Re:
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The AES Corporation
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Registration Statement on Form S-4
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Filed March 28, 2012
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File No. 333-180388
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Form 10-K for Fiscal Year Ended December 31, 2011
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Filed February 27, 2012
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File No. 1-12291
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1.
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Prior to effectiveness, please provide us with a supplemental letter stating that you are registering the exchange offer in reliance on the staff’s position enunciated in the Exxon Capital Holdings Corporation (May 13, 1988), Morgan Stanley & Co. Incorporated (June 5, 1991) and Shearman & Sterling (July 2, 1993) no-action letters. Please include in your letter the supplemental representations substantially in the form set forth in the Morgan Stanley & Co. Incorporated and Shearman & Sterling letters.
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2.
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It appears that you are incorporating by reference in reliance on General Instruction B. of Form S-4. In this regard we note based on disclosure in your Annual Report on Form 10-K for the fiscal year ended December 31, 2011 that some of your subsidiaries are in default with respect to all or a portion of their outstanding indebtedness. General Instruction B. requires, among other things, that the registrant meet the requirements of General Instruction I.A. for Form S-3, including I.A.5, which provides, in relevant part, that “[n]either the registrant nor any of its consolidated or unconsolidated subsidiaries have, since the end of the last fiscal year for which certified financial statements of the registrant and its consolidated subsidiaries were included in a report filed pursuant to Section 13(a) or 15(d) of the Exchange Act: … (b) defaulted (i) on any installment or installments on indebtedness for borrowed money …, which defaults in the aggregate are material to the financial position of the registrant and its consolidated and unconsolidated subsidiaries, taken as a whole. Please provide us with your analysis as to how you satisfy the requirements of General Instruction B. In this regard, you may wish to review Question 115.10 of our Compliance and Disclosure Interpretations for Securities Act Forms, which are available on our website.
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3.
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We note that you incorporate your 8-K/A filed on March 27, 2012. It appears, however, that the EDGAR filing date for the 8-K was March 28, 2012. Please revise your disclosure to incorporate by reference your Form 8-K filed on March 28, 2012.
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4.
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Please eliminate the language in the italicized introductory paragraph indicating that the listed risk factors are not the only risks you may face and that additional risks that you currently deem immaterial may also harm your business, results of operations or financial condition. All material risks should be described. If risks are not deemed material, you should not reference them.
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5.
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We note your disclosure in the third paragraph that “[you] will not accept for exchange any old notes tendered, and no new notes will be issued in exchange for any old notes, if at that time any stop order shall be threatened or in effect with respect to the exchange offer to which this prospectus relates or the qualification of the indenture under the Trust Indenture Act.” It appears that you could assert this condition after the expiration of your offer. As all offer conditions, except those related to the receipt of government regulatory approvals necessary to consummate the offer, must be satisfied or waived at or before the expiration of the offer, please revise the disclosure accordingly.
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6.
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Please revise your disclosure to include the undertakings required by Item 512(b) of Regulation S-K, as it appears to be applicable to your registration statement.
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7.
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Please tell us the items and their amounts included the gain (loss) from sale of investments and impairment expense and (gain) loss on disposal and impairment write-down – discontinued operations line items for each year presented.
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Table 7A. (Gain) loss from sale of investments and impairment expense
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2011
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2010
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2009
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(in millions)
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Gain on sale of investments
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a
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8
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-
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131
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Goodwill impairment
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a
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(17)
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(21)
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(122)
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Asset impairment expense
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a
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(225)
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(389)
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(20)
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Other non-operating expense (other than temporary impairments)
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a
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(82)
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(7)
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(12)
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Impairments recorded in operations of discontinued businesses
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b
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(42)
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(825)
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(12)
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Gain on sale of assets
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c
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47
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12
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14
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Loss on sale and disposal of assets
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c
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(70)
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(84)
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(33)
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Other
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(5)
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1
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(3)
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Total
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(386)
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(1,313)
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(57)
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a
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As per the consolidated statements of operations.
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b
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Represents impairment expenses classified within discontinued operations.
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c
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As per Note 19 - Other Income and Expense - to the consolidated notes to the financial statements.
