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AES Reports Adjusted Earnings Per Share Of $0.39 For Third Quarter 2013 And Reaffirms Full Year 2013 Guidance

For the nine months ended September 30, 2013, Diluted Earnings per Share from Continuing Operations increased $2.09 to $0.55, principally due to lower goodwill impairment expense, a lower effective tax rate, lower foreign currency losses, lower interest expense, and higher other income due to the gain from the PPA termination at Beaver Valley, partially offset by losses on extinguishment of debt, lower gain on sale of investment, higher asset and equity investment impairments and lower gross margin.

Discussion of Cash Flow

Third quarter 2013 Proportional Free Cash Flow (a non-GAAP financial measure) was $347 million, a decrease of $154 million from third quarter 2012. This performance was driven by lower Proportional Operating Cash Flow in Brazil and EMEA, as a result of higher working capital requirements, and higher environmental capital expenditures at IPL in Indiana, as anticipated.

Third quarter 2013 Consolidated Net Cash Provided by Operating Activities decreased $160 million to $855 million, driven by lower operating cash flow in Andes and EMEA, as a result of higher working capital requirements.

For the nine months ended September 30, 2013, Proportional Free Cash Flow was $847 million, a decrease of $102 million from the nine months ended September 30, 2012, driven by lower Operating Cash Flow in Andes, due to higher working capital requirements, partially offset by higher Operating Cash Flow in the Dominican Republic, as a result of lower working capital requirements.

For the nine months ended September 30, 2013, Consolidated Net Cash Provided by Operating Activities was $2,040 million, an decrease of $89 million from the nine months ended September 30, 2012, driven by Lower Operating Cash Flow in Andes, partially offset by higher Operating Cash Flow in the Dominican Republic, as described above.

Discussion of Other Announcements

  • The Company announced that its Board of Directors approved a 25% increase in its quarterly dividend beginning first quarter 2014
    • The quarterly dividend will increase by $0.01 per share to $0.05 per share
    • The first dividend of $0.05 per share will be payable on February 18, 2014 to shareholders of record on February 3, 2014; the ex-dividend date is January 30, 2014
  • The Company increased its cumulative annual cost savings target by $55 million to $200 million by 2015
    • The Company's prior target was $145 million in annual cost savings by 2014 and the Company expects to achieve $135 million in 2013 and the remainder in 2014
    • The Company announced incremental savings of $55 million expected to be achieved on a ratable basis over 2014 and 2015
  • The Company announced three new asset sale transactions for approximately $236 million in equity proceeds to AES
    • In September 2013, the Company agreed to sell its SONEL power distribution business and Dibamba and Kribi generation facilities in Cameroon for $220 million in equity proceeds to AES; once the transaction is closed, the Company will exit Cameroon; the transaction is expected to close in early 2014
    • In October 2013, the Company signed an agreement to sell its 39 MW wind generation business in Gujarat India; this will allow the Company to focus its efforts on the 1,300 MW expansion of its existing OPGC coal-fired plant in the state of Odisha; the transaction is expected to close in early 2014
    • In November 2013, the Company signed an agreement to sell its wind development pipeline in Poland
    • Since September 2011, the Company has announced or closed 21 asset sales representing approximately $1.4 billion in equity proceeds to AES and plans to exit operations in 8 countries
  • On schedule to complete 2,231 MW of capacity under construction expected to come on-line through 2016
    • In July 2013, the Company achieved commercial operations of two wind plants (36 MW in total) in the United Kingdom
    • In September 2013, the Company brought on-line 40 MW of energy storage resource in Ohio, bringing the Company's total energy storage resource to more than 200 MW, including 40 MW in construction in Chile
    • Commenced construction of $511 million investment program to upgrade 2,400 MW of baseload coal-fired capacity at IPL
  • Year-to-date, the Company has signed approximately $500 million of partnership agreements, including an investment from Google into the Mount Signal construction project owned by Silver Ridge Power Corporation, the Company's solar joint venture with Riverstone, and a 40% equity investment by Antofagasta Minerals into the Alto Maipo hydro development project in Chile

2013 Guidance

The Company reaffirmed its full year 2013 guidance for all metrics, which is based on foreign exchange and commodity price forward curves as of October 31, 2013. The Company expects to be at the high end of its $750-$1,050 million guidance range for Proportional Free Cash Flow. In addition to reaffirming its guidance, the Company also expects to reach the high end of its $400-$500 million target range for Parent Free Cash Flow.

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