Reconciliations of Non-GAAP Measures Adjusted Operating Margin
## Table 0 ##
Adjusted Pre-Tax Contribution: For a reconciliation of Adjusted PTC to net income from continuing operations, see Note 17 — Segment and Geographic Information included in Item 8.
— Financial Statements and Supplementary Data of this Form 10-K.
Adjusted EPS
## Table 1 ##
(1) Unrealized derivative (gains) losses were net of income tax per share of $(0.02), $0.04 and $(0.01) in 2013, 2012, and 2011, respectively.
(2) Unrealized foreign currency transaction (gains) losses were net of income tax per share of $0.02, $0.00 and $0.01 in 2013, 2012, and 2011, respectively.
(3) Amount primarily relates to the gain from the sale of the remaining 20% of our interest in Cartagena for $20 million ($15 million, or $0.02 per share, net of income tax per share of $0.01) as well as the gain from the sale of Trinidad for $3 million ($4 million, or $0.01 per share, net of income tax per share of $0.00).
(4) Amount primarily relates to the gains from the sale of 80% of our interest in Cartagena for $178 million ($109 million, or $0.14 per share, net of income tax per share of $0.09) and equity method investments in China of $24 million ($25 million, or $0.03 per share, including an income tax credit of $1 million, or income tax per share of $0.00).
(5) Amount primarily relates to the goodwill impairments at DPL of $307 million ($307 million, or $0.41 per share, net of income tax per share of $0.00), at Ebute of $58 million ($58 million, or $0.08 per share, net of income tax per share of $0.00) and at Mountain View of $7 million ($7 million, or $0.01 per share, net of income tax per share of $0.00).
Amount also includes an other-thantemporary impairment of our equity method investment at Elsta in the Netherlands of $129 million ($128 million, or $0.17 per share, net of income tax per share of $0.00) and asset impairments at Beaver Valley of $46 million ($30 million, or $0.04 per share, net of income tax per share of $0.02), at DPL of $26 million ($17 million, or $0.02 per share, net of income tax per share of $0.01), at Itabo (San Lorenzo) of $16 million ($6 million, or $0.01 per share, net of noncontrolling interest of $8 million and of income tax per share of $0.00), at El Salvador for $4 million ($4 million, or $0.01 per share, net of income tax per share of $0.00).
(6) Amount primarily relates to the goodwill impairment at DPL of $1.82 billion ($1.82 billion, or $2.39 per share, net of income tax per share of $0.00).
Amount also includes other-than-temporary impairment of equity method investments in China of $32 million ($32 million, or $0.04 per share, net of income tax per share of $0.00), and at InnoVent of $17 million ($17 million, or $0.02 per share, net of income tax per share of $0.00), as well as asset impairments of Wind turbines and projects of $41 million ($26 million, or $0.03 per share, net of income tax per share of $0.02) and asset impairments at Kelanitissa of $19 million ($17 million, or $0.02 per share,
THE AES CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) DECEMBER 31, 2013, 2012, AND 2011 165 (1) Excludes revenue of $23 million, $63 million and $396 million for the years ended December 31, 2013, 2012 and 2011, respectively, and property, plant and equipment of $69 million and $123 million as of December 31, 2013 and 2012, respectively, related to Condon, Mid-West Wind, Eastern Energy, Thames, Red Oak and Ironwood which were reflected as discontinued operations and assets held for sale in the accompanying Consolidated Statements of Operations and Consolidated Balance Sheets.
Additionally, property, plant and equipment excludes $25 million as of December 31, 2012 related to wind turbines which were reflected as assets held for sale in the accompanying Consolidated Balance Sheets.
(2) Excludes revenue of $124 million for the year ended December 31, 2011 related to Brazil Telecom, which was reflected as discontinued operations in the accompanying Consolidated Statements of Operations.
(3) Excludes revenue of $102 million for the year ended December 31, 2011 related to our Argentina distribution businesses, which were reflected as discontinued operations in the accompanying Consolidated Statements of Operations.
(4) Our wind project in Maritza started operations in June 2011.
(5) Excludes revenue of $474 million, $457 million and $386 million for the years ended December 31, 2013, 2012 and 2011, respectively, and property, plant and equipment of $1,100 million and $992 million as of December 31, 2013 and 2012 respectively, related to Dibamba, Kribi and Sonel, which were reflected as discontinued operations and assets held for sale in the accompanying Consolidated Statements of Operations and Consolidated Balance Sheets.
