x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 54 1163725 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
4300 Wilson Boulevard Arlington, Virginia | 22203 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer x | Accelerated filer ¨ | Non-accelerated filer ¨ | Smaller reporting company ¨ | |||
(Do not check if a smaller reporting company) |
ITEM 1. | ||
ITEM 2. | ||
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ITEM 4. | ||
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September 30, 2014 | December 31, 2013 | |||||||
(in millions, except share and per share data) | ||||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalents | $ | 1,670 | $ | 1,642 | ||||
Restricted cash | 487 | 597 | ||||||
Short-term investments | 686 | 668 | ||||||
Accounts receivable, net of allowance for doubtful accounts of $104 and $134, respectively | 2,755 | 2,363 | ||||||
Inventory | 741 | 684 | ||||||
Deferred income taxes | 148 | 166 | ||||||
Prepaid expenses | 208 | 179 | ||||||
Other current assets | 1,192 | 976 | ||||||
Current assets of discontinued operations and held-for-sale businesses | — | 464 | ||||||
Total current assets | 7,887 | 7,739 | ||||||
NONCURRENT ASSETS | ||||||||
Property, Plant and Equipment: | ||||||||
Land | 903 | 922 | ||||||
Electric generation, distribution assets and other | 30,670 | 30,596 | ||||||
Accumulated depreciation | (9,981 | ) | (9,604 | ) | ||||
Construction in progress | 3,475 | 3,198 | ||||||
Property, plant and equipment, net | 25,067 | 25,112 | ||||||
Other Assets: | ||||||||
Investments in and advances to affiliates | 704 | 1,010 | ||||||
Debt service reserves and other deposits | 480 | 541 | ||||||
Goodwill | 1,468 | 1,622 | ||||||
Other intangible assets, net of accumulated amortization of $156 and $153, respectively | 283 | 297 | ||||||
Deferred income taxes | 693 | 666 | ||||||
Other noncurrent assets | 2,401 | 2,170 | ||||||
Noncurrent assets of discontinued operations and held-for-sale businesses | — | 1,254 | ||||||
Total other assets | 6,029 | 7,560 | ||||||
TOTAL ASSETS | $ | 38,983 | $ | 40,411 | ||||
LIABILITIES AND EQUITY | ||||||||
CURRENT LIABILITIES | ||||||||
Accounts payable | $ | 2,203 | $ | 2,259 | ||||
Accrued interest | 402 | 263 | ||||||
Accrued and other liabilities | 2,121 | 2,114 | ||||||
Non-recourse debt, including $242 and $267, respectively, related to variable interest entities | 2,347 | 2,062 | ||||||
Recourse debt | — | 118 | ||||||
Current liabilities of discontinued operations and held-for-sale businesses | — | 837 | ||||||
Total current liabilities | 7,073 | 7,653 | ||||||
NONCURRENT LIABILITIES | ||||||||
Non-recourse debt, including $1,036 and $979, respectively, related to variable interest entities | 13,372 | 13,318 | ||||||
Recourse debt | 5,347 | 5,551 | ||||||
Deferred income taxes | 1,165 | 1,119 | ||||||
Pension and other post-retirement liabilities | 1,224 | 1,310 | ||||||
Other noncurrent liabilities | 3,158 | 3,299 | ||||||
Noncurrent liabilities of discontinued operations and held-for-sale businesses | — | 432 | ||||||
Total noncurrent liabilities | 24,266 | 25,029 | ||||||
Contingencies and Commitments (see Note 9) | ||||||||
Cumulative preferred stock of subsidiaries | 78 | 78 | ||||||
EQUITY | ||||||||
THE AES CORPORATION STOCKHOLDERS’ EQUITY | ||||||||