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Table 7B. (Gain) loss on disposal and impairment write-down - discontinued operations
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2011
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2010
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2009
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CONSOLIDATED STATEMENTS OF OPERATIONS
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(in millions)
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Gain (loss) from disposal of discontinued businesses, net of income tax
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expense (benefit) of $300, $132 and $0, respectively
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86
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64
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(150)
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Add-back income taxes
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300
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132
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-
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Gross amount classified within the consolidated statements of operations
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386
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196
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(150)
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CONSOLIDATED STATEMENTS OF CASH FLOWS
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(Gain) loss on disposal and impairment write-down - discontinued operations
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(388)
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(209)
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150
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Other operating activities:
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Net income
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-
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12
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a
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-
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Other
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2
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1
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-
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Total classified within the consolidated statements of cash flows
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(386)
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(196)
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150
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a
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Transaction costs recorded upon the sale of certain businesses
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8.
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It appears that the restatement of comprehensive income was quantitatively material and that you should have complied with the disclosure and presentation requirements of ASC 250. Please provide us with your assessment of materiality, including the qualitative factors you considered in determining that the error correction was not subject to the disclosure and presentation requirements of ASC 250. Refer to ASC 250-10-S99-1.
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9.
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Please tell us how you have met the disclosure objectives of ASC 810-10-50-8, particularly with respect to the nature of restrictions on consolidated VIE assets reported in the consolidated balance sheet, including the carrying amount of such assets and how your involvement with VIEs affects your financial position, financial performance and cash flows.
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a.
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ASC 810-10-50-2AA.a.1. – Please note that Note 1 – General and Summary of Significant Accounting Policies discusses the significant judgments and assumptions that we have made in determining whether or not to consolidate a variable interest entity (and, in some cases, whether an entity is a variable interest entity or not).
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b.
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ASC 810-10-50-2AA.a.2. – Please note that we do not believe that there were any significant judgments and assumptions made about the information to be disclosed about our involvement with variable interest entities. Without material exception, our variable interest entities, where we are the primary beneficiary, meet the criteria to be exempt from the disclosure requirements in ASC 810-10-50-3 and 50-5A (pursuant to 50-5B) because:
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·
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these entities issue voting interests;
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·
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we hold a majority of those voting interests;
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·
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the entities meet the definition of a business, by either (a) being in operations and having inputs, processes and outputs or (b) being at a point in construction that inputs, processes and a capability to produce outputs all exist, and;
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·
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the assets of the entities can be used for purposes other than the settlement of the obligations of the entities as the assets are to be used in generating or distributing electricity with the goal of having enough profitability to fund more than just the settlement of the obligations (including to fund operations or remit dividends, or both, to their parent companies as frequently as possible).
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c.
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ASC 810-10-50-2AA.b. through 50-2AA.d. – These paragraphs seek disclosures on any restrictions on assets of variable interest entities and the risks associated with and the effects from our involvement with variable interest entities. As noted above, the assets of variable interest entities can be used for purposes other than the settlement of obligations of the entities. As a result and considering that these entities represent businesses, there is not a meaningful difference between our businesses, whether they meet the definition of a variable interest entity or not. So, there is not a meaningful difference in the risks associated with and the effects from our involvement with our businesses based on whether they meet the definition of a variable interest entity.
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Also, our holding company structure is what is most meaningful for an investor to understand regardless of whether an entity is a variable interest entity or not as there are no meaningful differences in restrictions on the assets of a subsidiary or in the risks associated with our involvement with that entity. As such, we disclosed the following in Note 1 – General and Summary of Significant Accounting Policies: “The AES Corporation is a holding company (the “Parent Company”) that through its subsidiaries and affiliates, (collectively, “AES” or “the Company”) operates a geographically diversified portfolio of electricity generation and distribution businesses. Generally, given this holding company structure, the liabilities of the individual operating entities are not recourse to the parent and are isolated to the operating entities. Most of our operating entities are structured as limited liability entities, which limit the liability of shareholders. The structure is generally the same regardless of whether a subsidiary is consolidated under a voting or variable interest model.” Similarly, we disclosed the following information in Note 11 – Debt: “Various lender and governmental provisions restrict the ability of certain of the Company’s subsidiaries to transfer their net assets to the Parent Company. Such restricted net assets of subsidiaries amounted to approximately $3.3 billion at December 31, 2011.” Cash that is legally restricted is disclosed as “Restricted Cash” on the face of the consolidated balance sheet and discussed in Note 1 – General and Summary of Significant Accounting Policies – Restricted Cash. Assets legally restricted for purposes of settling asset retirement obligations are disclosed in Note 3 – Property, Plant and
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Equipment. Furthermore, we have disclosed the risks related to our entities in Note 25 – Risks and Uncertainties.
