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:



	Nine Months Ended September 30, 2014									Nine Months Ended September 30, 2013
	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	$	4,330		$	3,321		$	7,651		$	4,569		$	2,945		$	7,514
Net income	563			286			849			320			435			755
Total change in fair value of available-for-sale securities, net of income tax	(1		)	—			(1		)	—			—			—
Total foreign currency translation adjustment, net of income tax	(269		)	(82		)	(351		)	(158		)	(65		)	(223		)
Total change in derivative fair value, net of income tax	(79		)	(106		)	(185		)	151			54			205
Total pension adjustments, net of income tax	15			21			36			9			30			39
Balance sheet reclassification related to an equity method investment ⁽¹⁾	40			—			40			—			—			—
Capital contributions from noncontrolling interests	—			131			131			—			86			86
Distributions to noncontrolling interests	—			(380		)	(380		)	—			(382		)	(382		)
Disposition of businesses	—			(152		)	(152		)	—			(20		)	(20		)
Acquisition of treasury stock	(140		)	—			(140		)	(63		)	—			(63		)
Issuance and exercise of stock-based compensation benefit plans, net of income tax	23			—			23			39			—			39
Dividends declared on common stock ⁽²⁾	(72		)	—			(72		)	(60		)	—			(60		)
Sale of subsidiary shares to noncontrolling interests	—			130			130			12			71			83
Acquisition of subsidiary shares from noncontrolling interests	(13		)	—			(13		)	(6		)	(1		)	(7		)
Balance at the end of the period	$	4,397		$	3,169		$	7,566		$	4,813		$	3,153		$	7,966

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⁽¹⁾Reclassification resulting from Silver Ridge Power transaction. See Note 7 — Investments In and Advances to Affiliates for further information.

⁽²⁾Dividends price per share was $0.10 and $0.08 as of September 30, 2014 and September 30, 2013, respectively.

Equity Transactions with Noncontrolling Interests

Dominican Republic — In September 2014, the Company executed an agreement with the Estrella-Linda group, an investor-based group in the Dominican Republic, to form a strategic partnership. Under the terms of the agreement, Estrella Linda will acquire an 8% noncontrolling interest in our businesses in the Dominican Republic for $96 million, with an option to acquire an additional 2% for $24 million at any time between closing date and December 31, 2015, and an additional 10% for $125 million at any time between closing date and December 31, 2016. The transaction is expected to close during the fourth quarter of 2014, subject to customary closing conditions. The Company is still evaluating the fourth quarter accounting implications of this transaction.

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 net proceeds of $443 million, including $23 million contingent upon the achievement of certain restructuring efficiencies. The transaction was accounted for as a sale of real estate. Noncontrolling interest of $130 million and a pretax gain of approximately $283 million, net of transaction costs, was recognized as a gain on sale of investment during the third quarter of 2014. The portion of the gain related to the contingency has been deferred.

After completion of the sale, the Company continues to own 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 (EGCO Group) and 8% owned by the International Finance Corporation (IFC). As the Company maintained control after the sale, Masinloc will continue to be accounted for as a consolidated subsidiary within the Asia SBU reportable segment.

Accumulated Other Comprehensive Loss

The changes in AOCL by component, net of tax and noncontrolling interests for the nine months ended September 30, 2014 were as follows:



	Unrealized derivative losses, net			Unfunded pension obligations, net			Foreign currency translation adjustment, net			Available-for-sale securities, net			Total
	(in millions)
Balance at the beginning of the period	$	(307	)	$	(291	)	$	(2,284	)	—			$	(2,882	)
Other comprehensive income (loss) before reclassifications	(131		)	8			(218		)	(1		)	(342		)
Amount reclassified to earnings	52			7			(51		)	—			8
Other comprehensive income	(79		)	15			(269		)	(1		)	(334		)
Balance sheet reclassification related to an equity method investment ⁽¹⁾	19			—			21			—			40
Balance at the end of the period	$	(367	)	$	(276	)	$	(2,532	)	$	(1	)	$	(3,176	)

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⁽¹⁾Reclassification resulting from Silver Ridge transaction. See Note 7 — Investments In and Advances to Affiliates for further information.

