XML 73 R11.htm IDEA: XBRL DOCUMENT
v2.4.0.8

Fair Value | 6 Months Ended
--- | ---
Jun. 30, 2014
Fair Value Disclosures [Abstract] |
FAIR VALUE | FAIR VALUE The fair value of current financial assets and liabilities, debt service reserves and other deposits approximate their reported carrying amounts. The estimated fair value of the Company’s assets and liabilities have been determined using available market information. By virtue of these amounts being estimates and based on hypothetical transactions to sell assets or transfer liabilities, the use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. There were no changes in fair valuation techniques during the period and the Company continues to follow the valuation techniques described in Note 4. — Fair Value in Item 8. — Financial Statements and Supplementary Data of its 2013 Form 10-K. Recurring Measurements The following table sets forth, by level within the fair value hierarchy, the Company’s financial assets and liabilities that were measured at fair value on a recurring basis as of the periods indicated:
|  | June 30, 2014 |  | December 31, 2013
|  | Level 1 |  | Level 2 |  | Level 3 |  | Total |  | Level 1 |  | Level 2 |  | Level 3 |  | Total
|  | (in millions)
Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
AVAILABLE-FOR-SALE:(1) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Debt securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Unsecured debentures |  | $ | — |  |  | $ | 260 |  |  | $ | — |  |  | $ | 260 |  |  | $ | — |  |  | $ | 435 |  |  | $ | — |  |  | $ | 435 |
Certificates of deposit |  | — |  |  | 72 |  |  | — |  |  | 72 |  |  | — |  |  | 151 |  |  | — |  |  | 151 |
Government debt securities |  | — |  |  | 44 |  |  | — |  |  | 44 |  |  | — |  |  | 25 |  |  | — |  |  | 25 |
Subtotal |  | — |  |  | 376 |  |  | — |  |  | 376 |  |  | — |  |  | 611 |  |  | — |  |  | 611 |
Equity securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Mutual funds |  | — |  |  | 47 |  |  | — |  |  | 47 |  |  | — |  |  | 44 |  |  | — |  |  | 44 |
Subtotal |  | — |  |  | 47 |  |  | — |  |  | 47 |  |  | — |  |  | 44 |  |  | — |  |  | 44 |
Total available-for-sale |  | — |  |  | 423 |  |  | — |  |  | 423 |  |  | — |  |  | 655 |  |  | — |  |  | 655 |
TRADING: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Mutual funds |  | 15 |  |  | — |  |  | — |  |  | 15 |  |  | 13 |  |  | — |  |  | — |  |  | 13 |
Total trading |  | 15 |  |  | — |  |  | — |  |  | 15 |  |  | 13 |  |  | — |  |  | — |  |  | 13 |
DERIVATIVES: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate derivatives |  | — |  |  | 22 |  |  | — |  |  | 22 |  |  | — |  |  | 98 |  |  | — |  |  | 98 |
Cross currency derivatives |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 5 |  |  | — |  |  | 5 |
Foreign currency derivatives |  | — |  |  | 15 |  |  | 111 |  |  | 126 |  |  | — |  |  | 15 |  |  | 98 |  |  | 113 |
Commodity derivatives |  | — |  |  | 47 |  |  | 17 |  |  | 64 |  |  | — |  |  | 18 |  |  | 6 |  |  | 24 |
Total derivatives |  | — |  |  | 84 |  |  | 128 |  |  | 212 |  |  | — |  |  | 136 |  |  | 104 |  |  | 240 |
TOTAL ASSETS |  | $ | 15 |  |  | $ | 507 |  |  | $ | 128 |  |  | $ | 650 |  |  | $ | 13 |  |  | $ | 791 |  |  | $ | 104 |  |  | $ | 908 |
Liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
DERIVATIVES: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate derivatives |  | $ | — |  |  | $ | 226 |  |  | $ | 183 |  |  | $ | 409 |  |  | $ | — |  |  | $ | 221 |  |  | $ | 101 |  |  | $ | 322 |
Cross currency derivatives |  | — |  |  | 11 |  |  | — |  |  | 11 |  |  | — |  |  | 11 |  |  | — |  |  | 11 |
Foreign currency derivatives |  | — |  |  | 35 |  |  | 4 |  |  | 39 |  |  | — |  |  | 16 |  |  | 5 |  |  | 21 |
Commodity derivatives |  | — |  |  | 42 |  |  | 1 |  |  | 43 |  |  | — |  |  | 15 |  |  | 2 |  |  | 17 |
Total derivatives |  | — |  |  | 314 |  |  | 188 |  |  | 502 |  |  | — |  |  | 263 |  |  | 108 |  |  | 371 |
TOTAL LIABILITIES |  | $ | — |  |  | $ | 314 |  |  | $ | 188 |  |  | $ | 502 |  |  | $ | — |  |  | $ | 263 |  |  | $ | 108 |  |  | $ | 371 |
_____________________________
(1) | Amortized cost approximated fair value at June 30, 2014 and December 31, 2013.
