AES Reports Adjusted Earnings Per Share of $0.36 for Third Quarter 2012 and $0.91 for Year-To-Date 2012; Reaffirms 2012 Guidance

  AES Reports Adjusted Earnings Per Share of $0.36 for Third Quarter 2012 and
  $0.91 for Year-To-Date 2012; Reaffirms 2012 Guidance Ranges for All Metrics;
  Increases Cost Savings Target By $45 Million

Third Quarter & Year-To-Date 2012 Results

  *Third Quarter Adjusted Earnings Per Share increased $0.08 to $0.36, driven
    by contributions from new businesses, cost cutting and a lower share
    count, partially offset by unfavorable foreign currency exchange rates
  *Third Quarter Diluted Earnings Per Share from Continuing Operations
    decreased $2.01 to ($2.10), primarily due to a $2.46 per share goodwill
    impairment loss at DPL in the United States, partially offset by higher
    operating earnings
  *Year-To-Date 2012 Adjusted Earnings Per Share up 12% over Year-To-Date
    2011

Other Significant Announcements

  *Increased cost savings target by $45 million to $145 million when compared
    to 2011
  *Board authorized $225 million of Parent debt pre-payment
  *Repurchased $49 million of stock since the Second Quarter earnings call,
    for a total investment of $390 million since September 2011
  *Completed the sale of its interests in wind and coal assets in China for
    proceeds of approximately $86 million
  *Reaffirmed full year 2012 guidance ranges for all metrics

Business Wire

ARLINGTON, Va. -- November 07, 2012

The AES Corporation (NYSE: AES) today reported Adjusted Earnings Per Share
(Adjusted EPS, a non-GAAP financial measure) of $0.36 for the third quarter of
2012 and $0.91 for the first nine months of 2012, in line with the Company’s
expectations. Third Quarter 2012 results were driven by the contributions of
new businesses in the United States and Latin America, reduced SG&A expenses
and a lower share count. These positive drivers were partially offset by
unfavorable movements in foreign exchange rates.

“We continue to take important steps to better align the organization with our
strategic goals. We recently announced a reorganization of the Company that
will streamline how we work and decrease our company-wide overhead. As a
result, we have increased our overhead cost savings target by $45 million to
$145 million annually by 2014 from our starting point in 2011,” said Andrés
Gluski, AES President and Chief Executive Officer. “Regarding capital
allocation, we have executed on what we laid out as our first year plan last
November by repurchasing $390 million of our stock and paying down or
authorizing pre-payment of a total of $717 million in debt, largely with the
proceeds from our focused asset sales. Next week, we will be paying our first
quarterly dividend of $0.04 per share, the Company’s first cash dividend since
1993.”

“Our third quarter results exceeded last year’s results, driven by our new
businesses in the United States and Latin America, cost cutting initiatives
and the results of our capital allocation strategy,” said Tom O’Flynn, AES
Executive Vice President and Chief Financial Officer. “We are positioned to
deliver on our 2012 commitments and we are reaffirming all of our 2012
guidance metrics.”

Additional Highlights

  *Since August 2012, the Company repurchased 4.3 million shares for a total
    investment of $49 million. Since September 2011, the Company repurchased
    34 million shares for $390 million, at an average price of $11.55 per
    share. Total shares outstanding as of September 30, 2012 is 744 million.
  *In late 2011, the Company announced a cost cutting target of $100 million
    by 2014. This year, the Company is ahead of this original goal and now
    expects to achieve $65 million, net of one-time restructuring expenses in
    2012, and expects to reach the full $100 million of savings in 2013. The
    recently announced reorganization will result in an additional $45 million
    in sustainable cost savings by 2014, totaling $145 million less in
    overhead costs than in 2011.
  *During the quarter, the Company completed the sale of its interests in the
    2,100 MW coal-fired Yangcheng plant in China and its 49 percent equity
    interest in the 248 MW China Wind joint venture for a total of $86
    million. The Company expects to close the sale of the remaining 379 MW
    hydro capacity for $49 million before the end of 2012.
  *During the quarter, the Company completed construction of two wind and
    solar projects, totaling 52 MW.
  *The quarterly cash dividend of $0.04 per share is payable on November 15,
    2012 to common shareholders of record as of October 30, 2012, with an
    ex-dividend date of October 26, 2012. On an annual basis the total
    dividend payment will be approximately $120 million, or $0.16 per share.

2012 Guidance

  *The Company reaffirmed its full year 2012 Adjusted EPS guidance range of
    $1.22-$1.30, which is based on foreign exchange and commodity price
    assumptions as of September 30, 2012, and includes all announced and
    closed asset sales. As previously disclosed in August 2012, the Company
    expects its Adjusted EPS to come in at the low end of the guidance range.
  *The Company reaffirmed its Proportional Free Cash Flow guidance range of
    $1,050-$1,250 million. As previously disclosed in May 2012, the Company
    expects Proportional Free Cash Flow to come in at the low end of the
    guidance range. The Company reaffirmed its Subsidiary Distributions
    guidance range of $1,325-$1,525 million. As previously disclosed in August
    2012, the Company expects Subsidiary Distributions to come in at the low
    end of the range.

    In providing its full year 2012 Adjusted EPS guidance, the Company notes
    that there could be differences between expected reported earnings and
    estimated operating earnings for matters such as, but not limited to:
    (a)unrealized gains or losses related to derivative transactions;
    (b)unrealized foreign currency gains or losses; (c)gains or losses due
    to dispositions and acquisitions of business interests; (d)losses due to
    impairments; and (e)costs due to the early retirement of debt. At this
    time, management is not able to estimate the aggregate impact, if any, of
    these items on reported earnings. Accordingly, the Company is not able to
    provide a corresponding GAAP equivalent for its Adjusted EPS guidance.

Table 1: Results for Third Quarter & Year-to-Date 2012

                                                                    
               Third         Third         Year-to-Date   Year-to-Date   Full Year 2012
                Quarter       Quarter       2011           2012           Guidance
               2011         2012                                    
Consolidated   $ 4,307  M  $ 4,587  M  $ 12,898  M  $ 13,519  M   NA           
Revenue
Consolidated   $ 1,010  M  $ 1,004  M  $ 2,995   M  $ 2,774   M  $ 3,600-3,800  M
Gross Margin
Proportional
Gross          $ 570    M  $ 738    M  $ 1,779   M  $ 2,063   M  $ 2,650-2,850  M
Margin^1
Consolidated
Cash Flow
from           $ 1,136  M  $ 1,015  M  $ 2,313   M  $ 2,129   M  $ 2,900-3,100  M
Operating
Activities
Proportional
Cash Flow
from           $ 625    M  $ 656    M  $ 1,238   M  $ 1,444   M  $ 1,925-2,125  M
Operating
Activities^1
Consolidated
Free Cash      $ 895    M  $ 785    M  $ 1,615   M  $ 1,423   M  $ 1,700-1,900  M
Flow^1
Proportional
Free Cash      $ 460    M  $ 501    M  $ 764     M  $ 949     M  $ 1,050-1,250  M
Flow^1
Subsidiary
Distributions  $ 394    M  $ 343    M  $ 1,104   M  $ 1,010   M  $ 1,325-1,525  M
to the Parent
Company^2
Diluted EPS
from           $ (0.09 )   $ (2.10 )   $ 0.46      $ (1.52  )    NA           
Continuing
Operations
Adjusted       $ 0.28     $ 0.36     $ 0.81      $ 0.91      $ 1.22-1.30    
EPS^1

^1 A non-GAAP financial measure. See “Non-GAAP Financial Measures” for
definitions and reconciliations to the most comparable GAAP financial
measures.