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



		Three Months Ended September 30,						Nine Months Ended September 30,
Details About AOCL Components	Affected Line Item in the Condensed Consolidated Statement of Operations	2014			2013			2014			2013
		(in millions) ⁽¹⁾
Unrealized derivative losses, net
	Non-regulated revenue	$	4		$	(3	)	$	23		$	(4	)
	Non-regulated cost of sales	(2		)	(2		)	(4		)	(4		)
	Interest expense	(39		)	(36		)	(102		)	(105		)
	Gain on sale of investments	—			—			—			(21		)
	Foreign currency transaction gains (losses)	(17		)	7			(13		)	(3		)
	Income from continuing operations before taxes and equity in earnings of affiliates	(54		)	(34		)	(96		)	(137		)
	Income tax expense	10			8			23			30
	Net equity in earnings of affiliates	—			(1		)	(3		)	(5		)
	Income from continuing operations	(44		)	(27		)	(76		)	(112		)
	Income from continuing operations attributable to noncontrolling interests	9			2			24			15
	Net income attributable to The AES Corporation	$	(35	)	$	(25	)	$	(52	)	$	(97	)
Amortization of defined benefit pension actuarial loss, net
	Regulated cost of sales	$	(8	)	$	(17	)	$	(25	)	$	(56	)
	Non-regulated cost of sales	—			(1		)	—			(3		)
	Other income	—			—			(2		)	—
	Income from continuing operations before taxes and equity in earnings of affiliates	(8		)	(18		)	(27		)	(59		)
	Income tax expense	3			6			4			20
	Income from continuing operations	(5		)	(12		)	(23		)	(39		)
	Net loss from disposal and impairments of discontinued businesses	—			9			2			30
	Net income	(5		)	(3		)	(21		)	(9		)
	Income from continuing operations attributable to noncontrolling interests	3			—			14			—
	Net income attributable to The AES Corporation	$	(2	)	$	(3	)	$	(7	)	$	(9	)
Available-for-sale securities, net
	Interest income	$	—		$	—		$	—		$	(1	)
	Net income attributable to The AES Corporation	$	—		$	—		$	—		$	(1	)
Foreign currency translation adjustment, net
	Gain on sale of investments	$	4		$	—		$	4		$	(1	)
	Net loss from disposal and impairments of discontinued businesses	—			—			47			(35		)
	Net income attributable to The AES Corporation	$	4		$	—		$	51		$	(36	)
Total reclassifications for the period, net of income tax and noncontrolling interests		$	(33	)	$	(28	)	$	(8	)	$	(143	)

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⁽¹⁾ Amounts in parentheses indicate debits to the condensed consolidated statement of operations.

Stock Repurchase Program

During the three months ended September 30, 2014, the Company repurchased 7,378,387 shares of AES common stock at a cost of $108 million under the existing stock repurchase program (the "Program"). The cumulative repurchases since the Program commenced in July 2010 has totaled 93,696,331 shares at a total cost of $1.1 billion, which includes a nominal amount of commissions (average price per share of $12.18, including commissions). The Company has not retired any shares repurchased under the Program.

The Company's Board of Directors recently authorized a further increase in the Program by an additional $140 million, which increased the total remaining amount for repurchases of AES common stock from $52 million to $192 million as of September 30, 2014.

Subsequent to September 30, 2014, the Company repurchased an additional 2,960,908 shares at a cost of $42 million, bringing the cumulative repurchases total through November 5, 2014 to 96,657,239 shares at a total cost of $1.2 billion (average price of $12.25 per share including commissions). As of November 5, 2014, $150 million remains available under the Program.