First Quarter Adjusted Earnings Per Share increased $0.13 to $0.37

First Quarter Diluted Earnings Per Share from Continuing Operations increased $0.14 to $0.44

Net Cash from Operating Activities increased 6% to $534 million and Proportional Free Cash Flow increased 51% to $235 million

Reaffirmed full year 2012 guidance for Adjusted Earnings Per Share and Cash Flow

Revised full year 2012 guidance for Diluted Earnings Per Share from Continuing Operations due to non-cash impairments

Completed the sales of Ironwood and Red Oak in the United States with proceeds of $227 million

Announced the sale of its interest in 379 MW of hydro assets in China for approximately $48 million in proceeds

Increased the outstanding authorization for share repurchases by $180 million to $302 million

The Company announced a $180 million increase in its authorization for share repurchases from $500 million to $680 million. With $378 million of share repurchases completed since July 2010, $302 million of the authorization is outstanding.

The Company announced the sale of its interest in 379 MW of hydro generation assets in China for proceeds of approximately $48 million. Subject to customary purchase price adjustments and regulatory approval, the sale is expected to close in the second half of 2012.

AES has closed or announced seven asset sales since September 2011 with aggregate proceeds of $804 million.

Updated 2012 Guidance

Remarks

Adjusted EPS¹

$1.22-$1.30

No change

Diluted EPS from Continuing Operations

$1.22-$1.30

$0.06 lower due to non-cash impairments

Consolidated Cash Flow from Operating Activities

$3,100-$3,300 million

No change; expect low end of range

Proportional Free Cash Flow¹

$1,050-$1,250 million

No change; expect low end of range

Subsidiary Distributions²

$1,325-$1,525 million

No change

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

See definitions.

Consolidated Revenue

Consolidated Gross Margin

Proportional Gross Margin¹

Consolidated Cash Flow from Operating Activities

Proportional Cash Flow from Operating Activities¹

Consolidated Free Cash Flow¹

Proportional Free Cash Flow¹

Subsidiary Distributions to the Parent Company²

Diluted EPS from Continuing Operations

Adjusted EPS¹

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

See definitions.

Consolidated Revenue increased by $584 million to $4.7 billion, benefiting from: (i) contributions from new businesses including DP&L in the United States, Maritza in Bulgaria, Angamos in Chile, and Changuinola in Panama; (ii) increased volume at its utility and generation businesses in Latin America; (iii) the impact of a non-recurring arbitration settlement at Cartagena in Spain; and (iv) increased prices at Sul in Brazil and its utility businesses in El Salvador. These gains were partially offset by: (i) unfavorable impact of foreign currency; (ii) lower prices at Eletropaulo in Brazil, primarily related to the estimated impact of the July 2011 tariff reset; (iii) decreased spot prices at AES Gener in Chile; and (iv) the impact of the sale of 80% of its interest in Cartagena in February 2012.

Consolidated Gross Margin increased by $85 million to $1.1 billion, benefiting from: (i) the impact of new businesses; (ii) increased volume at its generation and utility businesses in Latin America; and (iii) the favorable impact of a non-recurring arbitration settlement at Cartagena. These gains were partially offset by: (i) the unfavorable impact of foreign currency; (ii) lower prices at Eletropaulo in Brazil; (iii) lower spot prices and higher fuel costs at AES Gener; and (iv) an increase in outages, primarily in Latin America and Europe.

Proportional Gross Margin (a non-GAAP financial measure, see Appendix for definition and reconciliation) increased by $172 million to $779 million due to the same factors driving Consolidated Gross Margin.

Consolidated Cash Flow from Operating Activities increased by $32 million to $534 million driven by: (i) an increase from the acquisition of DP&L in the United States; and (ii) an increase in Europe primarily due to the non-recurring arbitration settlement at Cartagena in Spain. These factors were partially offset by: (i) a decrease at its utility businesses in Latin America primarily in Brazil due to higher working capital requirements; and (ii) an increase in interest payments due to the financing of the DP&L acquisition.

Proportional Cash Flow from Operating Activities (a non-GAAP financial measure, see Appendix for definition and reconciliation) increased by $86 million to $405 million due to the same factors driving Consolidated Cash Flow from Operating Activities.

