Equity

12 Months Ended

Dec. 31, 2015

Equity [Abstract]

Equity

EQUITY

Equity Transactions with Noncontrolling Interests

Brazil Reorganization — In 2015, the Company completed a restructuring of AES Brasiliana. This transaction resulted in no change of ownership or control. The $27 million impact of this equity transaction was recognized in additional paid-in capital.

Gener — On November 18, 2015, the Company sold a 4% stake in AES Gener S.A. ("Gener") through its 99.9% owned subsidiary inversions Cachagua S.p.A ("Cachagua") for $145 million, net of transaction costs. The sale was of previously issued common shares of Gener to certain institutional investors and is not a sale of in-substance real estate. While the sale decreased Parent ownership interest from 70.7% to 66.7%, the Parent continues to retain its controlling financial interest in the subsidiary. The difference of $24 million between the fair value of the consideration received, net of taxes and transaction costs, and the amount by which the NCI is adjusted was recognized in additional paid-in capital. No pretax gain or loss was recognized in net income as a result 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 a controlling interest in the Jordan IPP4 gas-fired plant for $30 million. The sale was completed on February 18, 2016. See Note 30—Subsequent Events for further information.

IPALCO — In February 2015, La Caisse de depot et placement du Quebec ("CDPQ") purchased 15% of AES US Investment, Inc., a wholly-owned subsidiary that owns 100% of IPALCO Enterprises, Inc. ("IPALCO"), for $247 million, with an option to invest an additional $349 million in IPALCO through 2016 in exchange for a 17.65% equity stake. 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, $84 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 $460 million, net of proportional dividends, is classified in temporary equity as redeemable stock of subsidiaries on the Consolidated Balance Sheets. No gain or loss was recognized in net income as the sale was 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.

Dominican Republic — In December 2014 Estrella and Linda Groups, an investor-based group in the Dominican Republic acquired 8% noncontrolling interest in our businesses in the Dominican Republic for $83 million, net of transaction costs, 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. In December 2015, Estrella and Linda Groups exercised its first call option of additional 2% for $18 million, net of discount and transaction costs. This resulted in Estrella and Linda Groups having a total of 10% noncontrolling interest in our businesses in the Dominican Republic.

As a result of these transactions, $29 million and $7 million, net of taxes and transaction costs, was recognized in additional paid-in capital at December 31, 2014 and 2015, respectively. 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.

The following table summarizes the net income attributable to The AES Corporation and all transfers (to) from noncontrolling interests in millions for the periods indicated:

	December 31,
	2015			2014
Net income attributable to The AES Corporation	$	306		$	769
Transfers from the noncontrolling interest:
Net increase in The AES Corporation's paid-in capital for sale of subsidiary shares	323			29
Additional paid-in capital, IPALCO shares, transferred to redeemable stock of subsidiaries (1)	(377		)	—
Increase in The AES Corporation's paid-in capital for purchase of subsidiary shares	—			7
Net transfers (to) from noncontrolling interest	(54		)	36
Change from net income attributable to The AES Corporation and transfers (to) from noncontrolling interests	$	252		$	805

⁽¹⁾ See Note19—Redeemable stock of subsidiaries for further information on increase in paid-in capital transferred to redeemable stock of subsidiaries.

Accumulated Other Comprehensive Loss

The changes in AOCL by component, net of tax and noncontrolling interests in millions for the year endedDecember 31, 2015 were as follows:

	Foreign currency translation adjustment, net			Unrealized derivative losses, net			Unfunded pension obligations, net			Total
Balance at the beginning of the period	$	(2,595	)	$	(396	)	$	(295	)	$	(3,286	)
Other comprehensive (loss) income before reclassifications	(674		)	(5		)	19			(660		)
Amount reclassified to earnings	$	—		$	48		$	2		50
Other comprehensive (loss) income	(674		)	43			21			(610		)
Cumulative effect of a change in accounting principle	$	13		$	—		$	—		$	13
Balance at the end of the period	(3,256		)	(353		)	(274		)	(3,883		)

Reclassifications out of AOCL for the periods indicated were as follows (in millions):

Details About		December 31,
AOCL Components	Affected Line Item in the Consolidated Statements of Operations	2015			2014			2013
Foreign currency translation adjustment, net
	Gain on sale of businesses	$	—		$	4		$	(2	)
	Net loss from disposal and impairments of discontinued operations	—			(38		)	(35		)
	Net income attributable to The AES Corporation	$	—		$	(34	)	$	(37	)
Unrealized derivative gains (losses), net
	Non-regulated revenue	$	43		$	30		$	(3	)
	Non-regulated cost of sales	(14		)	(4		)	(7		)
	Interest expense	(112		)	(139		)	(137		)
	Gain on sale of businesses	(4		)	—			(21		)
	Foreign currency transaction gains (losses)	12			(9		)	(6		)
	Income from continuing operations before taxes and equity in earnings of affiliates	(75		)	(122		)	(174		)
	Income tax expense	11			26			41
	Net equity in earnings of affiliates	(2		)	(3		)	(6		)
	Income from continuing operations	(66		)	(99		)	(139		)
	Less: (Income) from continuing operations attributable to noncontrolling interests	18			27			11
	Net income attributable to The AES Corporation	$	(48	)	$	(72	)	$	(128	)
Amortization of defined benefit pension actuarial loss, net
	Regulated cost of sales	$	(25	)	$	(33	)	$	(73	)
	Non-regulated cost of sales	2			(5		)	(4		)
	General and administrative expenses	(2		)	—			(1		)
	Income from continuing operations before taxes and equity in earnings of affiliates	(25		)	(38		)	(78		)
	Income tax expense	9			7			26
	Income from continuing operations	(16		)	(31		)	(52		)
	Net loss from disposal and impairments of discontinued operations	—			2			—
	Net Income	(16		)	(29		)	(52		)
	Less: (Income) from continuing operations attributable to noncontrolling interests	14			19			39
	Net income attributable to The AES Corporation	$	(2	)	$	(10	)	$	(13	)
Total reclassifications for the period, net of income tax and noncontrolling interests		$	(50	)	$	(116	)	$	(178	)

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

Common Stock Dividends — The Company paid dividends of $0.10 per outstanding share to its common stockholders during the first, second, third and fourth quarters of 2015 for dividends declared in December 2014, April 2015, July 2015 and October 2015.

On December 11, 2015, the Board of Directors declared a quarterly common stock dividend of $0.11 per share payable on February 16, 2016 to shareholders of record at the close of business on February 2, 2016.

Secondary Offering and Concurrent Stock Repurchase — On May 18, 2015, the Parent Company completed an underwritten secondary public offering (the "Offering") of approximately 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 — In October 2015, the Company's Board of Directors authorized an increase to the Company's common stock repurchase program (the "Program") for up to an additional $400 million of repurchases of the Company's common stock, bringing the cumulative total of authorized repurchases under the Program to $2.1 billion.

During the year ended December 31, 2015, the Company repurchased 39.7 million shares of its common stock under the Program at a total cost of $482 million under the existing stock repurchase program. The cumulative repurchase from the commencement of the Program in July 2010 through December 31, 2015 totaled 145.6 million shares for a total cost of $1.8 billion, at an average price per share of $12.31 (including a nominal amount of commissions). As of December 31, 2015, $343 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 149,037,831 and 110,687,849 shares were held as treasury stock at December 31, 2015 and 2014, 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.