08-08-17 second quarter 2017 financial review...

The AES CorporationSecond Quarter 2017 Financial ReviewAugust 8, 2017

2Contains Forward-Looking Statements

Certain statements in the following presentation regarding AES’ business operations may constitute“forward-looking statements.” Such forward-looking statements include, but are not limited to, thoserelated to future earnings growth and financial and operating performance. Forward-looking statementsare not intended to be a guarantee of future results, but instead constitute AES’ current expectationsbased on reasonable assumptions. Forecasted financial information is based on certain materialassumptions. These assumptions include, but are not limited to, accurate projections of future interestrates, commodity prices and foreign currency pricing, continued normal or better levels of operatingperformance and electricity demand at our distribution companies and operational performance at ourgeneration businesses consistent with historical levels, as well as achievements of planned productivityimprovements and incremental growth from investments at investment levels and rates of returnconsistent with prior experience. For additional assumptions see Slide 55 and the Appendix to thispresentation. Actual results could differ materially from those projected in our forward-lookingstatements due to risks, uncertainties and other factors. Important factors that could affect actual resultsare discussed in AES’ filings with the Securities and Exchange Commission including but not limited tothe risks discussed under Item 1A “Risk Factors” and Item 7: “Management’s Discussion & Analysis” inAES’ 2016 Annual Report on Form 10-K, as well as our other SEC filings. AES undertakes no obligationto update or revise any forward-looking statements, whether as a result of new information, futureevents or otherwise.

Reconciliation to U.S. GAAP Financial InformationThe following presentation includes certain “non-GAAP financial measures” as defined in Regulation Gunder the Securities Exchange Act of 1934, as amended. Schedules are included herein that reconcilethe non-GAAP financial measures included in the following presentation to the most directly comparablefinancial measures calculated and presented in accordance with U.S. GAAP.

Safe Harbor Disclosure


l Adjusted EPS1 of $0.25, an increase of $0.08, largely driven by higher availability and capital allocation decisions

l Reaffirming 2017 guidance and expectations through 2020

l Evaluating path forward for Alto Maipo hydro project under construction in Chile

l Successfully completed the expansion of our DPP gas-fired plant in the Dominican Republic

l Secured $2 billion in non-recourse financing on favorable terms and broke ground on our 1.4 GW Southland re-powering project in California

l With the exception of Alto Maipo, our 4.7 GW under construction are progressing well and remain on track to be completed through 2020

l Closed acquisition of sPower, the largest independent solar developer in the United States, to increase our long-term contracted, U.S. Dollar-denominated, renewable portfolio

l To take advantage of our leadership position in energy storage, we announced a 50/50 joint venture with Siemens to create a global energy storage technology and services company

l On track to achieve our $400 million per year cost reduction and revenue enhancement program

1. A non-GAAP financial measure. See Appendix for definition.

Q2 2017 Financial Review Call


l As disclosed in May, construction difficulties resulted in projected cost overruns of up to 22% ($460 million) of total project cost

l Slower than anticipated productivity by construction contractors since last call

� Alto Maipo terminated one of the project’s contractors for performance reasons

l In discussion with potential replacement construction contractors and non-recourse lenders

� Alto Maipo looking for modified construction contracts and financial flexibility

l AES’ total exposure to the project is approximately $415 million, 87% of which has already been invested

l Will be disciplined when it comes to evaluating any incremental investment from AES Gener into Alto Maipo

l Do not expect any material impact on our 2017 guidance and expectations through 2020

Alto Maipo in Chile


122 MW CCGT Expansion

DPP in the Dominican Republic

l Recently completed 122 MW expansion of existing DPP plant, for total capacity of 358 MW

l One of the lowest cost generators in the Dominican Republic

l New capacity contracted under a long-term, U.S. Dollar-denominated PPA

l Completed on budget for total capex of $260 million, funded through debt capacity at AES Dominicana


671 MW CCGT, COD1: 1H 2018

Eagle Valley in Indiana

l Remain confident that the project will achieve COD1 in 1H 2018

l EPC contractor, CBI2, has created positive momentum by subcontracting some critical work in an effort to achieve substantial completion by year-end 2017� Approximately 1,000 workers on-

site

1. Commercial Operations Date.2. Chicago Bridge and Iron Company.


1,384 MW Gas and Energy Storage, COD1: 1H 2020 (Gas) and 1H 2021 (Energy Storage)

Southland Repowering in California

l Closed $2 billion in long-term, non-recourse financing at 4.5%� Demonstrates strength of the

project, which has 20-year PPAs with Southern California Edison

� Largest non-recourse financing including a battery-based energy storage project

l Gas-fired capacity will be constructed by Kiewit� One of North America’s largest

engineering and construction contractors

� Successful track record of completing similar CCGT projects in California

1. Commercial Operations Date.


4,659 MW Currently Under Construction Coming On-Line Through 2020

1. Includes: 79 MW sPower (US-CA), 20 MW Dominican Energy Storage (Dominican Republic) and 19 MW Distributed Energy (US).2. Includes: 1,320 MW OPGC 2 (India), 671 MW Eagle Valley CCGT (US), 380 MW Colón (Panama) and 20 MW Distributed Energy (US).3. Includes: 531 MW Alto Maipo (Chile) and 335 MW Masinloc 2 (Philippines).4. Includes: 1,284 MW Southland Re-Powering (US-CA).

On Track to Complete Projects Under Construction

4,659

1181

2,3912

8663

1,2844

YTG 2017 2018 2019 2020 Total


Wind and Solar: Acquired 1.8 GW and Potential to Add at Least 1.5 GW Through 2020

Note: Solar capacity shown in DC and wind capacity shown in AC.1. Includes: 1,287 MW sPower (solar, US-CA), 386 MW Alto Sertão (wind, Brazil), 75 MW Boa Hora (solar, Brazil) and 28 MW Na Pua Makani (wind, Hawaii).

Significant Progress Toward Repositioning Our Portfolio

1,673

1,7761

400

926

500

2017 2018 2019 2020 Total

Acquired Signed PPAs Exclusive Negotiations Advanced Development

525570

8343,602


New Global Energy Storage Technology and Services Company

Joining Forces with Siemens to Create Fluence

l Worldwide installed base for energy storage projected to grow to 28 GW over next five years� Well-positioned to take advantage

and see it as an upside to our outlook

l New 50/50 joint venture unites scale, experience and resources of AES and Siemens, to develop new storage solutions and services, reaching customers in more than 160 countries� Expected to close in the fourth

quarter of this year, following regulatory approvals


$ in Millions

1. Cost reductions reflected in General and Administrative Expense (G&A), as well as Cost of Sales. Some of the previously reported 2012 and 2013 G&A Expense related to administrative costs at our SBUs has been reclassified to Cost of Sales.