(6) Excludes revenue of $187 million, $491 million and $418 million for the years ended December 31, 2013, 2012 and 2011, respectively, and property, plant and equipment of $112 million as of December 31, 2012 related to Kievoblenergo and Rivnooblenergo, which were reflected as discontinued operations and assets held for sale in the accompanying Consolidated Statements of Operations and Consolidated Balance Sheets.
(7) Excludes revenue of $18 million and $219 million for the years ended December 31, 2012 and 2011, respectively, related to Borsod, Tiszapalkonya and Tisza II, which were reflected as discontinued operations and assets held for sale in the accompanying Consolidated Statements of Operations.
(8) Excludes revenue of $6 million, $11 million and $18 million for the years ended December 31, 2013, 2012 and 2011, respectively, and property, plant and equipment of $19 million and $54 million as of December 31, 2013 and 2012, respectively, related to Saurashtra, Poland wind and our carbon reduction projects, which were reflected as discontinued operations and assets held for sale in the accompanying Consolidated Statements of Operations and Consolidated Balance Sheets.18.
SHARE-BASED COMPENSATION STOCK OPTIONS—AES grants options to purchase shares of common stock under stock option plans to employees and non-employee directors.
Under the terms of the plans, the Company may issue options to purchase shares of the Company’s common stock at a price equal to 100% of the market price at the date the option is granted.
Stock options are generally granted based upon a percentage of an employee’s base salary.
Stock options issued under these plans in 2013, 2012 and 2011 have a three-year vesting schedule and vest in one-third increments over the three-year period.
The stock options have a contractual term of ten years.
At December 31, 2013, approximately 15 million shares were remaining for award under the plans.
In all circumstances, stock options granted by AES do not entitle the holder the right, or obligate AES, to settle the stock option in cash or other assets of AES.
The following table presents the weighted average fair value of each option grant and the underlying weighted average assumptions, as of the grant date, using the Black-Scholes option-pricing model:
## Table 2 ##
The Company exclusively relies on implied volatility as the expected volatility to determine the fair value using the Black-Scholes option-pricing model.
The implied volatility may be exclusively relied upon due to the following factors: ?
The Company utilizes a valuation model that is based on a constant volatility assumption to value its employee share options; ?
The implied volatility is derived from options to purchase AES common stock that are actively traded; ?
The market prices of both the traded options and the underlying shares are measured at a similar point in time and on a date reasonably close to the grant date of the employee share options; ?
The traded options have exercise prices that are both near-the-money and close to the exercise price of the employee share options; and ?
The remaining maturities of the traded options on which the estimate is based are at least one year.
THE AES CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) DECEMBER 31, 2013, 2012, AND 2011 173 The following table summarizes the deferred tax assets and liabilities, as of December 31, 2013 and 2012:
## Table 3 ##
The Company considers undistributed earnings of certain foreign subsidiaries to be indefinitely reinvested outside of the United States and, accordingly, no U. S.  deferred taxes have been recorded with respect to such earnings in accordance with the relevant accounting guidance for income taxes.
Should the earnings be remitted as dividends, the Company may be subject to additional U. S.  taxes, net of allowable foreign tax credits.
It is not practicable to estimate the amount of any additional taxes which may be payable on the undistributed earnings.
Income from operations in certain countries is subject to reduced tax rates as a result of satisfying specific commitments regarding employment and capital investment.
The Company’s income tax benefits related to the tax status of these operations are estimated to be $70 million, $81 million and $60 million for the years ended December 31, 2013, 2012 and 2011, respectively.
The per share effect of these benefits after noncontrolling interests was $0.09, $0.10 and $0.07 for the years ended December 31, 2013, 2012 and 2011, respectively.
The benefit related to our operations in the Philippines will expire in the fourth quarter of 2014.
The Company’s income tax benefits related to these specific operations are estimated to be $41 million, $60 million and $34 million for the years ended December 31, 2013, 2012 and 2011.
The per share effect of these benefits after noncontrolling interests was $0.05, $0.07 and $0.04 for the years ended December 31, 2013, 2012 and 2011.
