||||||||||
|
|
Carrying
Amount
|
|
Fair Value
|
||||||||||||||||
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||||
Assets:
|
Accounts receivable — noncurrent (1)
|
$
|
163
|
|
|
$
|
217
|
|
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
211
|
|
Liabilities:
|
Non-recourse debt
|
15,340
|
|
|
15,890
|
|
|
—
|
|
|
13,350
|
|
|
2,540
|
|
|||||
|
Recourse debt
|
4,630
|
|
|
4,920
|
|
|
—
|
|
|
4,920
|
|
|
—
|
|
(1)
|
These amounts primarily relate to amounts due from CAMMESA, the administrator of the wholesale electricity market in Argentina, and are included in Other noncurrent assets in the accompanying Condensed Consolidated Balance Sheets. The fair value and carrying amount of these receivables exclude VAT of $14 million and $31 million as of September 30, 2018 and December 31, 2017, respectively.
|
Derivatives
|
|
Maximum Notional Translated to USD
|
|
Latest Maturity
|
||
Interest rate (LIBOR and EURIBOR)
|
|
$
|
4,499
|
|
|
2042
|
Cross-currency swaps (Chilean Unidad de Fomento and Chilean peso)
|
|
376
|
|
|
2029
|
|
Foreign Currency:
|
|
|
|
|
||
Argentine peso
|
|
73
|
|
|
2026
|
|
Chilean peso
|
|
334
|
|
|
2021
|
|
Colombian peso
|
|
163
|
|
|
2020
|
|
Brazilian real
|
|
80
|
|
|
2019
|
|
Others, primarily with weighted average remaining maturities of a year or less
|
|
246
|
|
|
2021
|
Fair Value
|
September 30, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
Assets
|
Designated
|
|
Not Designated
|
|
Total
|
|
Designated
|
|
Not Designated
|
|
Total
|
||||||||||||
Interest rate derivatives
|
$
|
68
|
|
|
$
|
2
|
|
|
$
|
70
|
|
|
$
|
15
|
|
|
$
|
—
|
|
|
$
|
15
|
|
Cross-currency derivatives
|
26
|
|
|
—
|
|
|
26
|
|
|
29
|
|
|
—
|
|
|
29
|
|
||||||
Foreign currency derivatives
|
—
|
|
|
243
|
|
|
243
|
|
|
8
|
|
|
261
|
|
|
269
|
|
||||||
Commodity derivatives
|
—
|
|
|
17
|
|
|
17
|
|
|
5
|
|
|
30
|
|
|
35
|
|
||||||
Total assets
|
$
|
94
|
|
|
$
|
262
|
|
|
$
|
356
|
|
|
$
|
57
|
|
|
$
|
291
|
|
|
$
|
348
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate derivatives
|
$
|
159
|
|
|
$
|
2
|
|
|
$
|
161
|
|
|
$
|
125
|
|
|
$
|
137
|
|
|
$
|
262
|
|
Cross-currency derivatives
|
2
|
|
|
—
|
|
|
2
|
|
|
3
|
|
|
—
|
|
|
3
|
|
||||||
Foreign currency derivatives
|
29
|
|
|
25
|
|
|
54
|
|
|
1
|
|
|
29
|
|
|
30
|
|
||||||
Commodity derivatives
|
—
|
|
|
4
|
|
|
4
|
|
|
9
|
|
|
11
|
|
|
20
|
|
||||||
Total liabilities
|
$
|
190
|
|
|
$
|
31
|
|
|
$
|
221
|
|
|
$
|
138
|
|
|
$
|
177
|
|
|
$
|
315
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||||||||||
Fair Value
|
Assets
|
|
Liabilities
|
|
Assets
|
|
Liabilities
|
||||||||
Current
|
$
|
74
|
|
|
$
|
69
|
|
|
$
|
84
|
|
|
$
|
211
|
|
Noncurrent
|
282
|
|
|
152
|
|
|
264
|
|
|
104
|
|
||||
Total
|
$
|
356
|
|
|
$
|
221
|
|
|
$
|
348
|
|
|
$
|
315
|
|
Credit Risk-Related Contingent Features (1)
|
|
|
|
|
|
|
December 31, 2017
|
||
Present value of liabilities subject to collateralization
|
|
|
|
$
|
15
|
|
|||
Cash collateral held by third parties or in escrow
|
|
|
|
9
|
|
(1)
|
Based on the credit rating of certain subsidiaries
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
2018
|
|
2017
|
|
2018
|
|
2017
|
|||||||||
Effective portion of cash flow hedges
|
|
|
|
|
|
|
|
||||||||
Gains (losses) recognized in AOCL
|
|
|
|
|
|
|
|
||||||||
Interest rate derivatives
|
$
|
26
|
|
|
$
|
(6
|
)
|
|
$
|
81
|
|
|
$
|
(79
|
)
|
Cross-currency derivatives
|
3
|
|
|
12
|
|
|
(2
|
)
|
|
14
|
|
||||
Foreign currency derivatives
|
(11
|
)
|
|
(4
|
)
|
|
(44
|
)
|
|
(15
|
)
|
||||
Commodity derivatives
|
—
|
|
|
9
|
|
|
—
|
|
|
23
|
|
||||
Total
|
$
|
18
|
|
|
$
|
11
|
|
|
$
|
35
|
|
|
$
|
(57
|
)
|
Gains (losses) reclassified from AOCL into earnings
|
|
|
|
|
|
|
|
||||||||
Interest rate derivatives
|
$
|
(12
|
)
|
|
$
|
(19
|
)
|
|
$
|
(42
|
)
|
|
$
|
(63
|
)
|
Cross-currency derivatives
|
(8
|
)
|
|
14
|
|
|
(26
|
)
|
|
18
|
|
||||
Foreign currency derivatives
|
(8
|
)
|
|
(1
|
)
|
|
(9
|
)
|
|
(24
|
)
|
||||
Commodity derivatives
|
—
|
|
|
10
|
|
|
(5
|
)
|
|
13
|
|
||||
Total
|
$
|
(28
|
)
|
|
$
|
4
|
|
|
$
|
(82
|
)
|
|
$
|
(56
|
)
|
Loss reclassified from AOCL to earnings due to discontinuance of hedge accounting (1)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(16
|
)
|
Gains (losses) recognized in earnings related to
|
|
|
|
|
|
|
|
||||||||
Ineffective portion of cash flow hedges
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
(3
|
)
|
|
$
|
4
|
|
Not designated as hedging instruments:
|
|
|
|
|
|
|
|
||||||||
Foreign currency derivatives
|
(10
|
)
|
|
5
|
|
|
144
|
|
|
(13
|
)
|
||||
Commodity derivatives and other
|
2
|
|
|
1
|
|
|
33
|
|
|
7
|
|
||||
Total
|
$
|
(8
|
)
|
|
$
|
6
|
|
|
$
|
177
|
|
|
$
|
(6
|
)
|
(1)
|
Cash flow hedge was discontinued because it was probable the forecasted transaction will not occur.
