AES CORP (Form: 8-K, Received: 05/09/2016 06:07:39)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

______________________________________________________________________________________________________

FORM 8-K

________________________________________________________________

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (date of earliest event reported): May 6, 2016

_____________________________________________________________________________________________________

THE AES CORPORATION

(Exact name of registrant as specified in its charter)

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DELAWARE	001-12291	54-1163725
(State of Incorporation)	(Commission File No.)	(IRS Employer Identification No.)

4300 Wilson Boulevard, Suite 1100

Arlington, Virginia 22203

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code:

(703) 522-1315

NOT APPLICABLE

(Former Name or Former Address, if changed since last report)

_________________________________________________________________________________________________________________________________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:



o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)



o	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)



o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))



o	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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Item 1.01 Entry into a Material Definitive Agreement.

On May 6, 2016, The AES Corporation (the “Company”) entered into an Amendment No. 1 (the “Amendment No. 1”) to the Sixth Amended and Restated Credit and Reimbursement Agreement, dated as of July 26, 2013, among the Company and various lending institutions (the “Existing Credit Agreement”) that amends the Existing Credit Agreement (as so amended by the Amendment No. 1, the “Credit Agreement”). The Credit Agreement adjusts the terms and conditions of the Existing Credit Agreement, including the following changes:


•	the final maturity date of the revolving credit loan facility is extended to July 26, 2021 from July 26, 2018; and


•	the undrawn fee applicable to the revolving credit loan facility is based on the credit rating assigned to the loans under the Credit Agreement, with pricing currently at 0.375%, a 0.125% decrease.

The aggregate commitment for the revolving credit loan facility remains $800 million. The foregoing description of the Amendment No. 1 does not purport to be complete and is qualified in its entirety by reference to the Amendment No. 1, which is filed as Exhibit 10.1 hereto, and is incorporated herein by reference.

Item 2.02 Results of Operations and Financial Condition.

On May 9, 2016 , The AES Corporation (“AES” or the “Company”) issued a press release announcing its financial results for the quarter ended March 31, 2016 . A copy of the press release is being furnished as Exhibit 99.1 attached hereto and is incorporated by reference herein. Such information is furnished pursuant to Item 2.02 and shall not be deemed “filed” for any purpose, including for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information in this Current Report on Form 8-K shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act regardless of any general incorporation language in such filing.

Item 2.03 Creation of a Direct Financial Obligation of a Registrant.

The discussion contained in "Item 1.01 Entry into a Material Definitive Agreement" of this Current Report on Form 8-K is incorporated into this Item 2.03 by reference.

Item 7.01 Regulation FD Disclosure.

On May 9, 2016 , AES issued a press release announcing its financial results for the quarter ended March 31, 2016 and its most recent guidance. A copy of the press release is being furnished as Exhibit 99.1 attached hereto and is incorporated by reference herein. Such information is furnished pursuant to Item 7.01 and shall not be deemed “filed” for any purpose, including for the purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that Section. The information in this Current Report on Form 8-K shall not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act regardless of any general incorporation language in such filing.

Safe Harbor Disclosure

This news release contains forward-looking statements within the meaning of the Securities Act and of the Exchange Act. 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 achievements of planned productivity improvements and incremental 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’ 2015 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 2015 Annual Report on Form 10-K dated on or about February 23, 2016 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 also be obtained by visiting the Company’s website at www.aes.com.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

Exhibit No. Description


10.1	Amendment No. 1, dated as of May 6, 2016, to the Sixth Amended and Restated Credit and Reimbursement Agreement, dated as of July 26, 2013 among The AES Corporation, a Delaware corporation, the Banks listed on the signature pages thereof and Citibank, N.A., as Administrative Agent and Collateral Agent.

99.1 Press Release issued by The AES Corporation, dated May 9, 2016

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf of the undersigned hereunto duly authorized.




			THE AES CORPORATION

Date:	May 9, 2016	By:	/s/ Thomas M. O’Flynn
		Name:	Thomas M. O’Flynn
		Title:	Executive Vice President and Chief Financial Officer

EXHIBIT INDEX

Exhibit No. Description


10.1	Amendment No. 1, dated as of May 6, 2016, to the Sixth Amended and Restated Credit and Reimbursement Agreement, dated as of July 26, 2013 among The AES Corporation, a Delaware corporation, the Banks listed on the signature pages thereof and Citibank, N.A., as Administrative Agent and Collateral Agent.

