Segment and Geographic Information

12 Months Ended

Dec. 31, 2011

SEGMENT AND GEOGRAPHIC INFORMATION

16. SEGMENT AND GEOGRAPHIC INFORMATION

During the first quarter of 2012, the Company completed the restructuring of its operational management and reporting process. The management reporting structure is organized along two lines of business – Generation and Utilities, each led by a Chief Operating Officer. The segment reporting structure primarily uses the Company's management reporting structure as its foundation to reflect how the Company manages the business internally with further aggregation by geographic regions to provide better socio-political-economic understanding of our business. Upon the application of the accounting guidance for segment reporting, the Company concluded that Tietê, our 2,663 MW hydro generation business in Brazil, met the quantitative thresholds to require separate presentation. As such, an additional reportable segment which consists solely of the results of Tietê is now reported as Generation – Tietê. Tietê was formerly reported within the Latin America –Generation segment. The previously disclosed Latin America – Generation segment is now reported as Generation – Latin America – Other and, with the exception of Tietê, includes the results of all remaining businesses as previously reported. All prior period results have been retrospectively revised to reflect the new segment reporting structure. The Company has increased from six to the following seven reportable segments:

•       Generation – Latin America – Other;

•       Generation – Tietê;

•       Generation – North America;

•       Generation – Europe;

•       Generation – Asia;

•       Utilities – Latin America;

•       Utilities – North America.

Corporate and Other—The Company's Europe Utilities, Africa Utilities, Africa Generation, Wind Generation operating segments and other climate solutions and renewables projects are reported within “Corporate and Other” because they do not meet the criteria to allow for aggregation with another operating segment or the quantitative thresholds that would require separate disclosure under segment reporting accounting guidance. None of these operating segments are currently material to our presentation of reportable segments, individually or in the aggregate. AES Solar and certain other unconsolidated businesses are accounted for using the equity method of accounting; therefore, their operating results are included in “Net Equity in Earnings of Affiliates” on the face of the Consolidated Statements of Operations, not in revenue or gross margin. “Corporate and Other” also includes corporate overhead costs which are not directly associated with the operations of our seven reportable segments and other intercompany charges such as self-insurance premiums which are fully eliminated in consolidation.

The Company uses adjusted gross margin, a non-GAAP measure, to evaluate the performance of its segments. Adjusted gross margin is defined by the Company as gross margin plus depreciation and amortization less general and administrative expenses.

Total revenue includes inter-segment sales related to the transfer of electricity from generation plants to utilities within Latin America. No material inter-segment revenue relationships exist between other segments. Corporate allocations include certain self-insurance activities which are reflected within segment adjusted gross margin. All intra-segment activity has been eliminated with respect to revenue and adjusted gross margin within the segment. Inter-segment activity has been eliminated within the total consolidated results. Asset information for businesses that were discontinued or classified as held for sale as of December 31, 2011 is segregated and is shown in the line “Discontinued Businesses” in the accompanying segment tables.

The tables below present the breakdown of business segment balance sheet and income statement data as of and for the years ended December 31, 2011 through 2009:

	Total Revenue						Intersegment						External Revenue
	2011		2010		2009		2011		2010		2009		2011		2010		2009
	(in millions)
Revenue
Generation - Latin America - Other	$	3,854	$	3,282	$	2,806	$	(39)	$	(34)	$	(16)	$	3,815	$	3,248	$	2,790
Generation - Tiete		1,128		999		845		(1,109)		(983)		(848)		19		16		(3)
Generation - North America		1,325		1,315		1,249		(4)		-		-		1,321		1,315		1,249
Generation - Europe		1,550		1,318		762		(2)		(2)		2		1,548		1,316		764
Generation - Asia		625		618		375		-		-		-		625		618		375
Utilities - Latin America		7,374		6,987		5,877		-		-		-		7,374		6,987		5,877
Utilities - North America		1,326		1,145		1,068		-		-		-		1,326		1,145		1,068
Corporate and Other		1,109		1,053		868		(9)		(13)		(14)		1,100		1,040		854
Total Revenue	$	18,291	$	16,717	$	13,850	$	(1,163)	$	(1,032)	$	(876)	$	17,128	$	15,685	$	12,974