The following tables present a reconciliation of net derivative assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and six months ended June 30, 2014 and 2013 (presented net by type of derivative). Transfers between Level 3 and Level 2 are determined as of the end of the reporting period and principally result from changes in the significance of unobservable inputs used to calculate the credit valuation adjustment.
|  | Three Months Ended June 30, 2014
|  | Interest Rate |  | Foreign Currency |  | Commodity |  | Total
|  | (in millions)
Balance at the beginning of the period |  | $ | (87 | ) |  | $ | 101 |  |  | $ | — |  |  | $ | 14 |
Total gains (losses) (realized and unrealized): |  |  |  |  |  |  |  |
Included in earnings |  | — |  |  | 10 |  |  | 3 |  |  | 13 |
Included in other comprehensive income - derivative activity |  | (30 | ) |  | — |  |  | — |  |  | (30 | )
Included in other comprehensive income - foreign currency translation activity |  | — |  |  | (2 | ) |  | — |  |  | (2 | )
Included in regulatory (assets) liabilities |  | — |  |  | — |  |  | 15 |  |  | 15 |
Settlements |  | 3 |  |  | (2 | ) |  | (2 | ) |  | (1 | )
Transfers of assets (liabilities) into Level 3 |  | (69 | ) |  | — |  |  | — |  |  | (69 | )
Transfers of (assets) liabilities out of Level 3 |  | — |  |  | — |  |  | — |  |  | — |
Balance at the end of the period |  | $ | (183 | ) |  | $ | 107 |  |  | $ | 16 |  |  | $ | (60 | )
Total gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities held at the end of the period |  | $ | — |  |  | $ | 9 |  |  | $ | — |  |  | $ | 9 |
|  | Three Months Ended June 30, 2013
|  | Interest Rate |  | Foreign Currency |  | Commodity |  | Total
|  | (in millions)
Balance at the beginning of the period |  | $ | (72 | ) |  | $ | 71 |  |  | $ | (3 | ) |  | $ | (4 | )
Total gains (losses) (realized and unrealized): |  |  |  |  |  |  |  |
Included in earnings |  | (4 | ) |  | 12 |  |  | 1 |  |  | 9 |
Included in other comprehensive income - derivative activity |  | 13 |  |  | — |  |  | — |  |  | 13 |
Included in other comprehensive income - foreign currency translation activity |  | — |  |  | (3 | ) |  | — |  |  | (3 | )
Included in regulatory (assets) liabilities |  | — |  |  | — |  |  | 11 |  |  | 11 |
Settlements |  | 4 |  |  | (1 | ) |  | — |  |  | 3 |
Transfers of assets (liabilities) into Level 3 |  | (42 | ) |  | — |  |  | — |  |  | (42 | )
Transfers of (assets) liabilities out of Level 3 |  | 38 |  |  | (9 | ) |  | — |  |  | 29 |
Balance at the end of the period |  | $ | (63 | ) |  | $ | 70 |  |  | $ | 9 |  |  | $ | 16 |
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 |  | $ | — |  |  | $ | 14 |  |  | $ | — |  |  | $ | 14 |
|  | Six Months Ended June 30, 2014
|  | Interest Rate |  | Foreign Currency |  | Commodity |  | Total
|  | (in millions)
Balance at the beginning of the period |  | $ | (101 | ) |  | $ | 93 |  |  | $ | 4 |  |  | $ | (4 | )
Total gains (losses) (realized and unrealized): |  |  |  |  |  |  |  |
Included in earnings |  | 1 |  |  | 37 |  |  | 1 |  |  | 39 |
Included in other comprehensive income - derivative activity |  | (99 | ) |  | (1 | ) |  | — |  |  | (100 | )
Included in other comprehensive income - foreign currency translation activity |  | — |  |  | (20 | ) |  | — |  |  | (20 | )
Included in regulatory (assets) liabilities |  | — |  |  | — |  |  | 12 |  |  | 12 |
Settlements |  | 16 |  |  | (3 | ) |  | (1 | ) |  | 12 |
Transfers of (assets) liabilities out of Level 3 |  | — |  |  | 1 |  |  | — |  |  | 1 |
Balance at the end of the period |  | $ | (183 | ) |  | $ | 107 |  |  | 16 |  |  | $ | (60 | )
Total gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities held at the end of the period |  | $ | 1 |  |  | $ | 34 |  |  | $ | — |  |  | $ | 35 |
| Six Months Ended June 30, 2013
| Interest Rate |  | Foreign Currency |  | Commodity |  | Total