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Argentina
|
$
|
83
|
|
|
$
|
177
|
|
Panama
|
27
|
|
|
—
|
|
||
Other
|
9
|
|
|
17
|
|
||
Total
|
$
|
119
|
|
|
$
|
194
|
|
|
Nine Months Ended September 30,
|
||||||
50%-or-less-Owned Affiliates
|
2018
|
|
2017
|
||||
Revenue
|
$
|
734
|
|
|
$
|
532
|
|
Operating margin
|
119
|
|
|
91
|
|
||
Net income
|
36
|
|
|
44
|
|
Subsidiary
|
|
Transaction Period
|
|
Issuances
|
|
Repayments
|
|
Loss on Extinguishment of Debt
|
||||||
Southland
|
|
Q1, Q2, Q3
|
|
$
|
587
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Tietê
|
|
Q1
|
|
385
|
|
|
(231
|
)
|
|
—
|
|
|||
Alto Maipo
|
|
Q2
|
|
104
|
|
|
—
|
|
|
—
|
|
|||
DPL
|
|
Q2
|
|
—
|
|
|
(106
|
)
|
|
(6
|
)
|
|||
Gener
|
|
Q3
|
|
—
|
|
|
(104
|
)
|
|
(7
|
)
|
|||
Angamos
|
|
Q3
|
|
—
|
|
|
(98
|
)
|
|
—
|
|
Subsidiary
|
|
Primary Nature of Default
|
|
Debt in Default
|
|
Net Assets
|
||||
AES Puerto Rico
|
|
Covenant
|
|
$
|
322
|
|
|
$
|
135
|
|
AES Ilumina (Puerto Rico)
|
|
Covenant
|
|
35
|
|
|
17
|
|
||
|
|
|
|
$
|
357
|
|
|
|
Contingent Contractual Obligations
|
|
Amount
(in millions)
|
|
Number of Agreements
|
|
Maximum Exposure Range for Individual Agreements (in millions)
|
|||
Guarantees and commitments
|
|
$
|
435
|
|
|
21
|
|
|
<$1 — 68
|
Letters of credit under the unsecured credit facility
|
|
348
|
|
|
6
|
|
|
$2 — 247
|
|
Letters of credit under the senior secured credit facility
|
|
43
|
|
|
25
|
|
|
<$1 — 14
|
|
Asset sale related indemnities (1)
|
|
27
|
|
|
1
|
|
|
$27
|
|
Total
|
|
$
|
853
|
|
|
53
|
|
|
|
(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.
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
IPALCO common stock
|
$
|
618
|
|
|
$
|
618
|
|
Colon quotas (1)
|
201
|
|
|
159
|
|
||
IPL preferred stock
|
60
|
|
|
60
|
|
||
Total redeemable stock of subsidiaries
|
$
|
879
|
|
|
$
|
837
|
|
(1)
|
Characteristics of quotas are similar to common stock.
|
|
Nine Months Ended September 30, 2018
|
|
Nine Months Ended September 30, 2017
|
||||||||||||||||||||
|
The Parent Company Stockholders’ Equity
|
|
NCI
|
|
Total Equity
|
|
The Parent Company Stockholders’ Equity
|
|
NCI
|
|
Total Equity
|
||||||||||||
Balance at the beginning of the period
|
$
|
2,465
|
|
|
$
|
2,380
|
|
|
$
|
4,845
|
|
|
$
|
2,794
|
|
|
$
|
2,906
|
|
|
$
|
5,700
|
|
Net income
|
1,075
|
|
|
309
|
|
|
1,384
|
|
|
181
|
|
|
328
|
|
|
509
|
|
||||||
Total foreign currency translation adjustment, net of income tax
|
(232
|
)
|
|
72
|
|
|
(160
|
)
|
|
117
|
|
|
10
|
|
|
127
|
|
||||||
Total change in derivative fair value, net of income tax
|
64
|
|
|
35
|
|
|
99
|
|
|
5
|
|
|
3
|
|
|
8
|
|
||||||
Total pension adjustments, net of income tax
|
5
|
|
|
—
|
|
|
5
|
|
|
1
|
|
|
19
|
|
|
20
|
|
||||||
Cumulative effect of a change in accounting principle (1)
|
87
|
|
|
81
|
|
|
168
|
|
|
31
|
|
|
—
|
|
|
31
|
|
||||||
Fair value adjustment (2)
|
(4
|
)
|
|
—
|
|
|
(4
|
)
|
|
(19
|
)
|
|
—
|
|
|
(19
|
)
|
||||||
Disposition of businesses (3)
|
—
|
|
|
(250
|
)
|
|
(250
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Distributions to noncontrolling interests
|
—
|
|
|
(253
|
)
|
|
(253
|
)
|
|
—
|
|
|
(261
|
)
|
|
(261
|
)
|
||||||
Contributions from noncontrolling interests
|
—
|
|
|
6
|
|
|
6
|
|
|
—
|
|
|
17
|
|
|
17
|
|
||||||
Dividends declared on common stock
|
(172
|
)
|
|
—
|
|
|
(172
|
)
|
|
(158
|
)
|
|
—
|
|
|
(158
|
)
|
||||||
Issuance and exercise of stock-based compensation
|
18
|
|
|
—
|
|
|
18
|
|
|
12
|
|
|
—
|
|
|
12
|
|
||||||
Sale of subsidiary shares to noncontrolling interests
|
(1
|
)
|
|
21
|
|
|
20
|
|
|
22
|
|
|
47
|
|
|
69
|
|
||||||
Acquisition of subsidiary shares from noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
200
|
|
|
(85
|
)
|
|
115
|
|
||||||
Less: Net loss attributable to redeemable stock of subsidiaries
|
—
|
|
|
3
|
|
|
3
|
|
|
—
|
|
|
9
|
|
|
9
|
|
||||||
Balance at the end of the period
|
$
|
3,305
|
|
|
$
|
2,404
|
|
|
$
|
5,709
|
|
|
$
|
3,186
|
|
|
$
|
2,993
|
|
|
$
|
6,179
|
|
(1)
|
See Note 1—Financial Statement Presentation, New Accounting Standards Adopted for further information.
|
(2)
|
Adjustment to record the redeemable stock of Colon at fair value.
|
(3)
|
See Note 17—Held-for-Sale and Dispositions for further information.
|
|
Foreign currency translation adjustment, net
|
|
Unrealized derivative gains (losses), net
|
|
Unfunded pension obligations, net
|
|
Total
|
||||||||
Balance at the beginning of the period
|
$
|
(1,486
|
)
|
|
$
|
(333
|
)
|
|
$
|
(57
|
)
|
|
$
|
(1,876
|
)
|
Other comprehensive income (loss) before reclassifications
|
(231
|
)
|
|
9
|
|
|
—
|
|
|
(222
|
)
|
||||
Amount reclassified to earnings
|
(1
|
)
|
|
55
|
|
|
5
|
|
|
59
|
|
||||
Other comprehensive income (loss)
|
(232
|
)
|
|
64
|
|
|
5
|
|
|
(163
|
)
|
||||
Cumulative effect of a change in accounting principle
|
—
|
|
|
19
|
|
|
—
|
|
|
19
|
|
||||
Balance at the end of the period
|
$
|
(1,718
|
)
|
|
$
|
(250
|
)
|
|
$
|
(52
|
)
|
|
$
|
(2,020
|
)
|
AOCL Components
|
|
Affected Line Item in the Condensed Consolidated Statements of Operations
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||
Foreign currency translation adjustment, net
|
|
|
||||||||||||||||
|
|
Gain (loss) on disposal and sale of businesses
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
19
|
|
|
$
|
(98
|
)
|
|
|
Net gain from disposal of discontinued businesses
|
|
—
|
|
|
—
|
|
|
(18
|
)
|
|
$
|
—
|
|
|||
|
|
Net income attributable to The AES Corporation
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
(98
|
)
|
Unrealized derivative gains (losses), net
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Non-regulated revenue
|
|
$
|
(1
|
)
|
|
$
|
12
|
|
|
$
|
(6
|
)
|
|
$
|
22
|
|
|
|
Non-regulated cost of sales
|
|
(1
|
)
|
|
(2
|
)
|
|
$
|
(3
|
)
|
|
(11
|
)
|
|||
|
|
Interest expense
|
|
(11
|
)
|
|
(20
|
)
|
|
$
|
(38
|
)
|
|
(63
|
)
|
|||
|
|
Foreign currency transaction gains (losses)
|
|
(15
|
)
|
|
14
|
|
|
$
|
(35
|
)
|
|
(4
|
)
|
|||
|
|
Income from continuing operations before taxes and equity in earnings of affiliates
|
|
(28
|
)
|
|
4
|
|
|
(82
|
)
|
|
(56
|
)
|
||||
|
|
Income tax expense
|
|
7
|
|
|
(5
|
)
|
|
15
|
|
|
6
|
|
||||
|
|
Income from continuing operations
|
|
(21
|
)
|
|
(1
|
)
|
|
(67
|
)
|
|
(50
|
)
|
||||
|
|
Less: Income from continuing operations attributable to noncontrolling interests and redeemable stock of subsidiaries
