Schedule I - Condensed Financial Information of Parent

12 Months Ended

Dec. 31, 2019

Condensed Financial Information Disclosure [Abstract]

SCHEDULE I CONDENSED FINANCIAL INFORMATION OF PARENT

THE AES CORPORATION

SCHEDULE I CONDENSED FINANCIAL INFORMATION OF PARENT

BALANCE SHEETS

	December 31,
	2019			2018
	(in millions)
ASSETS
Current Assets:
Cash and cash equivalents	$	11		$	19
Accounts and notes receivable from subsidiaries	238			285
Prepaid expenses and other current assets	35			31
Total current assets	284			335
Investment in and advances to subsidiaries and affiliates	6,782			6,834
Office Equipment:
Cost	27			27
Accumulated depreciation	(20		)	(19		)
Office equipment, net	7			8
Other Assets:
Other intangible assets, net of accumulated amortization	1			3
Deferred financing costs, net of accumulated amortization of $5 and $4, respectively	5			4
Deferred income taxes	14			24
Other assets	16			2
Total other assets	36			33
Total assets	$	7,109		$	7,210
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable	$	20		$	15
Accounts and notes payable to subsidiaries	339			74
Accrued and other liabilities	221			206
Senior notes payable—current portion	5			5
Total current liabilities	585			300
Long-term Liabilities:
Senior notes payable	3,391			3,650
Accounts and notes payable to subsidiaries	28			28
Other long-term liabilities	109			24
Total long-term liabilities	3,528			3,702
Stockholders' equity:
Common stock	8			8
Additional paid-in capital	7,776			8,154
Accumulated deficit	(692		)	(1,005		)
Accumulated other comprehensive loss	(2,229		)	(2,071		)
Treasury stock	(1,867		)	(1,878		)
Total stockholders' equity	2,996			3,208
Total liabilities and equity	$	7,109		$	7,210

See Notes to Schedule I.

THE AES CORPORATION

SCHEDULE I CONDENSED FINANCIAL INFORMATION OF PARENT

STATEMENTS OF OPERATIONS

For the Years Ended December 31,	2019			2018			2017
	(in millions)
Revenue from subsidiaries and affiliates	$	30		$	36		$	28
Equity in earnings of subsidiaries and affiliates	674			1,909			630
Interest income	53			39			49
General and administrative expenses	(148		)	(142		)	(158		)
Other income	1			25			5
Other expense	(103		)	—			(554		)
Loss on extinguishment of debt	(5		)	(171		)	(92		)
Interest expense	(197		)	(220		)	(317		)
Income (loss) before income taxes	305			1,476			(409		)
Income tax (expense)	(2		)	(273		)	(752		)
Net income (loss)	$	303		$	1,203		$	(1,161	)

See Notes to Schedule I.

THE AES CORPORATION

SCHEDULE I CONDENSED FINANCIAL INFORMATION OF PARENT

STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

YEARS ENDED DECEMBER 31, 2019, 2018, AND 2017

	2019			2018			2017
	(in millions)
NET INCOME (LOSS)	$	303		$	1,203		$	(1,161	)
Foreign currency translation activity:
Foreign currency translation adjustments, net of income tax benefit of $1, $2 and $11, respectively	(23		)	(214		)	18
Reclassification to earnings, net of $0 income tax for all periods	23			(21		)	643
Total foreign currency translation adjustments, net of tax	—			(235		)	661
Derivative activity:
Change in derivative fair value, net of income tax benefit of $53, $16 and $13, respectively	(202		)	(64		)	(14		)
Reclassification to earnings, net of income tax benefit (expense) of $(4), $(13) and $1, respectively	36			78			37
Total change in fair value of derivatives, net of tax	(166		)	14			23
Pension activity:
Prior service cost for the period, net of income tax expense of $0, $1 and $1, respectively	1			(2		)	1
Change in pension adjustments due to net actuarial gain (loss) for the period, net of income tax benefit (expense) of $6, $(1) and $6, respectively	(16		)	2			(20		)
Reclassification of earnings, net of income tax expense of $13, $2 and $126, respectively	27			7			248
Total change in unfunded pension obligation	12			7			229
OTHER COMPREHENSIVE INCOME (LOSS)	(154		)	(214		)	913
COMPREHENSIVE INCOME (LOSS)	$	149		$	989		$	(248	)

See Notes to Schedule I.

