SEGMENTS

The segment reporting structure uses the Company’s management reporting structure as its foundation to reflect how the Company manages the business internally and is organized by geographic regions which provide better socio-political-economic understanding of our business. The management reporting structure is organized along six strategic business units (“SBUs”) — led by our Chief Executive Officer (“CEO”). Using the accounting guidance on segment reporting, the Company has determined that it has six reportable segments corresponding to its six SBUs:


•	US SBU;


•	Andes SBU;


•	Brazil SBU;


•	MCAC SBU;


•	EMEA SBU; and


•	Asia SBU

Corporate and Other — Silver Ridge Power (formerly AES Solar Holding Company) 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. “Corporate and Other” also includes corporate overhead costs which are not directly associated with the operations of our six reportable segments and other intercompany charges such as self-insurance premiums which are fully eliminated in consolidation.

The Company uses Adjusted PTC as its primary segment performance measure. Adjusted PTC, a non-GAAP measure, is defined by the Company as pretax income from continuing operations attributable to AES excluding unrealized gains or losses related to derivative transactions, unrealized foreign currency gains or losses, gains or losses due to dispositions and acquisitions of business interests, losses due to impairments and costs due to the early retirement of debt. The Company has concluded that Adjusted PTC best reflects the underlying business performance of the Company and is the most relevant measure considered in the Company’s internal evaluation of the financial performance of its segments. Additionally, given its large number of businesses and complexity, the Company concluded that Adjusted PTC is a more transparent measure that better assists the investors in determining which businesses have the greatest impact on the overall Company results.

Corporate allocations include certain self-insurance activities which are reflected within segment Adjusted PTC. All intra-segment activity has been eliminated with respect to revenue and Adjusted PTC 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 June 30, 2014 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 periods indicated was as follows:



Revenue	Total Revenue				Intersegment						External Revenue
Three Months Ended June 30,	2014		2013		2014			2013			2014		2013
	(in millions)
US SBU	$	893	$	858	$	—		$	—		$	893	$	858
Andes SBU	724		725		(1		)	—			723		725
Brazil SBU	1,533		1,230		—			—			1,533		1,230
MCAC SBU	692		694		—			—			692		694
EMEA SBU	305		295		—			—			305		295
Asia SBU	163		142		—			—			163		142
Corporate and Other	5		3		(3		)	(2		)	2		1
Total Revenue	$	4,315	$	3,947	$	(4	)	$	(2	)	$	4,311	$	3,945



Revenue	Total Revenue				Intersegment						External Revenue
Six Months Ended June 30,	2014		2013		2014			2013			2014		2013
	(in millions)
US SBU	$	1,894	$	1,744	$	—		$	—		$	1,894	$	1,744
Andes SBU	1,344		1,415		(1		)	—			1,343		1,415
Brazil SBU	2,978		2,659		—			—			2,978		2,659
MCAC SBU	1,330		1,363		(1		)	—			1,329		1,363
EMEA SBU	696		638		—			—			696		638
Asia SBU	331		275		—			—			331		275
Corporate and Other	7		4		(5		)	(3		)	2		1
Total Revenue	$	8,580	$	8,098	$	(7	)	$	(3	)	$	8,573	$	8,095



	Total Adjusted Pretax Contribution						Intersegment						External Adjusted Pretax Contribution
Adjusted Pretax Contribution ⁽¹⁾	Total Adjusted Pretax Contribution						Intersegment						External Adjusted Pretax Contribution
Three Months Ended June 30,	2014			2013			2014			2013			2014			2013
	(in millions)
US SBU	$	80		$	63		$	3		$	3		$	83		$	66
Andes SBU	104			88			1			4			105			92
Brazil SBU	115			78			—			—			115			78
MCAC SBU	95			104			10			4			105			108
EMEA SBU	73			72			3			2			76			74
Asia SBU	23			40			—			—			23			40
Corporate and Other	(150		)	(156		)	(17		)	(13		)	(167		)	(169		)
Total Adjusted Pretax Contribution	$	340		$	289		$	—		$	—		$	340		$	289
Reconciliation to Income from Continuing Operations before Taxes and Equity Earnings of Affiliates:
Non-GAAP Adjustments:
Unrealized derivative gains (losses)													22			53
Unrealized foreign currency gains (losses)													(7		)	(23		)
Disposition/acquisition gains (losses)													(2		)	23
Impairment losses													(99		)	—
Loss on extinguishment of debt													(13		)	(164		)
Pretax contribution													241			178
Add: income from continuing operations before taxes, attributable to noncontrolling interests													197			231
Less: Net equity in earnings of affiliates													20			2
Income from continuing operations before taxes and equity in earnings of affiliates													$	418		$	407



	Total Adjusted Pretax Contribution						Intersegment						External Adjusted Pretax Contribution
Adjusted Pretax Contribution ⁽¹⁾	Total Adjusted Pretax Contribution						Intersegment						External Adjusted Pretax Contribution
Six Months Ended June 30,	2014			2013			2014			2013			2014			2013
	(in millions)
US SBU	$	155		$	196		$	6		$	5		$	161		$	201
Andes SBU	157			169			4			7			161			176
Brazil SBU	184			120			1			1			185			121
MCAC SBU	160			160			14			7			174			167
EMEA SBU	188			168			6			5			194			173
Asia SBU	31			71			1			1			32			72
Corporate and Other	(292		)	(325		)	(32		)	(26		)	(324		)	(351		)
Total Adjusted Pretax Contribution	$	583		$	559		$	—		$	—		$	583		$	559
Reconciliation to Income from Continuing Operations before Taxes and Equity Earnings of Affiliates:
Non-GAAP Adjustments:
Unrealized derivative gains (losses)													32			39
Unrealized foreign currency gains (losses)													(33		)	(49		)
Disposition/acquisition gains (losses)													(1		)	26
Impairment losses													(265		)	(48		)
Loss on extinguishment of debt													(147		)	(207		)
Pretax contribution													169			320
Add: income from continuing operations before taxes, attributable to noncontrolling interests													412			403
Less: Net equity in earnings of affiliates													45			6
Income from continuing operations before taxes and equity in earnings of affiliates													$	536		$	717

_____________________________


⁽¹⁾	Adjusted pretax contribution in each segment before intersegment eliminations includes the effect of intercompany transactions with other segments except for interest, charges for certain management fees and the write-off of intercompany balances.

Assets by segment as of the periods indicated were as follows:



	Total Assets
	June 30, 2014		December 31, 2013
Assets	(in millions)
US SBU	$	9,835	$	9,952
Andes SBU	7,458		7,356
Brazil SBU	9,144		8,388
MCAC SBU	5,060		5,075
EMEA SBU	4,240		4,191
Asia SBU	2,953		2,810
Discontinued businesses	—		1,718
Corporate and Other & eliminations	743		921
Total Assets	$	39,433	$	40,411