|
|
1
|
|
|
1
|
|
|
12
|
|
|
10
|
|
||||
|
|
Net income attributable to The AES Corporation
|
|
$
|
(20
|
)
|
|
$
|
—
|
|
|
$
|
(55
|
)
|
|
$
|
(40
|
)
|
Amortization of defined benefit pension actuarial loss, net
|
|
|
|
|
|
|
|
|
||||||||||
|
|
General and administrative expenses
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
1
|
|
|
|
Other expense
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
(1
|
)
|
||||
|
|
Income from continuing operations before taxes and equity in earnings of affiliates
|
|
(1
|
)
|
|
(1
|
)
|
|
(3
|
)
|
|
—
|
|
||||
|
|
Income from continuing operations
|
|
(1
|
)
|
|
(1
|
)
|
|
(3
|
)
|
|
—
|
|
||||
|
|
Net income (loss) from operations of discontinued businesses
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
(20
|
)
|
||||
|
|
Net gain from disposal of discontinued operations
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
||||
|
|
Net income
|
|
(1
|
)
|
|
(7
|
)
|
|
(5
|
)
|
|
(20
|
)
|
||||
|
|
Less: Loss (income) from discontinued operations attributable to noncontrolling interest
|
|
—
|
|
|
6
|
|
|
—
|
|
|
16
|
|
||||
|
|
Net income attributable to The AES Corporation
|
|
$
|
(1
|
)
|
|
$
|
(1
|
)
|
|
$
|
(5
|
)
|
|
$
|
(4
|
)
|
Total reclassifications for the period, net of income tax and noncontrolling interests
|
|
$
|
(18
|
)
|
|
$
|
(1
|
)
|
|
$
|
(59
|
)
|
|
$
|
(142
|
)
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
Total Revenue
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
US and Utilities SBU
|
$
|
1,230
|
|
|
$
|
1,086
|
|
|
$
|
3,252
|
|
|
$
|
3,179
|
|
South America SBU
|
923
|
|
|
834
|
|
|
2,664
|
|
|
2,377
|
|
||||
MCAC SBU
|
462
|
|
|
397
|
|
|
1,276
|
|
|
1,120
|
|
||||
Eurasia SBU
|
224
|
|
|
380
|
|
|
935
|
|
|
1,204
|
|
||||
Corporate and Other
|
7
|
|
|
9
|
|
|
21
|
|
|
29
|
|
||||
Eliminations
|
(9
|
)
|
|
(13
|
)
|
|
(34
|
)
|
|
(22
|
)
|
||||
Total Revenue
|
$
|
2,837
|
|
|
$
|
2,693
|
|
|
$
|
8,114
|
|
|
$
|
7,887
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
Total Adjusted PTC
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Income from continuing operations before taxes and equity in earnings of affiliates
|
$
|
332
|
|
|
$
|
304
|
|
|
$
|
1,672
|
|
|
$
|
687
|
|
Add: Net equity in earnings of affiliates
|
6
|
|
|
24
|
|
|
31
|
|
|
33
|
|
||||
Less: Income from continuing operations before taxes, attributable to noncontrolling interests
|
(116
|
)
|
|
(112
|
)
|
|
(409
|
)
|
|
(405
|
)
|
||||
Pre-tax contribution
|
222
|
|
|
216
|
|
|
1,294
|
|
|
315
|
|
||||
Unrealized derivative and equity securities losses (gains)
|
16
|
|
|
(8
|
)
|
|
4
|
|
|
(7
|
)
|
||||
Unrealized foreign currency losses (gains)
|
(7
|
)
|
|
(21
|
)
|
|
42
|
|
|
(54
|
)
|
||||
Disposition/acquisition losses (gains)
|
17
|
|
|
1
|
|
|
(822
|
)
|
|
109
|
|
||||
Impairment expense
|
80
|
|
|
2
|
|
|
172
|
|
|
264
|
|
||||
Losses (gains) on extinguishment of debt
|
(1
|
)
|
|
48
|
|
|
177
|
|
|
43
|
|
||||
Restructuring costs
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
||||
Total Adjusted PTC
|
$
|
327
|
|
|
$
|
238
|
|
|
$
|
870
|
|
|
$
|
670
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
Total Adjusted PTC
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
US and Utilities SBU
|
$
|
167
|
|
|
$
|
138
|
|
|
$
|
363
|
|
|
$
|
288
|
|
South America SBU
|
128
|
|
|
67
|
|
|
381
|
|
|
289
|
|
||||
MCAC SBU
|
81
|
|
|
91
|
|
|
215
|
|
|
209
|
|
||||
Eurasia SBU
|
37
|
|
|
61
|
|
|
175
|
|
|
218
|
|
||||
Corporate, Other and Eliminations
|
(86
|
)
|
|
(119
|
)
|
|
(264
|
)
|
|
(334
|
)
|
||||
Total Adjusted PTC
|
$
|
327
|
|
|
$
|
238
|
|
|
$
|
870
|
|
|
$
|
670
|
|
Total Assets
|
September 30, 2018
|
|
December 31, 2017
|
||||
US and Utilities SBU
|
$
|
11,971
|
|
|
$
|
11,297
|
|
South America SBU
|
11,049
|
|
|
10,874
|
|
||
MCAC SBU
|
4,477
|
|
|
4,087
|
|
||
Eurasia SBU
|
4,588
|
|
|
4,557
|
|
||
Assets held-for-sale
|
111
|
|
|
2,034
|
|
||
Corporate and Other
|
293
|
|
|
263
|
|
||
Total Assets
|
$
|
32,489
|
|
|
$
|
33,112
|
|
|
Three Months Ended September 30, 2018
|
||||||||||||||||||||||
|
US and Utilities SBU
|
|
South America SBU
|
|
MCAC SBU
|
|
Eurasia SBU
|
|
Corporate and Other/ Eliminations
|
|
Total
|
||||||||||||
Regulated Revenue
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenue from contracts with customers
|
$
|
759
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
759
|
|
Other regulated revenue
|
18
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18
|
|
||||||
Total regulated revenue
|
$
|
777
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
777
|
|
Non-Regulated Revenue
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenue from contracts with customers
|
$
|
386
|
|
|
$
|
922
|
|
|
$
|
440
|
|
|
$
|
152
|
|
|
$
|
(2
|
)
|
|
$
|
1,898
|
|
Other non-regulated revenue (1)
|
67
|
|
|
1
|
|
|
22
|
|
|
72
|
|
|
—
|
|
|
162
|
|
||||||
Total non-regulated revenue
|
$
|
453
|
|
|
$
|
923
|
|
|
$
|
462
|
|
|
$
|
224
|
|
|
$
|
(2
|
)
|
|
$
|
2,060
|
|
Total revenue
|
$
|
1,230
|
|
|
$
|
923
|
|
|
$
|
462
|
|
|
$
|
224
|
|
|
$
|
(2
|
)
|
|
$
|
2,837
|
|
|
Nine Months Ended September 30, 2018
|
||||||||||||||||||||||
|
US and Utilities SBU
|
|
South America SBU
|
|
MCAC SBU
|
|
Eurasia SBU
|
|
Corporate and Other/ Eliminations
|
|
Total
|
||||||||||||
Regulated Revenue
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenue from contracts with customers
|
$
|
2,176
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,176
|
|
Other regulated revenue
|
39
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
39
|
|
||||||
Total regulated revenue
|
$
|
2,215
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,215
|
|
Non-Regulated Revenue
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenue from contracts with customers
|
$
|
774
|
|
|
$
|
2,661
|
|
|
$
|
1,211
|
|
|
$
|
701
|
|
|
$
|
(11
|
)
|
|
$
|
5,336
|
|
Other non-regulated revenue (1)
|
263
|
|
|
3
|
|
|
65
|
|
|
234
|
|
|
(2
|
)
|
|
563
|
|
||||||
Total non-regulated revenue
|
$
|
1,037
|
|
|
$
|
2,664
|
|
|
$
|
1,276
|
|
|
$
|
935
|
|
|
$
|
(13
|
)
|
|
$
|
5,899
|
|
Total revenue
|
$
|
3,252
|
|
|
$
|
2,664
|
|
|
$
|
1,276
|
|
|
$
|
935
|
|
|
$
|
(13
|
)
|
|
$
|
8,114
|
|
(1)
|
Other non-regulated revenue primarily includes lease and derivative revenue not accounted for under ASC 606.