The following table summarizes the income (loss) from continuing operations, before income taxes, net equity in earnings of affiliates and noncontrolling interests, for the years ended December 31, 2013, 2012 and 2011:
## Table 4 ##
Uncertain Tax Positions Uncertain tax positions have been classified as noncurrent income tax liabilities unless expected to be paid in one year.
The Company’s policy for interest and penalties related to income tax exposures is to recognize interest and penalties as a component of the provision for income taxes in the Consolidated Statements of Operations.
As of December 31, 2013 and 2012, the total amount of gross accrued income tax related interest included in the Consolidated Balance Sheets was $12 million and $17 million, respectively.
The total amount of gross accrued income tax related penalties included in the Consolidated Balance Sheets as of December 31, 2013 and 2012 was $1 million and $4 million, respectively.
The total expense (benefit) for interest related to unrecognized tax benefits for the years ended December 31, 2013, 2012 and 2011 amounted to $(4) million, $3 million and $3 million, respectively.
For the years ended December 31, 2013, 2012 and 2011, the total expense (benefit) for penalties related to unrecognized tax benefits amounted to $(3) million, $1 million and $0 million, respectively.
?
Driving our business to manage capital more effectively and to increase the amount of discretionary cash available for deployment into debt repayment, growth investments, shareholder dividends and share buybacks; ?
Realignment of our geographic focus.
To this end, we will continue to exit markets where we do not have a competitive advantage or where we are unable to earn a fair risk-adjusted return relative to monetization alternatives.
In addition, we will focus our growth investments on platform expansions or opportunities to expand our existing operations; and ?
Reduce the cash flow and earnings volatility of our businesses by proactively managing our currency, commodity and political risk exposures, mostly through contractual and regulatory mechanisms, as well as commercial hedging activities.
We also will continue to limit our risk by utilizing non-recourse project financing for the majority of our businesses.2013 Strategic Performance We continued to execute on our strategic objectives of safe, reliable and sustainable operations, improvement of available capital and deployment of discretionary cash and realignment of our geographic focus.
Key highlights of our progress during the year ended December 31, 2013 include: Safe, Reliable and Sustainable Operations — Our 2013 operating performance for the year was driven by the strategic management of our assets and cost reductions across our portfolio, but we also faced dry hydrological conditions across many markets in Latin America and challenges at two of our utilities in Brazil and the US.
We continue to focus on safety as our top priority.
Our safety performance improved in 2013, as we lowered our lost-time incident case rates for both employees and operational contractors.
AES' strategic initiatives have resulted in both better operational availability and reliability of our generation portfolio, as measured by our Key Performance Indicators ("KPIs").
For example, our asset management program works to optimize the timing of plant maintenance by focusing on market pricing trends to minimize the costs of outages.
This is evidenced by our performance in the Commercial Availability ("CA") KPI, as defined below, which improved 4%.
Another strategic initiative focuses on the techniques of coal blending and using a variety of coals to improve margin.
Coal blending can reduce the efficiency of certain generating units, which unfavorably affects our heat rate; however, it is offset by the financial benefits from utilizing lower-cost coal.
Our utility portfolio also recorded some improvements in KPIs for the year.
Our dedication to providing reliable energy is evidenced by the improvement in our System Average Interruption Duration Index ("SAIDI") and System Average Interruption Frequency Index ("SAIFI"), which improved 15% and 24%, respectively, compared to 2012.
SAIDI and SAIFI metrics benefited in 2013 from fewer significant weather events in the US and asset optimization in the US and Brazil, such as crew productivity improvement, tree-trimming, and pole replacement.
Our key performance indicators for 2013 and 2012 are as follows:
## Table 5 ##
Definitions: ?
Lost-Time Incident Case Rate: Number of lost-time cases per number of full-time employees or contractors.  ?
Commercial Availability: Actual variable margin, as a percentage of potential variable margin if the unit had been available at full capacity during outages.  ?
Equivalent Forced Outage Factor: The percentage of the time that a plant is not capable of producing energy, due to unplanned operational reductions in production.
Notes to Consolidated Financial Statements — (Continued) Becton, Dickinson and Company 54 (B) These reclassifications were recorded to Interest expense and Cost of products sold.
Additional details regarding the Company's cash flow hedges are provided in Note 13.
