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Acquistions and Dispositions

12 Months Ended

Dec. 31, 2012

24. ACQUISITIONS AND DISPOSITIONS

Acquisitions

DPL— On November 28, 2011, AES completed the acquisition of 100% of the common stock of DPL Inc. (“DPL”), the parent company of The Dayton Power and Light Company (“DP&L”), a utility based in Ohio, for approximately $3.5 billion, pursuant to the terms and conditions of a definitive agreement (the “Merger Agreement”) dated April 19, 2011. Upon completion of the acquisition, DPL became a wholly owned subsidiary of AES. DPL's operating results for the period beginning November 28, 2011 have been included in the Consolidated Statement of Operations with no comparable amounts for 2010. DPL's net assets acquired and liabilities assumed in the acquisition have been included in the Consolidated Balance Sheet as of December 31, 2011. The purchase price allocation was finalized in the third quarter of 2012 and the resulting adjustments to the preliminary purchase price allocation (recorded as of the acquisition date) have been retrospectively reflected as of December 31, 2011 in the accompanying Consolidated Balance Sheet. The effect of these adjustments on net income for the period November 28, 2011 through December 31, 2011 was not material. The preliminary purchase allocation, the measurement period adjustments, and the final purchase price allocation are presented in the table below:


		Preliminary		Measurement Period Adjustments		Final

		(in millions)
Cash		$	116	$	-	$	116
Accounts receivable			278		-		278
Inventory			124		-		124
Other current assets			41		-		41
Property, plant and equipment			2,549		(71)⁽¹⁾		2,478
Intangible assets subject to amortization			166		(19)⁽²⁾		147
Intangible assets - indefinite-lived			5		-		5
Regulatory assets			201		16⁽³⁾		217
Other noncurrent assets			58		-		58
Current liabilities			(401)		(5)		(406)
Non-recourse debt			(1,255)		-		(1,255)
Deferred income taxes			(558)		7⁽⁴⁾		(551)
Regulatory liabilities			(117)		-		(117)
Other noncurrent liabilities			(195)		(15)⁽⁵⁾		(210)
Redeemable preferred stock			(18)		-		(18)
	Net identifiable assets acquired		994		(87)		907
Goodwill			2,489		87⁽⁶⁾		2,576
	Net assets acquired	$	3,483	$	-		3,483

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Represents net adjustments resulting from the refined information associated with certain contractual arrangements, growth and ancillary revenue assumptions. There was a related decrease of $25 million in the provisionally recognized deferred tax liabilities.
Represents net adjustments to certain customer contracts of DPLER and other intangible assets resulting from the refined market and contractual information obtained during the measurement period. There was a related decrease of $7 million in the provisionally recognized deferred tax liabilities.
Represents net adjustments resulting from an assessment of overall deferred tax liabilities on regulated property, plant and equipment. There was a related increase of $21 million in the provisionally recognized deferred tax liabilities.
Represents the net impact of adjustments to the purchase price allocation recognized during the measurement period, including a decrease of $12 million related to the unfavorable coal contract and an increase of $16 million as a result of the finalization of DPL Inc.'s standalone federal tax return.
Primarily represents an increase of $29 million related to an unfavorable coal contract partially offset by a decrease of $13 million in income taxes payable as a result of the finalization of DPL Inc.'s standalone federal tax return.
Represents the net impact of purchase price adjustments on goodwill during the measurement period.

Dispositions

Cartagena ― On February 9, 2012, a subsidiary of the Company completed the sale of 80% of its interest in the wholly-owned holding company of AES Energia Cartagena S.R.L. (“AES Cartagena”), a 1,199 MW gas-fired generation business in Spain. The Company owned approximately 70.81% of AES Cartagena through this holding company structure, as well as 100% of a related operations and maintenance company. Net proceeds from the sale were approximately €172 million ($229 million) and during the first quarter of 2012, the Company recognized a pretax gain of $178 million on the transaction.

Under the terms of the sale agreement, the buyer, Electrabel International Holdings B.V. (“Electrabel”), a subsidiary of GDF SUEZ S.A. or “GDFS”, has an option to purchase the Company's remaining 20% interest at a fixed price of €28 million ($37 million) during a five month period beginning March 2013. Of the total proceeds received, approximately $9 million was deferred and allocated to Electrabel's option to purchase the Company's remaining interest. In the fourth quarter of 2012, the Company received $9 million in dividends from its 20% ownership of AES Cartagena, of which $5 million was deferred and allocated to Electrabel's option to purchase the Company's remaining interest. Concurrent with the sale, GDFS settled the outstanding arbitration between the parties regarding certain emissions costs and other taxes that AES Cartagena sought to recover from GDFS as energy manager under the existing commercial arrangements. GDFS agreed to pay €71 million ($95 million) to AES Cartagena for such costs incurred by AES Cartagena for the 2008-2010 period and for 2011 through the date of sale close, of which €28 million ($38 million) was paid at closing. Due to the Company's expected continuing ownership interest extending beyond one year from the completion of the sale of its 80% interest, the prior period operating results of AES Cartagena have not been reclassified as discontinued operations.

InnoVent and St. Patrick ― On June 28, 2012, the Company closed the sale of its equity interest in InnoVent and controlling interest in St. Patrick. Net proceeds from the sale transactions were $42 million. The prior period operating results of St. Patrick were not deemed material for reclassification to discontinued operations. See Note 21—Impairment Expense and Note 9—Other Non-Operating Expense for further information.

China ― On September 6, 2012 and December 31, 2012, the Company completed the sale of its interest in equity method investments in China. These investments included coal-fired, hydropower and wind generation facilities accounted for under the equity method of accounting. Net proceeds from the sale were approximately $133 million and the Company recognized a pretax gain of $27 million on the transaction, which is reflected as a gain on sale of investment. See Note 9―Other Non-Operating Expense for further information.