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Other Income
|
Legal settlements (1)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
60
|
|
|
Allowance for funds used during construction (US Utilities)
|
1
|
|
|
7
|
|
|
8
|
|
|
20
|
|
||||
|
Other
|
9
|
|
|
9
|
|
|
22
|
|
|
23
|
|
||||
|
Total other income
|
$
|
10
|
|
|
$
|
16
|
|
|
$
|
30
|
|
|
$
|
103
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other Expense
|
Loss on sale and disposal of assets (2)
|
$
|
20
|
|
|
$
|
5
|
|
|
$
|
25
|
|
|
$
|
26
|
|
|
Water rights write-off
|
—
|
|
|
15
|
|
|
—
|
|
|
18
|
|
||||
|
Allowance for other receivables
|
—
|
|
|
15
|
|
|
—
|
|
|
15
|
|
||||
|
Other
|
9
|
|
|
1
|
|
|
17
|
|
|
8
|
|
||||
|
Total other expense
|
$
|
29
|
|
|
$
|
36
|
|
|
$
|
42
|
|
|
$
|
67
|
|
(1)
|
In December 2016, the Company and YPF entered into a settlement agreement in which all parties agreed to give up any and all legal action related to gas supply contracts that were terminated in 2008 and have been in dispute since 2009. In January 2017, the YPF board approved the agreement and paid the Company $60 million, thereby resolving all uncertainties around the dispute.
|
(2)
|
In September 2018, the Company recorded a $20 million loss due to damage associated with a lightning incident at the Andres facility in the Dominican Republic.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
U.S. generation facility
|
$
|
73
|
|
|
$
|
—
|
|
|
$
|
156
|
|
|
$
|
—
|
|
Kazakhstan hydroelectric
|
—
|
|
|
2
|
|
|
—
|
|
|
92
|
|
||||
Kazakhstan CHPs
|
—
|
|
|
—
|
|
|
—
|
|
|
94
|
|
||||
DPL
|
—
|
|
|
—
|
|
|
—
|
|
|
66
|
|
||||
Other
|
1
|
|
|
—
|
|
|
10
|
|
|
8
|
|
||||
Total
|
$
|
74
|
|
|
$
|
2
|
|
|
$
|
166
|
|
|
$
|
260
|
|
|
December 31, 2017
|
||
Assets of discontinued operations and held-for-sale businesses:
|
|
||
Investments in and advances to affiliates (1)
|
$
|
86
|
|
Total assets of discontinued operations
|
$
|
86
|
|
Other assets of businesses classified as held-for-sale (2)
|
1,948
|
|
|
Total assets of discontinued operations and held-for-sale businesses
|
$
|
2,034
|
|
Liabilities of discontinued operations and held-for-sale businesses:
|
|
||
Other liabilities of businesses classified as held-for-sale (2)
|
1,033
|
|
|
Total liabilities of discontinued operations and held-for-sale businesses
|
$
|
1,033
|
|
(1)
|
Represents the Company's 17% ownership interest in Eletropaulo.
|
(2)
|
Electrica Santiago, the DPL Peaker Assets and Masinloc were classified as held-for-sale as of December 31, 2017. See Note 17—Held-for-Sale and Dispositions for further information.
|
Income from discontinued operations, net of tax:
|
Three Months Ended September 30, 2017
|
|
Nine Months Ended September 30, 2017
|
||||
Revenue — regulated
|
$
|
945
|
|
|
$
|
2,726
|
|
Cost of sales
|
(876
|
)
|
|
(2,573
|
)
|
||
Other income and expense items that are not major
|
(26
|
)
|
|
(94
|
)
|
||
Income from discontinued operations
|
$
|
43
|
|
|
$
|
59
|
|
Less: Net income attributable to noncontrolling interests
|
(21
|
)
|
|
(30
|
)
|
||
Income from discontinued operations attributable to The AES Corporation
|
$
|
22
|
|
|
$
|
29
|
|
Income tax expense
|
(17
|
)
|
|
(24
|
)
|
||
Income from discontinued operations, net of tax
|
$
|
5
|
|
|
$
|
5
|
|
|
Three Months Ended September 30, 2017
|
|
Nine Months Ended September 30, 2017
|
||||
Cash flows provided by operating activities of discontinued operations
|
$
|
129
|
|
|
$
|
254
|
|
Cash flows used in investing activities of discontinued operations
|
(61
|
)
|
|
(181
|
)
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
(in millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Masinloc
|
$
|
—
|
|
|
$
|
26
|
|
|
$
|
9
|
|
|
$
|
78
|
|
Stuart and Killen (1)
|
8
|
|
|
9
|
|
|
38
|
|
|
1
|
|
||||
DPL peaker assets
|
—
|
|
|
11
|
|
|
7
|
|
|
12
|
|
||||
Other
|
—
|
|
|
2
|
|
|
5
|
|
|
23
|
|
||||
Total
|
$
|
8
|
|
|
$
|
48
|
|
|
$
|
59
|
|
|
$
|
114
|
|
(1)
|
The Company entered into contracts to buy back all open capacity years for Stuart and Killen at prices lower than the PJM capacity revenue prices. As such, the Company continues to earn capacity margin.
|
Three Months Ended September 30,
|
2018
|
|
2017
|
||||||||||||||||||
(in millions, except per share data)
|
Income
|
|
Shares
|
|
$ per Share
|
|
Income
|
|
Shares
|
|
$ per Share
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
BASIC EARNINGS PER SHARE
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from continuing operations attributable to The AES Corporation common stockholders
|
$
|
102
|
|
|
662
|
|
|
$
|
0.15
|
|
|
$
|
147
|
|
|
660
|
|
|
$
|
0.22
|
|
EFFECT OF DILUTIVE SECURITIES
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Restricted stock units
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
||||
DILUTED EARNINGS PER SHARE
|
$
|
102
|
|
|
665
|
|
|
$
|
0.15
|
|
|
$
|
147
|
|
|
663
|
|
|
$
|
0.22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Nine Months Ended September 30,
|
2018
|
|
2017
|
||||||||||||||||||
(in millions, except per share data)
|
Income
|
|
Shares
|
|
$ per Share
|
|
Income
|
|
Shares
|
|
$ per Share
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
BASIC EARNINGS PER SHARE
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income from continuing operations attributable to The AES Corporation common stockholders
|
$
|
883
|
|
|
661
|
|
|
$
|
1.33
|
|
|
$
|
176
|
|
|
660
|
|
|
$
|
0.27
|
|
EFFECT OF DILUTIVE SECURITIES
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Restricted stock units
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
—
|
|
||||
DILUTED EARNINGS PER SHARE
|
$
|
883
|
|
|
664
|
|
|
$
|
1.33
|
|
|
$
|
176
|
|
|
662
|
|
|
$
|
0.27
|
|
(1)
|
See Item 2.—SBU Performance Analysis—Non-GAAP Measures for reconciliation and definition.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Improving Risk Profile
|
|
|
|||
|
|
●
|
Closed sales of Philippines businesses in March 2018 and Eletropaulo in Brazil in June 2018 and signed an agreement to sell-down 24% of our interest in sPower’s operating portfolio in October 2018, at attractive valuations
|
|
|
||
|
|
●
|
Allocated $1 billion to prepay Parent debt and strengthen credit ratings
|
|
|
||
|
|
|
○
|
Upgraded by S&P to BB+ in March 2018, by Fitch to BB+ in May 2018 and by Moody’s to Ba1 in June 2018
|
|
|
|
|
|
●
|
AES Gener restructured the 531 MW Alto Maipo hydroelectric project under construction in Chile in May 2018
|
|
|
||
|
|
●
|
DPL successfully completed its distribution rate case with an order from the Ohio Commission and began collecting new rates on October 1, 2018
|
|
|
||
|
|
●
|
In October, IPL received an order from the Indiana Utility Regulatory Commission, authorizing new rates to become effective on December 5, 2018
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Efficiency
|
|
|
|||
|
|
●
|
On track to achieve $100 million cost savings program
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profitable Growth
|
|
|
|||
|
|
●
|
5,701 MW backlog, including 3,836 MW under construction and 1,865 MW of renewables signed to long-term PPAs
|
|
|
||
|
|
|
○
|
Completed 671 MW Eagle Valley CCGT in Indiana in April 2018 and 381 MW Colon CCGT in Panama in September 2018
|
|
|
|
|
|
●
|
Year-to-date, Fluence energy storage joint venture awarded more than 250 MW of new projects
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
$144 million in US and Utilities driven primarily by higher market energy sales at Southland as well as higher wholesale and retail volumes at IPL, partially offset by the sale and closure of several generation facilities at DPL; and
|
•
|
$125 million in South America mainly due to higher contract and spot sales in Colombia and Chile, higher generation at Gener due to planned maintenance in 2017 and higher capacity prices in Argentina resulting from the 2017 market reforms; and
|
•
|
$69 million in MCAC driven primarily by higher availability due to improved hydrology in Panama and the commencement of operations of the Colon combined cycle facility in September 2018.
