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 first quarter of 2018, the Andes and Brazil SBUs were merged in order to leverage scale and are now reported together as part of the South America SBU. Further, Puerto Rico and El Salvador businesses, formerly part of the MCAC SBU, were combined with the US SBU, which is now reported as the US and Utilities SBU. The management reporting structure is organized by four SBUs led by our President and Chief Executive Officer: US and Utilities, South America, MCAC, and Eurasia SBUs. Using the accounting guidance on segment reporting, the Company determined that its four operating segments are aligned with its four reportable segments corresponding to its SBUs. All prior period results have been retrospectively revised to reflect the new segment reporting structure.

Corporate and Other — The results of the Fluence equity affiliate are included in “Corporate and Other.” Also included are corporate overhead costs which are not directly associated with the operations of our four reportable segments, and 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 pre-tax 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 and equity securities; (b) unrealized foreign currency gains or losses; (c) gains, losses and associated benefits and costs due to dispositions and acquisitions of business interests, including early plant closures; (d) losses due to impairments; (e) gains, losses and costs due to the early retirement of debt; and (f) costs directly associated with a major restructuring program, including, but not limited to, workforce reduction efforts, relocations, and office consolidation. 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 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 March 31,
Total Revenue	2018			2017
US and Utilities SBU	$	1,027		$	1,047
South America SBU	895			747
MCAC SBU	408			348
Eurasia SBU	419			429
Corporate and Other	9			14
Eliminations	(18		)	(4		)
Total Revenue	$	2,740		$	2,581



	Three Months Ended March 31,
Total Adjusted PTC	2018			2017
Income from continuing operations before taxes and equity in earnings of affiliates	$	998		$	157
Add: Net equity in earnings of affiliates	11			7
Less: Income from continuing operations before taxes, attributable to noncontrolling interests	(126		)	(168		)
Pre-tax contribution	883			(4		)
Unrealized derivative and equity securities losses (gains)	12			(1		)
Unrealized foreign currency gains	(3		)	(9		)
Disposition/acquisition losses (gains)	(778		)	52
Impairment expense	—			168
Losses (gains) on extinguishment of debt	171			(16		)
Restructuring costs	3			—
Total Adjusted PTC	$	288		$	190



	Three Months Ended March 31,
Total Adjusted PTC	2018			2017
US and Utilities SBU	$	120		$	61
South America SBU	136			127
MCAC SBU	53			46
Eurasia SBU	83			77
Corporate and Other	(104		)	(121		)
Total Adjusted PTC	$	288		$	190



Total Assets	March 31, 2018		December 31, 2017
US and Utilities SBU	$	11,633	$	11,297
South America SBU	11,113		10,874
MCAC SBU	4,322		4,087
Eurasia SBU	4,855		4,557
Assets of discontinued operations and held-for-sale businesses	358		2,034
Corporate and Other	292		263
Total Assets	$	32,573	$	33,112