Consolidated Free Cash Flow (a non-GAAP financial measure, see Appendix for definition and reconciliation) increased by $32 million to $292 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 $79 million to $235 million due to the same factors driving Consolidated Cash Flow from Operating Activities.

Diluted EPS from Continuing Operations increased by $0.14 per share to $0.44 per share due primarily to the increase in gross margin and a gain on the sale of 80% of its interest in Cartagena in Spain, partially offset by the financing costs related to the acquisition of DP&L and impairment losses, including other than temporary impairments of certain equity method investments.

Adjusted EPS (a non-GAAP financial measure, see Appendix for definition and reconciliation) increased by $0.13 to $0.37 per share, as the increase in gross margin, including $0.06 from a favorable one-time arbitration settlement at Cartagena, was partially offset by the financing costs related to the acquisition of DP&L. Table 3 provides a reconciliation of Diluted EPS to Adjusted EPS for the first quarter of 2012 as compared to first quarter of 2011.

Diluted Earnings Per Share from Continuing Operations

Derivative Mark-to-Market (Gains)/Losses

Currency Transaction (Gains)

Disposition/Acquisition (Gains)

Impairment Losses

Adjusted Earnings Per Share

Revenue:

Regulated

Non-Regulated

Total revenue

Cost of Sales:

Regulated

Non-Regulated

Total cost of sales

Gross margin

General and administrative expenses

Interest expense

Interest income

Other expense

Other income

Gain on sale of investments

Asset impairment expense

Foreign currency transaction gains (losses)

Other non-operating expense

INCOME FROM CONTINUING OPERATIONS BEFORE TAXES AND EQUITY IN EARNINGS OF AFFILIATES

Income tax expense

Net equity in earnings of affiliates

INCOME FROM CONTINUING OPERATIONS

Income (loss) from operations of discontinued businesses, net of income tax (benefit) expense of $2 and $(3), respectively

Net gain (loss) from disposal and impairments of discontinued businesses, net of income tax expense of $0 and $0, respectively

NET INCOME

Noncontrolling interests:

Less: Income from continuing operations attributable to noncontrolling interests

Less: Income from discontinued operations attributable to noncontrolling interests

Total net income attributable to noncontrolling interests

NET INCOME ATTRIBUTABLE TO THE AES CORPORATION

BASIC EARNINGS PER SHARE:

Income from continuing operations attributable to The AES Corporation common stockholders, net of tax

Discontinued operations attributable to The AES Corporation common stockholders, net of tax

NET INCOME ATTRIBUTABLE TO THE AES CORPORATION

COMMON STOCKHOLDERS

DILUTED EARNINGS PER SHARE:

Income from continuing operations attributable to The AES Corporation common stockholders, net of tax

Discontinued operations attributable to The AES Corporation common stockholders, net of tax

NET INCOME ATTRIBUTABLE TO THE AES CORPORATION

COMMON STOCKHOLDERS

AMOUNTS ATTRIBUTABLE TO THE AES CORPORATION

COMMON STOCKHOLDERS:

Income from continuing operations, net of tax

Discontinued operations, net of tax

Net income

ASSETS

CURRENT ASSETS

Cash and cash equivalents

Restricted cash

Short-term investments

Accounts receivable, net of allowance for doubtful accounts of $300 and $273, respectively

Inventory

Deferred income taxes

Prepaid expenses

Other current assets

Current assets of discontinued and held for sale businesses

Total current assets

NONCURRENT ASSETS

Property, Plant and Equipment:

Land

Electric generation, distribution assets and other

Accumulated depreciation

Construction in progress

Property, plant and equipment, net

Other Assets:

Investments in and advances to affiliates

Debt service reserves and other deposits

Goodwill

Other intangible assets, net of accumulated amortization of $201 and $164, respectively

Deferred income taxes

Other

Noncurrent assets of discontinued and held for sale businesses

Total other assets

TOTAL ASSETS

LIABILITIES AND EQUITY

CURRENT LIABILITIES

Accounts payable

Accrued interest

Accrued and other liabilities

Non-recourse debt, including $296 and $259, respectively, related to variable interest entities

