Segment and Geographic Information

12 Months Ended

Dec. 31, 2019

SEGMENTS AND GEOGRAPHIC INFORMATION

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 mainly organized by geographic regions which provides a socio-political-economic understanding of our business. 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.

Corporate and Other — Included in "Corporate and Other" are the results of the AES self-insurance company

and certain equity affiliates, 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, benefits and costs associated with dispositions and acquisitions of business interests, including early plant closures, and gains and losses recognized at commencement of sales-type leases; (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 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):



	Total Revenue
Year Ended December 31,	2019			2018			2017
US and Utilities SBU	$	4,058		$	4,230		$	4,162
South America SBU	3,208			3,533			3,252
MCAC SBU	1,882			1,728			1,519
Eurasia SBU	1,047			1,255			1,590
Corporate and Other	46			41			35
Eliminations	(52		)	(51		)	(28		)
Total Revenue	$	10,189		$	10,736		$	10,530



Reconciliation from Income from Continuing Operations before Taxes and Equity in Earnings of Affiliates:	Total Adjusted PTC
Year Ended December 31,	2019			2018			2017
Income from continuing operations before taxes and equity in earnings of affiliates	$	1,001		$	2,018		$	771
Add: Net equity in earnings (losses) of affiliates	(172		)	39			71
Less: Income from continuing operations before taxes, attributable to noncontrolling interests	(277		)	(509		)	(521		)
Pre-tax contribution	552			1,548			321
Unrealized derivative and equity securities losses (gains)	113			33			(3		)
Unrealized foreign currency losses (gains)	36			51			(59		)
Disposition/acquisition losses (gains)	12			(934		)	123
Impairment expense	406			307			542
Loss on extinguishment of debt	121			180			62
Restructuring costs	—			—			31
Total Adjusted PTC	$	1,240		$	1,185		$	1,017



	Total Adjusted PTC
Year Ended December 31,	2019			2018			2017
US and Utilities SBU	$	569		$	511		$	424
South America SBU	504			519			446
MCAC SBU	367			300			277
Eurasia SBU	159			222			290
Corporate and Other	(347		)	(346		)	(411		)
Eliminations	(12		)	(21		)	(9		)
Total Adjusted PTC	$	1,240		$	1,185		$	1,017



	Total Assets						Depreciation and Amortization						Capital Expenditures
Year Ended December 31,	2019		2018		2017		2019		2018		2017		2019		2018			2017
US and Utilities SBU	$	13,334	$	12,286	$	11,548	$	465	$	449	$	487	$	1,484	$	1,373		$	905
South America SBU	11,314		10,941		11,126		315		300		301		692		662			477
MCAC SBU	4,770		4,462		4,087		183		141		122		344		302			435
Eurasia SBU	3,990		4,538		6,002		67		99		127		30		51		—	211
Discontinued operations	—		—		86		—		—		123		—		—			315
Corporate and Other	240		294		263		15		14		9		1		8			13
Total	$	33,648	$	32,521	$	33,112	$	1,045	$	1,003	$	1,169	$	2,551	$	2,396		$	2,356



	Interest Income						Interest Expense
Year Ended December 31,	2019		2018		2017		2019		2018		2017
US and Utilities SBU	$	18	$	10	$	5	$	301	$	287	$	315
South America SBU	95		92		95		285		283		297
MCAC SBU	22		20		13		142		124		111
Eurasia SBU	180		186		130		127		145		167
Corporate and Other	3		2		1		195		217		280
Total	$	318	$	310	$	244	$	1,050	$	1,056	$	1,170



	Investments in and Advances to Affiliates							Net Equity in Earnings (Losses) of Affiliates
Year Ended December 31,	2019		2018		2017			2019			2018			2017
US and Utilities SBU	$	465	$	538	$	535		$	11		$	35		$	41
South America SBU	77		213		358			(129		)	15			28
MCAC SBU	107		5		(5		)	(13		)	(7		)	(4		)
Eurasia SBU	215		293		307			(9		)	14			9
Corporate and Other	102		65		2			(32		)	(18		)	(3		)
Total	$	966	$	1,114	$	1,197		$	(172	)	$	39		$	71

The following table presents information, by country, about the Company's consolidated operations for each of the three years ended December 31, 2019, 2018, and 2017, and as of December 31, 2019 and 2018 (in millions). Revenue is recorded in the country in which it is earned and assets are recorded in the country in which they are located.



	Total Revenue						Property, Plant & Equipment, net
Year Ended December 31,	2019		2018		2017		2019		2018
United States ⁽¹⁾	$	3,230	$	3,462	$	3,487	$	9,706	$	8,731
Non-U.S.:
Chile	1,839		2,087		1,944		5,939		5,453
Dominican Republic	877		884		826		1,002		903
El Salvador	824		768		686		343		334
Panama	601		438		338		1,819		1,777
Brazil	525		527		541		1,260		1,287
Colombia	472		428		332		340		302
Bulgaria	459		426		367		1,104		1,183
Mexico	402		399		352		648		666
Argentina	373		487		435		392		234
Vietnam ⁽²⁾	343		245		278		2		2
United Kingdom ⁽³⁾	147		390		328		—		90
Jordan ⁽⁴⁾	95		95		95		—		418
Philippines ⁽⁵⁾	—		93		449		—		—
Kazakhstan	—		—		67		—		—
Other Non-U.S.	2		7		5		19		16
Total Non-U.S.	6,959		7,274		7,043		12,868		12,665
Total	$	10,189	$	10,736	$	10,530	$	22,574	$	21,396

_____________________________


⁽¹⁾	Includes Puerto Rico revenues of $294 million, $257 million and $247 million for the years ended December 31, 2019, 2018 and 2017, respectively, and property, plant & equipment of $538 million and $553 million as of December 31, 2019 and 2018, respectively.


⁽²⁾	The Mong Duong II power project is operated under a build, operate and transfer contract. Future expected payments for the construction performance obligation are recognized in Loan receivable on the Consolidated Balance Sheets. See Note 20—Revenue for further information.


⁽³⁾	The Kilroot and Ballylumford property, plant and equipment was deconsolidated upon completion of the sale in June 2019. See Note 25—Held-For-Sale and Dispositions for further information.


⁽⁴⁾	The property, plant and equipment in Jordan was classified as held-for-sale as of December 31, 2019. See Note 25—Held-For-Sale and Dispositions for further information.

⁽⁵⁾

The Masinloc property, plant and equipment was classified as held-for-sale as of December 31, 2017, and deconsolidated upon completion of the sale in March 2018. See Note 25—Held-For-Sale and Dispositions for further information.