^2 See definitions.

Key drivers of Third Quarter results include (comparison of Q3 2012 vs. Q3
2011):

  *Consolidated Revenue increased by $280 million to $4.6 billion, due to:
    (i) the contributions of the Company’s new businesses, primarily DPL; and
    (ii) recovery of pass through costs of energy at Eletropaulo in Brazil.
    These increases were partially offset by the unfavorable impact of foreign
    currency.
  *Consolidated Gross Margin decreased by $6 million to $1.0 billion, due to:
    (i) the unfavorable impact of foreign currency; (ii) lower tariffs at
    Eletropaulo as a result of the worse than expected outcome related to the
    2011 tariff reset passed by the Brazilian regulator in July of 2012; and
    (iii) an increase in fixed costs in Latin America. These declines were
    mostly offset by: (i) the contribution of the Company’s new businesses, as
    discussed above; and (ii) the favorable impact of unrealized
    mark-to-market derivative adjustments at Sonel in Cameroon.
  *Proportional Gross Margin (a non-GAAP financial measure, see Appendix for
    definition and reconciliation) increased by $168 million to $738 million,
    due to the contribution of the Company’s new businesses, partially offset
    by lower tariffs and higher fixed costs at Eletropaulo.
  *Consolidated Cash Flow from Operating Activities decreased by $121 million
    to $1.0 billion driven by a decrease at its utility businesses in Latin
    America. This decline was partially offset by: (i) an increase due to the
    acquisition of DP&L in the United States, which closed in November 2011;
    and (ii) an increase at the Company’s generation businesses in Latin
    America.
  *Proportional Cash Flow from Operating Activities (a non-GAAP financial
    measure, see Appendix for definition and reconciliation) increased by $31
    million to $656 million, due to: (i) an increase due to the acquisition of
    DP&L and (ii) an increase at the Company’s generation businesses in Latin
    America. These increases were partially offset by a decrease at its
    utility businesses in Latin America.
  *Consolidated Free Cash Flow (a non-GAAP financial measure, see Appendix
    for definition and reconciliation) decreased by $110 million to $785
    million due to the same factors driving Consolidated Cash Flow from
    Operating Activities.
  *Proportional Free Cash Flow (a non-GAAP financial measure, see Appendix
    for definition and reconciliation) increased by $41 million to $501
    million due to the same factors driving Proportional Cash Flow from
    Operating Activities.
  *Diluted EPS from Continuing Operations decreased by $2.01 per share to a
    loss of $2.10 per share due primarily to goodwill impairment expense at
    DPL in the United States of $1,850 million or $2.46 per share. This
    decline was partially offset by: (i) the contribution of the Company’s new
    businesses, as discussed above; (ii) lower foreign currency transaction
    losses compared to the third quarter of 2011; and (iii) lower SG&A
    expenses.
  *Adjusted EPS (a non-GAAP financial measure, see Appendix for definition
    and reconciliation) increased by $0.08 to $0.36 per share due to: (i) the
    contribution of the Company’s new businesses, as discussed above; (ii)
    lower SG&A expenses; and (iii) a lower share count. These gains were
    partially offset by unfavorable foreign currency. Table 2 provides a
    reconciliation of Diluted EPS to Adjusted EPS for the third quarter of
    2012 as compared to the third quarter of 2011.

Table 2: Reconciliation of Diluted EPS to Adjusted EPS for Q3 2012 as compared
to Q3 2011

                                                                 
                                                        Q3 2012    Q3 2011
Diluted Earnings Per Share from Continuing Operations    $ (2.09 )  $ (0.09 )
Unrealized derivative losses                               -           0.01
Unrealized foreign currency transaction (gains)/losses     (0.01 )     0.08
Disposition/Acquisition (gains)                            (0.04 )     -
Impairment losses                                          2.50        0.25
Debt retirement losses                                    -        0.03  
Adjusted Earnings Per Share                             $ 0.36    $ 0.28  

See Appendix for more detail and additional reconciliations for non-GAAP
measures. Diluted weighted-average shares outstanding for non-GAAP measures:
751 million (2012) and 782 million (2011).

Key drivers of Year-to-Date results include (comparison of Q3 YTD 2012 vs. Q3
YTD 2011):

  *Consolidated Revenue increased by $621 million to $13.5 billion, due to:
    (i) the contributions of the Company’s new businesses in the United
    States, Bulgaria and Latin America; (ii) higher volume at its generation
    businesses in Latin America and Asia; and (iii) higher prices at its
    utility businesses in El Salvador and at Sul in Brazil. These increases
    were partially offset by: (i) the unfavorable impact of foreign currency;
    (ii) lower prices due to the unfavorable 2011 tariff reset at Eletropaulo
    that was passed by the Brazilian regulator in July 2012; and (iii) the
    unfavorable impact of the deconsolidation of Cartagena, in Spain, as a
    result of the sale of 80% of its ownership in February 2012.
  *Consolidated Gross Margin decreased by $221 million to $2.8 billion, due
    to: (i) the unfavorable impact of foreign currency; and (ii) lower prices
    due to the unfavorable tariff reset at Eletropaulo described above. These
    declines were partially offset by the contributions of new businesses, as
    discussed above.
  *Proportional Gross Margin (a non-GAAP financial measure, see Appendix for
    definition and reconciliation) increased by $284 million to $2.1 billion
    due to: (i) the contributions of new businesses in the United States,
    Bulgaria and Latin America; and (ii) the favorable impact of a
    non-recurring arbitration settlement during the first quarter of 2012 at
    Cartagena in Spain. These gains were partially offset by: (i) lower prices
    and the impact of the July 2011 tariff reset at Eletropaulo, as discussed
    above; and (ii) lower energy exports from TermoAndes in Argentina to Chile
    and higher contract levels at lower energy prices at AES Gener in Chile.
  *Consolidated Cash Flow from Operating Activities decreased by $184 million
    to $2.1 billion, driven by a decrease at its utility businesses in Latin
    America. This decrease was partially offset by: (i) an increase at its
    utility businesses in North America, due to the acquisition of DP&L in
    November 2011; and (ii) an increase at its generation businesses in Latin
    America and Asia.
  *Proportional Cash Flow from Operating Activities (a non-GAAP financial
    measure, see Appendix for definition and reconciliation) increased by $206
    million to $1.4 billion due to: (i) an increase at its utility businesses
    in North America, due to DP&L, which was acquired in November 2011; and
    (ii) an increase at its generation businesses in Latin America and Asia.
    This was partially offset by a decrease at its utility businesses in Latin
    America.
  *Consolidated Free Cash Flow (a non-GAAP financial measure, see Appendix
    for definition and reconciliation) decreased by $192 million to $1.4
    billion due to the same factors driving Consolidated Cash Flow from
    Operating Activities.
  *Proportional Free Cash Flow (a non-GAAP financial measure, see Appendix
    for definition and reconciliation) increased by $185 million to $949
    million due to the same factors driving Proportional Cash Flow from
    Operating Activities.
  *Diluted EPS from Continuing Operations decreased by $1.98 to a loss of
    $1.52 per share due primarily to: (i) goodwill impairment expense at DPL
    in the United States; (ii) higher foreign currency transaction losses; and
    (iii) a higher effective tax rate. This decline was partially offset by:
    (i) the contribution of the Company’s new businesses, as discussed above;
    (ii) the favorable impact of a non-recurring arbitration settlement during
    the first quarter of 2012 at Cartagena in Spain; (iii) gains on the
    disposition of assets; and (iv) lower SG&A expenses.
  *Adjusted EPS (a non-GAAP financial measure, see Appendix for definition
    and reconciliation) increased by $0.10 to $0.91 per share, due to: (i) the
    contribution of the Company’s new businesses, as discussed above; (ii) the
    favorable impact of a non-recurring arbitration settlement during the
    first quarter of 2012 at Cartagena in Spain; (iii) lower SG&A expenses;
    and (iv) a lower share count. These increases were partially offset by:
    (i) unfavorable foreign currency; and (ii) a higher effective tax rate.
    Table 3 provides a reconciliation of Diluted EPS to Adjusted EPS for
    Year-to-Date 2012 as compared to Year-to-Date 2011.