Common stock ($0.01 par value, 1,200,000,000 shares authorized; 814,456,569 issued and 715,960,427 outstanding at September 30, 2014 and 813,316,510 issued and 722,508,342 outstanding at December 31, 2013) | 8 | 8 | ||||||
Additional paid-in capital | 8,355 | 8,443 | ||||||
Retained earnings (accumulated deficit) | 413 | (150 | ) | |||||
Accumulated other comprehensive loss | (3,176 | ) | (2,882 | ) | ||||
Treasury stock, at cost (98,496,142 shares at September 30, 2014 and 90,808,168 shares at December 31, 2013) | (1,203 | ) | (1,089 | ) | ||||
Total AES Corporation stockholders’ equity | 4,397 | 4,330 | ||||||
NONCONTROLLING INTERESTS | 3,169 | 3,321 | ||||||
Total equity | 7,566 | 7,651 | ||||||
TOTAL LIABILITIES AND EQUITY | $ | 38,983 | $ | 40,411 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
(in millions, except per share amounts) | ||||||||||||||||
Revenue: | ||||||||||||||||
Regulated | $ | 2,378 | $ | 2,062 | $ | 6,636 | $ | 6,175 | ||||||||
Non-Regulated | 2,063 | 1,934 | 6,378 | 5,916 | ||||||||||||
Total revenue | 4,441 | 3,996 | 13,014 | 12,091 | ||||||||||||
Cost of Sales: | ||||||||||||||||
Regulated | (1,956 | ) | (1,663 | ) | (5,732 | ) | (5,082 | ) | ||||||||
Non-Regulated | (1,718 | ) | (1,406 | ) | (4,902 | ) | (4,432 | ) | ||||||||
Total cost of sales | (3,674 | ) | (3,069 | ) | (10,634 | ) | (9,514 | ) | ||||||||
Operating margin | 767 | 927 | 2,380 | 2,577 | ||||||||||||
General and administrative expenses | (45 | ) | (53 | ) | (148 | ) | (160 | ) | ||||||||
Interest expense | (390 | ) | (358 | ) | (1,086 | ) | (1,065 | ) | ||||||||
Interest income | 69 | 85 | 205 | 213 | ||||||||||||
Loss on extinguishment of debt | (47 | ) | — | (196 | ) | (212 | ) | |||||||||
Other expense | (12 | ) | (15 | ) | (37 | ) | (58 | ) | ||||||||
Other income | 12 | 25 | 56 | 106 | ||||||||||||
Gain on disposals and sale of investments | 362 | 3 | 363 | 26 | ||||||||||||
Goodwill impairment expense | — | (58 | ) | (154 | ) | (58 | ) | |||||||||
Asset impairment expense | (15 | ) | (16 | ) | (90 | ) | (64 | ) | ||||||||
Foreign currency transaction gains (losses) | (79 | ) | 32 | (91 | ) | (16 | ) | |||||||||
Other non-operating expense | (16 | ) | (122 | ) | (60 | ) | (122 | ) | ||||||||
INCOME FROM CONTINUING OPERATIONS BEFORE TAXES AND EQUITY IN EARNINGS OF AFFILIATES | 606 | 450 | 1,142 | 1,167 | ||||||||||||
Income tax expense | (92 | ) | (126 | ) | (303 | ) | (285 | ) | ||||||||
Net equity in earnings of affiliates | (6 | ) | 15 | 39 | 21 | |||||||||||
INCOME FROM CONTINUING OPERATIONS | 508 | 339 | 878 | 903 | ||||||||||||
Income (loss) from operations of discontinued businesses, net of income tax expense (benefit) of $0, $(3), $22, and $2, respectively | — | (38 | ) | 27 | (37 | ) | ||||||||||
Net loss from disposal and impairments of discontinued businesses, net of income tax expense (benefit) of $0, $(1), $4, and $(2), respectively | — | (78 | ) | (56 | ) | (111 | ) | |||||||||
NET INCOME | 508 | 223 | 849 | 755 | ||||||||||||
Noncontrolling interests: | ||||||||||||||||
Less: Income from continuing operations attributable to noncontrolling interests | (20 | ) | (164 | ) | (295 | ) | (449 | ) | ||||||||
Less: Loss from discontinued operations attributable to noncontrolling interests | — | 12 | 9 | 14 | ||||||||||||
Total net income attributable to noncontrolling interests | (20 | ) | (152 | ) | (286 | ) | (435 | ) | ||||||||