$250

$400

$50$50 $25

$25

2012-2016 Total

2017 Estimate

2018 Estimate

2019 Estimate

2020 Estimate

Total

Performance Excellence1

On Track to Achieve $400 Run Rate through 2020


l Q2 2017 results� Adjusted EPS1

� Consolidated Free Cash Flow1 and Adjusted PTC1 by Strategic Business Unit (SBU)

l 2017 Parent capital allocation plan

l 2017 Guidance and 2018-2020 expectations

1. A non-GAAP financial measure. See Appendix for definition.

Q2 2017 Financial Review


$0.17

$0.25$0.08

($0.01)

$0.01

Q2 2016 SBUs/Corp Tax Capital Allocation Q2 2017

1. A non-GAAP financial measure. See Appendix for definition and reconciliation to the nearest GAAP measure.

Q2 2017 Adjusted EPS1 Increased $0.08

l MCACl Argentinal UK

l 2016: 29%l 2017: 32%


$ in Millions

Consolidated FCF1 Decreased $448;Adjusted PTC1 Increased $83


Q2 Financial Results

l Margins improved primarily due to higher availability in MCAC and Argentina

l Adjusted PTC1 also reflects lower Parent interest expense

l Lower Consolidated FCF1 also reflects the collection of overdue receivables at Maritza in Bulgaria in 2016, and higher working capital requirements in Brazil

$137

$13

$160$243

$0

$100

$200

$300

$400

$500

$600

Q2 2016 Q2 2017 Q2 2016 Q2 2017

FCF Attributable to NCI

Consolidated FCF1

Adjusted PTC1

1

$554

$106


$ in Millions



Q2 Financial Results: US SBU

l Margins declined primarily due to an accrual associated with the 2016 rate order at IPL in Indiana and a reversion to prior ESP rates at DPL in Ohio

l Higher Adjusted PTC1 also reflects growth in distributed energy business

l Lower Consolidated FCF1 also reflects higher working capital requirements at DPL

$6

($2)

$58 $63

-$10

$10

$30

$50

$70

$90

$110

$130

$150

Q2 2016 Q2 2017 Q2 2016 Q2 2017


Consolidated FCF1

Adjusted PTC1

1

$123$104


$ in Millions

Consolidated FCF1 Increased $2;Adjusted PTC1 Decreased $2


Q2 Financial Results: Andes SBU

l Margins improved primarily due to improved availability in Argentina

l Lower Adjusted PTC1 also reflects lower capitalized interest expense on completed construction projects in Chile and lower interest income in Argentina

l Higher Consolidated FCF1 also reflects lower tax payments at Chivor in Colombia, offset by lower VAT refunds and higher tax payments at Gener in Chile

$21 $21

$84 $82

$0$10$20$30$40$50$60$70$80$90

$100

Q2 2016 Q2 2017 Q2 2016 Q2 2017


Consolidated FCF1

Adjusted PTC1

1

$77 $79


$ in Millions



Q2 Financial Results: Brazil SBU

l Margins were flat

l Lower Consolidated FCF1 reflects the impact from the recovery of high purchased power costs in 2016 at Eletropaulo, and the sale of Sul $77

($45)

$7 $13

-$90

-$40

$10

$60

$110

$160

Q2 2016 Q2 2017 Q2 2016 Q2 2017


Consolidated FCF1

Adjusted PTC1

1

$125

($53)


$ in Millions

Consolidated FCF1 Increased $28;Adjusted PTC1 Increased $24


Q2 Financial Results: MCAC SBU

l Margins improved primarily due to higher availability in the Dominican Republic, Mexico and Puerto Rico

$6($2)

$75

$99

-$20

$0

$20

$40

$60

$80

$100

$120

Q2 2016 Q2 2017 Q2 2016 Q2 2017


Consolidated FCF1

Adjusted PTC1

1

-

$28


$ in Millions



Q2 Financial Results: Europe SBU

l Margins improved primarily due to higher capacity margins in the United Kingdom

l Lower Consolidated FCF1 also reflects the collection of overdue receivables in 2016 at Maritza in Bulgaria

$9

$13 $34$54

$0

$50

$100

$150

$200

$250

$300

$350

$400

Q2 2016 Q2 2017 Q2 2016 Q2 2017


Consolidated FCF1

Adjusted PTC1

1

$352

$59


$ in Millions

Consolidated FCF1 Increased $15;Adjusted PTC1 Flat


Q2 Financial Results: Asia SBU

l Margins were flat

l Higher Consolidated FCF1 reflects the timing of fuel payments at Masinloc in the Philippines

$19

$28

$26 $26

$0

$10

$20

$30

$40

$50

$60

Q2 2016 Q2 2017 Q2 2016 Q2 2017


Consolidated FCF1

Adjusted PTC1

1

$38

$53


Regulatory Developments in Ohio – Dayton Power & Light (DP&L)

l In March, reached settlement agreement with PUCO Staff and various intervenors on Electric Security Plan (ESP)� Distribution Modernization Rider of $105 million/year over three years with potential

for two-year extension

� Commenced sale process for Miami Fort, Zimmer and Conesville (1 GW)

l Post-hearing brief concluded May 15, 2017

l PUCO approval expected Q3 2017

l Committed to:� Exiting 100% of coal capacity by June 2018 (2.1 GW)

� Exploring strategic options for remaining generation (1 GW peakers)

� Reducing debt

Taking Active Steps Towards DPL Becoming a Stable and Growing T&D Business


Since 2011, Reduced Parent Debt by 32% or $2.1 Billion($ in Millions)

Improving Our Debt Profile

$6,515

$4,423($530) ($308)

($419) ($240) ($301) ($294)

Total Parent Debt as of

December 31, 2011

2012 2013 2014 2015 2016 2017 Total Parent Debt as of

June 30, 2017


$ in Millions

Discretionary Cash – Sources ($1,495-$1,595)

Discretionary Cash – Uses ($1,495-$1,595)

1. Includes: completed $300 million (Sul, Brazil) and $500 million asset sale proceeds target.2. A non-GAAP financial measure. See Appendix for definition and reconciliation to the nearest GAAP measure.

