XML 191 R26.htm IDEA: XBRL DOCUMENT v2.4.1.9
Equity
 12 Months Ended
Dec. 31, 2014
Equity [Abstract]  
Equity
EQUITY
Equity Transactions with Noncontrolling Interests
Dominican Republic — On September 2, 2014, the Company executed an agreement with the Estrella and Linda Groups, an investor-based group in the Dominican Republic, to form a strategic partnership. Under the terms of the agreement, the Estrella and Linda Groups acquired an 8% noncontrolling interest in our businesses in the Dominican Republic for $84 million, with options to acquire an additional 2% for $24 million at any time between the closing date and December 31, 2015, and an additional 10% for $125 million at any time between the closing date and December 31, 2016. The transaction closed on December 19, 2014. As a result of this transaction, $29 million was recognized in equity as Additional Paid-In Capital and no gain or loss was recognized in net income as the sale is not considered to be a sale of in-substance real estate. As the Company maintained control after the sale, our businesses in the Dominican Republic continue to be consolidated by the Company within the MCAC SBU reportable segment.
Masinloc — On June 25, 2014, the Company executed an agreement to sell approximately 45% of its interest in Masin-AES Pte Ltd., a wholly-owned subsidiary that owns the Company's business interests in the Philippines, for $453 million, subject to certain purchase price adjustments. On July 15, 2014, the Company completed the Masinloc sale transaction and received cumulative net proceeds of $436 million, including $23 million contingent upon the achievement of certain restructuring efficiencies. The transaction was accounted for as a sale of in-substance real estate. Noncontrolling interest of $130 million and a pretax gain on sale of investment of approximately $283 million, net of transaction costs, were recognized during the third quarter of 2014. The portion of the proceeds related to the contingency has been deferred.
After completion of the sale, the Company owns a 51% net ownership interest in Masinloc and will continue to manage and operate the plant, with 41% owned by Electricity Generating Public Company Limited and 8% owned by the International Finance Corporation. As the Company maintained control after the sale, Masinloc continues to be accounted for as a consolidated subsidiary within the Asia SBU reportable segment.
IPALCO — On December 15, 2014, the Company executed an agreement with La Caisse de depot et placement du Quebec ("CDPQ"). Under the agreement, CDPQ will purchase 15% of AES US Investment, Inc., a wholly-owned subsidiary that owns 100% of IPALCO Enterprises, Inc. ("IPALCO"), for $247 million . This transaction closed on February 11, 2015. Under the agreement, CDPQ will invest an additional $349 million in IPALCO through 2016 in exchange for a 17.65% equity stake, by funding existing growth and environmental projects at Indianapolis Power & Light Company. Upon completion of these transactions, CDPQ's direct and indirect interests in IPALCO will total 30%. As the Company maintained control after the sale, IPALCO continues to be accounted for as a consolidated subsidiary within the US SBU reportable segment.
The following table summarizes the net income (loss) attributable to The AES Corporation and all transfers (to) from noncontrolling interests for the periods indicated:
 
 
December 31,
 
 
2014
 
2013
 
 
(in millions)
Net income (loss) attributable to The AES Corporation
 
$
769

 
$
114

Transfers (to) from the noncontrolling interest:
 
 
 
 
Net increase in The AES Corporation's paid-in capital for sale of subsidiary shares
 
29

 
16

Increase (decrease) in The AES Corporation's paid-in capital for purchase of subsidiary shares
 
7

 
(6
)
Net transfers (to) from noncontrolling interest
 
36

 
10

Change from net income attributable to The AES Corporation and transfers (to) from noncontrolling interests
 
$
805

 
$
124


Accumulated Other Comprehensive Loss
The changes in AOCL by component, net of tax and noncontrolling interests for the year ended December 31, 2014 were as follows:
 
 
Foreign currency translation adjustment, net
 
Unrealized derivative losses, net
 
Unfunded pension obligations, net
 
Total
 
 
(in millions)
Balance at the beginning of the period
 
$
(2,284
)
 
$
(307
)
 
$
(291
)
 
$
(2,882
)
Other comprehensive loss before reclassifications
 
(366
)
 
(180
)
 
(14
)
 
(560
)
Amount reclassified to earnings
 
$
34

 
$
72

 
$
10

 
116

Other comprehensive loss
 
(332
)
 
(108
)
 
(4
)
 
(444
)
Balance sheet reclassification related to an equity method investment (1)
 
$
21

 
$
19

 
$
—

 
$
40

Balance at the end of the period
 
(2,595
)
 
(396
)
 
(295
)
 
(3,286
)