THE AES CORPORATION

SCHEDULE I CONDENSED FINANCIAL INFORMATION OF PARENT

STATEMENTS OF CASH FLOWS

For the Years Ended December 31,	2019			2018			2017
	(in millions)
Net cash provided by operating activities	$	583		$	409		$	148
Investing Activities:
Proceeds from the sale of business interests, net of expenses	196			1,222			—
Investment in and net advances to subsidiaries	(596		)	(216		)	(339		)
Return of capital	411			242			243
Additions to property, plant and equipment	(8		)	(13		)	(13		)
Net cash provided by (used in) investing activities	3			1,235			(109		)
Financing Activities:
(Repayments) Borrowings under the revolver, net	180			(207		)	207
Borrowings of notes payable and other coupon bearing securities	—			1,000			1,025
Repayments of notes payable and other coupon bearing securities	(450		)	(1,933		)	(1,353		)
Loans from (Repayments to) subsidiaries	40			(143		)	309
Proceeds from issuance of common stock	6			7			1
Common stock dividends paid	(362		)	(344		)	(317		)
Payments for deferred financing costs	(3		)	(11		)	(12		)
Other financing	(4		)	(5		)	(7		)
Net cash used in financing activities	(593		)	(1,636		)	(147		)
Effect of exchange rate changes on cash	(1		)	1			6
Increase (Decrease) in cash and cash equivalents	(8		)	9			(102		)
Cash and cash equivalents, beginning	19			10			112
Cash and cash equivalents, ending	$	11		$	19		$	10
Supplemental Disclosures:
Cash payments for interest, net of amounts capitalized	$	192		$	232		$	282
Cash payments (refunds) for income taxes	$	(5	)	$	10		$	2

See Notes to Schedule I

SCHEDULE I

NOTES TO SCHEDULE I

1. Application of Significant Accounting Principles

The Schedule I Condensed Financial Information of the Parent includes the accounts of The AES Corporation (the “Parent Company”) and certain holding companies.

ACCOUNTING FOR SUBSIDIARIES AND AFFILIATES — The Parent Company has accounted for the earnings of its subsidiaries on the equity method in the financial information.

INCOME TAXES — Positions taken on the Parent Company's income tax return which satisfy a more-likely-than-not threshold will be recognized in the financial statements. The income tax expense or benefit computed for the Parent Company reflects the tax assets and liabilities on a stand-alone basis and the effect of filing a consolidated U.S. income tax return with certain other affiliated companies as well as effects of U.S. tax law reform enacted in 2017.

ACCOUNTS AND NOTES RECEIVABLE FROM SUBSIDIARIES — Amounts have been shown in current or long-term assets based on terms in agreements with subsidiaries, but payment is dependent upon meeting conditions precedent in the subsidiary loan agreements.

2. Debt

Senior and Secured Notes and Loans Payable ($ in millions)

			December 31,
	Interest Rate	Maturity	2019			2018
Senior Unsecured Note	4.00%	2021	500			500
Senior Secured Term Loan	LIBOR + 1.75%	2022	18			366
Senior Unsecured Note	4.875%	2023	613			713
Senior Unsecured Note	4.50%	2023	500			500
Drawings on secured credit facility	LIBOR + 1.75%	2024	180			—
Senior Unsecured Note	5.50%	2024	63			63
Senior Unsecured Note	5.50%	2025	544			544
Senior Unsecured Note	6.00%	2026	500			500
Senior Unsecured Note	5.125%	2027	500			500
Unamortized (discounts)/premiums & debt issuance (costs)			(22		)	(31		)
Subtotal			$	3,396		$	3,655
Less: Current maturities			(5		)	(5		)
Total			$	3,391		$	3,650

FUTURE MATURITIES OF RECOURSE DEBT — As of December 31, 2019 scheduled maturities are presented in the following table (in millions):

December 31,	Annual Maturities
2020	$	5
2021	505
2022	8
2023	1,113
2024	243
Thereafter	1,544
Unamortized (discount)/premium & debt issuance (costs)	(22		)
Total debt	$	3,396

3. Dividends from Subsidiaries and Affiliates

Cash dividends received from consolidated subsidiaries were $1.0 billion, $1.9 billion and $1.2 billion for the years ended December 31, 2019, 2018, and 2017, respectively. For the years ended December 31, 2019 and 2018, $200 million and $1.2 billion, respectively, of the dividends paid to the Parent Company are derived from the sale of business interests and are classified as an investing activity for cash flow purposes. All other dividends are classified as operating activities. There were no cash dividends received from affiliates accounted for by the equity method for the years ended December 31, 2019, 2018, and 2017.

4. Guarantees and Letters of Credit

GUARANTEES — In connection with certain project financing, acquisitions and dispositions, power purchases and other agreements, the Parent Company has expressly undertaken limited obligations and commitments, most of which will only be effective or will be terminated upon the occurrence of future events. These obligations and commitments, excluding those collateralized by letter of credit and other obligations discussed below, were limited as of December 31, 2019 by the terms of the agreements, to an aggregate of approximately $865 million, representing 38 agreements with individual exposures ranging up to $157 million. These amounts exclude normal and customary representations and warranties in agreements for the sale of assets (including ownership in associated legal entities) where the associated risk is considered to be nominal.

LETTERS OF CREDIT — At December 31, 2019, the Parent Company had $19 million in letters of credit outstanding under the senior secured credit facility, representing 28 agreements with individual exposures up to $4 million, and $342 million in letters of credit outstanding under the senior unsecured credit facility, representing 11 agreements with individual exposures ranging from $1 million to $296 million. During the year ended December 31, 2019, the Parent Company paid letter of credit fees ranging from 1% to 3% per annum on the outstanding amounts.