2017 Parent Capital Allocation Plan

$100

$575-$675

$1,495-$1,595

$800

$20

Beginning Cash

Asset Sales Proceeds

Parent FCF Return of Capital

Total Discretionary

Cash

$50 $53-$153

$317

$350 $382

$343

21

Target Closing Cash Balance

Shareholder Dividend

Unallocated Discretionary Cash

Investments in Subsidiaries

Maximizing Discretionary Cash to Increase Risk-Adjusted Returns for Shareholders

Debt Prepayment

sPowerAcquisition


2017-2020; $ in Millions

1. Includes: $100 million beginning cash; $800 million asset sale proceeds; and Parent Free Cash Flow of $2,900 million, which is based on the mid-point of 2017 guidance of $625 million, growing at the mid-point of our 8%-10% average annual growth rate through 2020. Does not include additional asset sale proceeds.

2. Assumes constant payment of $0.12 per share each quarter on 662 million shares outstanding.3. Includes investments in renewable development projects in 2018-2020 shown on Slide 9.

Allocating $3.8 Billion1 Discretionary Cash Through 2020 to Maximize Risk-Adjusted Returns

$1,090

$1,270

$700

$382

$358Unallocated Discretionary Cashl 8%-10% dividend

growthl Modest Parent de-

leveringl Investments in

natural gas and renewable projects3

2017 Parent Debt Prepayment

sPowerAcquisition

Committed Investments in

Subsidiaries

Shareholder Dividend2


$ in Millions, Except Per Share AmountsReaffirming Expectations Through 2020

FY 2016 Guidance & Expectations FY 2017 Guidance 2020 Expectations

Adjusted EPS1 $0.95-$1.05 $1.00-$1.108%-10% growth off mid-point of 2016

guidanceConsolidated Net Cash Provided by Operating Activities $2,000-$2,900 $2,000-$2,800 N/A

Consolidated Free Cash Flow1 $1,300-$2,200 $1,400-$2,0008%-10% growth off mid-point of 2016

guidance


l 2017 guidance based on foreign currency and commodity forward curves as of June 30, 2017


l Year-to-date results in line with expectations

l Resolution of Alto Maipo expected before year-end

l To deliver attractive growth, on track to complete remaining construction projects, as well as revenue enhancement and cost reduction initiatives

l Repositioning our portfolio by adding renewables and natural gas with long-term, U.S. Dollar-denominated contracts

l Continuing to reduce leverage to achieve investment grade metrics by 2020

Conclusion

Reaffirming 8%-10% Average Annual Growth in all Key Financial Metrics Through 2020


l YTD Adjusted EPS1 Slide 28l Q2 and YTD Adjusted EPS1 Roll-Up Slide 29l YTD Financial Results Slides 30-36l Listed Subs & Public Filers Slide 37l SBU Modeling Disclosures Slides 38-39l DPL Inc. Modeling Disclosures Slide 40l DP&L and DPL Inc. Debt Maturities Slide 41l Parent Only Cash Flow Slides 42-44l Currencies and Commodities Slides 45-47l AES Modeling Disclosures Slide 48l Construction Program Slides 49 l Reconciliations Slides 50-54l Assumptions & Definitions Slides 55-56

1. A non-GAAP financial measure.

Appendix


$0.32

$0.42

$0.05 $0.02

$0.02 $0.01

YTD 2016 SBUs/Corp FX Tax Capital Allocation

YTD 2017

1. A non-GAAP financial measure. See Slide 52 for reconciliation to the nearest GAAP measure and “definitions”.

YTD 2017 Adjusted EPS1 Increased $0.10


Q2 2017 Q2 2016 Variance YTD 2017 YTD 2016 VarianceAdjusted PTC1

US $63 $58 $5 $111 $143 ($32)Andes $82 $84 ($2) $170 $145 $25Brazil $13 $7 $6 $52 $12 $40MCAC $99 $75 $24 $158 $123 $35Europe $54 $34 $20 $109 $103 $6Asia $26 $26 - $48 $48 -

Total SBUs $337 $284 $53 $648 $574 $74Corp/Other ($94) ($124) $30 ($215) ($229) $14

Total AES Adjusted PTC1,2 $243 $160 $83 $433 $345 $88

Adjusted Effective Tax Rate 32% 29% 36% 39%Diluted Share Count 662 662ADJUSTED EPS1 $0.25 $0.17 $0.08 $0.42 $0.32 $0.10

$ in Millions, Except Per Share Amounts

1. A non-GAAP financial measure. See Slides 51 and 52 for reconciliation to the nearest GAAP measure and “definitions”.2. Includes $6 million and $8 million of after-tax equity in earnings for Q2 2017 and Q2 2016, respectively, and $12 million and $14 million for YTD 2017 and

YTD 2016, respectively.

Q2 and YTD 2017 Adjusted EPS1 Roll-Up


$ in Millions


1. A non-GAAP financial measure. See Slides 50 and 52 for reconciliation to the nearest GAAP measure and “definitions”.

YTD Financial Results

l Margins improved primarily in MCAC, Andes and Brazil

l Higher Adjusted PTC1 also reflects the successful settlement of a legal dispute in Brazil

l Lower Consolidated FCF1 also reflects the receipt of overdue receivables at Maritza in Bulgaria in 2016, and higher working capital requirements in Brazil

$374

$291$345

$433

$0

$200

$400

$600

$800

$1,000

$1,200

YTD 2016

YTD 2017

YTD 2016

YTD 2017


Consolidated FCF1

Adjusted PTC1

1

$1,044

$652


$ in Millions

Consolidated FCF1 Decreased $70;Adjusted PTC1 Decreased $32

1. A non-GAAP financial measure. See “definitions”.

YTD Financial Results: US SBU

l Margins declined primarily due to an accrual associated with the 2016 rate order at IPL and reversion to prior ESP rates at DPL in Ohio

l Lower Adjusted PTC1 also reflects as a result of a contract termination in 2016, related to DPL’s competitive retail business

l Lower Consolidated FCF1 also reflects higher purchased power and fuel costs at DPL

$16

$14$143

$111

$0

$50

$100

$150

$200

$250

$300

YTD 2016

YTD 2017

YTD 2016

YTD 2017


Consolidated FCF1

Adjusted PTC1

1

$266

$196


$ in Millions



YTD Financial Results: Andes SBU

l Margins improved due to higher availability in Argentina and higher reservoir levels and generation in Colombia

l Higher Consolidated FCF1 also reflects the non-cash impact on margins from environmental tax accruals and higher depreciation in Chile