|
•
|
$20 million in US & Utilities due to the drivers discussed above, partially offset by higher costs related to early plant closures at DPL.
|
•
|
$336 million in South America primarily due to higher capacity prices in Argentina resulting from market reforms enacted in 2017 as well as higher contract sales and prices in Colombia and Chile;
|
•
|
$159 million in MCAC primarily due to higher pass-through fuel prices in Mexico, increased availability driven by improved hydrology in Panama, and higher contracted energy sales in Dominican Republic due to commencement of the combined cycle operations at Los Mina in June 2017; and
|
•
|
$73 million in US and Utilities driven primarily by higher regulated rates approved in November 2017 and favorable weather at DPL and higher market energy sales at Southland, partially offset at DPL due to the sale and closure of several generation facilities.
|
•
|
$139 million in South America due to the drivers discussed above;
|
•
|
$56 million in US and Utilities mostly due to the drivers discussed above; and
|
•
|
$43 million in MCAC mostly due to the drivers discussed above.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|||||||||||||
(in millions)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|||||||||
Corporate
|
$
|
(2
|
)
|
|
$
|
4
|
|
|
$
|
17
|
|
|
$
|
(1
|
)
|
|
Argentina
|
(2
|
)
|
|
9
|
|
|
(47
|
)
|
|
4
|
|
|||||
Colombia
|
—
|
|
|
(15
|
)
|
|
(1
|
)
|
|
(26
|
)
|
|||||
Chile
|
4
|
|
|
9
|
|
|
(11
|
)
|
|
4
|
|
|||||
Bulgaria
|
(1
|
)
|
—
|
|
5
|
|
|
(4
|
)
|
|
12
|
|
||||
Philippines
|
—
|
|
|
4
|
|
|
(1
|
)
|
|
10
|
|
|||||
Other
|
6
|
|
|
6
|
|
|
3
|
|
|
11
|
|
|||||
Total (1)
|
$
|
5
|
|
|
$
|
22
|
|
|
$
|
(44
|
)
|
|
$
|
14
|
|
(1)
|
Includes $6 million of gains on foreign currency derivative contracts for the three months ended September 30, 2018, and $37 million of gains and $37 million of losses for the nine months ended September 30, 2018 and 2017, respectively.
|
•
|
Lower earnings due to the deconsolidation of Eletropaulo in November 2017 and the sale of Masinloc in March 2018.
|
•
|
Higher earnings due to project completions in Panama; and
|
•
|
Higher earnings in Colombia primarily due to higher contract sales and prices.
|
•
|
Lower earnings at Tietê primarily due to higher interest expense due to non-recourse debt issued in 2018 and the assumption of debt for the acquisition of Alto Sertão in August 2017;
|
•
|
Prior year favorable impact of a legal settlement at Uruguaiana; and
|
•
|
Lower earnings due to the deconsolidation of Eletropaulo in November 2017 and the sale of Masinloc in March 2018.
|
•
|
Current year gain on sale of Electrica Santiago;
|
•
|
Higher earnings in Colombia primarily due to higher contract sales and prices; and
|
•
|
Higher earnings in Vietnam due to the adoption of the new revenue recognition standard (See Note 1—Financial Statement Presentation included in Item 1.—Financial Statements of this Form 10-Q for further information).
|
•
|
Current year impairment in the U.S.;
|
•
|
Charge to true-up the provisional estimate of U.S. tax reform;
|
•
|
Post-closing adjustments to the gain on sale of Electrica Santiago; and
|
•
|
Lower margins in the current year at our Eurasia SBU as a result of the sales of Masinloc and Kazakhstan.
|
•
|
Prior year loss on extinguishment of debt;
|
•
|
Lower interest on Parent Company debt; and
|
•
|
Higher margins at our South America and US and Utilities SBUs in the current year.
|
•
|
Current year gains on the sales of Masinloc, Eletropaulo (reflected within discontinued operations), and Electrica Santiago, net of tax;
|
•
|
Prior year loss on sale of Kazakhstan CHPs;
|
•
|
Prior year asset impairments in Kazakhstan and DP&L;
|
•
|
Lower interest on Parent Company debt; and
|
•
|
Higher margins at our US and Utilities, South America and MCAC SBUs in the current year.
|
•
|
Current year impairment in the U.S.;
|
•
|
Current year loss and prior year gain on extinguishment of debt;
|
•
|
Current year unrealized foreign exchange losses primarily due to the devaluation of the Argentine peso;
|
•
|
Prior year favorable impact of a legal settlement at Uruguaiana; and
|
•
|
Lower margins in the current year at our Eurasia SBU as a result of the sales of Masinloc and Kazakhstan.
|
Reconciliation of Adjusted Operating Margin (in millions)
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Operating Margin
|
$
|
671
|
|
|
$
|
640
|
|
|
$
|
1,927
|
|
|
$
|
1,820
|
|
Noncontrolling interests adjustment
|
(160
|
)
|
|
(165
|
)
|
|
(502
|
)
|
|
(503
|
)
|
||||
Unrealized derivative losses (gains)
|
4
|
|
|
(6
|
)
|
|
11
|
|
|
(16
|
)
|
||||
Disposition/acquisition losses
|
7
|
|
|
3
|
|
|
20
|
|
|
12
|
|
||||
Restructuring costs
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
||||
Total Adjusted Operating Margin
|
$
|
522
|
|
|
$
|
472
|
|
|
$
|
1,459
|
|
|
$
|
1,313
|
|
Reconciliation of Adjusted PTC (in millions)
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Income from continuing operations, net of tax, attributable to The AES Corporation
|
$
|
102
|
|
|
$
|
147
|
|
|
$
|
883
|
|
|
$
|
176
|
|
Income tax expense attributable to The AES Corporation
|
120
|
|
|
69
|
|
|
411
|
|
|
139
|
|
||||
Pretax contribution
|
222
|
|
|
216
|
|
|
1,294
|
|
|
315
|
|
||||
Unrealized derivative and equity securities losses (gains)
|
16
|
|
|
(8
|
)
|
|
4
|
|
|
(7
|
)
|
||||
Unrealized foreign currency losses (gains)
|
(7
|
)
|
|
(21
|
)
|
|
42
|
|
|
(54
|
)
|
||||
Disposition/acquisition losses (gains)
|
17
|
|
|
1
|
|
|
(822
|
)
|
|
109
|
|
||||
Impairment expense
|
80
|
|
|
2
|
|
|
172
|
|
|
264
|
|
||||
Losses (gains) on extinguishment of debt
|
(1
|
)
|
|
48
|
|
|
177
|
|
|
43
|
|
||||
Restructuring costs (1)
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
||||
Total Adjusted PTC
|
$
|
327
|
|
|
$
|
238
|
|
|
$
|
870
|
|
|
$
|
670
|
|
(1)
|
In February 2018, the Company announced a reorganization as a part of its ongoing strategy to simplify its portfolio, optimize its cost structure and reduce its carbon intensity.