| (in millions)
Balance at the beginning of the period | $ | (412 | ) |  | $ | 72 |  |  | $ | (1 | ) |  | $ | (341 | )
Total gains (losses) (realized and unrealized): |  |  |  |  |  |  |
Included in earnings | (4 | ) |  | 15 |  |  | 1 |  |  | 12 |
Included in other comprehensive income - derivative activity | 81 |  |  | — |  |  | — |  |  | 81 |
Included in other comprehensive income - foreign currency translation activity | 2 |  |  | (6 | ) |  | — |  |  | (4 | )
Included in regulatory (assets) liabilities | — |  |  | — |  |  | 10 |  |  | 10 |
Settlements | 48 |  |  | (2 | ) |  | (1 | ) |  | 45 |
Transfers of (assets) liabilities out of Level 3 | 222 |  |  | (9 | ) |  | — |  |  | 213 |
Balance at the end of the period | $ | (63 | ) |  | $ | 70 |  |  | $ | 9 |  |  | $ | 16 |
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 | $ | — |  |  | $ | 13 |  |  | $ | 1 |  |  | $ | 14 |
The following table summarizes the significant unobservable inputs used for the Level 3 derivative assets (liabilities) as of June 30, 2014:
Type of Derivative |  | Fair Value |  | Unobservable Input |  | Amount or Range (Weighted Average)
|  | (in millions) |  |  |  |
Interest rate |  | $ | (183 | ) |  | Subsidiaries’ credit spreads |  | 3.75% - 5.30% (4.67%) |
Foreign currency: |  |  |  |  |  |
Embedded derivative — Argentine Peso |  | 111 |  |  | Argentine Peso to U.S. Dollar currency exchange rate after 1 year |  | 8.36 - 30.60 (20.06) |
Embedded derivative — Euro |  | (4 | ) |  | Subsidiaries’ credit spreads |  | 5.3 | %
Commodity: |  |  |  |  |  |
Other |  | 16 |  |  |  |  |
Total |  | $ | (60 | ) |  |  |  |
Nonrecurring Measurements When evaluating impairment of goodwill, long-lived assets, discontinued operations and held-for-sale businesses, and equity method investments, the Company measures fair value using the applicable fair value measurement guidance. Impairment expense is measured by comparing the fair value at the evaluation date to their then-latest available carrying amount. The following table summarizes major categories of assets and liabilities measured at fair value on a nonrecurring basis during the period and their level within the fair value hierarchy:
|  | Six Months Ended June 30, 2014
|  | Carrying Amount |  | Fair Value |  | Gross Loss
|  | Level 1 |  | Level 2 |  | Level 3 |
|  | (in millions)
Assets |  |  |  |  |  |  |  |  |  |
Long-lived assets held and used:(1) |  |  |  |  |  |  |  |  |  |
DPL (East Bend) |  | $ | 14 |  |  | $ | — |  |  | $ | 2 |  |  | $ | — |  |  | $ | 12 |
Ebute |  | 99 |  |  | — |  |  | — |  |  | 47 |  |  | 52 |
UK Wind (Newfield) |  | 11 |  |  | — |  |  | — |  |  | — |  |  | 11 |
Discontinued operations and held-for-sale businesses:(2) |  |  |  |  |  |  |  |  |  |
Cameroon |  | 372 |  |  | — |  |  | 340 |  |  | — |  |  | 38 |
Equity method investments |  |  |  |  |  |  |  |  |  |
Silver Ridge Power |  | 317 |  |  | — |  |  | — |  |  | 273 |  |  | 44 |
Goodwill:(3) |  |  |  |  |  |  |  |  |  |
DPLER |  | 136 |  |  | — |  |  | — |  |  | — |  |  | 136 |
Buffalo Gap |  | 28 |  |  | — |  |  | — |  |  | 10 |  |  | 18 |
|  | Six Months Ended June 30, 2013
|  | Carrying Amount |  | Fair Value |  | Gross Loss
|  | Level 1 |  | Level 2 |  | Level 3 |
|  | (in millions)
Assets |  |  |  |  |  |  |  |  |  |
Long-lived assets held and used:(1) |  |  |  |  |  |  |  |  |  |
Beaver Valley |  | $ | 61 |  |  | $ | — |  |  | $ | — |  |  | $ | 15 |  |  | $ | 46 |
Long-lived assets held for sale:(1) |  |  |  |  |  |  |  |  |  |
Wind turbines |  | 25 |  |  | — |  |  | 25 |  |  | — |  |  | — |
Discontinued operations and held-for-sale businesses:(2) |  |  |  |  |  |  |  |  |  |  |
Ukraine utilities |  | 143 |  |  | — |  |  | 113 |  |  | — |  |  | 34 |
_____________________________
(1) | See Note 15 — Asset Impairment Expense for further information.