$37

$65 $145$170

$0

$50

$100

$150

$200

YTD 2016

YTD 2017

YTD 2016

YTD 2017


$97

$186

Consolidated FCF1

Adjusted PTC1

1


$ in Millions



YTD Financial Results: Brazil SBU

l Margins improved due to higher spot sales at Tietê, and higher tariffs at Eletropaulo

l Higher Adjusted PTC1 also reflects the successful settlement of a legal dispute at Uruguaiana

l Lower Consolidated FCF1 also reflects the impact from the recovery of high purchased power costs in 2016 at Eletropaulo

$239

$117

$12$52

$0

$50

$100

$150

$200

$250

$300

$350

$400

YTD 2016

YTD 2017

YTD 2016

YTD 2017


Consolidated FCF1

Adjusted PTC1

1

$321

$165


$ in Millions



YTD Financial Results: MCAC SBU

l Margins improved primarily due to higher availability in Mexico and higher energy sales in the Dominican Republic

l Higher Consolidated FCF1 also reflects lower working capital requirements in the Dominican Republic and Puerto Rico, primarily related to the timing of collections and fuel payments

$6

$6

$123

$158

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

YTD 2016

YTD 2017

YTD 2016

YTD 2017


Consolidated FCF1

Adjusted PTC1

1

$13

$93


$ in Millions



YTD Financial Results: Europe SBU

l Margins improved primarily due to higher capacity margins in the United Kingdom

l Lower Consolidated FCF1 also reflects the collection of overdue receivables at Maritza in Bulgaria in 2016

$14

$20 $103 $109

$0$50

$100$150$200$250$300$350$400$450$500

YTD 2016

YTD 2017

YTD 2016

YTD 2017


Consolidated FCF1

Adjusted PTC1

1

$433

$145


$ in Millions

Consolidated FCF1 Increased $9;Adjusted PTC1 Flat


YTD Financial Results: Asia SBU

l Margins were flat

l Higher Consolidated FCF1 reflects lower working capital requirements at Masinloc in the Philippines due to the timing of fuel payments

$63 $69

$48 $48

$0

$20

$40

$60

$80

$100

$120

$140

$160

YTD 2016

YTD 2017

YTD 2016

YTD 2017


Consolidated FCF1

Adjusted PTC1

1

$125$134


AES SBU/Reporting Country US Andes/Chile BrazilAES Company IPL DPL AES Gener2 Eletropaulo2 Tietê2

$ in Millions Q2 2017

Q2 2016

Q2 2017

Q2 2016

Q2 2017

Q2 2016

Q2 2017

Q2 2016

Q2 2017

Q2 2016

US GAAP RECONCILIATIONAES Business Unit Adjusted Earnings1,3 $15 $21 $5 $4 $32 $48 $1 ($2) $8 $7Adjusted PTC1,3 Public Filer (Stand-alone) $23 $31 $8 $7 $54 $72 $2 ($2) $12 $10

Impact of AES Differences from Public Filings - - - $1 - - - - - -AES Business Unit Adjusted PTC1 $23 $31 $8 $8 $54 $72 $2 ($2) $12 $10

Unrealized Derivatives (Losses)/Gains - - $2 $4 ($10) $1 - - - -Unrealized Foreign Currency Transaction Losses - - - - - - - - - $1Impairment Losses - - - ($235) - - - - - -Disposition/Acquisition Gains - - ($1) - - - - - - -Loss on Extinguishment of Debt - - - - ($2) $3 - - ($1) -Non-Controlling Interest before Tax $12 $13 - - $24 $36 $11 ($9) $36 $36Income Tax Benefit/(Expenses) ($11) ($14) ($8) $87 ($25) ($38) ($5) $3 ($14) ($15)

US GAAP Income/(Loss) from Continuing Operations4 $24 $30 $1 ($136) $41 $74 $8 ($8) $33 $32

Adjustment to Depreciation & Amortization5 ($10) ($10) ($7) ($7) ($3) ($3)Adjustment to Regulatory Liabilities & Assets - - - - - -Adjustment to Taxes6 ($3) $8 ($2) ($5) - $1Other Adjustments $16 ($6) $10 $22 ($2) ($1)

IFRS Net Income $44 $66 $9 $2 $28 $29BRL-USD Implied Exchange Rate 3.3012 1.8735 3.2104 3.5316

This table provides financial data of those operating subsidiaries of AES that are publicly listed or have publicly filed financial information on a stand-alone basis. The table provides a reconciliation of the subsidiary’s Adjusted PTC as it is included in AES consolidated Adjusted PTC with the subsidiary’s income/(loss) from continuing operations under US GAAP and the subsidiary’s locally IFRS reported net income, if applicable. Readers should consult the subsidiary’s publicly filed reports for further details of such subsidiary’s results of operations.

1. A non-GAAP financial measure. Reconciliation provided above. See “definitions” for descriptions of adjustments.2. The listed subsidiary is a public filer in its home country and reports its financial results locally under IFRS. Accordingly certain adjustments presented under IFRS Reconciliation are required to account

for differences between US GAAP and local IFRS standards.3. Total Adjusted PTC, US GAAP Income from continuing operations and intervening adjustments are calculated before the elimination of inter-segment transactions such as revenue and expenses related

to the transfer of electricity from AES generation plants to AES utilities within Brazil.4. Represents the income/(loss) from continuing operations of the subsidiary included in the consolidated operating results of AES under US GAAP.5. Adjustment to depreciation and amortization expense represents additional expense required due primarily to basis differences of long-lived and intangible assets under IFRS for each reporting period.6. Adjustment to taxes represents mainly differences relating to the goodwill tax benefit resulting from the restructuring of Brazilian subsidiaries that increased tax basis in long-term assets (Eletropaulo) and

depreciation for the difference in cost basis of PP&E (Eletropaulo and Tietê).