NET INCOME ATTRIBUTABLE TO THE AES CORPORATION | $ | 488 | $ | 71 | $ | 563 | $ | 320 | ||||||||
AMOUNTS ATTRIBUTABLE TO THE AES CORPORATION COMMON STOCKHOLDERS: | ||||||||||||||||
Income from continuing operations, net of tax | $ | 488 | $ | 175 | $ | 583 | $ | 454 | ||||||||
Loss from discontinued operations, net of tax | — | (104 | ) | (20 | ) | (134 | ) | |||||||||
Net income | $ | 488 | $ | 71 | $ | 563 | $ | 320 | ||||||||
BASIC EARNINGS PER SHARE: | ||||||||||||||||
Income from continuing operations attributable to The AES Corporation common stockholders, net of tax | $ | 0.68 | $ | 0.23 | $ | 0.81 | $ | 0.61 | ||||||||
Loss from discontinued operations attributable to The AES Corporation common stockholders, net of tax | — | (0.14 | ) | (0.03 | ) | (0.18 | ) | |||||||||
NET INCOME ATTRIBUTABLE TO THE AES CORPORATION COMMON STOCKHOLDERS | $ | 0.68 | $ | 0.09 | $ | 0.78 | $ | 0.43 | ||||||||
DILUTED EARNINGS PER SHARE: | ||||||||||||||||
Income from continuing operations attributable to The AES Corporation common stockholders, net of tax | $ | 0.67 | $ | 0.23 | $ | 0.81 | $ | 0.61 | ||||||||
Loss from discontinued operations attributable to The AES Corporation common stockholders, net of tax | — | (0.14 | ) | (0.03 | ) | (0.18 | ) | |||||||||
NET INCOME ATTRIBUTABLE TO THE AES CORPORATION COMMON STOCKHOLDERS | $ | 0.67 | $ | 0.09 | $ | 0.78 | $ | 0.43 | ||||||||
DILUTED SHARES OUTSTANDING | 740 | 747 | 727 | 749 | ||||||||||||
DIVIDENDS DECLARED PER COMMON SHARE | $ | 0.05 | $ | — | $ | 0.10 | $ | 0.08 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
(in millions) | ||||||||||||||||
NET INCOME | $ | 508 | $ | 223 | $ | 849 | $ | 755 | ||||||||
Available-for-sale securities activity: | ||||||||||||||||
Change in fair value of available-for-sale securities, net of income tax (expense) benefit of $0, $0, $0 and $0, respectively | (1 | ) | — | (1 | ) | (1 | ) | |||||||||
Reclassification to earnings, net of income tax (expense) benefit of $0, $0, $0 and $0, respectively | — | — | — | 1 | ||||||||||||
Total change in fair value of available-for-sale securities | (1 | ) | — | (1 | ) | — | ||||||||||
Foreign currency translation activity: | ||||||||||||||||
Foreign currency translation adjustments, net of income tax (expense) benefit of $1, $1, $(7) and $3, respectively | (329 | ) | (6 | ) | (300 | ) | (264 | ) | ||||||||
Reclassification to earnings, net of income tax (expense) benefit of $0, $0, $0 and $0, respectively | (4 | ) | — | (51 | ) | 41 | ||||||||||
Total foreign currency translation adjustments | (333 | ) | (6 | ) | (351 | ) | (223 | ) | ||||||||
Derivative activity: | ||||||||||||||||
Change in derivative fair value, net of income tax (expense) benefit of $6, $0, $52 and $(28), respectively | (36 | ) | 7 | (261 | ) | 93 | ||||||||||
Reclassification to earnings, net of income tax (expense) of $(10), $(8), $(23) and $(30), respectively | 44 | 27 | 76 | 112 | ||||||||||||
Total change in fair value of derivatives | 8 | 34 | (185 | ) | 205 | |||||||||||
Pension activity: | ||||||||||||||||
Change in pension adjustments due to prior service cost, net of income tax (expense) benefit of $0, $0, $(1) $0, respectively | — | — | 1 | — | ||||||||||||
Change in pension adjustments due to disposal of discontinued operations for the period, net of income tax (expense) benefit of $0, $0, $(9), $0, respectively | — | — | 14 | — | ||||||||||||
