Investments In and Advances To Affiliates

12 Months Ended

Dec. 31, 2018

Equity Method Investments and Joint Ventures [Abstract]

INVESTMENTS IN AND ADVANCES TO AFFILIATES

The following table summarizes the relevant effective equity ownership interest and carrying values for the Company's investments accounted for under the equity method as of the periods indicated:



December 31,		2018		2017		2018		2017
Affiliate	Country	Carrying Value (in millions)				Ownership Interest %
sPower	United States	$	515	$	508	50	%	50	%
OPGC ⁽¹⁾	India	293		269		49	%	49	%
Guacolda⁽²⁾	Chile	209		357		33	%	33	%
Other affiliates ⁽³⁾	Various	97		63
Total		$	1,114	$	1,197

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⁽¹⁾	OPGC has one coal-fired project under development which is an expansion of our existing OPGC business. The project started construction in April 2014 and is expected to begin operations in 2019.


⁽²⁾	The Company's ownership in Guacolda is held through AES Gener, a 67%-owned consolidated subsidiary. AES Gener owns 50% of Guacolda, resulting in an AES effective ownership in Guacolda of 33%.


⁽³⁾	Includes Fluence, Simple Energy, Bosforo, Elsta, Distributed Energy equity method investments, and others.

Guacolda — In October 2018, an other-than-temporary impairment was identified at Guacolda primarily as a result of increased renewable generation in Chile lowering energy prices, impacting management's ability to re-contract Guacolda's generation after expiration of existing PPAs. A calculation of the fair value of Gener's investment in Guacolda was required to evaluate whether there was a loss in the carrying value of the investment. Based on management's estimate of fair value of $209 million, the Company recognized an other-than-temporary impairment of $144 million in Other non-operating expense. The Guacolda equity method investment is reported in the South America SBU reportable segment.

Distributed Energy — In December 2018, Distributed Energy acquired the remaining equity interest in a partnership holding various solar projects for consideration of $23 million. This transaction resulted in a loss of $5 million, reported in Other expense in the Consolidated Statement of Operations. The projects, previously recorded as equity method investments, have been consolidated. See Note 24—Acquisitions for further discussion.

Simple Energy — In April 2018, the Company invested $35 million in Simple Energy, a provider of utility-branded marketplaces and omni-channel instant rebates. As the Company does not control Simple Energy, the investment is accounted for as an equity method investment and is reported as part of Corporate and Other.

Fluence — On January 1, 2018, Siemens and AES closed on the creation of the Fluence joint venture with each party holding a 50% ownership interest. The Company contributed $7 million in cash and $20 million in non-cash assets from the AES Advancion energy storage development business as consideration for the transaction, and received an equity interest in Fluence with a fair value of $50 million. See Note 23—Held-for-Sale and Dispositions for further discussion. Fluence is a global energy storage technology and services company. As the Company does not control Fluence, the investment is accounted for as an equity method investment. The Fluence equity method investment is reported as part of Corporate and Other.

sPower — In February 2017, the Company and Alberta Investment Management Corporation (“AIMCo”) entered into an agreement to acquire FTP Power LLC (“sPower”). In July 2017, AES closed on the acquisition of its 48% ownership interest in sPower for $461 million. In November 2017, AES acquired an additional 2% ownership interest in sPower for $19 million. As the Company does not control sPower, it is accounted for as an equity method investment. The sPower portfolio includes solar and wind projects in operation, under construction, and in development located in the United States. The sPower equity method investment is reported in the US and Utilities SBU reportable segment.

AES Barry Ltd. — The Company holds a 100% ownership interest in AES Barry Ltd. ("Barry"), a dormant entity in the U.K. that disposed of its generation and other operating assets. Due to a debt agreement, no material financial or operating decisions can be made without the banks' consent, and the Company does not control Barry. As of December 31, 2018 and 2017, other long-term liabilities included $43 million and $45 million related to this debt agreement.

Summarized Financial Information — The following tables summarize financial information of the Company's 50%-or-less-owned affiliates and majority-owned unconsolidated subsidiaries that are accounted for using the equity method (in millions):



	50%-or-less Owned Affiliates						Majority-Owned Unconsolidated Subsidiaries
Years ended December 31,	2018		2017		2016		2018			2017			2016
Revenue	$	962	$	762	$	586	$	40		$	16		$	23
Operating margin	135		165		145		3			5			9
Net income (loss)	14		72		64		(3		)	(15		)	(2		)

December 31,	2018		2017				2018			2017
Current assets	$	558	$	418			$	89		$	70
Noncurrent assets	5,918		5,372				41			102
Current liabilities	546		633				35			10
Noncurrent liabilities	3,309		2,629				122			147
Stockholders' equity	2,622		2,527				(27		)	15

At December 31, 2018, retained earnings included $236 million related to the undistributed earnings of the Company's 50%-or-less owned affiliates. Distributions received from these affiliates were $42 million, $69 million, and $24 million for the years ended December 31, 2018, 2017, and 2016, respectively. As of December 31, 2018, the underlying equity in the net assets of our equity affiliates exceeded the aggregate carrying amount of our investments in equity affiliates by $49 million.