99.1 Press Release issued by The AES Corporation, dated May 9, 2016

Execution Copy

AMENDMENT NO. 1 TO THE SIXTH AMENDED AND RESTATED
CREDIT AND REIMBURSEMENT AGREEMENT

Dated as of May 6, 2016

AMENDMENT NO. 1 TO THE SIXTH AMENDED AND RESTATED CREDIT AND REIMBURSEMENT AGREEMENT (this “ Amendment ”) among The AES Corporation, a Delaware corporation (the “ Borrower ”), the Bank Parties listed on the signature pages hereto, CITIBANK, N.A., as administrative agent (the “ Agent ”) and CITIBANK, N.A., as collateral agent, for the Bank Parties (the “ Collateral Agent ”).

PRELIMINARY STATEMENTS

(1) WHEREAS, the Borrower is party to a Sixth Amended and Restated Credit and Reimbursement Agreement dated as of July 26, 2013 (as amended, amended and restated, supplemented or otherwise modified up to the date hereof, the “ Credit Agreement ”; capitalized terms used herein but not defined shall be used herein as defined in the Credit Agreement) among Citibank, N.A., as Administrative Agent and the other Bank Parties, agents and arrangers party thereto;

(2) WHEREAS, Citigroup Global Markets Inc., Mizuho Bank, Ltd., and MUFG Union Bank, N.A., are the joint lead arrangers for the Amendment; and

(3) WHEREAS, the Borrower, each 2016 Departing Revolving Credit Loan Bank (as defined below) and each Revolving Credit Loan Bank have agreed, subject to the terms and conditions hereinafter set forth, to amend the Credit Agreement as set forth below; and

(4) WHEREAS, certain of the Banks have agreed to increase their Revolving Credit Loan Commitments and others have elected to reduce their Revolving Credit Loan Commitments, which will result in the Revolving Credit Loan Commitments, as set forth on Appendix I to the Credit Agreement, being amended and restated as set forth on Annex A hereto.

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the sufficiency and receipt of all of which is hereby acknowledged, the parties hereto hereby agree as follows:

SECTION 1. Amendment . As of the Amendment Effective Date, the Credit Agreement is hereby amended as set forth below:

(a) Appendix I to the Credit Agreement shall be amended and restated as set forth on Annex A hereto.

(b) The following definitions shall be added to the Credit Agreement:

“ 2016 Bank ” means each lender listed on Annex A to the Amendment as having a Revolving Credit Loan Commitment on the Amendment Effective Date.

“ 2016 Additional Revolving Credit Loan Bank ” means a Revolving Credit Loan Bank identified as such on Annex A to the Amendment.

“ 2016 Assigned Interests ” has the meaning set forth in Section 2.01(a)(vii).

“ 2016 Assignee Revolving Credit Loan Bank ” has the meaning set forth in Section 2.01(a)(vii).

“ 2016 Departing Revolving Credit Loan Bank ” means each 2016 Existing Revolving Credit Loan Bank with a Revolving Credit Loan Commitment of $0 (zero) as shown on Annex A to the Amendment.

“ 2016 Existing Revolving Credit Loan Bank ” means each Revolving Credit Loan Bank under the Credit Agreement immediately before the Amendment Effective Date.

“ 2016 Increasing Revolving Credit Loan Bank ” means each 2016 Existing Revolving Credit Loan Bank whose Revolving Credit Loan Commitment as shown on Annex A to the Amendment is greater than its existing Revolving Credit Loan Commitment immediately prior to the Amendment Effective Date.

“ 2016 Reducing Revolving Credit Loan Bank ” means each 2016 Existing Revolving Credit Loan Bank other than a 2016 Departing Revolving Credit Loan Bank whose Revolving Credit Loan Commitment as shown on Annex A to the Amendment is smaller than its existing Revolving Credit Loan Commitment immediately prior to the Amendment Effective Date.

“ Amendment ” means Amendment No. 1 to the Credit Agreement, dated as of May 5, 2016 among the Borrower, the Bank Parties thereto, the Agent and the Collateral Agent.

“ Amendment Effective Date ” means the date that the Amendment becomes effective in accordance with Section 2 thereof.