Reclassification to earnings due to amortization of net actuarial loss, net of income tax (expense) benefit of $(3), $(6), $(4) and $(20), respectively | 5 | 12 | 21 | 39 | ||||||||||||
Total pension adjustments | 5 | 12 | 36 | 39 | ||||||||||||
OTHER COMPREHENSIVE INCOME (LOSS) | (321 | ) | 40 | (501 | ) | 21 | ||||||||||
COMPREHENSIVE INCOME | 187 | 263 | 348 | 776 | ||||||||||||
Less: Comprehensive (income) loss attributable to noncontrolling interests | 108 | (171 | ) | (119 | ) | (454 | ) | |||||||||
COMPREHENSIVE INCOME ATTRIBUTABLE TO THE AES CORPORATION | $ | 295 | $ | 92 | $ | 229 | $ | 322 |
Nine Months Ended September 30, | ||||||||
2014 | 2013 | |||||||
(in millions) | ||||||||
OPERATING ACTIVITIES: | ||||||||
Net income | $ | 849 | $ | 755 | ||||
Adjustments to net income: | ||||||||
Depreciation and amortization | 937 | 982 | ||||||
(Gain) loss on sale of assets and investments | (344 | ) | 4 | |||||
Impairment expenses | 304 | 309 | ||||||
Deferred income taxes | 83 | (82 | ) | |||||
Provisions for (releases of) contingencies | (41 | ) | 33 | |||||
Loss on the extinguishment of debt | 196 | 212 | ||||||
Loss on disposals and impairments - discontinued operations | 51 | 108 | ||||||
Other | 135 | (26 | ) | |||||
Changes in operating assets and liabilities | ||||||||
(Increase) decrease in accounts receivable | (494 | ) | 135 | |||||
(Increase) decrease in inventory | (75 | ) | (6 | ) | ||||
(Increase) decrease in prepaid expenses and other current assets | (12 | ) | 403 | |||||
(Increase) decrease in other assets | (439 | ) | (149 | ) | ||||
Increase (decrease) in accounts payable and other current liabilities | (14 | ) | (578 | ) | ||||
Increase (decrease) in income tax payables, net and other tax payables | (239 | ) | (66 | ) | ||||
Increase (decrease) in other liabilities | 319 | 6 | ||||||
Net cash provided by operating activities | 1,216 | 2,040 | ||||||
INVESTING ACTIVITIES: | ||||||||
Capital expenditures | (1,389 | ) | (1,330 | ) | ||||
Acquisitions, net of cash acquired | (728 | ) | (3 | ) | ||||
Proceeds from the sale of businesses, net of cash sold | 1,668 | 167 | ||||||
Proceeds from the sale of assets | 29 | 52 | ||||||
Sale of short-term investments | 3,335 | 3,375 | ||||||
Purchase of short-term investments | (3,386 | ) | (3,638 | ) | ||||
Decrease in restricted cash, debt service reserves and other assets | 162 | 75 | ||||||
Other investing | (55 | ) | 35 | |||||
Net cash used in investing activities | (364 | ) | (1,267 | ) | ||||
FINANCING ACTIVITIES: | ||||||||
Borrowings (repayments) under the revolving credit facilities, net | 14 | (22 | ) | |||||
Issuance of recourse debt | 1,525 | 750 | ||||||
Issuance of non-recourse debt | 2,253 | 3,082 | ||||||
Repayments of recourse debt | (2,019 | ) | (1,208 | ) | ||||
Repayments of non-recourse debt | (1,639 | ) | (2,288 | ) | ||||
Payments for financing fees | (111 | ) | (148 | ) | ||||
Distributions to noncontrolling interests | (377 | ) | (385 | ) | ||||
Contributions from noncontrolling interests | 114 | 157 | ||||||
Dividends paid on AES common stock | (108 | ) | (89 | ) | ||||
Payments for financed capital expenditures | (360 | ) | (436 | ) | ||||
Purchase of treasury stock | (140 | ) | (63 | ) | ||||
Other financing | 4 | 15 | ||||||
Net cash used in financing activities | (844 | ) | (635 | ) | ||||
