Market Overview

AES Reaffirms 2019 Guidance and its 7% to 9% Average Annual Growth Target Through 2022

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Q1 2019 Strategic Highlights

  • On track to attain investment grade credit ratings in 2020
  • Signed long-term contracts for 494 MW of renewable capacity,
    increasing backlog to 6.2 GW
  • Signed a 12-year agreement to sell up to 18 TBTU of LNG annually in
    the Caribbean, beginning in 2020
  • Announcing $100 million incremental annual run rate cost savings
    target, to be realized by 2022 from digital initiatives
  • Agreed to sell the Company's interests in its businesses in Jordan and
    Northern Ireland for $211 million

Q1 2019 Financial Highlights

  • Diluted EPS of $0.23, compared to $1.03 in Q1 2018, which included a
    gain on the sale of Masinloc in the Philippines
  • Adjusted EPS of $0.28, compared to $0.28 in Q1 20181
  • Reaffirming 2019 guidance and 7% to 9% average annual growth target
    for Adjusted EPS and Parent Free Cash Flow through 20221

The
AES Corporation
(NYSE:AES) today reported financial results for the
quarter ended March 31, 2019.

"We continue to execute on our strategic plan: de-risking our portfolio;
growing our LNG and renewables businesses; and becoming a technology
leader," said Andrés
Gluski
, AES President and Chief Executive Officer. "We agreed to
sell our assets in Jordan and Northern Ireland, which will reduce our
footprint to 13 countries. We also signed a long-term LNG tolling
agreement for up to 18 TBTU annually and grew our backlog of mostly
renewable projects to 6.2 GW. Today, we are announcing a target of an
additional $100 million in annual cost savings by 2022 from our digital
initiatives that are currently underway."

"With our first quarter 2019 performance in line with our expectations,
we are off to a solid start to deliver on our full year 2019 guidance
and our 7% to 9% average annual growth target through 2022," said Gustavo
Pimenta
, AES Executive Vice President and Chief Financial Officer.
"Our strong and growing cash flow, combined with our significant debt
reduction in 2018, keep us on track to attain investment grade ratings
by 2020."

Key Q1 2019 Financial Results

First quarter 2019 Diluted Earnings Per Share from Continuing Operations
(Diluted EPS) was $0.23, a decrease of $0.80 compared to first quarter
2018, primarily reflecting the $0.94 net gain on the sale of Masinloc in
the Philippines in 2018, partially offset by the $0.18 net loss on
extinguishment of debt in 2018.

First quarter 2019 Adjusted Earnings Per Share (Adjusted EPS, a non-GAAP
financial measure) was $0.28, which was unchanged compared to first
quarter 2018, primarily reflecting the impact of asset sales and
dispositions in the Eurasia and US and Utilities Strategic Business
Units (SBU), partially offset by lower Parent interest and a lower
effective tax rate.

Detailed Strategic Highlights

  • As of March 31, 2019, the Company's backlog of 6,225 MW includes:
    • 3,845 MW under construction and expected on-line through 2021; and
    • 2,380 MW of renewables signed under long-term Power Purchase
      Agreements (PPAs), including 494 MW signed in year-to-date 2019:
      • 219 MW of solar plus storage at AES Distributed Energy (AES
        DE) with utilities and commercial and industrial customers in
        the U.S.
      • 175 MW of solar at sPower with a utility in the U.S.
      • 100 MW of energy storage with a utility in the U.S.
  • In March and April, the Company agreed to sell its interests in its
    businesses in Jordan and Northern Ireland for $211 million
    • Once these transactions close, which is expected later this year,
      the Company will have operations in 13 countries, down from 28 in
      2011
  • The Company is announcing a $100 million incremental annual run rate
    cost savings target, to be realized by 2022 from digital initiatives,
    including utilizing data and technology for maintenance, outage
    prevention, inspection and procurement

Guidance and Expectations1

The Company reaffirms its 2019 Adjusted EPS guidance of $1.28 to $1.40
and its average annual growth rate target of 7% to 9% through 2022.
Growth in 2019 will be primarily driven by contributions from new
businesses, cost savings and lower Parent interest.

The Company also reaffirms its 2019 Parent Free Cash Flow expectation of
$700 million to $750 million and its average annual growth rate target
of 7% to 9% through 2022.

 
1 Adjusted EPS and Parent Free Cash Flow are non-GAAP financial
measures. See attached "Non-GAAP Measures" for definition of
Adjusted EPS and see below for definition of Parent Free Cash Flow.
The Company is not able to provide a corresponding GAAP equivalent
or reconciliation for its Adjusted EPS guidance or its Parent Free
Cash Flow expectation without unreasonable effort. See "Non-GAAP
measures" for a description of the adjustments to reconcile Adjusted
EPS to Diluted EPS for the quarter ended March 31, 2019.
 

Non-GAAP Financial Measures

See Non-GAAP Measures for definitions of Adjusted Earnings Per Share and
Adjusted Pre-Tax Contributions, as well as reconciliations to the most
comparable GAAP financial measures.

Parent Free Cash Flow should not be construed as an alternative to Net
Cash Provided by Operating Activities which is determined in accordance
with GAAP. Parent Free Cash Flow is equal to Subsidiary Distributions
less cash used for interest costs, development, general and
administrative activities, and tax payments by the Parent Company.
Parent Free Cash Flow is used for dividends, share repurchases, growth
investments, recourse debt repayments, and other uses by the Parent
Company.

Attachments

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

Conference Call Information

AES will host a conference call on Tuesday, May 7, 2019 at 9:00 a.m.
Eastern Daylight Time (EDT). Interested parties may listen to the
teleconference by dialing 1-888-317-6003 at least ten minutes before the
start of the call. International callers should dial +1-412-317-6061.
The Conference ID for this call is 1733093. Internet access to the
conference call and presentation materials will be available on the AES
website at www.aes.com by
selecting "Investors"
and then "Presentations
and Webcasts
."

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 500 global power company.
We provide affordable, sustainable energy to 15 countries through our
diverse portfolio of distribution businesses as well as thermal and
renewable generation facilities. Our workforce is committed to
operational excellence and meeting the world's changing power needs. Our
2018 revenues were $11 billion and we own and manage $33 billion in
total assets. To learn more, please visit www.aes.com.
Follow AES on Twitter @TheAESCorp.

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 the execution
of PPAs, conversion of our backlog and 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' 2018 Annual Report on Form 10-K and in subsequent reports filed
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 2018 Annual Report
on Form 10-K filed February 27, 2019 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 March 31,
2019   2018

(in millions, except
per share amounts)

Revenue:
Regulated $ 785 $ 722
Non-Regulated 1,865   2,018  
Total revenue 2,650   2,740  
Cost of Sales:
Regulated (635 ) (601 )
Non-Regulated (1,429 ) (1,483 )
Total cost of sales (2,064 ) (2,084 )
Operating margin 586   656  
General and administrative expenses (46 ) (56 )
Interest expense (265 ) (281 )
Interest income 79 76
Loss on extinguishment of debt (10 ) (170 )
Other expense (12
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