“ AML Laws ” means all laws, rules, and regulations of any jurisdiction applicable to the Borrower or the Borrower’s Subsidiaries from time to time concerning or relating to anti-money laundering .

“ Anti-Corruption Laws ” means all laws, rules, and regulations of any jurisdiction applicable to the Borrower or the Borrower’s Subsidiaries from time to time concerning or relating to bribery or corruption .

“ Bail-In Action ” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.

“ Bail-In Legislation ” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.

“ EEA Financial Institution ” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent;

“ EEA Member Country ” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

“ EEA Resolution Authority ” means any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

“ EU Bail-In Legislation Schedule ” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.

“ FATCA ” means Sections 1471 through 1474 of the Internal Revenue Code, as of the Amendment Effective Date (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreement entered into pursuant to Section 1471(b)(1) of the Internal Revenue Code.

“ Sanctions ” means economic or financial sanctions or trade embargoes or restrictive measures enacted, imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State (b) the United Nations Security Council; (c) the European Union; or (d) Her Majesty’s Treasury .

“ Sanctioned Country ” means at any time, a country or territory which is, or whose government is, the subject or target of any Sanctions broadly restricting or prohibiting dealings with such country, territory or government (currently, Crimea, Cuba, Iran, North Korea, Sudan, and Syria) .

“ Sanctioned Person ” means, at any time, any Person with whom dealings are restricted or prohibited under Sanctions, including (a) any Person listed in any Sanctions-related list of designated Persons maintained by the United States (including by the Office of Foreign Assets Control of the U.S. Department of the Treasury, or the U.S. Department of State), the United Nations Security Council, the European Union or Her Majesty’s Treasury, (b) any Person located, organized or resident in, or any Governmental Entity or governmental instrumentality of, a Sanctioned Country or (c) any Person 50% or more directly or indirectly owned by any Person described in clause (a) hereof .

“ Write-Down and Conversion Powers ” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.

“ Additional Revolving Credit Banks ” means a Revolving Credit Loan Bank identified as such on Appendix I hereto (as of immediately prior to the Amendment Effective Date).

“ Bank ” means (a) each lender listed on Appendix I hereto (as of immediately prior to the Amendment Effective Date) as having a Revolving Credit Loan Commitment on the Amendment and Restatement Effective Date, each Bank that is a “Term Loan Bank” under the Existing Bank Credit Agreement on the Amendment and Restatement Effective Date, each Assignee which becomes a Bank pursuant to Section 10.06(c), each Incremental Term Loan Bank and their respective successors and (b) without duplication, each 2016 Bank. Without limiting the generality of the foregoing, the term “Banks” shall not include any Departing Revolving Credit Loan Bank or 2016 Departing Revolving Credit Loan Bank.

“ Departing Revolving Credit Loan Bank ” shall mean each Existing Revolving Credit Loan Bank with a Revolving Credit Loan Commitment of $0 (zero) as shown on Appendix I hereto (as of immediately prior to the Amendment Effective Date).

“ Financing Documents ” means this Agreement, the Amendment, the Collateral Documents and the Notes.

“ Increasing Revolving Credit Loan Bank ” means each Existing Revolving Credit Loan Bank whose Revolving Credit Loan Commitment as shown on Appendix I hereto (as of immediately prior to the Amendment Effective Date) is greater than its existing Revolving Credit Loan Commitment immediately prior to the Amendment and Restatement Effective Date.

“ London Interbank Offered Rate ” means, for any date in respect of an Interest Period, the rate per annum equal to (i) the rate per annum equal to the rate determined by the Agent to be the offered rate which appears on the page of the Reuters Screen which displays an average ICE Benchmark Administration Interest Settlement Rate (or successor thereto if such rate is no longer displayed) (such page currently being the LIBOR01 page) for deposits (for delivery on the first day of such period) with a term equivalent to such period in Dollars, determined as of approximately 11:00 A.M. (London, England time) on such date, (ii) in the event the rate referenced in the preceding sub-clause (i) does not appear on such page or service or if such page or service shall cease to be available, the rate per annum equal to the rate determined by the Agent to be the offered rate on such other page or other service which displays an average ICE Benchmark Administration Interest Settlement Rate (or successor thereto if such rate is no longer displayed) for deposits (for delivery on the first day of such period) with a term equivalent to such period in Dollars, determined as of approximately 11:00 A.M. (London, England time) on such date or a rate determined through the use of straight-line interpolation by reference to two such rates, one of which shall be determined as if the length of the period of such deposits were the period of time for which the rate for such deposits are available is the period next shorter than the length of such Interest Period and the other of which shall be determined as if the period of time for which the rate for such deposits are available is the period next longer than the length of such Interest Period as determined by the Agent or (iii) in the event the rates referenced in the preceding sub-clauses (i) and (ii) are not available, the rate per annum at which the Agent could borrow funds in the London interbank market on such date, were it to do so by asking for and then accepting offers in Dollars of amounts in same day funds comparable to the principal amount of the applicable Loans for which the London Interbank Offered Rate is then being determined and with maturities comparable to such period; provided that at no time shall the London Interbank Offered Rate in respect of Loans be deemed to be less than 0.00% per annum .