Effect of exchange rate changes on cash | (55 | ) | (37 | ) | ||||
Decrease in cash of discontinued and held-for-sale businesses | 75 | 23 | ||||||
Total increase in cash and cash equivalents | 28 | 124 | ||||||
Cash and cash equivalents, beginning | 1,642 | 1,900 | ||||||
Cash and cash equivalents, ending | $ | 1,670 | $ | 2,024 | ||||
SUPPLEMENTAL DISCLOSURES: | ||||||||
Cash payments for interest, net of amounts capitalized | $ | 902 | $ | 923 | ||||
Cash payments for income taxes, net of refunds | $ | 401 | $ | 506 | ||||
SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES: | ||||||||
Assets received upon sale of subsidiaries | $ | 44 | $ | — | ||||
Assets acquired through capital lease | $ | 13 | $ | 12 |
September 30, 2014 | December 31, 2013 | |||||||
(in millions) | ||||||||
Coal, fuel oil and other raw materials | $ | 375 | $ | 334 | ||||
Spare parts and supplies | 366 | 350 | ||||||
Total | $ | 741 | $ | 684 |
September 30, 2014 | December 31, 2013 | |||||||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||
AVAILABLE-FOR-SALE:(1) | ||||||||||||||||||||||||||||||||
Debt securities: | ||||||||||||||||||||||||||||||||
Unsecured debentures | $ | — | $ | 484 | $ | — | $ | 484 | $ | — | $ | 435 | $ | — | $ | 435 | ||||||||||||||||
Certificates of deposit | — | 119 | — | 119 | — | 151 | — | 151 | ||||||||||||||||||||||||
Government debt securities | — | 56 | — | 56 | — | 25 | — | 25 | ||||||||||||||||||||||||
Subtotal | — | 659 | — | 659 | — | 611 | — | 611 | ||||||||||||||||||||||||
Equity securities: | ||||||||||||||||||||||||||||||||
Mutual funds | — | 38 | — | 38 | — | 44 | — | 44 | ||||||||||||||||||||||||
Subtotal | — | 38 | — | 38 | — | 44 | — | 44 | ||||||||||||||||||||||||
Total available-for-sale | — | 697 | — | 697 | — | 655 | — | 655 | ||||||||||||||||||||||||
TRADING: | ||||||||||||||||||||||||||||||||
Equity securities: | ||||||||||||||||||||||||||||||||
Mutual funds | 15 | — | — | 15 | 13 | — | — | 13 | ||||||||||||||||||||||||
Total trading | 15 | — | — | 15 | 13 | — | — | 13 | ||||||||||||||||||||||||
DERIVATIVES: | ||||||||||||||||||||||||||||||||
Interest rate derivatives | — | 20 | — | 20 | — | 98 | — | 98 | ||||||||||||||||||||||||
Cross-currency derivatives | — | — | — | — | — | 5 | — | 5 | ||||||||||||||||||||||||
Foreign currency derivatives | — | 29 | 102 | 131 | — | 15 | 98 | 113 | ||||||||||||||||||||||||
Commodity derivatives | — | 28 | 13 | 41 | — | 18 | 6 | 24 | ||||||||||||||||||||||||
Total derivatives | — | 77 | 115 | 192 | — | 136 | 104 | 240 | ||||||||||||||||||||||||
TOTAL ASSETS | $ | 15 | $ | 774 | $ | 115 | $ | 904 | $ | 13 | $ | 791 | $ | 104 | $ | 908 | ||||||||||||||||
Liabilities | ||||||||||||||||||||||||||||||||
DERIVATIVES: | ||||||||||||||||||||||||||||||||
Interest rate derivatives | $ | — | $ | 199 | $ | 180 | $ | 379 | $ | — | $ | 221 | $ | 101 | $ | 322 | ||||||||||||||||
Cross-currency derivatives | — | 25 | — | 25 | — | 11 | — | 11 | ||||||||||||||||||||||||
Foreign currency derivatives | — | 46 | 7 | 53 | — | 16 | 5 | 21 | ||||||||||||||||||||||||
Commodity derivatives | — | 33 | 1 | 34 | — | 15 | 2 | 17 | ||||||||||||||||||||||||
Total derivatives | — | 303 | 188 | 491 | — | 263 | 108 | 371 | ||||||||||||||||||||||||
TOTAL LIABILITIES | $ | — | $ | 303 | $ | 188 | $ | 491 | $ | — | $ | 263 | $ | 108 | $ | 371 |
(1) | Amortized cost approximated fair value at September 30, 2014 and December 31, 2013. |