Table 3: Reconciliation of Diluted EPS to Adjusted EPS for Q3 YTD 2012 as
compared to Q3 YTD 2011

                                                                       
                                                    Q3 YTD 2012  Q3 YTD 2011
Diluted Earnings Per Share from Continuing           $  (1.51  )  $  0.46
Operations
Unrealized derivative losses                            0.07          -
Unrealized foreign currency transaction                 (0.01  )      0.03
(gains)/losses
Disposition/Acquisition (gains)                         (0.18  )      -
Impairment losses                                       2.54          0.28
Debt retirement losses                                 -          0.04  
Adjusted Earnings Per Share                         $  0.91     $  0.81  

See Appendix for more detail and additional reconciliations for non-GAAP
measures. Diluted weighted-average shares outstanding for non-GAAP measures:
763 million (2012) and 787 million (2011).

Non-GAAP Financial Measures

See Non-GAAP Financial Measures for definitions of Adjusted Earnings Per
Share, Adjusted Pre-Tax Contribution, Proportional Gross Margin, Adjusted
Gross Margin, Proportional Adjusted Gross Margin, Proportional Cash Flow From
Operating Activities, Consolidated Free Cash Flow, Proportional Free Cash
Flow, as well as reconciliations to the most comparable GAAP financial
measure.

Attachments

Consolidated Statements of Operations, Consolidated Balance Sheets, Segment
Information, Consolidated Statements of Cash Flows, Non-GAAP Financial
Measures, Parent Financial Information and 2012 Financial Guidance Elements.

Conference Call Information

AES will host a conference call on Wednesday, November 7, 2012 at 10:00 a.m.
Eastern Standard Time (EST). Interested parties may listen to the
teleconference by dialing 1-800-857-6557 at least ten minutes before the start
of the call. International callers should dial +1-415-228-4653. The
participant passcode for this call is 11712. Internet access to the
presentation materials will be available on the AES website at www.aes.com by
selecting “Investor Information” and then “Quarterly Financial Reports.”

A telephonic replay of the call will be available from approximately 12:00
p.m. EST on Wednesday, November 7, 2012 through Wednesday, November 28, 2012.
Callers in the U.S. please dial 1-800-385-2567. International callers should
dial +1-203-369-3264. The system will ask for a passcode; please enter 11712.
A webcast replay, as well as a replay in downloadable MP3 format, will be
accessible at www.aes.com beginning shortly after the completion of the call.

About AES

The AES Corporation (NYSE: AES) is a Fortune 200 global power company. We
provide affordable, sustainable energy to 27 countries through our diverse
portfolio of distribution businesses as well as thermal and renewable
generation facilities. Our workforce of 27,000 people is committed to
operational excellence and meeting the world's changing power needs. Our 2011
revenues were $17 billion and we own and manage $45 billion in total assets.
To learn more, please visit www.aes.com.

Safe Harbor Disclosure

This news release contains forward-looking statements within the meaning of
the Securities Act of 1933 and of the Securities Exchange Act of 1934. Such
forward-looking statements include, but are not limited to, those related to
future earnings, growth and financial and operating performance.
Forward-looking statements are not intended to be a guarantee of future
results, but instead constitute AES’ current expectations based on reasonable
assumptions. Forecasted financial information is based on certain material
assumptions. These assumptions include, but are not limited to, our accurate
projections of future interest rates, commodity price and foreign currency
pricing, continued normal levels of operating performance and electricity
volume at our distribution companies and operational performance at our
generation businesses consistent with historical levels, as well as
achievements of planned productivity improvements and incremental growth
investments at normalized investment levels and rates of return consistent
with prior experience.

Actual results could differ materially from those projected in our
forward-looking statements due to risks, uncertainties and other factors.
Important factors that could affect actual results are discussed in AES’
filings with the Securities and Exchange Commission (the “SEC”), including,
but not limited to, the risks discussed under Item 1A “Risk Factors” and Item
7: Management's Discussion & Analysis in AES’ 2011 Annual Report on Form 10-K
and in subsequent reports filled with the SEC. Readers are encouraged to read
AES’ filings to learn more about the risk factors associated with AES’
business. AES undertakes no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise.

Any Stockholder who desires a copy of the Company’s 2011 Annual Report on Form
10-K dated on or about February 24, 2012 with the SEC may obtain a copy
(excluding Exhibits) without charge by addressing a request to the Office of
the Corporate Secretary, The AES Corporation, 4300 Wilson Boulevard,
Arlington, Virginia 22203. Exhibits also may be requested, but a charge equal
to the reproduction cost thereof will be made. A copy of the Form 10-K may be
obtained by visiting the Company’s website at www.aes.com.

                                                                 
THE AES CORPORATION
Condensed Consolidated Statements of Operations
(Unaudited)
                                      
                            Three Months Ended        Nine Months Ended
                            September 30,             September 30,
                             2012       2011       2012        2011   
                                                                    
                            (in millions, except per share amounts)
Revenue:
Regulated                   $ 2,546      $ 2,373      $ 7,375       $ 7,136
Non-Regulated                2,041      1,934      6,144       5,762  
Total revenue                4,587      4,307      13,519      12,898 
Cost of Sales:
Regulated                     (2,114 )     (1,707 )     (6,267  )     (5,332 )
Non-Regulated                (1,469 )    (1,590 )    (4,478  )    (4,571 )
Total cost of sales          (3,583 )    (3,297 )    (10,745 )    (9,903 )
Gross margin                 1,004      1,010      2,774       2,995  
General and                   (64    )     (90    )     (225    )     (282   )
administrative expenses
Interest expense              (401   )     (418   )     (1,202  )     (1,137 )
Interest income               89           102          263           293
Other expense                 (15    )     (76    )     (59     )     (126   )
Other income                  7            57           40            107
Gain on sale of               30           -            214           7
investments
Goodwill impairment           (1,850 )     (17    )     (1,850  )     (17    )
Asset impairment expense      (43    )     (130   )     (72     )     (163   )
Foreign currency              (8     )     (90    )     (110    )     (20    )
transaction losses
Other non-operating          -          (82    )    (50     )    (82    )
expense
INCOME (LOSS) FROM
CONTINUING OPERATIONS         (1,251 )     266          (277    )     1,575
BEFORE TAXES AND EQUITY
IN EARNINGS OF AFFILIATES
Income tax expense            (176   )     (68    )     (519    )     (457   )
Net equity in earnings of    24         5          48          11     
affiliates
INCOME (LOSS) FROM            (1,403 )     203          (748    )     1,129
CONTINUING OPERATIONS
Income (loss) from
operations of
discontinued businesses,
net of income tax             3            (28    )     -             (44    )
(benefit) expense of
$(2), $(16), $3, and
$(22), respectively
Net gain (loss) from
disposal and impairments
of discontinued
businesses, net of income    (2     )    -          68          -      
tax (benefit) expense of
$(1), $0, $60, and $0,
respectively
NET INCOME (LOSS)             (1,402 )     175          (680    )     1,085
Noncontrolling interests:
Less: Income from
continuing operations         (166   )     (271   )     (407    )     (769   )
attributable to
noncontrolling interests
Less: Income from
discontinued operations      -          (35    )    -           (49    )
attributable to
noncontrolling interests
Total net income
attributable to              (166   )    (306   )    (407    )    (818   )
noncontrolling interests
NET INCOME (LOSS)
ATTRIBUTABLE TO THE AES     $ (1,568 )   $ (131   )   $ (1,087  )   $ 267    
CORPORATION
                                                                    