|
Reconciliation of Adjusted EPS
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
||||||||
Diluted earnings per share from continuing operations
|
$
|
0.15
|
|
|
$
|
0.22
|
|
|
$
|
1.33
|
|
|
$
|
0.27
|
|
|
Unrealized derivative and equity securities losses (gains)
|
0.02
|
|
|
(0.01
|
)
|
|
0.01
|
|
|
(0.01
|
)
|
|
||||
Unrealized foreign currency losses (gains)
|
—
|
|
|
(0.03
|
)
|
|
0.06
|
|
(1)
|
(0.08
|
)
|
|
||||
Disposition/acquisition losses (gains)
|
0.02
|
|
|
—
|
|
|
(1.24
|
)
|
(2)
|
0.16
|
|
(3)
|
||||
Impairment expense
|
0.12
|
|
(4)
|
—
|
|
|
0.26
|
|
(5)
|
0.40
|
|
(6)
|
||||
Losses (gains) on extinguishment of debt
|
—
|
|
|
0.07
|
|
(7)
|
0.27
|
|
(8)
|
0.06
|
|
(9)
|
||||
U.S. Tax Law Reform Impact
|
0.05
|
|
(10)
|
—
|
|
|
0.05
|
|
(10)
|
—
|
|
|
||||
Less: Net income tax expense (benefit)
|
(0.01
|
)
|
|
(0.02
|
)
|
|
0.14
|
|
(11)
|
(0.15
|
)
|
(12)
|
||||
Adjusted EPS
|
$
|
0.35
|
|
|
$
|
0.23
|
|
|
$
|
0.88
|
|
|
$
|
0.65
|
|
|
(1)
|
Amount primarily relates to unrealized FX losses of $20 million, or $0.03 per share, associated with the devaluation of long-term receivables denominated in Argentine pesos, and unrealized FX losses of $9 million, or $0.01 per share, on intercompany receivables denominated in Euros at the Parent Company.
|
(2)
|
Amount primarily relates to gain on sale of Masinloc of $773 million, or $1.16 per share, gain on sale of Electrica Santiago of $36 million, or $0.05 per share, and realized derivative gains associated with the sale of Eletropaulo of $21 million, or $0.03 per share.
|
(3)
|
Amount primarily relates to loss on sale of Kazakhstan CHPs of $48 million, or $0.07 per share, realized derivative losses associated with the sale of Sul of $38 million, or $0.06 per share, and costs associated with early plant closures at DPL of $20 million, or $0.03 per share.
|
(4)
|
Amount primarily relates to the asset impairment at a U.S. generation facility of $73 million, or $0.11 per share.
|
(5)
|
Amount primarily relates to the asset impairment at a U.S. generation facility of $156 million, or $0.23 per share.
|
(6)
|
Amount primarily relates to asset impairments at Kazakhstan HPPs of $92 million, or $0.14 per share, Kazakhstan CHPs of $94 million, or $0.14 per share, and DPL of $66 million, or $0.10 per share.
|
(7)
|
Amount primarily relates to loss on early retirement of debt at the Parent Company of $38 million, or $0.06 per share.
|
(8)
|
Amount primarily relates to loss on early retirement of debt at the Parent Company of $169 million, or $0.25 per share.
|
(9)
|
Amount primarily relates to losses on early retirement of debt at the Parent Company of $92 million, or $0.14 per share, partially offset by the gain on early retirement of debt at AES Argentina of $65 million, or $0.10 per share.
|
(10)
|
Amount relates to a charge to true-up the provisional estimate of U.S. tax reform of $33 million, or $0.05 per share.
|
(11)
|
Amount primarily relates to the income tax expense under the GILTI provision associated with gain on sale of Masinloc of $155 million, or $0.23 per share, and income tax expense associated with the gain on sale of Electrica Santiago of $19 million, or $0.03 per share; partially offset by income tax benefits associated with the loss on early retirement of debt at the Parent Company of $52 million, or $0.08 per share, and income tax benefits associated with the impairment at a U.S. generation facility of $35 million, or $0.05 per share.
|
(12)
|
Amount primarily relates to the income tax benefit associated with asset impairments of $82 million, or $0.12 per share.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
||||||||||||||
Operating Margin
|
$
|
225
|
|
|
$
|
205
|
|
|
$
|
20
|
|
|
10
|
%
|
|
$
|
570
|
|
|
$
|
514
|
|
|
$
|
56
|
|
|
11
|
%
|
Adjusted Operating Margin (1)
|
209
|
|
|
177
|
|
|
32
|
|
|
18
|
%
|
|
523
|
|
|
454
|
|
|
69
|
|
|
15
|
%
|
||||||
Adjusted PTC (1)
|
167
|
|
|
138
|
|
|
29
|
|
|
21
|
%
|
|
363
|
|
|
288
|
|
|
75
|
|
|
26
|
%
|
(1)
|
A non-GAAP financial measure, adjusted for the impact of NCI. See SBU Performance Analysis—Non-GAAP Measures for definition and Item 1.—Business included in our 2017 Form 10-K for the respective ownership interest for key businesses.
|
Increase at Southland driven by higher market energy sales, partially offset by a decrease in capacity sales and lower ancillary services due to the expiration of long-term agreements
|
$
|
22
|
|
Increase at DPL primarily due to higher regulated rates following the approval of the 2017 ESP and favorable weather
|
15
|
|
|
Impact of the sale and closure of generation plants at DPL
|
(18
|
)
|
|
Other
|
1
|
|
|
Total US and Utilities SBU Operating Margin Increase
|
$
|
20
|
|
Increase at DPL primarily due to higher regulated rates following the approval of the 2017 ESP and favorable weather
|
$
|
37
|
|
Increase at Southland driven by higher market energy sales, partially offset by a decrease in capacity sales and lower ancillary services due to the expiration of long-term agreements
|
20
|
|
|
Increase at El Salvador primarily due to a new tariff regime effective in 2018
|
10
|
|
|
Impact of the sale and closure of generation plants at DPL
|
(5
|
)
|
|
Other
|
(6
|
)
|
|
Total US and Utilities SBU Operating Margin Increase
|
$
|
56
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
||||||||||||||
Operating Margin
|
$
|
250
|
|
|
$
|
190
|
|
|
$
|
60
|
|
|
32
|
%
|
|
$
|
754
|
|
|
$
|
612
|
|
|
$
|
142
|
|
|
23
|
%
|
Adjusted Operating Margin (1)
|
156
|
|
|
116
|
|
|
40
|
|
|
34
|
%
|
|
455
|
|
|
347
|
|
|
108
|
|
|
31
|
%
|
||||||
Adjusted PTC (1)
|
128
|
|
|
67
|
|
|
61
|
|
|
91
|
%
|
|
381
|
|
|
289
|
|
|
92
|
|
|
32
|
%
|
(1)
|
A non-GAAP financial measure, adjusted for the impact of NCI. See SBU Performance Analysis—Non-GAAP Measures for definition and Item 1.—Business included in our 2017 Form 10-K for the respective ownership interest for key businesses.