On August 25, 2016, in anticipation of proceeds to be received from the divestiture of the Respiratory Solutions business in the first quarter of fiscal year 2017, the Company entered into an accelerated share repurchase ("ASR") agreement.
Subsequent to the end of the Company's fiscal year 2016 and as per the terms of the ASR agreement, the Company received approximately 1.3 million shares of its common stock, which was recorded as a $220 million increase to Common stock in treasury.
Note 4 — Earnings per Share The weighted average common shares used in the computations of basic and diluted earnings per share (shares in thousands) for the years ended September 30 were as follows:
## Table 6 ##
Upon closing the acquisition of CareFusion Corporation (“CareFusion”) on March 17, 2015, the Company issued approximately 15.9 million of its common shares as part of the purchase consideration.
Additional disclosures regarding this acquisition are provided in Note 9.
Options to purchase shares of common stock are excluded from the calculation of diluted earnings per share when their inclusion would have an anti-dilutive effect on the calculation.
For the years ended September 30, 2016, 2015 and 2014 there were no options to purchase shares of common stock which were excluded from the diluted earnings per share calculation.

<table><tr><td>Reconciliation of Adjusted Operating Margin to Operating Margin</td><td colspan="3">Years Ended December 31,</td></tr><tr><td></td><td>2013</td><td>2012</td><td>2011</td></tr><tr><td>Adjusted Operating Margin</td><td colspan="3">($'s in millions)</td></tr><tr><td>US</td><td>$684</td><td>$707</td><td>$406</td></tr><tr><td>Andes</td><td>402</td><td>431</td><td>564</td></tr><tr><td>Brazil</td><td>271</td><td>356</td><td>489</td></tr><tr><td>MCAC</td><td>472</td><td>489</td><td>419</td></tr><tr><td>EMEA</td><td>392</td><td>447</td><td>351</td></tr><tr><td>Asia</td><td>159</td><td>204</td><td>153</td></tr><tr><td>Corp/Other</td><td>-16</td><td>-12</td><td>2</td></tr><tr><td>Intersegment Eliminations</td><td>64</td><td>35</td><td>26</td></tr><tr><td>Total Adjusted Operating Margin</td><td>2,428</td><td>2,657</td><td>2,410</td></tr><tr><td>Noncontrolling Interests Adjustment</td><td>833</td><td>908</td><td>1,643</td></tr><tr><td>Derivatives Adjustment</td><td>-14</td><td>18</td><td>-13</td></tr><tr><td>Operating Margin</td><td>3,247</td><td>3,583</td><td>4,040</td></tr></table>
<table><tr><td></td><td colspan="5">Years Ended December 31,</td><td></td></tr><tr><td>Reconciliation of Adjusted Earnings Per Share</td><td>2013</td><td></td><td>2012</td><td></td><td>2011</td><td></td></tr><tr><td>Diluted earnings (loss) per share from continuing operations</td><td>$0.38</td><td></td><td>$-1.26</td><td></td><td>$0.65</td><td></td></tr><tr><td>Unrealized derivative (gains) losses<sup>(1)</sup></td><td>-0.05</td><td></td><td>0.11</td><td></td><td>-0.02</td><td></td></tr><tr><td>Unrealized foreign currency transaction (gains) losses<sup>(2)</sup></td><td>0.02</td><td></td><td>-0.02</td><td></td><td>0.06</td><td></td></tr><tr><td>Disposition/acquisition (gains)</td><td>-0.03</td><td><sup>-3</sup></td><td>-0.18</td><td><sup>-4</sup></td><td>—</td><td></td></tr><tr><td>Impairment losses</td><td>0.75</td><td><sup>-5</sup></td><td>2.55</td><td><sup>-6</sup></td><td>0.38</td><td><sup>-7</sup></td></tr><tr><td>Loss on extinguishment of debt</td><td>0.22</td><td><sup>-8</sup></td><td>0.01</td><td><sup>-9</sup></td><td>0.04</td><td><sup>-10</sup></td></tr><tr><td>Adjusted earnings per share</td><td>$1.29</td><td></td><td>$1.21</td><td></td><td>$1.11</td><td></td></tr></table>