“ Reducing Revolving Credit Loan Bank ” means each Existing Revolving Credit Loan Bank other than a Departing Revolving Credit Loan Bank whose Revolving Credit Loan Commitment as shown on Appendix I hereto (as of immediately prior to the Amendment Effective Date) is smaller than its existing Revolving Credit Loan Commitment immediately prior to the Amendment and Restatement Effective Date.

(d) The definition of “Reference Banks” shall be deleted in its entirety.

(e) The definition of “Arranger Parties” shall be amended by adding the following language after “Merrill Lynch, Pierce, Fenner & Smith Incorporated”:

“(together with any affiliates it deems appropriate to provide the services contemplated herein)”.

(f) The definition of “Defaulting Bank” shall be amended by deleting “or” immediately prior to clause (iii) of the first sentence and adding the following clause (iv) before the “.” at the end of the first sentence:

“, or (iv) become the subject of a Bail-In Action”.

(g) The definition of “Termination Date” shall be amended by replacing “July 26, 2018” with “July 26, 2021.”

(h) Section 2.01(a) shall be amended to add the following paragraph (vii):

(vii)(A) On the Amendment Effective Date, each 2016 Departing Revolving Credit Loan Bank and each 2016 Reducing Revolving Credit Loan Bank hereby sells and assigns, without recourse, to the 2016 Additional Revolving Credit Loan Banks and the 2016 Increasing Revolving Credit Loan Banks (collectively, the “ 2016 Assignee Revolving Credit Loan Banks ”), and each of the 2016 Assignee Revolving Credit Loan Banks hereby purchases and assumes from such 2016 Departing Revolving Credit Loan Bank or 2016 Reducing Revolving Credit Loan Bank, such interests, rights and obligations with respect to the Total Outstandings and the Revolving Credit Loan Commitments of such 2016 Departing Revolving Credit Loan Bank or 2016 Reducing Revolving Credit Loan Bank on the Amendment Effective Date (all such interests, rights and obligations sold, purchased, assigned and assumed under the Revolving Credit Loan to be referred to herein as the “ 2016 Assigned Interests ”), as shall be necessary, in order that, after giving effect to all such sales and assignments and purchases and assumptions (x) no 2016 Departing Revolving Credit Loan Bank holds any Total Outstanding Amount or Revolving Credit Loan Commitment and (y) each of the 2016 Additional Revolving Credit Loan Banks, the 2016 Increasing Revolving Credit Loan Banks, the 2016 Reducing Revolving Credit Loan Banks and the other 2016 Existing Revolving Credit Loan Banks will hold the principal amounts of Total Outstandings and amounts of Revolving Credit Loan Commitments set forth on Annex A to the Amendment. Such sales and assignments and purchases and assumptions shall be made on the terms set forth in Exhibit C-1 and shall comply, with Sections 10.06(c), notwithstanding any failure of such sales, assignments, purchases and assumptions to comply with (x) the minimum assignment requirement in Section 10.06(c), (y) the requirement to pay the processing and recordation fees referenced in Section 10.06(c) or (z) any requirement to execute and deliver an Assignment and Assumption in respect thereof. Without limiting the generality of the foregoing, each 2016 Additional Revolving Credit Loan Bank, each 2016 Departing Revolving Credit Loan Bank, the 2016 Increasing Revolving Credit Loan Banks and the 2016 Reducing Revolving Credit Loan Banks hereby makes the representations and warranties required to be made under paragraph 5 of Exhibit C-1 to this Agreement by an Assignor and Assignee, respectively, with respect to the 2016 Assigned Interests being assigned or assumed by such Revolving Credit Loan Bank hereunder;