Q2 2017 Adjusted PTC1: Reconciliation to Public Financials of Listed Subsidiaries & Public Filers


Adjusted PTC1

Interest Expense Interest Income Depreciation & Amortization

Consolidated Attributableto NCI

Ownership-Adjusted Consolidated Attributable

to NCIOwnership-

Adjusted Consolidated Attributableto NCI

Ownership-Adjusted

US $63 $62 ($8) $54 - - - $109 ($15) $94

DPL $8 $27 - $27 - - - $26 - $26

IPL $23 $25 ($7) $18 - - - $51 ($15) $36

Andes $82 $52 ($17) $35 $12 ($1) $11 $62 ($23) $39

AES Gener $54 $44 ($17) $27 $2 ($1) $1 $60 ($23) $37

Brazil $13 $68 ($55) $13 $43 ($34) $9 $43 ($35) $8

Tietê $12 $10 ($8) $2 $6 ($5) $1 $10 ($8) $2

Eletropaulo $2 $56 ($47) $9 $34 ($29) $5 $33 ($27) $6

MCAC $99 $41 ($7) $34 $5 ($1) $4 $43 ($10) $33

Europe $54 $15 ($4) $11 - - - $23 ($4) $19

Asia $26 $26 ($13) $13 $32 ($16) $16 $7 ($3) $4

Subtotal $337 $264 ($104) $160 $92 ($52) $40 $287 ($90) $197

Corp/Other ($94) $69 - $69 $1 - $1 $3 - $3

TOTAL $243 $333 ($104) $229 $93 ($52) $41 $290 ($90) $200

$ in Millions

1. A non-GAAP financial measure. See reconciliation to the nearest GAAP measure on Slide 52 and “definitions”.

Q2 2017 Modeling Disclosures


Total Debt Cash & Cash Equivalents, Restricted Cash, Short-Term Investments, Debt Service Reserves & Other Deposits

Consolidated Attributable to NCI Ownership-Adjusted Consolidated Attributable to NCI Ownership-Adjusted

US $5,215 ($784) $4,431 $273 ($9) $264

DPL $1,838 - $1,838 $36 - $36

IPL $2,609 ($782) $1,827 $29 ($8) $21

Andes $4,200 ($1,565) $2,635 $472 ($150) $322

AES Gener $3,871 ($1,564) $2,307 $356 ($150) $206

Brazil1 $1,743 ($1,396) $347 $1,049 ($783) $266

Tietê $722 ($547) $175 $480 ($363) $117

Eletropaulo $1,021 ($849) $172 $445 ($370) $75

MCAC $2,625 ($452) $2,173 $419 ($77) $342

Europe $935 ($243) $692 $185 ($41) $144

Asia $1,669 ($818) $851 $197 ($94) $103

Subtotal $16,387 ($5,258) $11,129 $2,595 ($1,154) $1,441

Corp/Other $4,384 - $4,384 $249 - $249

TOTAL $20,771 ($5,258) $15,513 $2,844 ($1,154) $1,690

$ in Millions

1. In addition to total debt, Eletropaulo has $1,124 million of pension plan liabilities. AES owns 17% of Eletropaulo.

Q2 2017 Modeling Disclosures


Balance of Year 2017 Full Year 2018 Full Year 2019

Volume Production (TWh) 4.1 5.6 2.8% Volume Hedged ~47% ~24% ~11%Average Hedged Dark Spread ($/MWh) $13.59 $17.41 N/A

EBITDA Generation Business1 ($ in Millions) ~$45 to $50 per yearEBITDA DPL Inc. including Generation and T&D ($ in Millions) ~$275 to $300 per year

Reference Prices2

Henry Hub Natural Gas ($/mmbtu) $3.07 $2.99 $2.85AEP-Dayton Hub ATC Prices ($/MWh) $29 $30 $29

EBITDA Sensitivities (with Existing Hedges) ($ in Millions)+10% AD Hub Energy Price ATC ($/MWh) $5 $13 $7

-10% AD Hub Energy Price ATC ($/MWh) ($5) ($10) ($6)

Based on Market Conditions and Hedged Position as of June 30, 2017

Note: Data assume the exit of Stuart and Killen mid-2018, Miami Fort and Zimmer mid-2017, and Conesville in early 2018. 1. Includes capacity premium performance results.2. Balance of Year 2017 (July-December) and Full Year 2018-2019 based on forward curves as of June 30, 2017.

DPL Inc. Modeling Disclosures


Series InterestRate Maturity

AmountOutstanding as

of June 30,2017

AmountOutstanding as

of August 7,2017

Remarks

2016 FMB Secured B Loan Variable Aug. 2022 $442.8 $442.8 ● Redeemable at 101% of par

2006 OH Air Quality PCBs 4.8% Sept. 2036 $91.9 $70.0 ● Redeemable at par on any day

2015 Direct Purchase Tax Exempt TL Variable Aug. 2020

(put) $200.0 $200.0 ● Redeemable at par on any day

Total Pollution Control Various Various $291.9 $270.0

Wright-Patterson AFB Note 4.2% Feb. 2061 $17.9 $17.9 ● No redemption option

2015 DP&L Revolver Variable July 2020 - - ● Redeemable at par on any day

Total DP&L $752.6 $730.7

2018 Term Loan Variable May 2018 $112.5 $112.5 ● No redemption penalty

2019 Senior Unsecured 6.75% Oct. 2019 $200.0 $200.0 ● Callable at make-whole T+50

2021 Senior Unsecured 7.25% Oct. 2021 $780.0 $780.0 ● Callable at make-whole T+50

Total Senior Unsecured Bonds Various Various $980.0 $980.0

2015 DPL Revolver Variable July 2020 - - ● Redeemable at par on any day

2001 Cap Trust II Securities 8.125% Sept. 2031 $15.6 $15.6 ● Callable at make-whole T+25

Total DPL Inc. $1,108.1 $1,108.1TOTAL $1,860.7 $1,838.8

$ in MillionsNon-Recourse Debt at DP&L and DPL Inc.


$ in MillionsQ2 YTD

2017 2016 2017 2016

Sources

Total Subsidiary Distributions1 $375 $337 $584 $422

Proceeds from Asset Sales, Net $35 $42 $324 $53

Financing Proceeds, Net $519 $495 $519 $495

Increased/(Decreased) Credit Facility Commitments $300 - $300 -

Issuance of Common Stock, Net - - - -

Total Returns of Capital Distributions & Project Financing Proceeds $66 $14 $66 $31

Beginning Parent Company Liquidity2 $719 $675 $894 $1,137

TOTAL SOURCES $2,014 $1,563 $2,687 $2,138

Uses

Repayments of Debt ($519) ($495) ($860) ($611)

Shareholder Dividend ($79) ($72) ($158) ($145)

Repurchase of Equity - - - ($79)

Investments in Subsidiaries, Net ($84) ($109) ($144) ($248)

Cash for Development, Selling, General & Administrative and Taxes ($54) ($70) ($173) ($154)

Cash Payments for Interest ($86) ($78) ($160) ($152)

Changes in Letters of Credit and Other, Net $28 $24 $28 $14

Ending Parent Company Liquidity2 ($1,220) ($763) ($1,220) ($763)

TOTAL USES ($2,014) ($1,563) ($2,687) ($2,138)