Recourse debt

Current liabilities of discontinued and held for sale businesses

Total current liabilities

NONCURRENT LIABILITIES

Non-recourse debt, including $1,173 and $1,156, respectively, related to variable interest entities

Recourse debt

Deferred income taxes

Pension and other post-retirement liabilities

Other noncurrent liabilities

Noncurrent liabilities of discontinued and held for sale businesses

Total noncurrent liabilities

Contingencies and Commitments (see Note 8)

Cumulative preferred stock of subsidiaries

EQUITY

THE AES CORPORATION STOCKHOLDERS’ EQUITY

Common stock ($0.01 par value, 1,200,000,000 shares authorized; 809,082,637 issued and 767,434,120 outstanding at March 31, 2012 and 807,573,277 issued and 765,186,316 outstanding at December 31, 2011

Additional paid-in capital

Retained earnings

Accumulated other comprehensive loss

Treasury stock, at cost (41,648,517 shares at March 31, 2012 and 42,386,961 shares at December 31, 2011, respectively)

Total AES Corporation stockholders’ equity

NONCONTROLLING INTERESTS

Total equity

TOTAL LIABILITIES AND EQUITY

REVENUE

Generation - Latin America ⁽¹⁾

Generation - North America

Generation - Europe

Generation - Asia

Utilities - Latin America

Utilities - North America

Corporate and Other ⁽²⁾

Intersegment Eliminations ⁽³⁾

Total Revenue

GROSS MARGIN

Generation - Latin America ⁽¹⁾

Generation - North America

Generation - Europe

Generation - Asia

Utilities - Latin America

Utilities - North America

Corporate and Other ⁽²⁾

Total Gross Margin

Includes Generation - Latin America - Other and Generation - Tiete.

Corporate and Other includes the Company’s Europe Utilities, Africa Utilities, Africa Generation, Wind Generation operating segments and other climate solutions and renewable projects.

Represents inter-segment eliminations of revenue primarily related to transfers of electricity from Tiete (Generation - Latin America) to Eletropaulo (Utilities - Latin America).

OPERATING ACTIVITIES:

Net income

Adjustments to net income:

Depreciation and amortization

(Gain) loss from sale of investments and impairment expense

Provision for deferred taxes

Contingencies

Other

Changes in operating assets and liabilities:

(Increase) decrease in accounts receivable

(Increase) decrease in inventory

(Increase) decrease in prepaid expenses and other current assets

(Increase) decrease in other assets

Increase (decrease) in accounts payable and other current liabilities

Increase (decrease) in income taxes and other income tax payables, net

Increase (decrease) in other liabilities

Net cash provided by operating activities

INVESTING ACTIVITIES:

Capital expenditures

Acquisitions - net of cash acquired

Proceeds from the sale of businesses, net of cash sold

Proceeds from the sale of assets

Sale of short-term investments

Purchase of short-term investments

Decrease in restricted cash

(Increase) decrease in debt service reserves and other assets

Affiliate advances and equity investments

Proceeds from government grants for asset construction

Other investing

Net cash used in investing activities

FINANCING ACTIVITIES:

(Repayments) borrowings under the revolving credit facilities, net

Issuance of non-recourse debt

Repayments of recourse debt

Repayments of non-recourse debt

Payments for financing fees

Distributions to noncontrolling interests

Contributions from noncontrolling interests

Financed capital expenditures

Purchase of treasury stock

Other financing

Net cash provided by (used in) financing activities

Effect of exchange rate changes on cash

Decrease in cash of discontinued and held for sale businesses

Total decrease in cash and cash equivalents

Cash and cash equivalents, beginning

Cash and cash equivalents, ending

SUPPLEMENTAL DISCLOSURES:

Cash payments for interest, net of amounts capitalized

Cash payments for income taxes, net of refunds

Reconciliation of Adjusted Earnings Per Share ⁽¹⁾

Diluted EPS From Continuing Operations

Derivative mark-to-market (gains)/losses⁽²⁾

Currency transaction (gains)⁽³⁾

Disposition/acquisition (gains)

Impairment losses

Adjusted Earnings Per Share⁽¹⁾

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) 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 earnings per 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 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 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.