	Total Adjusted Gross Margin						Intersegment						External Adjusted Gross Margin
	2011		2010		2009		2011		2010		2009		2011		2010		2009
	(in millions)
Adjusted Gross Margin
Generation - Latin America - Other	$	1,209	$	945	$	891	$	20	$	(27)	$	(4)	$	1,229	$	918	$	887
Generation - Tiete		876		754		637		(1,109)		(983)		(848)		(233)		(229)		(211)
Generation - North America		439		448		453		9		2		(3)		448		450		450
Generation - Europe		469		395		273		8		3		4		477		398		277
Generation - Asia		176		255		111		2		2		4		178		257		115
Utilities - Latin America		1,321		1,248		1,060		1,118		1,018		865		2,439		2,266		1,925
Utilities - North America		394		407		401		1		2		2		395		409		403
Corporate and Other		(33)		62		3		(45)		(17)		(10)		(78)		45		(7)
Reconciliation to Income from Continuing Operations before Taxes
Depreciation and amortization														(1,176)		(1,034)		(884)
Interest expense														(1,553)		(1,451)		(1,406)
Interest income														400		408		344
Other expense														(154)		(234)		(104)
Other income														149		100		458
Gain on sale of investments														8		-		132
Goodwill impairment														(17)		(21)		(122)
Asset impairment expense														(225)		(389)		(20)
Foreign currency transaction gains (losses)														(38)		(33)		35
Other non-operating expense														(82)		(7)		(12)
Income from continuing operations before taxes and equity in earnings of affiliates													$	2,167	$	1,853	$	2,260

	Total Assets						Depreciation and Amortization						Capital Expenditures
	2011		2010		2009		2011		2010		2009		2011		2010		2009
	(in millions)
Generation - Latin America - Other	$	9,067	$	8,487	$	8,010	$	202	$	175	$	146	$	553	$	584	$	921
Generation - Tiete		1,645		1,886		1,792		59		40		37		105		57		30
Generation - North America		3,625		3,801		4,199		118		131		135		39		54		45
Generation - Europe		3,276		3,317		3,147		136		114		53		140		233		212
Generation - Asia		1,717		1,762		1,594		33		33		32		129		10		22
Utilities - Latin America		9,468		9,609		8,810		293		231		201		666		584		356
Utilities - North America		9,384		3,139		3,035		178		161		157		232		177		116
Discontinued businesses		1,531		2,587		3,756		59		110		140		91		105		119
Corp/Other and eliminations		5,620		5,923		5,192		184		183		148		506		529		717
Total	$	45,333	$	40,511	$	39,535	$	1,262	$	1,178	$	1,049	$	2,461	$	2,333	$	2,538

	Investment in and
	Advances to Affiliates						Equity in Earnings (Loss)
	2011		2010		2009		2011		2010		2009
	(in millions)
Generation - Latin America - Other	$	188	$	150	$	129	$	35	$	48	$	30
Generation - Tiete		-		-		-		-		-		-
Generation - North America		18		-		3		(2)		(2)		(2)
Generation - Europe		479		353		308		8		19		50
Generation - Asia		291		409		390		(1)		3		28
Utilities - Latin America		-		-		-		-		-		-
Utilities - North America		-		-		-		-		-		-
Discontinued businesses		-		-		-		-		-		-
Corp/Other and eliminations		446		408		327		(42)		115		(15)
Total	$	1,422	$	1,320	$	1,157	$	(2)	$	183	$	91

The table below presents information, by country, about the Company's consolidated operations for each of the years ended December 31, 2011 through 2009 and as of December 31, 2011 and 2010, respectively. Revenue is recorded in the country in which it is earned and assets are recorded in the country in which they are located.

	Revenue						Property, Plant & Equipment, net
	2011		2010		2009		2011		2010
	(in millions)
United States(1)	$	2,110	$	1,952	$	1,851	$	7,829	$	5,379
Non-U.S.:
Brazil(2)		6,640		6,355		5,292		5,896		6,263
Chile		1,608		1,355		1,239		2,781		2,560
Argentina(3)		979		771		571		279		270
El Salvador		752		648		619		268		261
Dominican Republic		674		535		429		662		625
United Kingdom(4)		587		364		228		523		507
Philippines		480		501		250		766		784
Ukraine		418		356		286		94		86
Mexico		404		409		329		774		786
Cameroon		386		422		370		901		823
Colombia		365		393		347		384		387
Puerto Rico		298		253		267		581		596
Spain(5)		258		411		-		-		-
Bulgaria(6)		251		44		-		1,619		1,825
Hungary(7)		204		252		259		6		73
Panama		189		194		168		1,040		921
Kazakhstan		145		138		123		86		63
Sri Lanka		140		100		109		22		69
Jordan		124		120		104		216		224
Qatar(8)		-		-		-		-		-
Pakistan(9)		-		-		-		-		-
Oman(10)		-		-		-		-		-
Other Non-U.S. (11)		116		112		133		395		291
Total Non-U.S.		15,018		13,733		11,123		17,293		17,414
Total	$	17,128	$	15,685	$	12,974	$	25,122	$	22,793

(1)Excludes revenue of $374 million, $662 million and $695 million for the years ended December 31, 2011, 2010 and 2009, respectively, and property, plant and equipment of $619 million and $788million as of December 31,2011 and 2010, respectively, related to Eastern Energy, Thames, Ironwood and Red Oak which were reflected as discontinued operations and businesses held for sale in the accompanying Consolidated Statements of Operations and Consolidated Balance Sheets.

(2)Excludes revenue of $124 million, $118 million and $102 million for the years ended December 31, 2011, 2010 and 2009, respectively, and property, plant and equipment of $151 million as of December 31, 2010, related to Brazil Telecom, which was reflected as discontinued operations and businesses held for sale in the accompanying Consolidated Statements of Operations and Consolidated Balance Sheets.

(3)Excludes revenue of $102 million, $116 million and $113 million for the years ended December 31, 2011, 2010 and 2009, respectively, and property, plant and equipment of $189 million as of December 31, 2010, related to our Argentina distribution businesses, which were reflected as discontinued operations and businesses held for sale in the accompanying Consolidated Statements of Operations and Consolidated Balance Sheets.

(4)Excludes revenue of $17 million, $21 million and $11 million for the years ended December 31, 2011, 2010 and 2009, respectively, and property, plant and equipment of $20 million as of December 31, 2010, related to carbon reduction projects, which were reflected as discontinued operations and businesses held for sale in the accompanying Consolidated Statements of Operations and Consolidated Balance Sheets.

(5)Excludes property, plant and equipment of $620 million and$667 million as of December 31, 2011 and 2010, respectively, related to Cartagena, which was reflected as businesses held for sale in the accompanying Consolidated Balance Sheets.

(6)Maritza and our wind project in Bulgaria were under development and therefore not operational as of December 31, 2009. Our wind project in Bulgaria started operations in 2010 and Maritza started operations in June 2011.

(7)Excludes revenue of $14 million, $44 million and $58 million for the years ended December 31, 2011, 2010 and 2009, respectively, and property, plant and equipment of $7 million as of December 31, 2010, related to Borsod and Tiszapalkonya, which were reflected as discontinued operations and businesses held for sale in the accompanying Consolidated Statements of Operations and Consolidated Balance Sheets.

(8)Excludes revenue of $129 million and $163 million for the years ended December 31, 2010 and 2009, respectively, related to Ras Laffan, which was reflected as discontinued operations and businesses held for sale in the accompanying Consolidated Statements of Operations.

(9)Excludes revenue of $299 million and $470 million for the years ended December 31, 2010 and 2009, respectively, related to Lal Pir and Pak Gen, which were reflected as discontinued operations and businesses held for sale in the accompanying Consolidated Statements of Operations.

(10)Excludes revenue of $62 million and $101 million for the years ended December 31, 2010 and 2009, respectively, related to Barka, which was reflected as discontinued operations and businesses held for sale in the accompanying Consolidated Statements of Operations.

(11)Excludes revenue of $1 million for the year ended December 31, 2011, and property, plant and equipment of $2 million and $18 million as of December 31, 2011, and 2010, respectively, related to alternative energy and carbon reduction projects, which were reflected as discontinued operations and businesses held for sale in the accompanying Consolidated Statements of Operations and Consolidated Balance Sheets.