AMOUNTS ATTRIBUTABLE TO
THE AES CORPORATION
COMMON STOCKHOLDERS:
Income (loss) from
continuing operations,      $ (1,569 )   $ (68    )   $ (1,155  )   $ 360
net of tax
Income (loss) from
discontinued operations,     1          (63    )    68          (93    )
net of tax
Net income (loss)           $ (1,568 )   $ (131   )   $ (1,087  )   $ 267    
                                                                    
BASIC EARNINGS PER SHARE:
Income (loss) from
continuing operations
attributable to The AES     $ (2.10  )   $ (0.09  )   $ (1.52   )   $ 0.46
Corporation common
stockholders, net of tax
Income (loss) from
discontinued operations
attributable to The AES      -         (0.08  )    0.09        (0.12  )
Corporation common
stockholders, net of tax
NET INCOME (LOSS)
ATTRIBUTABLE TO THE AES
CORPORATION
COMMON STOCKHOLDERS         $ (2.10  )   $ (0.17  )   $ (1.43   )   $ 0.34   
                                                                    
DILUTED EARNINGS PER
SHARE:
Income (loss) from
continuing operations
attributable to The AES     $ (2.10  )   $ (0.09  )   $ (1.52   )   $ 0.46
Corporation common
stockholders, net of tax
Income (loss) from
discontinued operations
attributable to The AES      -          (0.08  )    0.09        (0.12  )
Corporation common
stockholders, net of tax
NET INCOME (LOSS)
ATTRIBUTABLE TO THE AES
CORPORATION
COMMON STOCKHOLDERS         $ (2.10  )   $ (0.17  )   $ (1.43   )   $ 0.34   
                                                                             
DIVIDENDS DECLARED PER      $ 0.04      $ -         $ 0.04       $ -      
COMMON SHARE:


THE AES CORPORATION
Condensed Consolidated Balance Sheets
(Unaudited)
                                                September 30,  December 31,
                                                   2012           2011    
                                                                 
                                                                 (Revised)^(1)
                                                 (in millions, except
                                                 share and per share data)
ASSETS
CURRENT ASSETS
Cash and cash equivalents                        $  1,943        $   1,704
Restricted cash                                     735              478
Short-term investments                              873              1,356
Accounts receivable, net of allowance for
doubtful accounts of $307 and $273,                 2,671            2,534
respectively
Inventory                                           796              785
Deferred income taxes                               431              454
Prepaid expenses                                    226              157
Other current assets                                1,009            1,570
Current assets of discontinued operations and      -              191     
held for sale assets
Total current assets                               8,684          9,229   
NONCURRENT ASSETS
Property, Plant and Equipment:
Land                                                1,036            1,090
Electric generation, distribution assets and        31,429           31,073
other
Accumulated depreciation                            (9,562  )        (8,944  )
Construction in progress                           2,581          1,788   
Property, plant and equipment, net                 25,484         25,007  
Other Assets:
Investments in and advances to affiliates           1,334            1,422
Debt service reserves and other deposits            561              876
Goodwill                                            1,967            3,820
Other intangible assets, net of accumulated         462              547
amortization of $250 and $164, respectively
Deferred income taxes                               671              715
Other                                               2,168            2,345
Noncurrent assets of discontinued operations       25             1,385   
and held for sale assets
Total other assets                                 7,188          11,110  
TOTAL ASSETS                                     $  41,356      $   45,346  
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable                                 $  2,327        $   2,014
Accrued interest                                    426              327
Accrued and other liabilities                       2,438            3,390
Non-recourse debt, including $294 and $259,
respectively, related to variable interest          2,324            2,123
entities
Recourse debt                                       11               305
Current liabilities of discontinued operations     -              279     
and held for sale businesses
Total current liabilities                          7,526          8,438   
NONCURRENT LIABILITIES
Non-recourse debt, including $1,173 and
$1,156, respectively, related to variable           13,049           13,412
interest entities
Recourse debt                                       6,176            6,180
Deferred income taxes                               1,417            1,321
Pension and other post-retirement liabilities       1,555            1,729
Other noncurrent liabilities                        3,719            3,111
Noncurrent liabilities of discontinued and         -              1,348   
held for sale businesses
Total noncurrent liabilities                       25,916         27,101  
Contingencies and Commitments (see Note 8)
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; 810,312,922 issued and
743,875,691 outstanding at September 30, 2012       8                8
and 807,573,277 issued and 765,186,316
outstanding at December 31, 2011
Additional paid-in capital                          8,540            8,507
Retained earnings (Accumulated deficit)             (439    )        678
Accumulated other comprehensive loss                (2,905  )        (2,758  )
Treasury stock, at cost (66,437,231 shares at
September 30, 2012 and 42,386,961 shares at        (780    )       (489    )
December 31, 2011, respectively)
Total AES Corporation stockholders' equity          4,424            5,946
NONCONTROLLING INTERESTS                           3,412          3,783   
Total equity                                       7,836          9,729   
TOTAL LIABILITIES AND EQUITY                     $  41,356      $   45,346  

     
       December 31, 2011 balances revised to reflect updated DPL purchase
^(1)   accounting allocation. For further information see our Form 10-Q for
       the quarter ended September 30, 2012 filed with the SEC.


THE AES CORPORATION
SEGMENT INFORMATION (unaudited)
                                                                
                               Three Months Ended      Nine Months Ended
                               September 30,           September 30,
                               2012        2011        2012         2011
                                                                      
                                 (in millions)           (in millions)
REVENUE
Generation - Latin America^(1) $ 1,304     $ 1,301     $ 3,871      $ 3,810
Generation - North America       359         334         1,004        1,007
Generation - Europe              245         397         928          1,125
Generation - Asia                191         172         553          449
Utilities - Latin America        1,667       1,898       4,847        5,682
Utilities - North America        796         321         2,206        890
Corporate and Other^(2)          297         214         937          788
Intersegment Eliminations^(3)   (272  )    (330  )    (827   )    (853   )
(4)
                                                                      
Total Revenue                  $ 4,587    $ 4,307    $ 13,519    $ 12,898 
                                                                      
GROSS MARGIN
Generation - Latin America     $ 439       $ 439       $ 1,265      $ 1,307
^(1)
Generation - North America       106         92          272          258
Generation - Europe              74          95          349          240
Generation - Asia                61          38          175          136
Utilities - Latin America        91          309         175          821
Utilities - North America        173         71          379          170
Corporate and Other ^(2)         48          (29   )     135          51
Intersegment Eliminations^(4)   12        (5    )    24         12     
                                                                      
Total Gross Margin             $ 1,004    $ 1,010    $ 2,774     $ 2,995  

     
^(1)   Includes Generation - Latin America - Other and Generation - Tiete.
       