Three Months Ended September 30, 2014 | ||||||||||||||||
Interest Rate | Foreign Currency | Commodity | Total | |||||||||||||
(in millions) | ||||||||||||||||
Balance at the beginning of the period | $ | (183 | ) | $ | 107 | $ | 16 | $ | (60 | ) | ||||||
Total gains (losses) (realized and unrealized): | ||||||||||||||||
Included in earnings | — | (7 | ) | — | (7 | ) | ||||||||||
Included in other comprehensive income - derivative activity | (13 | ) | — | — | (13 | ) | ||||||||||
Included in other comprehensive income - foreign currency translation activity | 9 | (4 | ) | — | 5 | |||||||||||
Included in regulatory (assets) liabilities | — | — | (4 | ) | (4 | ) | ||||||||||
Settlements | 7 | (1 | ) | — | 6 | |||||||||||
Balance at the end of the period | $ | (180 | ) | $ | 95 | $ | 12 | $ | (73 | ) | ||||||
Total gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities held at the end of the period | $ | — | $ | (8 | ) | $ | — | $ | (8 | ) |
Three Months Ended September 30, 2013 | ||||||||||||||||
Interest Rate | Foreign Currency | Commodity | Total | |||||||||||||
(in millions) | ||||||||||||||||
Balance at the beginning of the period | $ | (63 | ) | $ | 70 | $ | 9 | $ | 16 | |||||||
Total gains (losses) (realized and unrealized): | ||||||||||||||||
Included in earnings | (1 | ) | 28 | (1 | ) | 26 | ||||||||||
Included in other comprehensive income - derivative activity | 7 | — | — | 7 | ||||||||||||
Included in other comprehensive income - foreign currency translation activity | (1 | ) | (6 | ) | — | (7 | ) | |||||||||
Included in regulatory (assets) liabilities | — | — | (4 | ) | (4 | ) | ||||||||||
Settlements | 9 | (1 | ) | — | 8 | |||||||||||
Transfers of assets (liabilities) into Level 3 | (84 | ) | — | — | (84 | ) | ||||||||||
Transfers of (assets) liabilities out of Level 3 | 30 | — | — | 30 | ||||||||||||
Balance at the end of the period | $ | (103 | ) | $ | 91 | $ | 4 | $ | (8 | ) | ||||||
Total gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities held at the end of the period | $ | — | $ | 27 | $ | (1 | ) | $ | 26 |
Nine Months Ended September 30, 2014 | ||||||||||||||||
Interest Rate | Foreign Currency | Commodity | Total | |||||||||||||
(in millions) | ||||||||||||||||
Balance at the beginning of the period | $ | (101 | ) | $ | 93 | $ | 4 | $ | (4 | ) | ||||||
Total gains (losses) (realized and unrealized): | ||||||||||||||||
Included in earnings | 1 | 29 | 2 | 32 | ||||||||||||
Included in other comprehensive income - derivative activity | (112 | ) | (2 | ) | — | (114 | ) | |||||||||
Included in other comprehensive income - foreign currency translation activity | 9 | (24 | ) | — | (15 | ) | ||||||||||
Included in regulatory (assets) liabilities | — | — | 7 | 7 | ||||||||||||
Settlements | 23 | (4 | ) | (1 | ) | 18 | ||||||||||
Transfers of (assets) liabilities out of Level 3 | — | 3 | — | 3 | ||||||||||||
Balance at the end of the period | $ | (180 | ) | $ | 95 | 12 | $ | (73 | ) | |||||||
Total gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities held at the end of the period | $ | 1 | $ | 26 | $ | 1 | $ | 28 |
Nine Months Ended September 30, 2013 | |||||||||||||||
Interest Rate | Foreign Currency | Commodity | Total | ||||||||||||
(in millions) | |||||||||||||||
Balance at the beginning of the period | $ | (412 | ) | $ | 72 | $ | (1 | ) | $ | (341 | ) | ||||