(B) On the Amendment Effective Date, subject to the terms and conditions set forth herein, (x) to the extent any Total Outstandings are outstanding on such date, each 2016 Assignee Revolving Credit Loan Bank purchasing and assuming 2016 Assigned Interests pursuant to paragraph (vii)(A) above shall pay the purchase price for such 2016 Assigned Interests pursuant to such paragraph (vii)(A) (equal to the principal amount of such Total Outstandings with respect to such 2016 Assigned Interest) by wire transfer of immediately available funds to the Agent not later than 12:00 Noon (New York City time), (y) the Borrower shall pay all unpaid interest and fees and other amounts accrued to but excluding the Amendment Effective Date for the account of each (1) 2016 Departing Revolving Credit Loan Bank in respect of such 2016 Departing Revolving Credit Loan Bank’s 2016 Assigned Interests and (2) 2016 Reducing Revolving Credit Loan Bank in respect of such 2016 Reducing Revolving Credit Loan Bank’s 2016 Assigned Interests, in each case by wire transfer of immediately available funds to the Agent not later than 12:00 Noon (New York City time) and (z) the Agent shall pay to each of the 2016 Departing Revolving Credit Loan Banks and 2016 Reducing Revolving Credit Loan Banks selling and assigning such 2016 Assigned Interests pursuant to paragraph (vii)(A) above, out of the amounts received by the Agent pursuant to clauses (x) and (y) of this paragraph (vii)(B), the purchase price for the 2016 Assigned Interests assigned by such 2016 Departing Revolving Credit Loan Bank or 2016 Reducing Revolving Credit Loan Bank, pursuant to such paragraph (vii)(A) and, to the relevant 2016 Departing Revolving Credit Loan Banks and 2016 Reducing Revolving Credit Loan Banks, all unpaid interest and fees and other amounts accrued for the account of each 2016 Departing Revolving Credit Loan Bank and each 2016 Reducing Revolving Credit Loan Bank, to but excluding the Amendment Effective Date by wire transfer of immediately available funds to the account designated by such 2016 Departing Revolving Credit Loan Bank or 2016 Reducing Revolving Credit Loan Bank to the Agent not later than 5:00 p.m. (New York City time) on the Amendment Effective Date;

(C) Each of the parties hereto hereby consents to the sales, assignments, purchases and assumptions provided for in paragraphs (vii)(A) and (B) above, and agrees that each 2016 Increasing Revolving Credit Loan Bank and each 2016 Reducing Revolving Credit Loan Bank shall be a party to this Agreement and, to the extent of (x) the interests purchased by such 2016 Increasing Revolving Credit Loan Bank pursuant to such paragraphs, (y) held by such 2016 Increasing Revolving Credit Loan Bank prior to the Amendment Effective Date and not sold or assigned hereunder and (z) held by such 2016 Reducing Revolving Credit Loan Bank prior to the Amendment Effective Date and not sold or assigned hereunder, shall have the rights and obligations of a Revolving Credit Loan Bank under this Agreement;

(D) On the Amendment Effective Date, each 2016 Additional Revolving Credit Loan Bank by its signature to the Amendment becomes a Revolving Credit Loan Bank under this Agreement and agrees to the terms of this Agreement as amended hereby. Each reference to a “Revolving Credit Loan Bank” in this Agreement shall be deemed to include the 2016 Additional Revolving Credit Loan Banks; and

(E) On the Amendment Effective Date, the 2016 Departing Revolving Credit Loan Banks shall cease to be Revolving Credit Loan Banks under this Agreement.

Each Bank, by executing this Amendment hereby confirms that, on the Amendment Effective Date, after giving effect to (a) each 2016 Departing Revolving Credit Loan Bank’s and each 2016 Reducing Revolving Credit Loan Bank’s (as defined herein) sale and assignment of its Total Outstandings and Revolving Credit Loan Commitment and (b) each 2016 Assignee Revolving Credit Loan Bank’s (as defined herein) purchase and assumption of such Total Outstandings and Revolving Credit Loan Commitments, the Revolving Credit Commitment of such Bank shall be as set forth on Annex A hereto.