       Corporate and Other includes the Company’s Europe Utilities, Africa
^(2)   Utilities, Africa Generation and Wind Generation operating segments and
       other renewable projects.
       
       Represents inter-segment eliminations of revenue primarily related to
^(3)   transfers of electricity from Tiete (Generation - Latin America) to
       Eletropaulo (Utilities - Latin America).
       
^(4)   Intersegment eliminations represent eliminations of revenue and gross
       margin among segments.


THE AES CORPORATION
Condensed Consolidated Statements of Cash Flows
(Unaudited)
                                                               
                             Three Months Ended        Nine Months Ended
                             September 30,             September 30,
                             2012         2011         2012         2011
                                                                      
                             (in millions)             (in millions)
OPERATING ACTIVITIES:
Net income (loss)            $ (1,402 )   $ 175        $ (680   )   $ 1,085
Adjustments to net income
(loss):
Depreciation and               332          325          1,038        947
amortization
(Gain) loss from sale of
investments and impairment     1,873        284          1,802        321
expense
Deferred income taxes          29           (95    )     101          (67    )
Contingencies                  16           (10    )     51           36
(Gain) loss on the             -            37           -            52
extinguishment of debt
(Gain) loss on disposal
and impairment write-down      1            1            (130   )     1
- discontinued operations
Other                          (40    )     154          10           65
Changes in operating
assets and liabilities:
(Increase) decrease in         (16    )     (3     )     (191   )     (185   )
accounts receivable
(Increase) decrease in         33           (30    )     (10    )     (118   )
inventory
(Increase) decrease in
prepaid expenses and other     72           (82    )     90           67
current assets
(Increase) decrease in         (86    )     (124   )     (379   )     (167   )
other assets
Increase (decrease) in
accounts payable and other     75           454          303          200
current liabilities
Increase (decrease) in         98           1            (151   )     (151   )
income tax payables, net
Increase (decrease) in        30         49         275        227    
other liabilities
Net cash provided by          1,015      1,136      2,129      2,313  
operating activities
INVESTING ACTIVITIES:
Capital expenditures           (510   )     (813   )     (1,581 )     (1,832 )
Acquisitions - net of cash     (5     )     (1     )     (18    )     (158   )
acquired
Proceeds from the sale of
businesses, net of cash        100          39           432          47
sold
Proceeds from the sale of      2            67           4            89
assets
Sale of short-term             1,511        1,126        5,116        4,191
investments
Purchase of short-term         (1,503 )     (1,139 )     (4,764 )     (3,632 )
investments
(Increase) decrease in         84           (148   )     11           (164   )
restricted cash
(Increase) decrease in
debt service reserves and      (2     )     (287   )     24           (379   )
other assets
Affiliate advances and         -            (31    )     1            (91    )
equity investments
Proceeds from performance      -            199          -            199
bond
Proceeds from government
grants for asset               3            2            120          7
construction
Other investing               (4     )    9          (21    )    (11    )
Net cash used in investing    (324   )    (977   )    (676   )    (1,734 )
activities
FINANCING ACTIVITIES:
(Repayments) borrowings
under the revolving credit     (12    )     1            (322   )     126
facilities, net
Issuance of recourse debt      -            -            -            2,050
Issuance of non-recourse       243          942          822          1,516
debt
Repayments of recourse         (3     )     (3     )     (8     )     (474   )
debt
Repayments of non-recourse     (431   )     (721   )     (759   )     (1,489 )
debt
Payments for financing         (7     )     (79    )     (24    )     (153   )
fees
Distributions to               (163   )     (276   )     (741   )     (990   )
noncontrolling interests
Contributions from             -            6            12           6
noncontrolling interests
Financed capital               (18    )     (7     )     (30    )     (13    )
expenditures
Purchase of treasury stock     (70    )     (127   )     (301   )     (225   )
Other financing               (20    )    (9     )    8          (7     )
Net cash (used in)
provided by financing          (481   )     (273   )     (1,343 )     347
activities
Effect of exchange rate        6            (108   )     9            (79    )
changes on cash
(Increase) decrease in
cash of discontinued and      -          (9     )    120        1      
held for sale businesses
Total increase (decrease)
in cash and cash               216          (231   )     239          848
equivalents
Cash and cash equivalents,    1,727      3,601      1,704      2,522  
beginning
Cash and cash equivalents,   $ 1,943     $ 3,370     $ 1,943     $ 3,370  
ending
SUPPLEMENTAL DISCLOSURES:
Cash payments for
interest, net of amounts     $ 241        $ 248        $ 1,024      $ 982
capitalized
Cash payments for income     $ 55         $ 141        $ 580        $ 647
taxes, net of refunds

THE AES CORPORATION
NON-GAAP FINANCIAL MEASURES (unaudited)
                                                                 
                               Three Months Ended       Nine Months Ended
                               September 30,            September 30,
Reconciliation of Adjusted     2012           2011       2012         2011
Earnings Per Share ^(1)
                                                         
Diluted earnings per share     $ (2.09)       $ (0.09)   $(1.51)      $ 0.46
from continuing operations
                                                                      
Unrealized derivative            -              0.01     0.07           -
losses^(2)
Unrealized foreign currency
transaction                      (0.01)         0.08     (0.01)         0.03
(gains)/losses^(3)
Disposition/acquisition          (0.04)^(4)     -        (0.18)^(5)     -
(gains)
Impairment losses                2.50 ^(6)      0.25     2.54 ^(8)      0.28
                                                ^(7)                    ^(9)
Debt retirement losses           -              0.03     -              0.04
                                                ^(10)                   ^(11)
                                                                  
Adjusted earnings per share    $ 0.36         $ 0.28     $0.91        $ 0.81
                                                                        

        We define adjusted earnings per share (“Adjusted EPS”) as diluted
        earnings per share from continuing operations excluding gains or
        losses of the consolidated entity due to (a) mark-to-market amounts
        related to derivative transactions, (b) unrealized foreign currency
        gains or losses, (c) significant gains or losses due to dispositions
        and acquisitions of business interests, (d) significant losses due to
        impairments, and (e) costs due to the early retirement of debt. The
        GAAP measure most comparable to Adjusted EPS is diluted earnings per
        share from continuing operations. AES believes that Adjusted EPS
        better reflects the underlying business performance of the Company and
        is considered in the Company’s internal evaluation of financial
^(1)   performance. Factors in this determination include the variability due
        to mark-to-market gains or losses related to derivative transactions,
        currency gains or losses, losses due to impairments and strategic
        decisions to dispose or acquire business interests or retire debt,
        which affect results in a given period or periods. Adjusted EPS should
        not be construed as an alternative to diluted earnings per share from
        continuing operations, which is determined in accordance with GAAP.
        Beginning with the quarter ended March 31, 2012, the Company refined
        its process for computing the tax effects of Adjusted EPS items for
        interim periods. Accordingly, the Company has also reflected the
        refined process in the comparative three and nine months ended
        September 30, 2011.
        
        Unrealized derivative losses were net of income tax per share of $0.01
^(2)    and $0.01 in the three months ended September 30, 2012 and 2011
        respectively, and $0.04 and $0.01 in the nine months ended September
        30, 2012 and 2011, respectively.
        