Derivative mark-to-market (gains)/losses were net of income tax per share of $0.01 and $0.00 in the three months ended March 31, 2012 and 2011, respectively.

Unrealized foreign currency transaction (gains) were net of income tax per share of ($0.01) and ($0.02) in the three months ended March 31, 2012 and 2011, respectively.

Amount primarily relates to the proceeds from the sale of 80% of our interest in Cartagena for $178 million ($107 million or $0.14 per share, net of income tax).

Amount primarily includes other-than-temporary impairments of equity method investments in China of $32 million ($26 million, or $0.03 per share, net of income taxes) and at InnoVent of $17 million ($12 million or $0.02 per share, net of income tax).

Three Months Ended

March 31,

Reconciliation of Adjusted Gross Margin ⁽¹⁾

Consolidated Gross Margin

Add: Depreciation and Amortization

Less: General and Administrative Expenses

Adjusted Gross Margin ⁽¹⁾

Reconciliation of Proportional Gross Margin ⁽²⁾

Consolidated Gross Margin

Less: Proportional Adjustment Factor

Proportional Gross Margin ⁽²⁾

Reconciliation of Proportional Adjusted Gross Margin ^(1),(2)

Consolidated Adjusted Gross Margin

Less: Proportional Adjustment Factor

Proportional Adjusted Gross Margin ^(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 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.

See footnote (2) on Guidance Elements for definition of proportional financial metrics.

Calculation of Maintenance Capital Expenditures for Free Cash Flow ⁽¹⁾
Reconciliation Below:

Maintenance Capital Expenditures, excluding environmental

Environmental Capital Expenditures

Growth Capital Expenditures

Total Capital Expenditures

Reconciliation of Proportional Operating Cash Flow⁽²⁾

Consolidated Operating Cash Flow

Less: Proportional Adjustment Factor

Proportional Operating Cash Flow⁽²⁾

Reconciliation of Free Cash Flow⁽¹⁾

Consolidated Operating Cash Flow

Less: Maintenance Capital Expenditures, excluding environmental

Less: Environmental Capital Expenditures

Free Cash Flow⁽¹⁾

Reconciliation of Proportional Free Cash Flow^(1),(2)

Proportional Operating Cash Flow

Less: Proportional Maintenance Capital Expenditures

Proportional Free Cash Flow^(1),(2)

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 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.

See footnote (2) on Guidance Elements for definition of proportional financial metrics.

Parent only data: last four quarters

($ in millions)

Total subsidiary distributions & returns of capital to Parent

Subsidiary distributions ⁽¹⁾ to Parent & QHCs

Returns of capital distributions to Parent & QHCs

Total subsidiary distributions & returns of capital to parent

Parent only data: quarterly

($ in millions)

Total subsidiary distributions & returns of capital to Parent

Subsidiary distributions to Parent & QHCs

Returns of capital distributions to Parent & QHCs

Total subsidiary distributions & returns of capital to Parent

Parent Company Liquidity ⁽²⁾

($ in millions)

Cash at Parent & Cash at QHCs ⁽³⁾

Availability under credit facilities

Ending liquidity

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 difference between the subsidiary distributions and the Net Cash Provided by Operating Activities consists of cash generated from operating 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 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 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.

2012 Updated Financial Guidance (as of 5/4/2012)

Consolidated

Income Statement Elements

Gross Margin

Adjusted Gross Margin⁽³⁾

Diluted Earnings Per Share From Continuing Operations

Adjusted Earnings Per Share Factors⁽⁴⁾

Adjusted Earnings Per Share⁽⁴⁾

Cash Flow Elements

Net Cash From Operating Activities

Operational Capital Expenditures (a)

Environmental Capital Expenditures (b)

Maintenance Capital Expenditures (a + b)

Free Cash Flow ⁽⁶⁾

Subsidiary Distributions⁽⁷⁾

Parent Free Cash Flow ⁽⁸⁾

Reconciliation of Free Cash Flow

Net Cash from Operating Activities

Less: Maintenance Capital Expenditures