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 the SEC.
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 the SEC 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 and El Salvador); South America (Chile, Colombia, Argentina and Brazil);
MCAC (Mexico, Central America and the Caribbean); and Eurasia (Europe and Asia).
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 in Colombia due to
a life extension project at the Chivor hydroelectric plant, prior year insurance
proceeds in the Dominican Republic, the impact of asset sales in Northern
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 the U.S., a lower effective tax rate, lower interest expense in Chile
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 the U.S., lower interest expense in Chile due to incremental
capitalized interest, and a lower adjusted tax rate; partially offset by lower
contributions from our US and Utilities SBU, lower generation in Colombia due to
a life extension project at the Chivor hydroelectric plant, prior year insurance
proceeds in the Dominican Republic, and the impact of asset sales in Northern
Ireland.

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24 | The AES Corporation | March 31, 2020 Form 10-Q



              [[Image Removed: aq12020aes10qaesinfographic4.jpg]]

(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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25 | The AES Corporation | March 31, 2020 Form 10-Q



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 Southern California;

• 100 MW Vientos Bonaerenses wind facility in Argentina; and

• 10 MW of solar and solar plus storage in the U.S. at AES Distributed Energy.

• In year-to-date 2020, the Company signed 685 MW of renewables under long-term

PPAs:

• 522 MW of wind and solar at AES Gener in Chile;

• 108 MW of energy storage, solar and solar plus storage in the U.S.; and

• 55 MW of wind in Panama.

• 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 March 31, 2020, the Company had $3.3 billion of available liquidity.


    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 $100 million in annual run rate cost savings from

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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26 | The AES Corporation | March 31, 2020 Form 10-Q

Review of Consolidated Results of Operations (unaudited)

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