(1) Reclassification resulting from Silver Ridge transaction. See Note 8—Investments In and Advances to Affiliates for further information.
Reclassifications out of accumulated other comprehensive loss for the periods indicated were as follows:
Details About
 
 
 
December 31,
AOCL Components
 
Affected Line Item in the Consolidated Statements of Operations
 
2014
 
2013
Foreign currency translation adjustment, net
 
(in millions) (1)
 
 
Gain on sale of investments
 
$
4

 
$
(2
)
 
 
Net gain (loss) from disposal and impairments of discontinued operations
 
(38
)
 
(35
)
 
 
Net income (loss) attributable to The AES Corporation
 
$
(34
)
 
$
(37
)
Unrealized derivative losses, net
 
 
 
 
Non-regulated revenue
 
$
30

 
$
(3
)
 
 
Non-regulated cost of sales
 
(4
)
 
(7
)
 
 
Interest expense
 
(139
)
 
(137
)
 
 
Gain on disposal and sale of investments
 
—

 
(21
)
 
 
Foreign currency transaction gains (losses)
 
(9
)
 
(6
)
 
 
Income from continuing operations before taxes and equity in earnings of affiliates
 
(122
)
 
(174
)
 
 
Income tax expense
 
26

 
41

 
 
Net equity in earnings of affiliates
 
(3
)
 
(6
)
 
 
Income (loss) from continuing operations
 
(99
)
 
(139
)
 
 
Less: (Income) from continuing operations attributable to noncontrolling interests
 
27

 
11

 
 
Net income (loss) attributable to The AES Corporation
 
$
(72
)

$
(128
)
Amortization of defined benefit pension actuarial loss, net
 
 
 
 
Regulated cost of sales
 
$
(33
)
 
$
(73
)
 
 
Non-regulated cost of sales
 
(5
)
 
(4
)
 
 
General and administrative expenses
 
—

 
(1
)
 
 
Income from continuing operations before taxes and equity in earnings of affiliates
 
(38
)

(78
)
 
 
Income tax expense
 
7

 
26

 
 
Income (loss) from continuing operations
 
(31
)

(52
)
 
 
Net gain (loss) from disposal and impairments of discontinued operations
 
2

 
—

 
 
Net Income (Loss)
 
(29
)
 
(52
)
 
 
Less: (Income) from continuing operations attributable to noncontrolling interests
 
19

 
39

 
 
Net income (loss) attributable to The AES Corporation
 
$
(10
)

$
(13
)
Total reclassifications for the period, net of income tax and noncontrolling interests
 
$
(116
)

$
(178
)
_____________________________
(1) 
Amounts in parentheses indicate debits to the consolidated statements of operations.
Common Stock Dividends
The Company paid dividends of $0.05 per outstanding share to its common stockholders during the first, second, third and fourth quarters of 2014. On December 12, 2014, the Board of Directors declared a quarterly common stock dividend of $0.10 per share payable on February 17, 2015 to shareholders of record at the close of business on February 3, 2015.
Stock Repurchase Program
In July 2014, the Company's Board of Directors authorized an increase to the Company's common stock repurchase program (the "Program") for up to an additional $140 million of repurchases of the Company's common stock, bringing the cumulative total of authorized repurchases under the Program to $1.3 billion.
During the year ended December 31, 2014, the Company repurchased 21,900,246 shares of its common stock under the Program at a total cost of $308 million. At December 31, 2014, the cumulative repurchases under the Program totaled 105,912,477 shares for a total cost of $1.3 billion, at an average price per share of $12.37 (including a nominal amount of commissions). As of December 31, 2014, $24 million remained available for repurchase under the Program.
The common stock repurchased has been classified as treasury stock and accounted for using the cost method. A total of 110,687,849 and 90,808,168 shares were held as treasury stock at December 31, 2014 and 2013, respectively. Restricted stock units under the Company’s employee benefit plans are issued from treasury stock. The Company has not retired any common stock repurchased since it began the Program in July 2010.
Subsequent to December 31, 2014, the Company repurchased an additional 1,892,432 shares at a cost of $24 million, bringing the cumulative repurchases total through February 25, 2015 to 107,804,909 shares at a total cost of $1.3 billion, at an average price per share of $12.37 (including a nominal amount of commissions).
In addition, the Company’s Board of Directors recently authorized the repurchase of up to $400 million of the Company’s common stock in one or more transactions, including through open market repurchases, Rule 10b5-1 plans and privately negotiated transactions. There can be no assurances as to the amount, timing or prices of repurchases, which may vary based on market conditions and other factors. The Program does not have an expiration date and it can be modified or terminated by the Company’s Board at any time. As of February 25, 2015, $400 million remains available under the Program.