        Unrealized foreign currency transaction (gains)/losses were net of
^(3)    income tax per share of $(0.01) and $0.03 in the three months ended
        September 30, 2012 and 2011, respectively, and of $(0.01) and $0.00 in
        the nine months ended September 30, 2012 and 2011, respectively.
        
        Amount primarily relates to the gain from the sale of our interest in
^(4)    China of $24 million ($28 million, or $0.04 per share including an
        income tax credit of $4 million, or $0.00 per share).
        
        Amount primarily relates to the gain from the sale of 80% of our
        interest in Cartagena for $178 million ($106 million or $0.14 per
^(5)    share, net of income tax of $0.09 per share) and China of $24 million
        ($28 million, or $0.04 per share including an income tax credit of $4
        million, or $0.00 per share).
        
        Amount primarily relates to the goodwill impairment at DPL of $1.85
        billion ($1.85 billion, or $2.46 per share, net of income tax of $0.00
        per share), asset impairments of Wind turbines and projects of $36
^(6)    million ($26 million, or $0.03 per share, net of income tax of $0.01
        per share) and at Kelanitissa of $5 million ($3 million or $0.00 per
        share, net of noncontrolling interest and of income tax of $0.00 per
        share).
        
        Amount includes equity method investment impairment at Chigen,
        including Yangcheng, of $79 million ($78 million or $0.10 per share,
        net of income tax of $0.00 per share), asset impairments at Wind of
        $116 million ($86 million, or $0.11 per share, net of income tax of
^(7)    $0.04 per share), Kelanitissa of $4 million ($4 million or $0.01 per
        share, net of non-controlling interest), and Bohemia of $9 million
        ($11 million, and $0.01 per share including an income tax credit of $2
        million or $0.00 per share), and goodwill impairment at Chigen of $17
        million ($13 million or $0.02 per share, net of income tax of $0.01
        per share).
        
        Amount primarily relates to the goodwill impairment at DPL of $1.85
        billion ($1.85 billion, or $2.42 per share, net of income tax of $0.00
        per share). Amount also includes other-than-temporary impairment of
        equity method investments in China of $32 million ($26 million or
        $0.03 per share, net of income tax of $0.01 per share), and at
^(8)    InnoVent of $17 million ($12 million, or $0.02 per share, net of
        income tax of $0.01 per share), as well as asset impairments of Wind
        turbines and projects of $40 million ($28 million, or $0.04 per share,
        net of income tax of $0.02 per share), at Kelanitissa of $17 million
        ($11 million or $0.01 per share, net of non-controlling interest and
        income tax of $0.01 per share), and at St. Patrick of $11 million ($8
        million, and $0.01 per share, net of income tax of $0.00 per share).
        
        Amount includes equity method investment impairment at Chigen,
        including Yangcheng, of $79 million ($78 million or $0.10 per share,
        net of income tax of $0.00 per share), asset impairments at Wind of
        $116 million ($86 million, or $0.11 per share, net of income tax of
^(9)    $0.04 per share), Kelanitissa of $37 million ($34 million or $0.04 per
        share, net of non-controlling interest), and Bohemia of $9 million
        ($11 million, and $0.01 per share including an income tax credit of $2
        million or $0.00 per share), and goodwill impairment at Chigen of $17
        million ($13 million or $0.02 per share, net of income tax of $0.01
        per share).
        
        Amount includes loss on retirement of debt at Gener of $38 million
^(10)   ($20 million, or $0.03 per share, net of non-controlling interest and
        income tax per share of $0.01)
        
        Amount includes loss on retirement of debt at IPL of $15 million ($11
^(11)   million, or $0.01 per share, net of income tax per share of $0.01) and
        at Gener of $38 million ($20 million, or $0.03 per share, net of
        non-controlling interest and income tax per share of $0.01).
        

THE AES CORPORATION
NON-GAAP FINANCIAL MEASURES (unaudited)
                                                                  
                                        Three Months Ended   Nine Months Ended
                                        September 30,        September 30,
                                        2012      2011      2012      2011
                                                                       
                                        (in millions)        (in millions)
Reconciliation of Adjusted Gross
Margin^(1)
                                                                       
Consolidated Gross Margin               $  1,004   $ 1,010   $2,774    $ 2,995
Add: Depreciation and Amortization         327       303       1,019     879
Less: General and Administrative          (64)     (90)     (225)    (282)
Expenses
                                                                       
Adjusted Gross Margin^(1)               $  1,267   $ 1,223   $ 3,568   $ 3,592
                                                                  
                                                                       
Reconciliation of Proportional Gross
Margin^(2)
                                                                       
Consolidated Gross Margin               $  1,004   $ 1,010   $2,774    $ 2,995
Less: Proportional Adjustment Factor      266      440      711      1,216
                                                                       
Proportional Gross Margin^(2)           $  738     $ 570     $ 2,063   $ 1,779
                                                                  
                                                                       
Reconciliation of Proportional
Adjusted Gross Margin ^ (1),(2)
                                                                       
Consolidated Adjusted Gross Margin      $  1,267   $ 1,223   $3,568    $ 3,592
Less: Proportional Adjustment Factor      336      525      932      1,472
                                                                       
Proportional Adjusted Gross Margin ^    $  931     $ 698     $ 2,636   $ 2,120
(1),(2)
                                                                  
                                                                       

       Adjusted Gross Margin (a non-GAAP financial measure) is defined by the
       Company as: Gross margin plus depreciation and amortization less
       general and administrative expenses. AES believes adjusted gross margin
       is a useful measure for evaluating and comparing the operating
^(1)  performance of its businesses because it includes the direct operating
       costs of its business including overhead related expenses and excludes
       potential differences caused by variations in capital structures
       affecting interest income and expense, tax positions, such as the
       impact of changes in effective tax rates and the impact of depreciation
       and amortization expense.
       
^(2)   See footnote (2) on Guidance Elements for definition of proportional
       financial metrics.
       

THE AES CORPORATION
NON-GAAP FINANCIAL MEASURES (unaudited)
                                                                
                                      Three Months Ended   Nine Months Ended
                                      September 30,        September 30,
                                      2012      2011      2012     2011
                                      (in millions)        (in millions)
Calculation of Maintenance Capital
Expenditures for Free Cash Flow ^
(1) Reconciliation Below:
                                                                     
Maintenance Capital Expenditures,     $  215     $ 209     $ 668     $ 645
Environmental Capital Expenditures       19        27        52        59
Growth Capital Expenditures             294      584      891      1,141
                                                                     
Total Capital Expenditures            $  528     $ 820     $ 1,611   $ 1,845
                                                                
                                                                     
Reconciliation of Proportional Cash
Flow from Operating Activities^(2)
                                                                     
Consolidated Cash Flow from           $  1,015   $ 1,136   $ 2,129   $ 2,313
Operating Activities
Less: Proportional Adjustment           (359)    (511)    (685)    (1,075)
Factor
                                                                     
Proportional Cash Flow from           $  656     $ 625     $ 1,444   $ 1,238
Operating Activities^(2)
                                                                
                                                                     
Reconciliation of Free Cash
Flow^(1)
                                                                     
Consolidated Cash Flow from           $  1,015   $ 1,136   $ 2,129   $ 2,313
Operating Activities
Less: Maintenance Capital
Expenditures, net of reinsurance         (211)     (214)     (654)     (639)
proceeds
Less: Environmental Capital             (19)     (27)     (52)     (59)
Expenditures
                                                                     