(2) | See Note 17 — Discontinued Operations and Held-For-Sale Businesses for further information. Also, the gross loss equals the carrying amount of the disposal group less its fair value less costs to sell.
(3) | See Note 14 — Goodwill Impairments for further information.
The following table summarizes the significant unobservable inputs used in the Level 3 measurement of long-lived assets during the six months ended June 30, 2014:
|  | Fair Value |  | Valuation Technique |  | Unobservable Input |  | Range (Weighted Average)
|  | (in millions) |  |  |  |  |  | ($ in millions)
Long-lived assets held and used: |  |  |  |  |  |  |  |
Ebute |  | $ | 47 |  |  | Discounted cash flow |  | Annual revenue growth |  | 0% to 1% (1%) |
|  |  |  |  |  | Annual pretax operating margin |  | 0% to 47% (24%) |
|  |  |  |  |  | Weighted-average cost of capital |  | 10.3 | %
Equity Method Investment: |  |  |  |  |  |  |  |
Silver Ridge Power (1) |  | 273 |  |  | Discounted cash flow |  | Annual revenue growth |  | -57% to 1% (-4%) |
|  |  |  |  |  | Annual pretax operating margin |  | -115% to 50% (6%) |
|  |  |  |  |  | Cost of equity |  | 13% to 16% (14%) |
Total |  | $ | 320 |  |  |  |  |  |  |
_____________________________ (1) The fair value for Silver Ridge Power was determined using a combination of the bid price (a level 2 input) obtained for the sale of AES’ interest in solar photovoltaic projects in operation and under development in Bulgaria, France, Greece, India and the United States, and a discounted cash flow model for the solar photovoltaic projects that were retained in Italy, Puerto Rico and Spain. Financial Instruments not Measured at Fair Value in the Condensed Consolidated Balance Sheets The following table sets forth the carrying amount, fair value and fair value hierarchy of the Company’s financial assets and liabilities that are not measured at fair value in the condensed consolidated balance sheets as of June 30, 2014 and December 31, 2013, but for which fair value is disclosed.
|  | Carrying Amount |  | Fair Value
|  | Total |  | Level 1 |  | Level 2 |  | Level 3
|  | (in millions)
June 30, 2014 |  |  |  |  |  |  |  |  |  |
Assets |  |  |  |  |  |  |  |  |  |
Accounts receivable — noncurrent(1) |  | $ | 220 |  |  | $ | 194 |  |  | $ | — |  |  | $ | — |  |  | $ | 194 |
Liabilities |  |  |  |  |  |  |  |  |  |
Non-recourse debt |  | 15,940 |  |  | 16,500 |  |  | — |  |  | 14,143 |  |  | 2,357 |
Recourse debt |  | 5,783 |  |  | 6,147 |  |  | — |  |  | 6,147 |  |  | — |
December 31, 2013 |  |  |  |  |  |  |  |  |  |
Assets |  |  |  |  |  |  |  |  |  |
Accounts receivable — noncurrent(1) |  | $ | 260 |  |  | $ | 194 |  |  | $ | — |  |  | $ | — |  |  | $ | 194 |
Liabilities |  |  |  |  |  |  |  |  |  |
Non-recourse debt |  | 15,380 |  |  | 15,620 |  |  | — |  |  | 13,397 |  |  | 2,223 |
Recourse debt |  | 5,669 |  |  | 6,164 |  |  | — |  |  | 6,164 |  |  | — |
_____________________________
(1) | These accounts receivable principally relate to amounts due from CAMMESA, the administrator of the wholesale electricity market in Argentina, and are included in “Noncurrent assets — Other” in the accompanying condensed consolidated balance sheets. The fair value and carrying amount of these accounts receivable exclude value-added tax of $38 million and $46 million at June 30, 2014 and December 31, 2013, respectively.

X
- Details
Name: | us-gaap_FairValueDisclosuresAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=28364263&loc=d3e13537-108611 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=28364263&loc=d3e13433-108611 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 28 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14064-108612 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=25499696&loc=d3e19207-110258 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 16 -URI http://asc.fasb.org/extlink&oid=28364263&loc=d3e13504-108611 + Details
Name: | us-gaap_FairValueDisclosuresTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration