Other Non-Operating Expense

12 Months Ended

Dec. 31, 2012

OTHER NON-OPERATING EXPENSE

9. OTHER NON-OPERATING EXPENSE

Other non-operating expense for the years ended December 31, 2012, 2011 and 2010 consisted of:

	Years Ended December 31,
	2012		2011		2010
	(in millions)
China generation and wind	$	32	$	79	$	-
InnoVent		17		-		-
Other		1		3		7
Total other-non operating expense	$	50	$	82	$	7

2012

China―During the first quarter of 2012, the Company concluded it was more likely than not that it would sell its interests in certain joint ventures in China before the end of their terms. These investments include coal-fired, hydroelectric and wind generation facilities accounted for under the equity method of accounting. This conclusion was considered an impairment indicator. In measuring the other-than-temporary impairment, the carrying value of $165 million of these investments was compared to their fair value of $133 million resulting in an other-than-temporary impairment expense of $32 million. The Company signed two separate sale agreements for the sale of these investments, which were closed in the third and fourth quarters of 2012. See Note 24―Acquisitions and Dispositions for further information.

InnoVent―During the first quarter of 2012, the Company concluded it was more likely than not that it would sell its interest in InnoVent S.A.S. (“InnoVent”), an equity method investment in France with wind generation projects totaling 75 MW. InnoVent had a carrying value of $36 million which exceeded its fair value of $19 million, resulting in an other-than-temporary impairment expense of $17 million. The sale transaction was completed on June 28, 2012.

2011

China―During the third quarter of 2011, the Company recognized other-than-temporary-impairment on its 25% investment in Yangcheng, a 2100 MW coal-fired plant in China. During the nine months ended September 30, 2011, continually increasing coal prices in China reducedoperating marginsof coal generation facilities with no corresponding increase in tariffs. Further, under the Yangchengventure agreement in effect at this time, AES was to surrender its equity interest to theventure partners in 2016 without additional compensation. As of September 30, 2011, Yangcheng had a carrying amount of $100 million which was written down to its estimated fair value of $26 million determined under the discounted cash flow analysis, and the difference was recognized as other non-operating expense.

2010

Other―Other non-operating expense of $7 million for the year ended December 31, 2010 primarily consisted ofan other-than-temporary impairment of an equity method investment. During the second quarter of 2010, AES decided not to pursue its investment in a project to generate environmental offset credits and recognized the other-than-temporary impairment.