Total gains (losses) (realized and unrealized): | |||||||||||||||
Included in earnings | (2 | ) | 40 | — | 38 | ||||||||||
Included in other comprehensive income - derivative activity | 84 | — | — | 84 | |||||||||||
Included in other comprehensive income - foreign currency translation activity | (3 | ) | (12 | ) | — | (15 | ) | ||||||||
Included in regulatory (assets) liabilities | — | — | 5 | 5 | |||||||||||
Settlements | 73 | (3 | ) | — | 70 | ||||||||||
Transfers of (assets) liabilities out of Level 3 | 157 | (6 | ) | — | 151 | ||||||||||
Balance at the end of the period | $ | (103 | ) | $ | 91 | $ | 4 | $ | (8 | ) | |||||
Total gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) relating to assets and liabilities held at the end of the period | $ | — | $ | 40 | $ | — | $ | 40 |
Type of Derivative | Fair Value | Unobservable Input | Amount or Range (Weighted Average) | ||||||
(in millions) | |||||||||
Interest rate | $ | (180 | ) | Subsidiaries’ credit spreads | 3.75% - 6.98% (5.51%) | ||||
Foreign currency: | |||||||||
Embedded derivative — Argentine Peso | 102 | Argentine Peso to USD currency exchange rate after 1 year | 8.84 - 36.40 (22.12) | ||||||
Embedded derivative — Euro | (7 | ) | Subsidiaries’ credit spreads | 6.98 | % | ||||
Commodity: | |||||||||
Other | 12 | ||||||||
Total | $ | (73 | ) |
Nine Months Ended September 30, 2014 | ||||||||||||||||||||
Carrying Amount (1) | Fair Value | Pretax Loss | ||||||||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||||||||||
(in millions) | ||||||||||||||||||||
Assets | ||||||||||||||||||||
Long-lived assets held and used:(2) | ||||||||||||||||||||
DPL (East Bend) | $ | 14 | $ | — | $ | 2 | $ | — | $ | 12 | ||||||||||
Ebute (measured at June 30, 2014) | 99 | — | — | 47 | 52 | |||||||||||||||
Ebute (measured at September 30, 2014) | 51 | — | — | 36 | 15 | |||||||||||||||
UK Wind (Newfield) | 11 | — | — | — | 11 | |||||||||||||||
Discontinued operations and held-for-sale businesses:(3) | ||||||||||||||||||||
Cameroon | 378 | — | 340 | — | 38 | |||||||||||||||
Equity method investments (5) | ||||||||||||||||||||
Silver Ridge Power | 315 | — | — | 273 | 42 | |||||||||||||||
Entek | 143 | — | 125 | — | 18 | |||||||||||||||
Goodwill:(4) | ||||||||||||||||||||
DPLER | 136 | — | — | — | 136 | |||||||||||||||
Buffalo Gap | 28 | — | — | 10 | 18 |
Nine Months Ended September 30, 2013 | ||||||||||||||||||||
Carrying Amount (1) | Fair Value | Pretax Loss | ||||||||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||||||||||
(in millions) | ||||||||||||||||||||
Assets | ||||||||||||||||||||
Long-lived assets held and used:(2) | ||||||||||||||||||||
Poland Wind projects | $ | 79 | $ | — | $ | — | $ | 14 | $ | 65 | ||||||||||
Itabo (San Lorenzo) | 22 | — | — | 7 | 15 | |||||||||||||||
Beaver Valley | 61 | — | — | 15 | 46 | |||||||||||||||
Long-lived assets held for sale:(2) | ||||||||||||||||||||
Wind turbines | 25 | — | 25 | — | — | |||||||||||||||
Discontinued operations and held-for-sale businesses:(3) | ||||||||||||||||||||
Cameroon | 264 | — | 199 | — | 65 | |||||||||||||||
Saurashtra | 19 | — | 7 | — | 12 | |||||||||||||||
Ukraine | 147 | — | 113 | — | 34 | |||||||||||||||
Equity method investments:(5) | ||||||||||||||||||||
Elsta | 240 | — | — | 118 | 122 | |||||||||||||||
Goodwill (4) | ||||||||||||||||||||
Ebute | 58 | — | — | — | 58 |