(i) Section 2.03(g)(iv) shall be amended by adding the following proviso before the “.” at the end of the paragraph:

“; provided, further, that subject to Section 10.19, no reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Bank arising from that Bank having become a Defaulting Bank, including any claim of a non-Defaulting Bank as a result of such non-Defaulting Bank’s increased exposure following such reallocation.”.

(j) Section 2.06(c) shall be amended and restated as follows:

Upon the occurrence and during the continuance of an Event of Default described in Section 6.01(a) or an Event of Default described in Section 6.01(g) or 6.01(h) with respect to the Borrower, the Borrower shall pay interest on (x) (i) the outstanding principal amount of each Base Rate Loan owing to each Bank Party, payable on demand, at a rate per annum equal at all times to 2% per annum above the rate per annum required to be paid on such Base Rate Loan pursuant to Section 2.06(a) above and (ii) to the fullest extent permitted by law, the amount of any interest that is not paid when due, from the date such amount shall be due until such amount shall be paid in full, at a rate per annum equal to 2% per annum above the rate per annum required to be paid on the Base Rate Loans on which such interest has accrued pursuant to Section 2.06(a) above and (y)(i) the outstanding principal amount of each Euro-Dollar Loan owing to each Bank Party payable on demand, at a rate per annum equal at all times to a rate per annum equal to the sum of 2% plus the Euro-Dollar Margin applicable to such Loan plus the Adjusted London Interbank Offered Rate applicable to such Euro-Dollar Loan (or, if the circumstances described in clause (a) or (b) of Section 8.01 shall exist, at a rate per annum equal to the sum of 2% plus the relevant rate applicable to Base Rate Loans) (the “ Euro-Dollar Default Rate ”) and (ii) to the fullest extent permitted by law, the amount of any interest that is not paid when due, from the date such amount shall be due until such amount shall be paid in full, at a rate per annum equal to the Euro-Dollar Default Rate for the Euro-Dollar Loans on which such interest has accrued pursuant to Section 2.06(b) above.

(k) Section 2.06(e) shall be replaced in its entirety by “[Reserved].”

(l) Section 2.08 shall be amended and restated as follows:

The Borrower shall pay to the Agent, for the account of the Revolving Credit Loan Banks (other than Defaulting Banks), ratably in proportion to their Revolving Credit Loan Commitments, on any date, a commitment fee on the daily amount by which the aggregate amount of the Revolving Credit Loan Commitments exceeds the aggregate Total Outstandings, at (i) with respect to the period from and including the Amendment and Restatement Effective Date to but excluding the Amendment Effective Date, 0.50% per annum and (ii) from and after the Amendment Effective Date, the per-annum percentage set forth in the table below under the heading “Commitment Fee,” in each case under this clause (ii) based on the ratings assigned to the Facilities on such date by Moody’s Investors Service, Inc. and Standard & Poor’s Ratings Services; provided that any commitment fee owing to a Revolving Credit Loan Bank which is a Defaulting Bank shall not be payable for any period during which such Bank remains a Defaulting Bank. Such commitment fee shall accrue from and including the Amendment Effective Date to but excluding the Revolving Credit Loan Termination Date (or earlier date of termination of the Revolving Credit Loan Commitments in their entirety). Accrued commitment fees under this Section 2.08 shall be payable quarterly in arrears on (A) the later of (x) each March 31, June 30, September 30 and December 31 and (y) the date that is three Domestic Business Days after receipt by the Borrower of the invoice relating to such date for the fee payable on such date, (B) the Revolving Credit Loan Termination Date and (C) upon the date of termination of the Revolving Credit Loan Commitments in their entirety.



Rating (Moody’s/S&P)	Commitment Fee
Baa3 (or higher)/BBB- (or higher)	0.375%
Ba1/BB+	0.375%
Ba2 (or lower)/BB (or lower)	0.500%

If the Facilities are rated by only one rating agency, the rating of such rating agency shall be used in determining the commitment fee. If the Facilities are rated by both such rating agencies and (x) the ratings differential is one level, the lower rating will apply or (y) the ratings differential is two levels or more, the midpoint rating will apply; provided that if there is no midpoint rating, the lower of the two intermediate ratings surrounding the midpoint will apply. If the Facilities are not rated by either of such rating agencies, the Facilities shall be deemed to be rated one level higher than (i) in the case of Moody’s Investors Service Inc., the Borrower’s corporate family rating and (ii) in the case of Standard & Poor’s Rating Services, the Borrower’s corporate credit rating and, in each case, the rules of the preceding two sentences shall apply to such deemed ratings. If the Facilities are not rated (or deemed rated in accordance with the preceding sentence) by either of such rating agencies, the commitment fee shall be with respect to any Revolving Credit Loan Commitments or Revolving Credit Loans the highest rate set forth in the table above.