|
Increase in Colombia mainly related to higher contract prices and higher contract and spot sales
|
$
|
21
|
|
Lower fixed costs at Gener primarily associated with planned maintenance performed in Q3 2017
|
21
|
|
|
Increase in Argentina primarily due to higher regulated tariffs resulting from market reforms enacted in 2017 and lower fixed costs primarily due to the devaluation of the Argentine peso
|
18
|
|
|
Increase mainly associated with the commencement of new PPAs in Chile
|
18
|
|
|
Impact of the sale of Electrica Santiago
|
(15
|
)
|
|
Other
|
(3
|
)
|
|
Total South America SBU Operating Margin Increase
|
$
|
60
|
|
Increase in Argentina primarily due to higher regulated tariffs resulting from market reforms enacted in 2017 and lower fixed costs primarily due to the devaluation of the Argentine peso
|
$
|
62
|
|
Increase in Colombia mainly related to higher contract prices
|
48
|
|
|
Increase in Chile due to the commencement of new PPAs
|
40
|
|
|
Lower fixed costs at Gener primarily associated with planned maintenance performed in 2017
|
16
|
|
|
Impact of the sale of Electrica Santiago
|
(28
|
)
|
|
Other
|
4
|
|
|
Total South America SBU Operating Margin Increase
|
$
|
142
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
||||||||||||||
Operating Margin
|
$
|
144
|
|
|
$
|
142
|
|
|
$
|
2
|
|
|
1
|
%
|
|
$
|
379
|
|
|
$
|
336
|
|
|
$
|
43
|
|
|
13
|
%
|
Adjusted Operating Margin (1)
|
106
|
|
|
109
|
|
|
(3
|
)
|
|
-3
|
%
|
|
282
|
|
|
263
|
|
|
19
|
|
|
7
|
%
|
||||||
Adjusted PTC (1)
|
81
|
|
|
91
|
|
|
(10
|
)
|
|
-11
|
%
|
|
215
|
|
|
209
|
|
|
6
|
|
|
3
|
%
|
(1)
|
A non-GAAP financial measure, adjusted for the impact of NCI. See SBU Performance Analysis—Non-GAAP Measures for definition and Item 1.—Business included in our 2017 Form 10-K for the respective ownership interest for key businesses.
|
Higher availability driven by improved hydrology in Panama
|
$
|
6
|
|
Higher energy costs in Dominican Republic due to the lightning incident at the Andres facility
|
(6
|
)
|
|
Other
|
2
|
|
|
Total MCAC SBU Operating Margin Increase
|
$
|
2
|
|
Higher contracted energy sales in Dominican Republic mainly driven by the commencement of operations at the Los Mina combined cycle facility in June 2017 and lower forced maintenance outages
|
$
|
30
|
|
Higher availability driven by improved hydrology in Panama
|
23
|
|
|
Higher energy costs in Dominican Republic due to the lightning incident at the Andres facility
|
(6
|
)
|
|
Other
|
(4
|
)
|
|
Total MCAC SBU Operating Margin Increase
|
$
|
43
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||||
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
||||||||||||||
Operating Margin
|
$
|
34
|
|
|
$
|
101
|
|
|
$
|
(67
|
)
|
|
-66
|
%
|
|
$
|
175
|
|
|
$
|
342
|
|
|
$
|
(167
|
)
|
|
-49
|
%
|
Adjusted Operating Margin (1)
|
31
|
|
|
67
|
|
|
(36
|
)
|
|
-54
|
%
|
|
152
|
|
|
235
|
|
|
(83
|
)
|
|
-35
|
%
|
||||||
Adjusted PTC (1)
|
37
|
|
|
61
|
|
|
(24
|
)
|
|
-39
|
%
|
|
175
|
|
|
218
|
|
|
(43
|
)
|
|
-20
|
%
|
(1)
|
A non-GAAP financial measure, adjusted for the impact of NCI. See SBU Performance Analysis—Non-GAAP Measures for definition and Item 1.—Business included in our 2017 Form 10-K for the respective ownership interest for key businesses.
|
Impact of the sale of Masinloc power plant in March 2018
|
$
|
(39
|
)
|
Decrease in Vietnam due to adoption of the new revenue recognition standard in 2018 and higher maintenance expense
|
(12
|
)
|
|
Impact of the sale of the Kazakhstan CHPs and the expiration of HPP concession in 2017
|
(8
|
)
|
|
Other
|
(8
|
)
|
|
Total Eurasia SBU Operating Margin Decrease
|
$
|
(67
|
)
|
Impact of the sale of Masinloc power plant in March 2018
|
$
|
(87
|
)
|
Impact of the sale of the Kazakhstan CHPs and the expiration of HPP concession in 2017
|
(36
|
)
|
|
Decrease in Vietnam due to adoption of the new revenue recognition standard in 2018 and higher maintenance costs
|
(26
|
)
|
|
Unfavorable MTM valuation of commodity swaps in Kilroot
|
(18
|
)
|
|
Total Eurasia SBU Operating Margin Decrease
|
$
|
(167
|
)
|
|
|
Nine Months Ended September 30,
|
||||||
Cash Sources:
|
|
2018
|
|
2017
|
||||
Net income, adjusted for non-cash items (1)
|
|
$
|
1,865
|
|
|
$
|
1,880
|
|
Proceeds from the sales of businesses, net of cash & restricted cash sold
|
|
1,796
|
|
|
39
|
|
||
Issuance of non-recourse debt
|
|
1,509
|
|
|
2,703
|
|
||
Borrowings under revolving credit facilities
|
|
1,434
|
|
|
1,489
|
|
||
Sale of short-term investments
|
|
1,010
|
|
|
2,942
|
|
||
Issuance of recourse debt
|
|
1,000
|
|
|
1,025
|
|
||
Other
|
|
155
|
|
|
140
|
|
||
Total Cash Sources
|
|
$
|
8,769
|
|
|
$
|
10,218
|
|
|
|
|
|
|
||||
Cash Uses:
|
|
|
|
|
||||
Repayments of recourse debt
|
|
$
|
(1,781
|
)
|
|
$
|
(1,353
|
)
|
Capital expenditures
|
|
(1,592
|
)
|
|
(1,587
|
)
|
||
Repayments under revolving credit facilities
|
|
(1,595
|
)
|
|
(851
|
)
|
||
Purchase of short-term investments
|
|
(1,215
|
)
|
|
(2,673
|
)
|
||
Repayments of non-recourse debt
|
|
(1,139
|
)
|
|
(1,731
|
)
|
||
Dividends paid on AES common stock
|
|
(258
|
)
|
|
(238
|
)
|
||
Distributions to noncontrolling interests
|
|
(199
|
)
|
|
(263
|
)
|
||
Increase in working capital (2)
|
|
(184
|
)
|
|
(179
|
)
|
||
Payments for financed capital expenditures
|
|
(186
|
)
|
|
(100
|
)
|
||
Contributions to equity affiliates
|
|
(101
|
)
|
|
(49
|
)
|
||
Acquisitions of businesses, net of cash acquired, and equity method investments
|
|
(66
|
)
|
|
(590
|
)
|
||
Payments for financing fees
|
|
(32
|
)
|
|
(96
|
)
|
||
Other
|
|
(87
|
)
|
|
(170
|
)
|
||
Total Cash Uses
|
|
$
|
(8,435
|
)
|
|
$
|
(9,880
|
)
|
Net Increase in Cash, Cash Equivalents, and Restricted Cash
|
|
$
|
334
|
|
|
$
|
338
|
|
(1)
|
Refer to the table within the Operating Activities section below for a reconciliation of non-cash items affecting net income during the applicable period.
|
(2)
|
Refer to the table within the Operating Activities section below for explanations of the variance in working capital requirements.