<table><tr><td></td><td colspan="3">December 31,</td></tr><tr><td></td><td>2013</td><td>2012</td><td>2011</td></tr><tr><td>Expected volatility</td><td>23%</td><td>26%</td><td>31%</td></tr><tr><td>Expected annual dividend yield</td><td>1%</td><td>1%</td><td>—%</td></tr><tr><td>Expected option term (years)</td><td>6</td><td>6</td><td>6</td></tr><tr><td>Risk-free interest rate</td><td>1.13%</td><td>1.08%</td><td>2.65%</td></tr><tr><td>Fair value at grant date</td><td>$2.23</td><td>$3.04</td><td>$4.54</td></tr></table>
<table><tr><td></td><td>2013</td><td>2012</td></tr><tr><td></td><td colspan="2">(in millions)</td></tr><tr><td>Differences between book and tax basis of property</td><td>$-2,178</td><td>$-2,089</td></tr><tr><td>Other taxable temporary differences</td><td>-337</td><td>-377</td></tr><tr><td>Total deferred tax liability</td><td>-2,515</td><td>-2,466</td></tr><tr><td>Operating loss carryforwards</td><td>2,108</td><td>1,592</td></tr><tr><td>Capital loss carryforwards</td><td>103</td><td>108</td></tr><tr><td>Bad debt and other book provisions</td><td>277</td><td>330</td></tr><tr><td>Retirement costs</td><td>291</td><td>611</td></tr><tr><td>Tax credit carryforwards</td><td>38</td><td>46</td></tr><tr><td>Other deductible temporary differences</td><td>420</td><td>512</td></tr><tr><td>Total gross deferred tax asset</td><td>3,237</td><td>3,199</td></tr><tr><td>Less: valuation allowance</td><td>-1,090</td><td>-895</td></tr><tr><td>Total net deferred tax asset</td><td>2,147</td><td>2,304</td></tr><tr><td>Net deferred tax asset (liability)</td><td>$-368</td><td>$-162</td></tr></table>
<table><tr><td></td><td>2013</td><td>2012</td><td>2011</td></tr><tr><td></td><td colspan="3">(in millions)</td></tr><tr><td>U.S.</td><td>$-575</td><td>$-1,921</td><td>$-524</td></tr><tr><td>Non-U.S.</td><td>1,623</td><td>2,151</td><td>2,784</td></tr><tr><td>Total</td><td>$1,048</td><td>$230</td><td>$2,260</td></tr></table>
<table><tr><td></td><td colspan="3">For the Years Ended December 31,</td></tr><tr><td></td><td>2013</td><td>2012</td><td>Variance 2012-2013</td></tr><tr><td>Safety: Employee Lost-Time Incident Case Rate</td><td>.105</td><td>.108</td><td>3%</td></tr><tr><td>Safety: Operational Contractor Lost-Time Incident Case Rate</td><td>.114</td><td>.173</td><td>34%</td></tr><tr><td>Generation</td><td colspan="3"></td></tr><tr><td>Commercial Availability (%)</td><td>93.55%</td><td>89.09%</td><td>4.46%</td></tr><tr><td>Equivalent Forced Outage Factor (EFOF, %)</td><td>2.92%</td><td>2.93%</td><td>—%</td></tr><tr><td>Heat Rate (BTU/kWh)</td><td>9,638</td><td>9,476</td><td>-162</td></tr><tr><td>Utility</td><td></td><td></td><td></td></tr><tr><td>System Average Interruption Duration Index (SAIDI, hours)</td><td>5.96</td><td>7.01</td><td>1.05</td></tr><tr><td>System Average Interruption Frequency Index (SAIFI, number of interruptions)</td><td>2.97</td><td>3.93</td><td>0.96</td></tr><tr><td>Non-Technical Losses (%)</td><td>2.52%</td><td>2.19%</td><td>-0.33%</td></tr></table>
<table><tr><td></td><td>2016</td><td>2015</td><td>2014</td></tr><tr><td>Average common shares outstanding</td><td>212,702</td><td>202,537</td><td>193,299</td></tr><tr><td>Dilutive share equivalents from share-based plans</td><td>4,834</td><td>4,972</td><td>4,410</td></tr><tr><td>Average common and common equivalent shares outstanding — assuming dilution</td><td>217,536</td><td>207,509</td><td>197,709</td></tr></table>

Question: What will Asia for Adjusted Operating Margin reach in 2014 if it continues to grow at its current rate? (in million)
Answer: 123.92647