(m) A new Section 4.19 shall be added that states as follows:

Section 4.19 AML Laws; Anti-Corruption Laws and Sanctions . The Borrower has implemented and maintains in effect policies and procedures reasonably designed to promote compliance by the Borrower, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions. None of (a) the Borrower or any Subsidiary, or, to the knowledge of the Borrower, any of their respective directors, officers or employees, or (b) to the knowledge of the Borrower, any agent of the Borrower, or any Subsidiary that will act in any capacity in connection with or benefit from the credit facility established hereby, is a Sanctioned Person. The Borrower and its Subsidiaries are in compliance in all material respects with AML Laws, Anti-Corruption Laws and applicable Sanctions.

(n) Section 5.05 shall be amended by adding the following sentence after the “.” at the end of the section:

“The Borrower will maintain in effect policies and procedures reasonably designed to promote compliance by the Borrower, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws, AML Laws and applicable Sanctions.”.

(o) Section 5.08 shall be amended by adding the following sentence after the “.” at the end of the section:

“The Borrower will not request any Borrowing or Letter of Credit, and the Borrower shall not use, directly or indirectly, the proceeds of any Borrowing or Letter of Credit, or lend, contribute or otherwise make available such proceeds to any Subsidiary, other Affiliate, joint venture partner or other Person, (a) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws , (b) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country except to the extent permissible for a Person required to comply with Sanctions, or (c) in any manner that would result in the violation of any Sanctions by any Person (including any Person participating in the transactions contemplated hereunder, whether as underwriter, advisor lender, investor or otherwise).”.

(p) Section 8.01(a) shall be amended and restated as follows:

the Agent determines that deposits in Dollars (in the applicable amounts) are not being offered in the relevant market for such Interest Period, or

(q) Section 8.04(a) shall be amended and restated as follows:

Any and all payments by the Borrower and any other Loan Party to or for the account of any Credit Party (which for purposes of this Section 8.04, shall include a Third Party Fronting Bank and its Assignees), the Agent or the Collateral Agent hereunder or under any other Financing Document shall be made free and clear of and without deduction for any and all present or future taxes, duties, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding, in the case of each Credit Party, the Agent and the Collateral Agent, (x) taxes imposed on its income (including branch profit taxes), franchise and similar taxes and other taxes imposed on it that, in any such case, would not have been imposed but for a material connection between such Credit Party, the Agent or the Collateral Agent (as the case may be) and the jurisdiction imposing such taxes (other than a material connection arising by reason of this Agreement or any other Financing Document or the receipt of payments made hereunder or thereunder or the exercise of any rights by a Credit Party, the Agent or the Collateral Agent (as the case may be) hereunder or thereunder) and (y) any U.S. federal withholding taxes imposed under FATCA (all such non-excluded taxes, duties, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as “ Taxes ”). If the Borrower or any other Loan Party shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder or under any other Financing Document to any Credit Party, the Agent or the Collateral Agent (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 8.04) such Credit Party, the Agent or the Collateral Agent (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made; (ii) the Borrower shall make such deductions; (iii) the Borrower shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law and (iv) the Borrower shall furnish to the Agent, at its address referred to in Section 10.01, the original or a certified copy of a receipt or other satisfactory documentation evidencing payment thereof.

(r) Section 8.04(d) shall be amended and restated as follows:

