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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

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 Operations $ (1.51 )   $ 0.46
Unrealized derivative losses 0.07 -
Unrealized foreign currency transaction (gains)/losses (0.01 ) 0.03
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).

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