1. See “definitions”.2. A non-GAAP financial measure. See “definitions”.

Parent Sources and Uses of Liquidity


Subsidiary Distributions1 by SBU

Q2 2017 YTD 2017

US $137 $156

Andes $166 $245

Brazil $4 $4

MCAC $16 $16

Europe $24 $130

Asia $24 $25

Corporate & Other2 $4 $8

TOTAL $375 $584

$ in Millions

1. See “definitions”.2. Corporate & Other includes Global Insurance.

Q2 2017 Subsidiary Distributions1

Top Ten Subsidiary Distributions1 by Business

Q2 2017 YTD 2017

Business Amount Business Amount Business Amount Business Amount

Gener (Andes) $91 Altai (Europe) $13 Argentina (Andes) $154 Mong Duong

(Asia) $25

US Holdco (US) $81 Itabo (MCAC) $9 Gener (Andes) $91 Elsta (Europe) $17

Argentina (Andes) $75 Maritza

(Europe) $8 Maritza (Europe) $82 Altai (Europe) $13

IPALCO (US) $52 Andres (MCAC) $6 US Holdco

(US) $81 Kilroot(Europe) $12

Mong Duong (Asia) $24 Brazil (Brazil) $4 IPALCO (US) $70 Itabo (MCAC) $9


$ in Millions

1. See “definitions”.2. A non-GAAP financial measure. See “definitions”.3. Qualified Holding Company. See “assumptions”.

Reconciliation of Subsidiary Distributions1 and Parent Liquidity2

Quarter Ended

June 30, 2017

March 31, 2017

December 31,2016

September 30,2016

Total Subsidiary Distributions1 to Parent & QHCs3 $375 $209 $426 $265

Total Return of Capital Distributions to Parent & QHCs3 $66 - $12 $4

Total Subsidiary Distributions1 & Returns of Capital to Parent $441 $209 $438 $269

Balance as of

June 30,2017

March 31,2017

December 31, 2016

September 30, 2016

Cash at Parent & QHCs3 $127 $52 $100 $42

Availability Under Credit Facilities $1,093 $667 $794 $519

Ending Liquidity $1,220 $719 $894 $561


Interest Rates1

Currencies

Commodity Sensitivity

l 100 bps move in interest rates over year-to-go 2017 is forecasted to have a change in EPS of approximately $0.015

10% appreciation in USD against the following key currencies is forecasted to have the following negative EPS impacts:

Balance of Year 2017

Average Rate Sensitivity

Brazilian Real (BRL) 3.38 Less than $0.005

Colombian Peso (COP) 3,089 Less than $0.005

Euro (EUR) 1.15 Less than $0.005

Great British Pound (GBP) 1.31 Less than $0.005

Kazakhstan Tenge (KZT) 341 Less than $0.005

10% increase in commodity prices is forecasted to have the following EPS impacts:

Balance of Year 2017

Average Rate Sensitivity

Illinois Basin Coal $34/tonLess than $0.005, negative correlation

Rotterdam Coal (API 2) $78/ton

NYMEX WTI Crude Oil $46/bblLess than $0.005, positive correlation

IPE Brent Crude Oil $49/bbl

NYMEX Henry Hub Natural Gas $3.1/mmbtuLess than $0.005, negative correlation

UK National Balancing Point Natural Gas £0.4/therm

US Power (DPL) – PJM AD Hub $ 29/MWh $0.005, positive correlation

Note: Guidance provided on August 8, 2017. Sensitivities are provided on a standalone basis, assuming no change in the other factors, to illustrate the magnitude and direction of changing market factors on AES’ results. Estimates show the impact on year-to-go 2017 Adjusted EPS. Actual results may differ from the sensitivities provided due to execution of risk management strategies, local market dynamics and operational factors. Full year 2017 guidance is based on currency and commodity forward curves and forecasts as of June 30, 2017. There are inherent uncertainties in the forecasting process and actual results may differ from projections. The Company undertakes no obligation to update the guidance presented. Please see Item 1 of the Form 10-Q for a more complete discussion of this topic. AES has exposure to multiple coal, oil, and natural gas, and power indices; forward curves are provided for representative liquid markets. Sensitivities are rounded to the nearest $0.005 cent per share.1. The move is applied to the floating interest rate portfolio balances as of June 30, 2017.

2017 Guidance Estimated Sensitivities


2017 Adjusted PTC1

by Currency Exposure2017 Full Year FX Sensitivity2,3

by SBU (Cents Per Share)

1. Before Corporate Charges. A non-GAAP financial measure. See “definitions”.2. Sensitivity represents full year 2017 exposure to a 10% appreciation of USD relative to foreign currency as of December 31, 2016.3. Andes includes Argentina and Colombia businesses only due to limited translational impact of USD appreciation to Chilean businesses.

2017 Foreign Exchange (FX) Risk Mitigated Through Structuring of Our Businesses and Active Hedging

l 2017 correlated FX risk after hedges is $0.015 for 10% USD appreciationl 80% of 2017 earnings effectively USD

� USD-based economies (i.e. U.S., Panama)� Structuring of our contracts

l FX risk mitigated on a rolling basis by shorter-term active FX hedging programs

0.51.0

0.51.5

1.0 1.0

1.5

US Andes Brazil MCAC Europe Asia CorTotalFX Risk After Hedges Impact of FX Hedges

80%

5% 7%

5%

1% 2%

USD-Equivalent

GBPKZTEUR

COP

BRL


Full Year 2019 Adjusted EPS1 Commodity Sensitivity2 for 10% Change in Commodity Prices

1. A non-GAAP financial measure. See “definitions”.2. Domestic and International sensitivities are combined and assumes each fuel category moves 10%. Adjusted EPS is negatively correlated to coal price

movement, and positively correlated to gas, oil and power price movements.