Free Cash Flow^(1)                    $  785     $ 895     $ 1,423   $ 1,615
                                                                
                                                                     
Reconciliation of Proportional Free
Cash Flow^(1),(2)
                                                                     
Proportional Cash Flow from           $  656     $ 625     $ 1,444   $ 1,238
Operating Activities
Less: Proportional Maintenance
Capital Expenditures net of
reinsurance proceeds and                155      165      495      474
Proportional Environmental Capital
Expenditures
                                                                     
Proportional Free Cash Flow^(1),(2)   $  501     $ 460     $ 949     $ 764
                                                                
                                                                     

       Free cash flow (a non-GAAP financial measure) is defined as net cash
       from operating activities less maintenance capital expenditures
       (including environmental capital expenditures), net of reinsurance
^(1)  proceeds from third parties. AES believes that free cash flow is a
       useful measure for evaluating our financial condition because it
       represents the amount of cash provided by operations less maintenance
       capital expenditures as defined by our businesses, that may be
       available for investing or for repaying debt.
       
^(2)   See footnote (2) on Guidance Elements for definition of proportional
       financial metrics.
       

The AES Corporation
Parent Financial Information
Parent only data: last                                       
four quarters
($ in millions)            4 Quarters Ended
                           September 30,   June 30,   March 31,   December 31,
Total subsidiary           2012            2012       2012        2011
distributions & returns
of capital to Parent       Actual          Actual     Actual      Actual
Subsidiary
distributions^(1) to       $    1,252      $  1,267   $  1,287    $    1,337
Parent & QHCs
Returns of capital
distributions to Parent        143          233       207          152
& QHCs
Total subsidiary
distributions & returns    $    1,395      $  1,500   $  1,494    $    1,489
of capital to Parent
                                                                  
Parent only data:
quarterly
($ in millions)            Quarter Ended
                           September 30,   June 30,   March 31,   December 31,
Total subsidiary           2012            2012       2012        2011
distributions & returns
of capital to Parent       Actual          Actual     Actual      Actual
Subsidiary distributions   $    331        $  374     $  176      $    371
^ to Parent & QHCs
Returns of capital
distributions to Parent        12           34        83           14
& QHCs
Total subsidiary
distributions & returns    $    343        $  408     $  259      $    385
of capital to Parent
                                                                  
                                                                  
Parent Company Liquidity   Balance at
^(2)
($ in millions)            September 30,   June 30,   March 31,   December 31,
                           2012            2012       2012        2011
                           Actual          Actual     Actual      Actual
Cash at Parent & Cash at   $    444        $  240     $  133      $    200
QHCs ^(3)
Availability under             795          795       778          493
credit facilities
Ending liquidity           $    1,239      $  1,035   $  911      $    693
                                                                  

      Subsidiary distributions should not be construed as an alternative to
      Net Cash Provided by Operating Activities which are determined in
      accordance with GAAP. Subsidiary distributions are important to the
      Parent Company because the Parent Company is a holding company that does
      not derive any significant direct revenues from its own activities but
      instead relies on its subsidiaries’ business activities and the
      resultant distributions to fund the debt service, investment and other
      cash needs of the holding company. The reconciliation of the difference
      between the subsidiary distributions and the Net Cash Provided by
      Operating Activities consists of cash generated from operating
(1)  activities that is retained at the subsidiaries for a variety of reasons
      which are both discretionary and non-discretionary in nature. These
      factors include, but are not limited to, retention of cash to fund
      capital expenditures at the subsidiary, cash retention associated with
      non-recourse debt covenant restrictions and related debt service
      requirements at the subsidiaries, retention of cash related to
      sufficiency of local GAAP statutory retained earnings at the
      subsidiaries, retention of cash for working capital needs at the
      subsidiaries, and other similar timing differences between when the cash
      is generated at the subsidiaries and when it reaches the Parent Company
      and related holding companies.
      
      Parent Company Liquidity is defined as cash at the Parent Company plus
      availability under corporate credit facilities plus cash at qualified
(2)   holding companies (QHCs). AES believes that unconsolidated Parent
      Company liquidity is important to the liquidity position of AES as a
      Parent Company because of the non-recourse nature of most of AES’s
      indebtedness.
      
      The cash held at QHCs represents cash sent to subsidiaries of the
      company domiciled outside of the US. Such subsidiaries had no
      contractual restrictions on their ability to send cash to AES, the
      Parent Company. Cash at those subsidiaries was used for investment and
      related activities outside of the US. These investments included equity
(3)   investments and loans to other foreign subsidiaries as well as
      development and general costs and expenses incurred outside the US.
      Since the cash held by these QHCs is available to the Parent, AES uses
      the combined measure of subsidiary distributions to Parent and QHCs as a
      useful measure of cash available to the Parent to meet its international
      liquidity needs.
      

THE AES CORPORATION
2012 FINANCIAL GUIDANCE ELEMENTS^(1)
                                                           
                           2012 Updated Financial Guidance (as of 8/6/2012)
                                             Proportional
                           Consolidated      Adjustment        Proportional
                                             Factors^(2)
                                                               
Income Statement
Elements
                                                               
Gross Margin               $3,600 to 3,800   $950 million      $2,650 to 2,850
                           million                             million
                                                               
Adjusted Gross             $4,725 to 4,925   $1,300 million    $3,425 to 3,625
Margin^(3)                 million                             million
                                                               
Adjusted Earnings Per      $1.22 to 1.30
Share^(4)
                                                               
Cash Flow Elements
                                                               
Net Cash From Operating    $2,900 to 3,100   $975 million      $1,925 to 2,125
Activities                 million                             million
                                                               
Operational Capital        $1,050 to 1,125   $300 million      $725 to 850
Expenditures (a)           million                             million
                                                               
Environmental Capital      $100 to 125       $25 million       $75 to 100
Expenditures (b)           million                             million
                                                               
Maintenance Capital        $1,150 to 1,250   $325 million      $800 to 950
Expenditures (a + b)       million                             million
                                                               
Free Cash Flow ^(5)        $1,700 to 1,900   $650 million      $1,050 to 1,250
                           million                             million
                                                               
Subsidiary                 $1,325 to 1,525
Distributions^(6)          million
                                                               
Parent Free Cash Flow ^    $550 to 650
(7)                        million
                                                               
Reconciliation of Free
Cash Flow
                                                               
Net Cash from Operating    $2,900 to 3,100   $975 million      $1,925 to 2,125
Activities                 million                             million
                                                               
Less: Maintenance          $1,150 to 1,250   $325 million      $800 to 950
Capital Expenditures       million                             million
                                                               
Free Cash Flow ^(6)        $1,700 to 1,900   $650 million      $1,050 to 1,250
                           million                             million
                                                               
Reconciliation of Parent
Free Cash Flow
                                                               
Subsidiary distributions   $1,325 to 1,525
                           million
                                                               
Less: Cash Interest        $450 to 500
                           million
                                                               
Less: Cash for             $325 to 375
development, SGA, and      million
taxes
                                                               
Parent Free Cash Flow      $550 to 650
^(8)                       million
                                                               
Reconciliation of
Adjusted Gross Margin
                                                               
Gross Margin               $3,600 to 3,800   $950 million      $2,650 to 2,850
                           million                             million
                                                               
Plus: Depreciation &       $1,400 to 1,500   $350 million      $1,050 to 1,150
Amortization               million                             million
                                                               
Less: General &            $300 to 350                        $300 to 350
Administrative             million                             million
                                                               
Adjusted Gross             $4,725 to 4,925   $1,300 million    $3,425 to 3,625
Margin^(3)                 million                             million
                                                               
Reconciliation of
Adjusted Pre-Tax
Contribution^(8)
                                                               
Adjusted Pre-Tax           $1,900 to 2,100
Contribution^(8) Before    million
Corporate Charges
                                                               
Less: Corporate Charges    $650 to 750
                           million
                                                               
Adjusted Pre-Tax           $1,250 to 1,350
Contribution^(8) After     million
Corporate Charges
                                                               

(1)  2012 Guidance is based on expectations for future foreign exchange rates
      and commodity prices as of September 30, 2012.
      
