EQUITY

Changes in Equity — The following table provides a reconciliation of the beginning and ending equity attributable to stockholders of The AES Corporation, noncontrolling interests and total equity as of the periods indicated:



	Six Months Ended June 30, 2015									Six Months Ended June 30, 2014
	The AES Corporation Stockholders’ Equity			Noncontrolling Interests			Total Equity			The AES Corporation Stockholders’ Equity			Noncontrolling Interests			Total Equity
	(in millions)
Balance at the beginning of the period	$	4,272		$	3,053		$	7,325		$	4,330		$	3,321		$	7,651
Net income	211			307			518			75			266			341
Total foreign currency translation adjustment, net of income tax	(204		)	(140		)	(344		)	(56		)	38			(18		)
Total change in derivative fair value, net of income tax	30			(1		)	29			(99		)	(94		)	(193		)
Total pension adjustments, net of income tax	2			7			9			14			17			31
Cumulative effect of a change in accounting principle	(5		)	—			(5		)	—			—			—
Capital contributions from noncontrolling interests	—			97			97			—			113			113
Distributions to noncontrolling interests	—			(119		)	(119		)	—			(215		)	(215		)
Acquisition of business ⁽¹⁾	—			16			16			—			—			—
Disposition of businesses	—			—			—			—			(151		)	(151		)
Acquisition of treasury stock	(307		)	—			(307		)	(32		)	—			(32		)
Issuance and exercise of stock-based compensation benefit plans, net of income tax	17			—			17			16			—			16
Dividends declared on common stock	(70		)	—			(70		)	(36		)	—			(36		)
Sale of subsidiary shares to noncontrolling interests	(82		)	—			(82		)	—			—			—
Transaction between entities under common control	—			—			—			5			2			7
Acquisition of subsidiary shares from noncontrolling interests	—			—			—			(6		)	—			(6		)
Balance at the end of the period	$	3,864		$	3,220		$	7,084		$	4,211		$	3,297		$	7,508

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⁽¹⁾Fair value of a tax equity partner’s right to preferential returns as a result of the acquisition of Solar Power PR, LLC (Solar Puerto Rico), which was previously accounted for as an equity method investment.

Equity Transactions with Noncontrolling Interests

IPALCO — On December 14, 2014, the Company executed sale and subscription agreements with CDPQ, whereby in the first quarter of 2015, CDPQ acquired a 15% noncontrolling interest in AES US Investments, Inc., a wholly-owned subsidiary, for $247 million. Prior to these agreements, AES US Investments, Inc. owned 100% of IPALCO. Under the subscription agreement, CDPQ committed to 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. In April 2015, CDPQ invested $214 million of the $349 million in IPALCO, which resulted in CDPQ’s combined equity interest in IPALCO to be 24.90%. Upon investing the remaining commitment of $135 million, CDPQ's equity interests in IPALCO will total 30%.

As a result of these transactions, $82 million in taxes and transaction costs were recognized as a net decrease to equity. The Company also recognized an increase of $377 million to additional paid-in capital and a reduction to retained earnings of $377 million for the excess of the fair value of the shares over their book value. Since the noncontrolling interest is contingently redeemable, the fair value of the consideration received of $461 million is classified in temporary equity as redeemable stock of subsidiaries on the Condensed Consolidated Balance Sheets. No gain or loss was recognized in net income as the sale is not considered to be a sale of in-substance real estate. Any subsequent adjustments to allocate earnings and dividends to CDPQ will be classified as noncontrolling interest within permanent equity and adjustments to the amount in temporary equity will occur only if and when it is probable that the shares will become redeemable. As the Company maintained control after the sale, IPALCO continues to be accounted for as a consolidated subsidiary within the US SBU reportable segment.

Jordan — On March 15, 2015, the Company executed an agreement to sell 40% of its interest in a wholly owned subsidiary in Jordan that owns a controlling interest in the 247 MW Jordan IPP4 gas-fired plant for $30 million. The sale is expected to be completed during 2015.