Commodity Exposure is Mostly Hedged in the Medium- to Long-Term

(2.0)

0.0

2.0

4.0

6.0

Coal Gas Oil DPL Power

Cen

ts P

er S

hare


Parent Company Cash Flow Assumptions 2017Subsidiary Distributions (a) $1,150-$1,265Cash Interest (b) $285-$300Corporate Overhead $150Parent-Funded SBU Overhead $100Business Development $40

Cash for Development, General & Administrative and Tax (c) $290

PARENT FREE CASH FLOW1 (a – b – c) $575-$675

$ in Millions


AES Modeling Disclosures


Project Country AES Ownership Fuel Gross MW

Expected COD Total Capex

Total AES

EquityROE Comments

Construction Projects Coming On-Line 2017-2020

IPL Wastewater US-IN 70% Coal 2H 2017 $224 $71 Environmental (NPDES) upgrades of 1,864 MW

Eagle Valley CCGT US-IN 70% Gas 671 1H 2018 $613 $193

Colón Panama 50% Gas 380 1H 2018 $996 $205Regasification and LNG

storage tank expected on-line in 2019

OPGC 2 India 49% Coal 1,320 2H 2018 $1,585 $227

Alto Maipo Chile 62% Hydro 531 1H 2019 $2,513 $413

Masinloc 2 Philippines 51% Coal 335 1H 2019 $740 $110

Southland Repowering US-CA 100% Gas 1,284 1H 2020 $2,314 $350

Total 4,621 $8,984 $1,568

ROE1 ~12%Weighted average; net income divided by AES

equity contribution

CASH YIELD1 ~13%

Weighted average; subsidiary distributions divided by AES equity

contribution

$ in Millions, Unless Otherwise Stated

1. Based on projections. See our 2016 Form 10-K for further discussion of development and construction risks. Based on 3-year average contributions from all projects under construction and IPL wastewater upgrades, once all projects under construction are completed.

Attractive Returns from Construction Pipeline


$ in Millions

1. A non-GAAP financial measure as reconciled above. See “definitions”.2. Includes capital expenditures under investing and financing activities.

Reconciliation of Q2 and YTD Capex and Free Cash Flow1

Q2 YTD

2017 2016 2017 2016

Operational Capex (a) $142 $158 $294 $320

Environmental Capex (b) $15 $68 $39 $155

Maintenance Capex (a + b) $157 $226 $333 $475

Growth Capex (c) $527 $466 $851 $867

TOTAL CAPEX2 (a + b + c) $684 $692 $1,184 $1,342

Q2 YTD

2017 2016 2017 2016

Operating Cash Flow $251 $723 $954 $1,363

Add: Capital Expenditures Related to Service Concession Assets $1 $2 $2 $26

Less: Maintenance Capex, net of Reinsurance Proceeds and Non-Recoverable Environmental Capex

($146) ($171) ($304) ($345)

CONSOLIDATED FREE CASH FLOW1 $106 $554 $652 $1,044



Q2 2017 Q2 2016

Net of NCI2Per Share

(Diluted) Net of NCI2



Income (Loss) from Continuing Operations Attributable to AES and Diluted EPS $53 $0.08 ($103) ($0.16)

Add: Income Tax Benefit from Continuing Operations Attributable to AES $53 ($42)

Pre-Tax Contribution $106 ($145)

Adjustments

Unrealized Derivative Gains $2 - $30 $0.04

Unrealized Foreign Currency Transaction Gains ($24) ($0.03) $17 $0.02

Disposition/Acquisition (Gains) Losses $54 $0.083 $17 $0.034

Impairment Expense $94 $0.145 $235 $0.366

(Gains) Losses on Extinguishment of Debt $11 $0.027 $6 $0.01

Less: Net Income Tax (Benefit) - ($0.04)8 - ($0.13)8

ADJUSTED PTC1 & ADJUSTED EPS1 $243 $0.25 $160 $0.17

1. Non-GAAP financial measures. See “definitions”.2. NCI is defined as Noncontrolling Interests.3. Amount primarily relates to loss on sale of Kazakhstan CHPs of $48 million, or $0.07 per share. 4. Amount primarily relates to the loss from the deconsolidation of UK Wind of $20 million, or $0.03 per share. 5. Amount primarily relates to asset impairments at Kazakhstan hydroelectric plants of $90 million, or $0.14 per share. 6. Amount primarily relates to the asset impairment at DPL of $235 million, or $0.36 per share.7. Amount primarily relates to the loss on early retirement of debt at the Parent Company of $6 million, or $0.01 per share. 8. Amount primarily relates to the income tax benefit associated with asset impairment losses of $30 million, or $0.05 per share and $70 million, or $0.11 per share in the three

months ended June 30, 2017 and 2016, respectively.

Reconciliation of Q2 Adjusted PTC1 and Adjusted EPS1



YTD 2017 YTD 2016





Income (Loss) from Continuing Operations Attributable to AES and Diluted EPS $29 $0.04 $32 $0.05

Add: Income Tax Benefit from Continuing Operations Attributable to AES $73 $19

Pre-Tax Contribution $102 $51

Adjustments

Unrealized Derivative Gains $1 - ($4) -

Unrealized Foreign Currency Transaction Gains ($33) ($0.04) $9 -

Disposition/Acquisition (Gains) Losses $106 $0.163 ($2) -

Impairment Expense $262 $0.404 $285 $0.435

(Gains) Losses on Extinguishment of Debt ($5) ($0.01)6 $6 $0.01

Less: Net Income Tax (Benefit) - ($0.13)7 - ($0.17)7

ADJUSTED PTC1 & ADJUSTED EPS1 $433 $0.42 $345 $0.32

1. Non-GAAP financial measures. See “definitions”.2. NCI is defined as Noncontrolling Interests.3. Amount primarily relates to loss on sale of Kazakhstan CHPs of $48 million, or $0.07 per share, realized derivative losses associated with the sale of Sul of $38 million, or $0.06

per share; costs associated with early plant closure of DPL of $20 million, or $0.03 per share. 4. Amount primarily relates to asset impairment at Kazakhstan hydroelectric plants of $90 million, or $0.14 per share, at Kazakhstan CHPs of $94 million, or $0.14 per share, and

DPL of $66 million, or $0.10 per share. 5. Amount primarily relates to asset impairment at DPL of $235 million, or $0.36 per share; and Buffalo Gap II of $159 million ($49 million, or $0.07 per share, net of NCI). 6. Amount primarily relates to the gain on early retirement of debt at Alicura of $65 million, or $0.10 per share, partially offset by the loss on early retirement of debt at the Parent

Company of $53 million, or $0.08 per share.7. Amount primarily relates to the income tax benefit associated with asset impairment losses of $81 million, or $0.12 per share and $122 million, or $0.18 per share in the six

months ended June 30, 2017 and 2016, respectively.

Reconciliation of YTD Adjusted PTC1 and Adjusted EPS1



1. A non-GAAP financial measure. See “definitions”. 2. Actual 2017 Adjusted EPS was $0.98. The above range is provided as a base for future growth rates. Reconciliation of Adjusted EPS may be found in the Company’s 2016

Form 10-K.