      AES is a holding company that derives its income and cash flows from the
      activities of its subsidiaries, some of which may not be wholly-owned by
      the Company. Accordingly, the Company has presented certain financial
      metrics which are defined as Proportional (a non-GAAP financial
      measure). Proportional metrics present the Company’s estimate of its
      share in the economics of the underlying metric. The Company believes
      that the Proportional metrics are useful to investors because they
      exclude the economic share in the metric presented that is held by
      non-AES shareholders. For example, Net Cash from Operating Activities
      (Operating Cash Flow) is a GAAP metric which presents the Company’s cash
      flow from operations on a consolidated basis, including operating cash
      flow allocable to noncontrolling interests. Proportional Operating Cash
      Flow removes the share of operating cash flow allocable to
(2)   noncontrolling interests and therefore may act as an aid in the
      valuation of the Company. Proportional metrics are reconciled to the
      nearest GAAP measure. Certain assumptions have been made to estimate our
      proportional financial measures. These assumptions include: (i) the
      Company’s economic interest has been calculated based on a blended rate
      for each consolidated business when such business represents multiple
      legal entities; (ii) the Company’s economic interest may differ from the
      percentage implied by the recorded net income or loss attributable to
      noncontrolling interests or dividends paid during a given period; (iii)
      the Company’s economic interest for entities accounted for using the
      hypothetical liquidation at book value method is 100%; (iv) individual
      operating performance of the Company’s equity method investments is not
      reflected and (v) inter-segment transactions are included as applicable
      for the metric presented.
      
      Adjusted Gross Margin is reconciled above. Adjusted Gross Margin (a
      non-GAAP financial measure) is defined by the Company as gross margin
      plus depreciation and amortization less general and administrative
      expenses. AES believes adjusted gross margin is a useful measure for
(3)   evaluating and comparing the operating performance of its businesses
      because it includes the direct operating costs of its business including
      overhead related expenses and excludes potential differences caused by
      variations in capital structures affecting interest income and expense,
      tax positions, such as the impact of changes in effective tax rates and
      the impact of depreciation and amortization expense.
      
      Adjusted earnings per share (a non-GAAP financial measure) is defined as
      diluted earnings per share from continuing operations excluding gains or
      losses of the consolidated entity due to (a) unrealized gains or losses
      related to derivative transactions, (b) unrealized foreign currency
      gains or losses, (c) significant gains or losses due to dispositions and
      acquisitions of business interests, (d) significant losses due to
      impairments, and (e) costs due to the early retirement of debt. The GAAP
      measure most comparable to Adjusted EPS is diluted earnings per share
      from continuing operations. AES believes that adjusted earnings per
(4)   share better reflects the underlying business performance of the
      Company, and is considered in the Company's internal evaluation of
      financial performance. Factors in this determination include the
      variability due to unrealized gains or losses related to derivative
      transactions, unrealized foreign currency gains or losses, losses due to
      impairments and strategic decisions to dispose or acquire business
      interests or retire debt, which affect results in a given period or
      periods. Adjusted earnings per share should not be construed as an
      alternative to diluted earnings per share from continuing operations,
      which is determined in accordance with GAAP. Non-GAAP financial measure
      as reconciled in the table.
      
      Free Cash Flow is reconciled above. Free cash flow (a non-GAAP financial
      measure) is defined as net cash from operating activities less
      maintenance capital expenditures (including environmental capital
(5)   expenditures), net of reinsurance proceeds from third parties. AES
      believes that free cash flow is a useful measure for evaluating our
      financial condition because it represents the amount of cash provided by
      operations less maintenance capital expenditures as defined by our
      businesses, that may be available for investing or for repaying debt.
      
      Subsidiary distributions should not be construed as an alternative to
      Net Cash Provided by Operating Activities which are determined in
      accordance with GAAP. Subsidiary distributions are important to the
      Parent Company because the Parent Company is a holding company that does
      not derive any significant direct revenues from its own activities but
      instead relies on its subsidiaries' business activities and the
      resultant distributions to fund the debt service, investment and other
      cash needs of the holding company. The reconciliation of the difference
      between the subsidiary distributions and the Net Cash Provided by
      Operating Activities consists of cash generated from operating
(6)   activities that is retained at the subsidiaries for a variety of reasons
      which are both discretionary and non-discretionary in nature. These
      factors include, but are not limited to, retention of cash to fund
      capital expenditures at the subsidiary, cash retention associated with
      non-recourse debt covenant restrictions and related debt service
      requirements at the subsidiaries, retention of cash related to
      sufficiency of local GAAP statutory retained earnings at the
      subsidiaries, retention of cash for working capital needs at the
      subsidiaries, and other similar timing differences between when the cash
      is generated at the subsidiaries and when it reaches the Parent Company
      and related holding companies.
      
      Parent Free Cash Flow is reconciled above. Parent Free Cash Flow (a
      non-GAAP financial measure) should not be construed as an alternative to
      Net Cash Provided by Operating Activities which is determined in
(7)   accordance with GAAP. Parent Free Cash Flow is equal to subsidiary
      distributions less cash used for dividends, share repurchases, growth
      investments, recourse debt repayments, and other uses by the Parent
      Company.
      
      Adjusted Pre-Tax Contribution (a non-GAAP financial measure) represents
      pre-tax income from continuing operations attributable to AES excluding
      gains or losses of the consolidated entity due to (a) unrealized gains
      or losses related to derivative transactions, (b) unrealized foreign
      currency gains or losses, (c) significant gains or losses due to
      dispositions and acquisitions of business interests, (d) significant
      losses due to impairments, and (e) costs due to the early retirement of
      debt. It includes net equity in earnings of affiliates, on an after-tax
      basis. The GAAP measure most comparable to Adjusted PTC is income from
      continuing operations attributable to AES. AES believes that Adjusted
      PTC better reflects the underlying business performance of the Company
(8)   and is considered in the Company’s internal evaluation of financial
      performance. Factors in this determination include the variability due
      to unrealized gains or losses related to derivative transactions,
      unrealized foreign currency gains or losses, losses due to impairments
      and strategic decisions to dispose or acquire business interests or
      retire debt, which affect results in a given period or periods. Earnings
      before tax represents the business performance of the Company before the
      application of statutory income tax rates and tax adjustments, including
      the affects of tax planning, corresponding to the various jurisdictions
      in which the Company operates. Adjusted PTC should not be construed as
      an alternative to income from continuing operations attributable to AES,
      which is determined in accordance with GAAP.
      

Contact:

The AES Corporation
Investor Contact: Ahmed Pasha, 703 682 6451
Media Contact: Rich Bulger, 703 682 6318
 
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