Based on the foregoing, we believe we have met the disclosure requirements for variable interest entities and that our financial statements provide sufficient disclosures about the restrictions on our assets and the risks related to all entities. In addition to the above disclosures provided in our consolidated financial statements, please note that there are other disclosures in our 2011 Form 10-K about the restrictions and risks of our entities, whether variable interest entities or not (e.g. pages 80-82 have risk factors specifically about our holding company structure).
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10.
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Please tell us your basis in GAAP for classifying make-whole payments in connection with early debt retirements as cash flows used in investing activities.
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11.
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We note that you account for your 51% investment in IC Ictas Energy Group as an equity method investment. Please tell us how you overcome the presumption of consolidation and the factors considered in evaluating whether noncontrolling rights are substantive. Refer to ASC 810-10-15-8 and ASC 810-10-25. We also note that you hold a variable interest in VIEs in which you are not the primary beneficiary. Please tell us your consideration of providing the disclosures in ASC 810-10-50-15.
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a.
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IC Ictas Energy Group – We considered that ASC 810-10-15-8 includes the following guidance: “The usual condition for a controlling financial interest is ownership of a majority voting interest, and, therefore, as a general rule ownership by one reporting entity, directly or indirectly, of more than 50 percent of the outstanding voting shares of another entity is a condition pointing toward consolidation.” Notwithstanding this guidance, we considered the following guidance from ASC 810-10-25-11 to overcome the presumption in ASC 810-10-15-8 that we should consolidate IC Ictas Energy Group: “A majority-owned subsidiary shall not be consolidated if control does not rest with the majority owner ….”
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While we own 51% of the outstanding shares, we own all of the Class A shares. The shareholders agreement provides for equal representation on the Board of Directors of IC Ictas Energy Group between the holders of the Class A and B shares. The holder of the other 49% of the outstanding shares owns all of the Class B shares. As a result, all decisions effectively require the approval of both shareholders, which results in the other shareholder having substantive participating rights that preclude us from having control of the entity. As such, control does not rest with the majority owner so we should not consolidate the IC Ictas Energy Group. As we have significant influence over its operating and financial policies as contemplated by ASC 323, we account for our 51% investment in IC Ictas Equity Group under the equity method.
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b.
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Disclosures about Variable Interest Entities by a Nonprimary Beneficiary Holder – Please see below for our analysis on each part of ASC 810-10-50-4, which effectively carried forward the requirements of ASC 810-10-50-15 after Accounting Standards Update No. 2009-17:
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Regarding ASC 810-10-50-4.a., please note the amounts disclosed in the table in Note 7 – Investments in and Advances to Affiliates represent the carrying amount of equity method investments. Please also note that these balances are classified on our consolidated balance sheets as investments in and advances to affiliates. In addition, please note that the table indicates where an investee is a variable interest entity and that there are no other carrying amounts related to these variable interest entities. As the carrying amounts for these entities were only $65 million as of December 31, 2011 (which is only about 0.01% of total assets), these entities are immaterial.
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Regarding ASC 810-10-50-4.b. and 50-4.c., we do not have any exposure to loss from these variable interest entities beyond the carrying amount that is already disclosed.
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Regarding ASC 810-10-50-4.d., these variable interest entities do not have any liquidity arrangements, guarantees and/or other commitments by third parties that may affect the fair value or risk of our variable interest (i.e., investment) in them.
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Regarding ASC 810-10-50-4.e., please note that Note 1 – General and Summary of Significant Accounting Policies addresses the significant judgments and assumptions that we have made in determining whether or not to consolidate a variable interest entity (and, in some cases, whether an entity is a variable interest entity or not).
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As such, we have complied with the applicable requirements of ASC 810-10-50-4.
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12.
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We note that you hold less than a controlling financial interest in certain Latin America generation facilities and a Latin America distribution utility, certain North America generation facilities, certain Europe generation facilities and distribution utilities and wind generation facilities which appear to be consolidated. Please provide us a summary of entities in which you hold less than a controlling financial
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a.
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Brasiliana – Please note that Brasiliana is not listed in Note 1 but is being discussed here since it is the holding company through which we have a controlling financial interest in and consolidate Tietê, Uruguaiana and Eletropaulo, which are each listed.