Reconciliation of 2016 Guidance

2016 GuidanceConsolidated Net Cash Provided by Operating Activities $2,000-$2,900

Adjusted EPS1,2 $0.95-$1.05

ReconciliationConsolidated Net Cash Provided by Operating Activities (a) $2,000-$2,900

Maintenance & Environmental Capital Expenditures (b) $600-$800

Consolidated Free Cash Flow1 (a - b) $1,300-$2,200

l Commodity and foreign currency exchange rates and forward curves as of September 30, 2016



1. A non-GAAP financial measure. See “definitions”.2. The Company is not able to provide a corresponding GAAP equivalent for its Adjusted EPS guidance. In providing its full year 2017 Adjusted EPS guidance, the Company notes

that there could be differences between expected reported earnings and estimated operating earnings, including the items listed below. Therefore, management is not able to estimate the aggregate impact, if any, of these items on reported earnings. As of June 30, 2017, the impact of these items was as follows: (a) unrealized gains or losses related to derivative transactions represent a loss of $1 million, (b) unrealized foreign currency gains or losses represent a gain of $17 million, (c) gains or losses and associated benefits and costs due to dispositions and acquisitions of business interests, including early plant closures, and the tax impact from the repatriation of sales proceeds represent a loss of $87 million, (d) losses due to impairments of $181 million and (e) gains, losses and costs due to the early retirement of debt represent a gain of $3 million.

Reconciliation of 2017 Guidance

2017 GuidanceConsolidated Net Cash Provided by Operating Activities $2,000-$2,800

Consolidated Free Cash Flow1 $1,400-$2,000Adjusted EPS1, 2 $1.00-$1.10

ReconciliationConsolidated Net Cash Provided by Operating Activities (a) $2,000-$2,800

Maintenance & Environmental Capital Expenditures (b) $600-$800

Consolidated Free Cash Flow1 (a - b) $1,400-$2,000

l Commodity and foreign currency exchange rates and forward curves as of June 30, 2017


Forecasted financial information is based on certain material assumptions. Such assumptions include, but are not limited to: (a) no unforeseen external events such as wars, depressions, or economic or political disruptions occur; (b) businesses continue to operate in a manner consistent with or better than prior operating performance, including achievement of planned productivity improvements including benefits of global sourcing, and in accordance with the provisions of their relevant contracts or concessions; (c) new business opportunities are available to AES in sufficient quantity to achieve its growth objectives; (d) no material disruptions or discontinuities occur in the Gross Domestic Product (GDP), foreign exchange rates, inflation or interest rates during the forecast period; and (e) material business-specific risks as described in the Company’s SEC filings do not occur individually or cumulatively. In addition, benefits from global sourcing include avoided costs, reduction in capital project costs versus budgetary estimates, and projected savings based on assumed spend volume which may or may not actually be achieved. Also, improvement in certain Key Performance Indicators (KPIs) such as equivalent forced outage rate and commercial availability may not improve financial performance at all facilities based on commercial terms and conditions. These benefits will not be fully reflectedin the Company’s consolidated financial results. The cash held at qualified holding companies (“QHCs”) represents cash sent to subsidiaries of the Company domiciled outside of the U.S. Such subsidiaries had no contractual restrictions on their ability to send cash to AES, the Parent Company, however, cash held at qualified holding companies does not reflect the impact of any tax liabilities that may result from any such cash being repatriated to the Parent Company in the U.S. Cash at those subsidiaries was used for investment and related activities outside of the U.S. These investments included equity investments and loans to other foreign subsidiaries as well as development and general costs and expenses incurred outside the U.S. 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. 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’ indebtedness.

Assumptions


l Adjusted Earnings Per Share (a non-GAAP financial measure) is defined as diluted earnings per share from continuing operations excluding gains or losses of both consolidated entities and entities accounted for under the equity method due to (a) unrealized gains or losses related to derivative transactions, (b) unrealized foreign currency gains or losses, (c) gains or losses and associated benefits and costs due to dispositions and acquisitions of business interests, including early plant closures, and the tax impact from the repatriation of sales proceeds, (d) losses due to impairments, and (e) gains, losses and costs due to the early retirement of debt. The GAAP measure most comparable to adjusted EPS is diluted earnings per share from continuing operations. We believe that adjusted EPS better reflect the underlying business performance of the Company and are 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 of or acquire business interests or retire debt, which affect results in a given period or periods. Adjusted EPS should not be construed as alternatives to income from continuing operations attributable to AES and diluted earnings per share from continuing operations, which are determined in accordance with GAAP. Beginning in the first quarter of 2017, the definition was revised to exclude associated benefits and costs due to acquisitions, dispositions and early plant closures, including the tax impact of decisions made at the time of sale to repatriate proceeds.

l Adjusted Pre-Tax Contribution (a non-GAAP financial measure) is defined as 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) gains or losses and associated benefits and costs due to dispositions and acquisitions of business interests, including early plant closures, and the tax impact from the repatriation of sales proceeds, (d) losses due to impairments, and (e) gains, losses and costs due to the early retirement of debt. Adjusted PTC also includes net equity in earnings of affiliates on an after-tax basis adjusted for the same gains or losses excluded from consolidated entities. The GAAP measure most comparable to adjusted PTC is income from continuing operations attributable to AES. We believe that adjusted PTC better reflect the underlying business performance of the Company and are 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 of or acquire business interests or retire debt, which affect results in a given period or periods. In addition, for adjusted PTC, earnings before tax represents the business performance of the Company before the application of statutory income tax rates and tax adjustments, including the effects of tax planning, corresponding to the various jurisdictions in which the Company operates. Adjusted PTC should not be construed as alternatives to income from continuing operations attributable to AES and diluted earnings per share from continuing operations, which are determined in accordance with GAAP. Beginning in the first quarter of 2017, the definition was revised to exclude associated benefits and costs due to acquisitions,dispositions and early plant closures, including the tax impact of decisions made at the time of sale to repatriate proceeds.

l Free Cash Flow (a non-GAAP financial measure) is defined as net cash from operating activities (adjusted for service concession asset capital expenditures) less maintenance capital expenditures (including non-recoverable 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 generated by the business after the funding of maintenance capital expenditures that may be available for investing in growth opportunities or for repaying debt. Free cash flow should not be construed as an alternative to net cash from operating activities, which is determined in accordance with GAAP.

l Parent Company Liquidity (a non-GAAP financial measure) 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’ indebtedness.

l 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 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.

l Subsidiary Liquidity (a non-GAAP financial measure) is defined as cash and cash equivalents and bank lines of credit at various subsidiaries.l Subsidiary Distributions should not be construed as an alternative to Net Cash Provided by Operating Activities which is 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 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.

Definitions

08-08-17 second quarter 2017 financial review...

Documents