(1) | Represents the carrying value (including costs to sell) at the date of measurement, before fair value adjustment. |
(2) | See Note 15 — Asset Impairment Expense for further information. |
(3) | See Note 18 — Discontinued Operations and Held-For-Sale Businesses for further information. |
(4) | See Note 14 — Goodwill Impairment for further information. |
(5) | See Note 16 — Other Non-Operating Expense and Note 7 — Investments in and Advances to Affiliates for further information. |
Fair Value | Valuation Technique | Unobservable Input | Range (Weighted Average) | ||||||||
(in millions) | ($ in millions) | ||||||||||
Long-lived assets held and used: | |||||||||||
Ebute (June 30, 2014) | $ | 47 | Discounted cash flow | Annual revenue growth | 0% to 1% (1%) | ||||||
Annual pretax operating margin | 0% to 47% (24%) | ||||||||||
Weighted-average cost of capital | 10.3 | % | |||||||||
Ebute (September 30, 2014) | $ | 36 | Discounted cash flow | Annual revenue growth | 0% to 1% (1%) | ||||||
Annual pretax operating margin | 0% to 56% (25%) | ||||||||||
Equity Method Investment: | |||||||||||
Silver Ridge Power (1) | $ | 273 | Discounted cash flow | Annual revenue growth | -57% to 1% (-4%) | ||||||
Annual pretax operating margin | -115% to 50% (6%) | ||||||||||
Cost of equity | 13% to 16% (14%) |
Carrying Amount | Fair Value | |||||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||
(in millions) | ||||||||||||||||||||
September 30, 2014 | ||||||||||||||||||||
Assets | ||||||||||||||||||||
Accounts receivable — noncurrent(1) | $ | 210 | $ | 170 | $ | — | $ | — | $ | 170 | ||||||||||
Liabilities | ||||||||||||||||||||
Non-recourse debt | 15,719 | 16,117 | — | 13,818 | 2,299 | |||||||||||||||
Recourse debt | 5,347 | 5,598 | — | 5,598 | — | |||||||||||||||
December 31, 2013 | ||||||||||||||||||||
Assets | ||||||||||||||||||||
Accounts receivable — noncurrent(1) | $ | 260 | $ | 194 | $ | — | $ | — | $ | 194 | ||||||||||
Liabilities | ||||||||||||||||||||
Non-recourse debt | 15,380 | 15,620 | — | 13,397 | 2,223 | |||||||||||||||
Recourse debt | 5,669 | 6,164 | — | 6,164 | — |
(1) | These accounts receivable principally relate to amounts due from CAMMESA, the administrator of the wholesale electricity market in Argentina, and are included in “Noncurrent assets — Other” in the accompanying Condensed Consolidated Balance Sheets. The fair value and carrying amount of these accounts receivable exclude value-added tax of $36 million and $46 million at September 30, 2014 and December 31, 2013, respectively. |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
(in millions) | ||||||||||||||||
Gross proceeds from sales of available-for-sale securities | $ | 1,144 | $ | 1,071 | $ | 3,362 | $ | 3,394 |
Current | Maximum | ||||||||||||||||||
Interest Rate and Cross-Currency | Derivative Notional | Derivative Notional Translated to USD | Derivative Notional | Derivative Notional Translated to USD | Weighted-Average Remaining Term | % of Debt Currently Hedged by Index(2) | |||||||||||||
(in millions) | (in years) | ||||||||||||||||||
Interest Rate Derivatives:(1) | |||||||||||||||||||
LIBOR (U.S. Dollar) | 2,943 | $ | 2,943 | 3,604 | $ | 3,604 | 11 | 57 | % | ||||||||||
EURIBOR (Euro) | 551 | 696 | 551 | 696 | 7 | 86 | % | ||||||||||||
Cross-Currency Swaps: | |||||||||||||||||||
Chilean Unidad de Fomento | 4 | 178 | 4 < |