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Please see the disclosures on page 92 of the 2011 Form 10-K, which include the following: “Companhia Brasiliana de Energia (“Brasiliana”) is a holding company in which we have a controlling equity interest and through which we own three of our four Brazilian businesses: Eletropaulo, Tietê and Uruguaiana. We entered into a shareholders’ agreement with an affiliate of the Brazilian National Development Bank (“BNDES”) which owns more than 49% of the voting equity of Brasiliana. Among other things, the shareholders’ agreement requires the consent of both parties before taking certain corporate actions, grants both parties rights of first refusal in connection with the sale of interests in Brasiliana and grants certain drag-along rights to BNDES.”
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We own 46% of the total outstanding shares of Brasiliana (comprised of 50% plus one of its voting shares and a smaller percentage of its non-voting shares). Based on owning a majority of the voting shares, we appoint the majority of the Board of Directors of Brasiliana. While the Shareholders Agreement governing Brasiliana gives BNDES several rights, they were assessed and determined to be protective (as contemplated by ASC 810-10-20) and would not preclude us from consolidating Brasiliana.
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1.
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Tietê (“AES Equity Interest” Disclosed: 24%) – Brasiliana owns more than 50% (i.e., approximately 71%) of the outstanding voting shares of Tietê (and 53% of the total outstanding shares). While other shareholders have specific rights, they were assessed and determined to be protective (as contemplated by ASC 810-10-20) and would not preclude Brasiliana from consolidating Tietê. As such, Brasiliana has a controlling financial interest in Tietê and we have a controlling financial interest in Brasiliana. As such, we have a controlling financial interest in Tietê so we should and do consolidate Tietê. (The “AES Equity Interest” is disclosed as 24% for Tietê based on multiplying the aforementioned total equity interests of 46% and 53%).
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2.
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Uruguaiana (“AES Equity Interest” Disclosed: 46%) –Brasiliana owns (directly or indirectly) 100% of the outstanding voting shares of Uruguaiana. As such, Brasiliana has a controlling financial interest in Uruguaiana. As we have a controlling financial interest in Brasiliana, we have a controlling financial interest in Uruguaiana so we should and do consolidate Uruguaiana. (The “AES Equity Interest” is disclosed as 46% for Uruguaiana by multiplying the total equity interests of 46% and 100%).
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3.
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Eletropaulo (“AES Equity Interest” Disclosed: 16%) –Brasiliana indirectly owns a majority (i.e., approximately 78%) of the outstanding voting shares of Eletropaulo (while directly and indirectly owning approximately 35% of the total outstanding shares of Eletropaulo). While other shareholders have specific rights, they were all assessed and determined to be protective (as contemplated by ASC 810-10-20) and would not preclude Brasiliana from consolidating Eletropaulo. As such, Brasiliana has a controlling financial interest in Eletropaulo. As we have a controlling financial interest in Brasiliana, we have a controlling financial interest in Eletropaulo so we should and do consolidate Eletropaulo. (The “AES Equity Interest” is disclosed as 16% for Eletropaulo by multiplying the aforementioned total equity interests of 46% and of 35%).
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b.
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Itabo (“AES Equity Interest” Disclosed: 50%) – Our 50% economic interest in Itabo is comprised entirely of 100% of the Class B shares. According to the bylaws for Itabo, the holders of the Class B shares have the right to elect four out of the five members of the Board of Directors. While the holder of Class A shares has several rights, they were assessed and determined to be protective (as contemplated by ASC 810-10-20) and would not preclude us from consolidating Itabo by controlling the Board (consistent with ASC 810-10-25-7).
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c.
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Bayano, Chiriqui–Esti, Chiriqui–La Estrella and Chiriqui–Los Valles (“AES Equity Interest” Disclosed: 49%) – Our 49% economic interest in these businesses is comprised entirely of 100% of the voting class of shares, where the by-laws provide the holder of those shares with administrative rights over these businesses and the right to elect a majority of the Board of Directors. The other shareholders do not have any veto rights. As a result, we have a controlling financial interest in these businesses.
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d.
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Amman East (“AES Equity Interest” Disclosed: 37%) – We own 61% of a holding company, which owns 60% of Amman East and the other 39% is owned entirely by one other shareholder. We also nominate five out of the seven members of the Board of Directors, where a simple majority of the Board decides on all matters, aside from certain matters that require the approval of a Director representing each of the two shareholders, which were assessed and determined to be protective. As such, we have a controlling financial interest over this holding company and we should and do consolidate this holding company as minority rights do not preclude consolidation.
