The condensed consolidated financial statements included in Item 1.-Financial Statements of this Form 10-Q and the discussions contained herein should be read in conjunction with our 2019 Form 10-K. Forward-Looking Information The following discussion may contain forward-looking statements regarding us, our business, prospects and our results of operations, including our expectations regarding the impact of the COVID-19 pandemic on our business, that are subject to certain risks and uncertainties posed by many factors and events that could cause our actual business, prospects and results of operations to differ materially from those that may be anticipated by such forward-looking statements. These statements include, but are not limited to, statements regarding management's intents, beliefs, and current expectations and typically contain, but are not limited to, the terms "anticipate," "potential," "expect," "forecast," "target," "will," "would," "intend," "believe," "project," "estimate," "plan," and similar words. Forward-looking statements are not intended to be a guarantee of future results, but instead constitute current expectations based on reasonable assumptions. Factors that could cause or contribute to such differences include, but are not limited to, those described in Item 1A.-Risk Factors of this Form 10-Q, Item 1A.-Risk Factors and Item 7.-Management's Discussion and Analysis of Financial Condition and Results of Operations of our 2019 Form 10-K and subsequent filings with theSEC . Readers are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date of this report. We undertake no obligation to revise any forward-looking statements in order to reflect events or circumstances that may subsequently arise. If we do update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements. Readers are urged to carefully review and consider the various disclosures made by us in this report and in our other reports filed with theSEC that advise of the risks and factors that may affect our business. Overview of Our Business We are a diversified power generation and utility company organized into the following four market-oriented SBUs: US and Utilities (United States ,Puerto Rico andEl Salvador );South America (Chile ,Colombia ,Argentina andBrazil ); MCAC (Mexico ,Central America and theCaribbean ); and Eurasia (Europe andAsia ). For additional information regarding our business, see Item 1.-Business of our 2019 Form 10-K. We have two lines of business: generation and utilities. Each of our SBUs participates in our first business line, generation, in which we own and/or operate power plants to generate and sell power to customers, such as utilities, industrial users, and other intermediaries. Our US and Utilities SBU participates in our second business line, utilities, in which we own and/or operate utilities to generate or purchase, distribute, transmit and sell electricity to end-user customers in the residential, commercial, industrial, and governmental sectors within a defined service area. In certain circumstances, our utilities also generate and sell electricity on the wholesale market. Executive Summary Compared with last year, first quarter diluted earnings per share from continuing operations decreased$0.01 to$0.22 . This decrease reflects lower contributions from our US and Utilities SBU, lower generation inColombia due to a life extension project at the Chivor hydroelectric plant, prior year insurance proceeds in theDominican Republic , the impact of asset sales inNorthern Ireland , and impairments in the current period; partially offset by higher margins at our MCAC SBU largely due to higher availability, a gain on sale of land in theU.S. , a lower effective tax rate, lower interest expense inChile due to incremental capitalized interest, and gains on foreign currency derivatives. Adjusted EPS, a non-GAAP measure, increased$0.01 to$0.29 , primarily due to higher margins at our MCAC SBU largely due to higher availability, a gain on sale of land in theU.S. , lower interest expense inChile due to incremental capitalized interest, and a lower adjusted tax rate; partially offset by lower contributions from our US and Utilities SBU, lower generation inColombia due to a life extension project at the Chivor hydroelectric plant, prior year insurance proceeds in theDominican Republic , and the impact of asset sales inNorthern Ireland .
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(1) See Item 2.-Management's Discussion and Analysis of Financial Condition and Results of Operations-SBU Performance Analysis-Non-GAAP Measures for reconciliation and definition.
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Overview of Strategic Performance AES is leading the industry's transition to clean energy by investing in sustainable growth and innovative solutions, while delivering superior results. The Company is taking advantage of favorable trends in clean power generation, transmission and distribution, and LNG infrastructure to grow the profitability of its business. Sustainable Growth: Through its presence in key growth markets, AES is well-positioned to benefit from the global transition toward a more sustainable power generation mix. • In the first quarter of 2020, the Company completed construction of 1,409 MW
of new projects, including:
• 1,299 MW Southland repowering in
• 100 MW Vientos Bonaerenses wind facility in
• 10 MW of solar and solar plus storage in the
• In year-to-date 2020, the Company signed 685 MW of renewables under long-term
PPAs:
• 522 MW of wind and solar at
• 108 MW of energy storage, solar and solar plus storage in the
• 55 MW of wind in
• The Company's backlog of 5,345 MW includes:
• 1,764 MW under construction and expected on-line through 2021; and
• 3,581 MW of renewables signed under long-term PPAs.
Innovative Solutions: The Company is developing and deploying innovative solutions such as battery-based energy storage, digital customer interfaces and energy management. • The Company's joint venture with Siemens, Fluence, is the global leader in
the fast-growing energy storage market, which is expected to increase by 15
to 20 GW annually.
• Fluence has been awarded 32 MW of projects in year-to-date 2020, bringing its total backlog to 1.3 GW.
Superior Results: By investing in sustainable growth and offering innovative
solutions to customers, the Company is transforming its business mix to deliver
superior results.
• As of
This includes$2.5 billion of cash and cash equivalents, restricted cash and short-term investments, as well as$0.8 billion available under committed credit lines.
• The Company is executing on
digital initiatives, including utilizing data and technology for maintenance,
outage prevention, inspection and procurement, to be fully realized by 2022.
• The Company remains committed to reducing its coal-fired generation below 30%
of total generation volume by year-end 2020 and to less than 10% by year-end 2030.
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Review of Consolidated Results of Operations (unaudited)
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