Accumulated Other Comprehensive Loss — See below for the changes in AOCL by component, net of tax and noncontrolling interests, for the six months ended June 30, 2015:



	Unrealized derivative gains (losses), net			Unfunded pension obligations, net			Foreign currency translation adjustment, net			Total
	(in millions)
Balance at the beginning of the period	$	(396	)	$	(295	)	$	(2,595	)	$	(3,286	)
Other comprehensive income (loss) before reclassifications	18			—			(204		)	(186		)
Amount reclassified to earnings	12			2			—			14
Other comprehensive income (loss)	30			2			(204		)	(172		)
Cumulative effect of a change in accounting principle	—			—			13			13
Balance at the end of the period	$	(366	)	$	(293	)	$	(2,786	)	$	(3,445	)

Reclassifications out of AOCL for the periods indicated were as follows:



Details About		Three Months Ended June 30,						Six Months Ended June 30,
AOCL Components	Affected Line Item in the Condensed Consolidated Statements of Operations	2015			2014			2015			2014
Foreign currency translation adjustment, net		(in millions) ⁽¹⁾
	Net loss from disposal and impairments of discontinued businesses	—			53			—			$	47
	Net income attributable to The AES Corporation	$	—		$	53		$	—		$	47
Unrealized derivative gains (losses), net
	Non-regulated revenue	$	10		$	6		$	15		$	19
	Non-regulated cost of sales	(5		)	(3		)	(5		)	$	(2	)
	Interest expense	(15		)	(31		)	(40		)	(63		)
	Foreign currency transaction gains (losses)	2			7			8			4
	Income from continuing operations before taxes and equity in earnings of affiliates	(8		)	(21		)	(22		)	(42		)
	Income tax expense	1			10			3			13
	Net equity in earnings of affiliates	—			(2		)	—			(3		)
	Income from continuing operations	(7		)	(13		)	(19		)	(32		)
	Income from continuing operations attributable to noncontrolling interests	4			15			7			15
	Net income attributable to The AES Corporation	$	(3	)	$	2		$	(12	)	$	(17	)
Amortization of defined benefit pension actuarial loss, net
	Regulated cost of sales	$	(6	)	$	(9	)	$	(14	)	$	(17	)
	Non-regulated cost of sales	—			1			—			—
	Other income	—			(2		)	—			(2		)
	Income from continuing operations before taxes and equity in earnings of affiliates	(6		)	(10		)	(14		)	(19		)
	Income tax expense	2			(2		)	5			1
	Income from continuing operations	(4		)	(12		)	(9		)	(18		)
	Net loss from disposal and impairments of discontinued businesses	—			2			—			2
	Net income	(4		)	(10		)	(9		)	(16		)
	Income from continuing operations attributable to noncontrolling interests	3			7			7			11
	Net income attributable to The AES Corporation	$	(1	)	$	(3	)	$	(2	)	$	(5	)
Total reclassifications for the period, net of income tax and noncontrolling interests		$	(4	)	$	52		$	(14	)	$	25

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⁽¹⁾	Amounts in parentheses indicate debits to the Condensed Consolidated Statements of Operations.

Common Stock Dividends

The Company paid dividends of $0.10 per outstanding share to its common stockholders during each of the first and second quarters of 2015 for dividends declared in December 2014 and April 2015, respectively. For information on dividends declared after the second quarter of 2015, see Note 20—Subsequent Events.

Secondary Offering and Concurrent Stock Repurchase

On May 18, 2015, the Parent Company completed an underwritten secondary public offering (the “Offering”) of 60 million shares of its common stock by the Terrific Investment Corporation (the “Selling Stockholder”), a subsidiary controlled by China Investment Corporation at a price of $13.25 per share. Of the 60 million shares, 40 million were sold to the market and 20 million were reserved to be repurchased by the Parent Company. The Parent Company did not receive any of the proceeds from the Offering and the Selling Stockholder has fully sold its stake in AES common stock. Concurrent with this offering, on May 18, 2015, the Parent Company completed the repurchase of the 20 million shares of its common stock from the Selling Stockholder at a price per share of $13.07, for an aggregate purchase price of $261 million.

Stock Repurchase Program

During the three months ended June 30, 2015, the Parent Company repurchased 20.8 million shares of its common stock (including the 20 million share repurchase in May referenced above) at a total cost of $271 million under the existing stock repurchase program (the “Program”). The cumulative repurchases from the commencement of the Program in July 2010 through June 30, 2015 totaled 129.5 million shares for a total cost of $1.6 billion, at an average price per share of $12.47 (including a nominal amount of commissions). As of June 30, 2015, $117 million remained available for repurchase under the Program. For information on stock repurchases after the second quarter of 2015, see Note 20—Subsequent Events.