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The holding company noted above indirectly owns 60% of Amman East whereas the other 40% is owned entirely by one other shareholder. As a result, we
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appoint three out of the five members of the Board of Directors at Amman East. All decisions of the Board are made by an affirmative vote of a simple majority of the Board, except for certain matters requiring unanimous approval of the shareholders that convey to the other shareholders rights that are only protective and do not include any matters related to the day-to-day operational and management decision-making activities.
As such, the holding company has a controlling financial interest over Amman East and the holding company should and does consolidate Amman East as minority rights do not preclude consolidation by the holding company. As we have a controlling financial interest in the holding company, we have a controlling financial interest in Amman East so we should and do consolidate Amman East. (The “AES Equity Interest” is disclosed as 37% for Amman East by multiplying the aforementioned interest of 61% in the holding company and interest of 60% in Amman East).
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13.
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We note that you hold a 50% ownership interest in Bursa, Kocaeli and Istanbul, which appear to be excluded from your table of investments accounted for under the equity method. Please tell us how these investments are accounted for and the facts and circumstances supporting your accounting. Refer to ASC 810-10-15.
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14.
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Please tell us your consideration of disclosing the net gain or loss and net prior service cost or credit recognized in other comprehensive income and reclassification adjustments for each year presented. Refer to ASC 715-20-50-1 and ASC 715-20-55-17.
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15.
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Please show how to reconcile derivative activity to your disclosures on page 205 in Note 6 and pension activity to your disclosures in Note 14.
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a.
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Changes from a Qualifying Hedge – The comprehensive income table includes all amounts recognized in accumulated other comprehensive income (AOCI) related to our cash flow hedges, including those that once but no longer qualified as cash flow hedges (i.e., de-designations) where there would be current activity in AOCI. When we adopted FAS 161 in 2009, it was not readily apparent whether and how the de-designations should be reflected in the effective portion table. Paragraph 44C.b. of FAS 133, as amended by FAS 161 (now ASC 815-10-50-4C) references “designated and qualifying … cash flow hedges)”. Paragraph A37 of FAS 133 includes the following: “The Board also decided that this Statement should not permit or require disclosure of the gains and losses related to hedged items not designated and qualifying in a Statement 133 hedging relationship within the required statement of financial performance table.” Based on these two paragraphs, we determined that these de-designations should be included in the comprehensive income table while being excluded from the effective portion table. Similarly, we determined that the AOCI activity that we record
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b.
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Ineffective Portion of Settlements – Settlements on any derivatives designated and qualifying as cash flow hedges ultimately do not have an impact on AOCI, but are considered in both the change in fair value (amount recorded to AOCI) and the reclassification to earnings. As the change in fair value reflected in settlements can include an ineffective portion, this ineffectiveness should not be reflected in the effective portion table. As there is ultimately no net impact on AOCI, we did not initially consider excluding the ineffective portion from the comprehensive income table. As best practices evolved, we prospectively excluded the ineffective portion from both of the tables.
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c.
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Currency and Classification Differences – The primary difference resulted from using different foreign exchange rates for the effective portion table than would have been used in translating the financial statements of subsidiaries with functional currencies other than the U.S. Dollar (where the latter rates determined the AOCI activity and thus the comprehensive income table). The remaining differences vary in nature. As with the other categories of differences, this difference for this category is also immaterial.
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16.
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Please tell us your consideration of disclosing the terms of the modification made to stock option awards disclosed in the first paragraph on page 242, the number of employees affected and the total incremental compensation costs resulting from the modifications. Refer to paragraph h.2 on ASC 718-10-50-2.
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17.
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We note that you estimated the fair value of restricted stock units with market conditions by applying a factor of 137% to the closing price of your stock on the grant date. Please tell us why this valuation complies with the guidance in ASC 718.
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18.
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We note that you held less than a controlling financial ownership interest in the Brazilian Telecom companies sold during 2011 and Barka sold in 2010. Please tell us your basis for consolidating Brazil Telecom and Barka and why the businesses are properly classified as discontinued operations.
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a.
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Brazilian Telecom – Please see the prior discussion on Brasiliana (of which we own 46%) provided in response to comment 12 as it related to businesses in Brazil. Brasiliana owned 100% of each of the two telecommunications companies and had a controlling financial interest in them. So, Brasiliana should and did consolidate them.
