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Segments
 3 Months Ended
Mar. 31, 2012
SEGMENTS

11. SEGMENTS

During the first quarter of 2012, the Company completed its operational management and reporting restructuring. The management reporting structure is organized along two lines of business – Generation and Utilities, each led by a Chief Operating Officer. The segment reporting structure primarily uses the Company's management reporting structure as its foundation to reflect how the Company manages the business internally with further aggregation by geographic regions to provide better socio-political-economic understanding of our business. For the three months ended March 31, 2012, the Company applied the segment reporting accounting guidance, which provides certain quantitative thresholds and aggregation criteria. The Company concluded that Tietê, our 2,663 MW hydro generation business in Brazil, met the quantitative thresholds to require separate presentation. As such, an additional reportable segment which consists solely of the results of Tietê is now reported as Generation – Tietê. Tietê was formerly reported within the Latin America –Generation segment. The previously disclosed Latin America – Generation segment is now reported as Generation – Latin America – Other and, with the exception of Tietê, includes the results of all remaining businesses as previously reported. All prior period results have been retrospectively revised to reflect the new segment reporting structure. The Company has increased from six to the following seven reportable segments:

•       Generation – Latin America – Other;

•       Generation – Tietê;

•       Generation – North America;

•       Generation – Europe;

•       Generation – Asia;

•       Utilities – Latin America;

•       Utilities – North America.

Corporate and Other—The Company's Europe Utilities, Africa Utilities, Africa Generation, Wind Generation operating segments and other climate solutions and renewables projects are reported within “Corporate and Other” because they do not meet the criteria to allow for aggregation with another operating segment or the quantitative thresholds that would require separate disclosure under segment reporting accounting guidance. None of these operating segments are currently material to our presentation of reportable segments, individually or in the aggregate. AES Solar and certain other unconsolidated businesses are accounted for using the equity method of accounting; therefore, their operating results are included in “Net Equity in Earnings of Affiliates” on the face of the Condensed Consolidated Statements of Operations, not in revenue or gross margin. “Corporate and Other” also includes corporate overhead costs which are not directly associated with the operations of our seven reportable segments and other intercompany charges such as self-insurance premiums which are fully eliminated in consolidation.

The Company uses adjusted gross margin, a non-GAAP measure, to evaluate the performance of its segments. Adjusted gross margin is defined by the Company as gross margin plus depreciation and amortization less general and administrative expenses.

Total revenue includes inter-segment sales related to the transfer of electricity from generation plants to utilities within Latin America. No material inter-segment revenue relationships exist between other segments. Corporate allocations include certain self-insurance activities which are reflected within segment adjusted gross margin. All intra-segment activity has been eliminated with respect to revenue and adjusted gross margin within the segment. Inter-segment activity has been eliminated within the total consolidated results. Asset information for businesses that were discontinued or classified as held for sale as of March 31, 2012 is segregated and is shown in the line “Discontinued Businesses” in the accompanying segment tables.

Information about the Company's operations by segment for the three months ended March 31, 2012 and 2011 was as follows:

Three months ended Total Revenue Intersegment External Revenue
March 31, 2012 2011 2012 2011 2012 2011
                   
  (in millions)
                   
Generation - Latin America - Other $ 959 $ 878 $ (10) $ (9) $ 949 $ 869
Generation - Tietê   305   253   (282)   (242)   23   11
Generation - North America   317   334   -   -   317   334
Generation - Europe   450   400   -   (1)   450   399
Generation - Asia   181   115   -   -   181   115
Utilities - Latin America   1,734   1,840   -   -   1,734   1,840
Utilities - North America   732   289   -   -   732   289
Corp and Other   347   293   7   6   354   299
Total Revenue $ 5,025 $ 4,402 $ (285) $ (246) $ 4,740 $ 4,156

Three months ended Total Adjusted Gross Margin Intersegment External Adjusted Gross Margin
March 31, 2012 2011 2012 2011 2012 2011
                   
  (in millions)
                   
Generation - Latin America - Other $ 287 $ 268 $ 4 $ 3 $ 291 $ 271
Generation - Tietê   239   202   (282)   (242)   (43)   (40)
Generation - North America   106   106   2   4   108   110
Generation - Europe   237   106   (7)   1   230   107
Generation - Asia   58   45   -   1   58   46
Utilities - Latin America   167   320   285   245   452   565
Utilities - North America   213   90   -   -   213   90
Corp and Other & eliminations   35   42   (2)   (12)   33   30
Reconciliation to Income from Continuing Operations before Taxes      
Depreciation and amortization   (351)   (281)
Interest expense    (416)   (338)
Interest income    91   95
Other expense   (29)   (15)
Other income   18   16
Gain on sale of investments   179   6
Asset impairment expense   (11)   -
Foreign currency transaction gains (losses)   (1)   33
Other non-operating expense   (49)   -
Income from continuing operations before taxes and equity in earnings of affiliates $ 773 $ 695

Assets by segment as of March 31, 2012 and December 31, 2011 were as follows:

   Total Assets
   March 31, 2012 December 31, 2011
        
   (in millions)
 Assets      
 Generation - Latin America - Other $ 9,271 $ 9,067
 Generation - Tietê   1,670   1,645
 Generation - North America   3,627   3,625
 Generation - Europe   3,456   3,276
 Generation - Asia   1,769   1,717
 Utilities - Latin America   9,987   9,468
 Utilities - North America   9,338   9,384
 Discontinued businesses   719   1,531
 Corp and Other & eliminations   5,594   5,620
 Total Assets $ 45,431 $ 45,333