|
|
|
Nine Months Ended September 30,
|
||||||||||
Cash flows provided by (used in):
|
|
2018
|
|
2017
|
|
$ Change
|
||||||
Operating activities
|
|
$
|
1,681
|
|
|
$
|
1,701
|
|
|
$
|
(20
|
)
|
Investing activities
|
|
(190
|
)
|
|
(1,955
|
)
|
|
1,765
|
|
|||
Financing activities
|
|
(1,163
|
)
|
|
678
|
|
|
(1,841
|
)
|
|
|
Nine Months Ended September 30,
|
||||||||||
|
|
2018
|
|
2017
|
|
$ Change
|
||||||
Net income
|
|
$
|
1,384
|
|
|
$
|
509
|
|
|
$
|
875
|
|
Depreciation and amortization
|
|
770
|
|
|
884
|
|
|
(114
|
)
|
|||
Loss (gain) on disposal and sale of businesses
|
|
(856
|
)
|
|
49
|
|
|
(905
|
)
|
|||
Impairment expenses
|
|
172
|
|
|
260
|
|
|
(88
|
)
|
|||
Deferred income taxes
|
|
221
|
|
|
(3
|
)
|
|
224
|
|
|||
Loss on extinguishment of debt
|
|
187
|
|
|
44
|
|
|
143
|
|
|||
Gain on sale of discontinued operations
|
|
(243
|
)
|
|
—
|
|
|
(243
|
)
|
|||
Other adjustments to net income
|
|
230
|
|
|
137
|
|
|
93
|
|
|||
Non-cash adjustments to net income
|
|
481
|
|
|
1,371
|
|
|
(890
|
)
|
|||
Net income, adjusted for non-cash items
|
|
$
|
1,865
|
|
|
$
|
1,880
|
|
|
$
|
(15
|
)
|
Changes in working capital (1)
|
|
$
|
(184
|
)
|
|
$
|
(179
|
)
|
|
$
|
(5
|
)
|
Net cash provided by operating activities (2)
|
|
$
|
1,681
|
|
|
$
|
1,701
|
|
|
$
|
(20
|
)
|
(1)
|
Refer to the table below for explanations of the variance in working capital requirements, which are defined as changes in operating assets and liabilities on the Condensed Consolidated Statements of Cash Flows.
|
(2)
|
Amounts included in the table above include the results of discontinued operations, where applicable.
|
Increases in:
|
|
||
Proceeds from the sales of businesses, net of cash and restricted cash sold, primarily due to the current year sales of Masinloc, Eletropaulo, Electrica Santiago and the DPL Peaker assets, partially offset by the sale of the Kazakhstan CHPs in 2017 and transaction costs incurred for the Beckjord sale
|
$
|
1,757
|
|
Capital expenditures (1)
|
(5
|
)
|
|
Decreases In:
|
|
||
Acquisitions of businesses, net of cash acquired, and equity method investees, primarily due to the acquisitions of sPower and Alto Sertão II in 2017
|
524
|
|
|
Cash resulting from net purchases and sales of short-term investments
|
(474
|
)
|
|
Other investing activities
|
(37
|
)
|
|
Total increase in net cash provided by investing activities
|
$
|
1,765
|
|
(1)
|
Refer to the tables below for a breakout of capital expenditures by type and primary business driver.
|
|
|
Nine Months Ended September 30,
|
||||||||||
|
|
2018
|
|
2017
|
|
$ Change
|
||||||
Growth Investments
|
|
$
|
1,266
|
|
|
$
|
1,109
|
|
|
$
|
157
|
|
Maintenance
|
|
296
|
|
|
423
|
|
|
(127
|
)
|
|||
Environmental
|
|
30
|
|
|
55
|
|
|
(25
|
)
|
|||
Total capital expenditures
|
|
$
|
1,592
|
|
|
$
|
1,587
|
|
|
$
|
5
|
|
Increases in:
|
|
||
Net repayments on revolving credit facilities at the Parent Company, IPALCO and DPL
|
$
|
(922
|
)
|
Net repayments of recourse debt at the Parent Company
|
(452
|
)
|
|
Net repayments of non-recourse debt at Angamos (1)
|
(132
|
)
|
|
Net issuance of non-recourse debt at Southland (1)
|
227
|
|
|
Net borrowing on revolving credit facilities at Gener
|
73
|
|
|
Decreases in:
|
|
||
Net issuance of non-recourse debt at AES Argentina, Tietê, DPL, Alto Maipo and Colon (1)
|
(584
|
)
|
|
Net repayments on revolving credit facilities at Los Mina and AES Andres
|
50
|
|
|
Other financing activities
|
(64
|
)
|
|
Total increase in net cash used in financing activities
|
$
|
(1,841
|
)
|
(1)
|
See Note 7—Debt in Item 1—Financial Statements of this Form 10-Q for more information regarding significant non-recourse debt transactions.
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
Consolidated cash and cash equivalents
|
$
|
1,187
|
|
|
$
|
949
|
|
Less: Cash and cash equivalents at subsidiaries
|
(1,144
|
)
|
|
(938
|
)
|
||
Parent Company and qualified holding companies’ cash and cash equivalents
|
43
|
|
|
11
|
|
||
Commitments under Parent Company credit facility
|
1,100
|
|
|
1,100
|
|
||
Less: Letters of credit under the credit facility
|
(43
|
)
|
|
(35
|
)
|
||
Less: Borrowings under the credit facility
|
(15
|
)
|
|
(207
|
)
|
||
Borrowings available under Parent Company credit facility
|
1,042
|
|
|
858
|
|
||
Total Parent Company Liquidity
|
$
|
1,085
|
|
|
$
|
869
|
|
•
|
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.
|
10.1
|
|
|
31.1
|
|
|
31.2
|
|
|
32.1
|
|
|
32.2
|
|
|
101.INS
|
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
|
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:
|
November 5, 2018
|
By:
|
|
/s/ THOMAS M. O’FLYNN
|
|
|
|
|
|
Name:
|
Thomas M. O’Flynn
|
|
|
|
|
Title:
|
Executive Vice President and Chief Financial Officer (Principal Financial Officer)
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ SARAH R. BLAKE
|
|
|
|
|
|
Name:
|
Sarah R. Blake
|
|
|
|
|
Title:
|
Vice President and Controller (Principal Accounting Officer)
|
•
|
The Participant’s voluntary resignation, including, but not limited to, the Participant’s unilateral Separation From Service at any time prior to the Termination Date established by the Employer, other than for Good Reason;
|
•
|
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 Participant) 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 a Participant’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 Participant’s death;
|
•
|
The Participant declines to accept a New Job Position offered by the Employer that is located equal to or less than 50 miles of the Participant’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 the Participant’s Employer to another AES related entity, irrespective of whether the Participant is required to relocate or whether the AES related entity qualifies as an Affiliated Employer.
|
•
|
Reduction-in-force that eliminates the Participant’s existing job position;
|
•
|
Permanent job elimination of the Participant;
|
•
|
The restructuring or reorganization of a business unit, division, department or other segment, which directly affects the Participant;
|
•
|
Termination by Mutual Consent; or
|
•
|
The Participant declines to accept a New Job Position offered by the Employer that requires the Participant to relocate to a work site location that is located greater than 50 miles from the Participant’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, a Participant who is an Executive shall not incur an Involuntary Termination if such Participant declines a New Job Position (regardless of its location) at a time when the Participant’s existing job position is being eliminated.
|
•
|
The Participant 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 a Participant 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 Participant was not required to relocate to a work site location that is located greater than 50 miles from the Participant’s then-assigned work site of the Employer.
|
B.
|
Separation Payments.
|
F.
|
Miscellaneous.
|
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/ ANDRÉS GLUSKI
|
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/ THOMAS M. O’FLYNN
|
Name: Thomas M. O’Flynn
|
Executive Vice President and Chief Financial Officer
|
(1)
|
the Quarterly Report on Form 10-Q for the quarter ended September 30, 2018, (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/ ANDRÉS GLUSKI
|
Name: Andrés Gluski
|
President and Chief Executive Officer
|
(1)
|
the Quarterly Report on Form 10-Q for the quarter ended September 30, 2018, (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/ THOMAS M. O’FLYNN
|
Name: Thomas M. O’Flynn
|
Executive Vice President and Chief Financial Officer
|