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:



	Three Months Ended March 31, 2015									Three Months Ended March 31, 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 (loss)	142			112			254			(58		)	124			66
Total foreign currency translation adjustment, net of income tax	(251		)	(170		)	(421		)	(40		)	51			11
Total change in derivative fair value, net of income tax	(26		)	(34		)	(60		)	(47		)	(54		)	(101		)
Total pension adjustments, net of income tax	1			4			5			2			4			6
Cumulative effect of a change in accounting principle	(5		)	—			(5		)	—			—			—
Capital contributions from noncontrolling interests	—			67			67			—			31			31
Distributions to noncontrolling interests	—			(19		)	(19		)	—			(24		)	(24		)
Disposition of businesses	—			—			—			—			(5		)	(5		)
Acquisition of treasury stock	(35		)	—			(35		)	—			—			—
Issuance and exercise of stock-based compensation benefit plans, net of income tax	5			—			5			6			—			6
Sale of subsidiary shares to noncontrolling interests	(81		)	—			(81		)	—			—			—
Balance at the end of the period	$	4,022		$	3,013		$	7,035		$	4,193		$	3,448		$	7,641

Equity Transactions with Noncontrolling Interests

IPALCO — On December 15, 2014, the Company executed a sale agreement with CDPQ which closed on February 11, 2015. Under the agreement, CDPQ acquired a 15% noncontrolling interest in AES US Investments, Inc., a wholly-owned subsidiary that owns 100% of IPALCO, for $247 million. As a result of this transaction, $81 million in taxes and transaction costs were recognized as a net decrease to equity. Additionally, the Company recognized an increase of $214 million to Additional paid-in capital and a reduction to Retained earnings of $214 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 $247 million was 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.

Under the sale agreement executed on December 15, 2014, CDPQ will also 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%. On April 1, 2015, as discussed in Note 19—Subsequent Events, CDPQ invested an additional $214 million of the $349 million in IPALCO. This additional investment resulted in CDPQ’s combined direct and indirect interest in IPALCO to be 24.90%. The Company is currently evaluating the accounting implications of this transaction.

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 the Company’s business indirect interest in the 247 MW Jordan IPP4 gas-fired plant for $30 million. The sale is expected to be completed during 2015. The Company is currently evaluating the 2015 accounting implications of this sale.

Accumulated Other Comprehensive Loss

The changes in AOCL by component, net of tax and noncontrolling interests, for the three months ended March 31, 2015 were as follows:



	Unrealized derivative 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 (loss) before reclassifications	(35		)	—			(251		)	(286		)
Amount reclassified to earnings	9			1			—			10
Other comprehensive income (loss)	(26		)	1			(251		)	(276		)
Cumulative effect of a change in accounting principle	—			—			13			13
Balance at the end of the period	$	(422	)	$	(294	)	$	(2,833	)	$	(3,549	)

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



		Three Months Ended March 31,
Details About AOCL Components	Affected Line Item in the Condensed Consolidated Statements of Operations	2015			2014
		(in millions) ⁽¹⁾
Foreign currency translation adjustment, net
	Net loss from disposal and impairments of discontinued businesses	—			(6		)
	Net income (loss) attributable to The AES Corporation	$	—		$	(6	)
Unrealized derivative losses, net
	Non-regulated revenue	$	5		$	13
	Non-regulated cost of sales	—			1
	Interest expense	(25		)	(32		)
	Foreign currency transaction losses	6			(3		)
	Income from continuing operations before taxes and equity in earnings of affiliates	(14		)	(21		)
	Income tax expense	2			3
	Net equity in earnings of affiliates	—			(1		)
	Income from continuing operations	(12		)	(19		)
	Income from continuing operations attributable to noncontrolling interests	3			—
	Net income (loss) attributable to The AES Corporation	$	(9	)	$	(19	)
Amortization of defined benefit pension actuarial loss, net
	Regulated cost of sales	$	(8	)	$	(8	)
	Non-regulated cost of sales	—			(1		)
	Income from continuing operations before taxes and equity in earnings of affiliates	(8		)	(9		)
	Income tax expense	3			3
	Income from continuing operations	(5		)	(6		)
	Net income	(5		)	(6		)
	Income from continuing operations attributable to noncontrolling interests	4			4
	Net income (loss) attributable to The AES Corporation	$	(1	)	$	(2	)
Total reclassifications for the period, net of income tax and noncontrolling interests		$	(10	)	$	(27	)

_____________________________


⁽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 the first quarter of 2015 for dividends declared in the fourth quarter of 2014. For information on dividends declared after the first quarter of 2015, see Note 19—Subsequent Events.

Stock Repurchase Program

During the three months ended March 31, 2015, the Company repurchased 2,816,493 shares of its common stock at a total cost of $35 million under the existing stock repurchase program (the “Program”). At March 31, 2015, the cumulative repurchases under the Program totaled 108,728,970 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 March 31, 2015, $388 million remained available for repurchase under the Program. For information on stock repurchases after the first quarter of 2015, see Note 19—Subsequent Events.