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As we have a controlling financial interest in Brasiliana, we had a controlling financial interest in these two telecommunications companies so we should and did consolidate them. (The ownership interest was disclosed as 46% for these companies by multiplying the aforementioned equity interests of 46% and of 100% for both).
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Due to each of these two companies being a component and upon both meeting the held-for-sale criteria, we considered the criteria in ASC 205-20-45-1 and determined that both companies should be presented as discontinued operations. Regarding ASC 205-20-45-1.a., the operations and cash flows of both companies would be (and were) eliminated from our ongoing operations within one year after the sale, during which our transition services would (and did) end. Regarding ASC 205-20-45-1.b., our involvement with both companies would be (and was) eliminated within one year after the sale. In assessing both criteria, we looked to the assessment period of one year after the sale (per ASC 205-20-55-20) and our expectations about meeting the criteria by the end of that period (per ASC 205-20- 55-22). As such, both of these telecommunications companies met all of the criteria for discontinued operations.
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b.
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Barka – Please see the prior discussion of a holding company (of which we own 61%) provided in response to comment 12 as it related to Amman East.
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That same holding company indirectly had owned 58% of Barka and appointed four out of the seven members (or 57%) of the Board of Directors of Barka. The Board was responsible for the day-to-day operations and overall direction and supervision of Barka and most Board matters requires an affirmative vote of just a simple majority. The remaining matters require an affirmative vote of 75% at the shareholders’ general meeting such that they gave the minority shareholder some rights, which were all assessed and determined to be protective and did not preclude consolidation by the holding company.
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As such, the holding company had a controlling financial interest in Barka and the holding company should and did consolidate Barka as the minority rights did not preclude consolidation by the holding company. As we had a controlling financial interest in the holding company, we had a controlling financial interest in Barka so we should and did consolidate Barka. (The ownership interest was disclosed as 35% for Barka by multiplying the aforementioned interests of 61% and of 58%).
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Due to Barka being a component and upon Barka meeting the held-for-sale criteria, we considered the criteria in ASC 205-20-45-1 and determined that Barka should be presented as discontinued operations. Regarding ASC 205-20-45-1.a., the operations and cash flows would be (and were) eliminated from our ongoing operations upon the sale. Regarding ASC 205-20-45-1.b., our involvement with Barka would be (and was) eliminated upon the sale and, therefore, Barka met the discontinued operations criteria.
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19.
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Please tell us your consideration of disclosing, to the extent applicable, information regarding indemnification assets, receivables and contingencies required by ASC 805-2-40-1.
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Very truly yours,
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By:
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/s/ Mary E. Wood
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Name:
Title:
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Mary E. Wood
Vice President, Controller and Interim Chief Financial Officer
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cc:
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Zafar Hasan
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Assistant General Counsel
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The AES Corporation
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4300 Wilson Boulevard
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Arlington, Virginia 22203
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Richard D. Truesdell, Jr.
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Davis Polk & Wardwell LLP
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450 Lexington Avenue
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New York, NY 10017
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2011
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2010
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2009
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Gains / (Losses) Recognized in AOCL
