SEGMENTS

The segment reporting structure uses the Company’s management reporting structure as its foundation to reflect how the Company manages the businesses internally and is organized by geographic regions which provides a socio-political-economic understanding of our business. During the third quarter of 2017, the Europe and Asia SBUs were merged in order to leverage scale and are now reported as part of the Eurasia SBU. The management reporting structure is organized by five SBUs led by our President and Chief Executive Officer: US, Andes, Brazil, MCAC, and Eurasia SBUs. Using the accounting guidance on segment reporting, the Company determined that it has five operating and five reportable segments corresponding to its SBUs. All prior period results have been retrospectively revised to reflect the new segment reporting structure.

Corporate and Other — Corporate overhead costs which are not directly associated with the operations of our five reportable segments are included in “Corporate and Other.” Also included are certain 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 The AES Corporation excluding gains or losses of the consolidated entity due to (a) unrealized gains or losses related to derivative transactions; (b) unrealized foreign currency gains or losses; (c) gains or losses and associated benefits and costs due to dispositions and acquisitions of business interests, including early plant closures, and the tax impact from the repatriation of sales proceeds; (d) losses due to impairments; and (e) gains, losses and costs due to the early retirement of debt. Adjusted PTC also includes net equity in earnings of affiliates on an after-tax basis adjusted for the same gains or losses excluded from consolidated entities. The Company has concluded that Adjusted PTC better 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 has concluded that Adjusted PTC is a more transparent measure that better assists investors in determining which businesses have the greatest impact on the Company’s results.

Revenue and Adjusted PTC are presented before inter-segment eliminations, which includes the effect of intercompany transactions with other segments except for interest, charges for certain management fees, and the write-off of intercompany balances, as applicable. All intra-segment activity has been eliminated within the segment. Inter-segment activity has been eliminated within the total consolidated results.

The following tables present financial information by segment for the periods indicated (in millions):



	Three Months Ended September 30,						Nine Months Ended September 30,
Total Revenue	2017			2016			2017			2016
US SBU	$	852		$	916		$	2,445		$	2,582
Andes SBU	689			667			1,979			1,864
Brazil SBU	1,085			1,027			3,106			2,761
MCAC SBU	630			547			1,851			1,596
Eurasia SBU	380			386			1,204			1,249
Corporate and Other	9			6			29			8
Eliminations	(13		)	(7		)	(20		)	(18		)
Total Revenue	$	3,632		$	3,542		$	10,594		$	10,042



	Three Months Ended September 30,						Nine Months Ended September 30,
Total Adjusted PTC	2017			2016			2017			2016
Reconciliation from Income from Continuing Operations before Taxes and Equity In Earnings of Affiliates:
Income from continuing operations before taxes and equity in earnings of affiliates	$	347		$	294		$	746		$	445
Add: Net equity in earnings of affiliates	24			11			33			25
Less: Income from continuing operations before taxes, attributable to noncontrolling interests	(148		)	(82		)	(454		)	(196		)
Pretax contribution	223			223			325			274
Unrealized derivative losses (gains)	(8		)	5			(7		)	1
Unrealized foreign currency transaction losses (gains)	(21		)	3			(54		)	12
Disposition/acquisition losses (gains)	1			(3		)	107			(5		)
Impairment expense	2			24			264			309
Losses on extinguishment of debt	48			20			43			26
Total Adjusted PTC	$	245		$	272		$	678		$	617

	Three Months Ended September 30,						Nine Months Ended September 30,
Total Adjusted PTC	2017			2016			2017			2016
US SBU	$	129		$	114		$	240		$	257
Andes SBU	62			134			232			279
Brazil SBU	12			6			64			18
MCAC SBU	98			74			256			197
Eurasia SBU	61			46			218			197
Corporate and Other	(117		)	(102		)	(332		)	(331		)
Total Adjusted PTC	$	245		$	272		$	678		$	617



Total Assets	September 30, 2017		December 31, 2016
US SBU	$	10,104	$	9,333
Andes SBU	9,339		8,971
Brazil SBU	7,416		6,448
MCAC SBU	5,640		5,162
Eurasia SBU	5,938		5,777
Assets of held-for-sale businesses	76		—
Corporate and Other	321		428
Total Assets	$	38,834	$	36,119