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Gains / (Losses) Reclassified from AOCL Into Earnings
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Gains / (Losses) Recognized in AOCL
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Gains / (Losses) Reclassified from AOCL Into Earnings
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Gains / (Losses) Recognized in AOCL
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Gains / (Losses) Reclassified from AOCL Into Earnings
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Comprehensive Income Table (Note 16)
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Amount in Columns (Net of Tax)
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$ | (379 | ) | $ | 137 | $ | (242 | ) | $ | 162 | $ | 214 | $ | (141 | ) | |||||||||
Amount in Parentheses (Taxes)
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(108 | ) | 22 | (56 | ) | 41 | (34 | ) | 41 | |||||||||||||||
Total from Disclosure (Pre-Tax)
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(487 | ) | 159 | (298 | ) | 203 | 180 | (100 | ) | |||||||||||||||
Effective Cash Flow Hedge Table (Note 6)
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Total from Table
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(487 | ) | (159 | ) | (249 | ) | (90 | ) | 219 | (24 | ) | |||||||||||||
Footnote on Disc Ops (Interest Rate)
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- | - | - | (113 | ) | - | (35 | ) | ||||||||||||||||
Footnote on Disc Ops (Commodity)
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- | - | - | 11 | - | 190 | ||||||||||||||||||
Total from Disclosure
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(487 | ) | (159 | ) | (249 | ) | (192 | ) | 219 | 131 | ||||||||||||||
Difference in Totals Disclosed
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- | - | (49 | ) | 11 | (39 | ) | 31 | ||||||||||||||||
Properly Recorded But Disclosed Only in One Table
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Changes to or from a Qualifying Hedge
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- | - | 13 | - | 12 | (1 | ) | |||||||||||||||||
Ineffective Portion of Settlements
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- | - | 19 | (19 | ) | 32 | (32 | ) | ||||||||||||||||
Currency and Classification Differences
|
- | - | 17 | 8 | (5 | ) | 2 | |||||||||||||||||
- | - | 49 | (11 | ) | 39 | (31 | ) | |||||||||||||||||
Difference Based on Amounts Recorded
|
$ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
2010
|
2009
|
|||||||||||||||
Net Difference in Totals Disclosed
|
$ | (38 | ) | $ | (8 | ) | ||||||||||
Net Income (and % Thereof)
|
$ | 1,055 | -3.6 | % | $ | 1,755 | -0.5 | % | ||||||||
Comprehensive Income (and % Thereof)
|
$ | 1,496 | -2.5 | % | $ | 2,437 | -0.3 | % |
2011 | 2010 | 2009 | |||||||||||||||||||||||||||||||
Footnote 15 - Equity from page 234 of the AES 2011 Form 10-K
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Total
|
Total
|
Total
|
||||||||||||||||||||||||||||||
1 |
Reclassification to earnings (net of tax) per Note 10 - Equity
|
$ | 13 | $ | 23 | $ | - | ||||||||||||||||||||||||||
2 |
Add: Tax impact
|
6 | 12 | 1 | |||||||||||||||||||||||||||||
3 |
Actual reclassification to earnings (gross including tax) in Note 10 - Equity
|
$ | 19 | $ | 35 | $ | 1 | ||||||||||||||||||||||||||
Footnote 14 - Benefit Plans page 229 of the AES 2011 Form 10-K
|
|||||||||||||||||||||||||||||||||
Components of net periodic benefit cost as presented in Note 14 of the 2011 10-K
|
2011 | 2010 | 2009 | |||||||||||||||||||||||||||||||||||||
US
|
Foreign
|
Total
|
US
|
Foreign
|
Total
|
US
|
Foreign
|
Total
|
|||||||||||||||||||||||||||||||
4 |
Amortization of initial net obligation (asset)
|
$ | - | $ | - | $ | - | $ | - | $ | (1 | ) | $ | (1 | ) | $ | - | $ | (2 | ) | $ | (2 | ) | ||||||||||||||||
5 |
Amortization of prior service cost
|
4 | - | 4 | 3 | - | 3 | 4 | - | 4 | |||||||||||||||||||||||||||||
6 |
Amortization of net (gain) loss
|
13 | 23 | 36 | 12 | 38 | 50 | 16 | 6 | 22 | |||||||||||||||||||||||||||||
7 |
Amounts representing amortization reclassified to earnings (sum of lines 4 - 6 above)
|
$ | 17 | $ | 23 | $ | 40 | $ | 15 | $ | 37 | $ | 52 | $ | 20 | $ | 4 | $ | 24 | ||||||||||||||||||||
Reconciling Items
|
|||||||||||||||||||||||||||||||||||||||
8 |
Less: Portion reclassified from regulatory assets ( US - IPL )
|
$ | (17 | ) | $ | - | $ | (17 | ) | $ | (15 | ) | $ | - | $ | (15 | ) | $ | (20 | ) | $ | - | $ | (20 | ) | ||||||||||||||
9 |
Immaterial classification difference
|
(4 | ) | (2 | ) | (3 | ) | ||||||||||||||||||||||||||||||||
$ | 19 | $ | 35 | $ | 1 |
Re:
|
The AES Corporation
|
Registration Statement on Form S-4
|
|
File No. 333-180388
|
By:
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/s/ Zafar Hasan
|
|
Name:
|
Zafar Hasan, Esq.
|
|
Title:
|
Assistant General Counsel
|
cc:
|
Richard D. Truesdell, Jr.
|
Davis Polk & Wardwell LLP
|
|
450 Lexington Avenue
|
|
New York, NY 10017
|