Each Credit Party that is organized under the laws of a jurisdiction outside the United States shall, on or prior to the date of its execution and delivery of this Agreement in the case of a Credit Party listed on the signature pages hereof or on or prior to the date on which it becomes a Credit Party in the case of each other Credit Party and in the case any Credit Party changes jurisdiction of its Applicable Lending Office and from time to time thereafter as requested in writing by the Borrower (but only so long thereafter as such Credit Party remains lawfully able to do so), shall deliver to the Borrower and the Agent such certificates, documents or other evidence, as required by the Internal Revenue Code or Treasury Regulations issued pursuant thereto, including Internal Revenue Service Form W‑8BEN, Form W-8BEN-E, Form W-8IMY or Form W‑8ECI and any other certificate or statement of exemption specified by the Borrower and required by Treasury Regulation Section 1.1441‑4(a) or Section 1.1441‑6(c) or any subsequent version thereof, properly completed and duly executed by such Credit Party establishing that any payment under this Agreement or any other Financing Documents is (i) not subject to withholding under the Internal Revenue Code because such payment is effectively connected with the conduct by such Credit Party of a trade or business in the United States, or (ii) fully or partially exempt from United States tax under a provision of an applicable tax treaty, or (iii) not subject to withholding under the portfolio interest exception under Section 881(c) of the Internal Revenue Code (and, if such Credit Party delivers a Form W‑8BEN or Form W-8BEN-E claiming the benefits of exemption from United States withholding tax under Section 881(c), a certificate representing that such Credit Party is not a “bank” for purposes of Section 881(c) of the Internal Revenue Code, is not a 10‑percent shareholder (within the meaning of Section 871(h)(3)(B) of the Internal Revenue Code) of the Borrower and is not a controlled foreign corporation related to the Borrower (within the meaning of Section 864(d)(4) of the Internal Revenue Code). Unless the Borrower and the Agent have received forms or other documents reasonably satisfactory to them indicating that payments hereunder are not subject to United States withholding tax or are subject to such tax at a rate reduced by an applicable tax treaty, the Borrower or the Agent shall withhold taxes from such payments at the applicable statutory rate in the case of payments to or for any Credit Party organized under the laws of a jurisdiction outside the United States. If a Credit Party is unable to deliver one of these forms or if the forms provided by a Credit Party at the time such Credit Party first becomes a party to this Agreement or at the time a Credit Party changes its Applicable Lending Office (other than at the request of the Borrower) or designates a Conduit Lender indicates a United States interest withholding tax rate in excess of zero, withholding tax at such rate shall be considered excluded from Taxes unless and until such Credit Party provides the appropriate forms certifying that a lesser rate applies, whereupon withholding tax at such lesser rate only shall be considered excluded from Taxes for periods governed by such appropriate forms; provided , however , that (i) that should a Credit Party, which is otherwise exempt from or subject to a reduced rate of withholding tax, becomes subject to Taxes because of its failure to deliver a form required hereunder, the Borrower shall take such steps as such Credit Party shall reasonably request to assist such Credit Party to recover such Taxes and (ii) if at the effective date of a transfer pursuant to which a Credit Party becomes a party to this Agreement, the Credit Party assignor was entitled to payments under Section 8.04(a) in respect of United States withholding tax with respect to interest paid at such date, then, to such extent, the term Taxes shall include (in addition to withholding taxes that may be imposed in the future or other amounts otherwise includable in Taxes) United States withholding tax, if any, applicable with respect to the Credit Party assignee on such date. If a payment made to a Credit Party under any Financing Document would be subject to U.S. federal withholding tax imposed by FATCA if such Credit Party were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Internal Revenue Code, as applicable), such Credit Party shall deliver to the Borrower and the Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Internal Revenue Code) and such additional documentation reasonably requested by the Borrower or the Agent as may be necessary for the Borrower and the Agent to comply with their obligations under FATCA and to determine that such Credit Party has complied with such Credit Party’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (D), “FATCA” shall include any amendments made to FATCA after the Amendment Effective Date.

(s) A new paragraph 8.04(i) shall be added that states as follows:

For purposes of this Section 8.04, the term “applicable law” includes FATCA.

(t) A new Section 10.19 shall be added that states as follows:

Section 10.19 Acknowledgement and Consent to Bail-In of EEA Financial Institutions . Notwithstanding anything to the contrary in any Credit Agreement Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any EEA Financial Institution arising under any Credit Agreement Document, to the extent such liability is unsecured, may be subject to the write-down and conversion powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

(a) the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and

(b) the effects of any Bail-in Action on any such liability, including, if applicable:

(i) a reduction in full or in part or cancellation of any such liability;

(ii) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Financing Document; or

(iii) the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of any EEA Resolution Authority.

SECTION 2. Conditions to Effectiveness . This Amendment shall become effective when, and only when, and as of the date (the “ Amendment Effective Date ”) on which:

(a) the Agent shall have received counterparts of this Amendment executed by the Borrower, each 2016 Departing Revolving Credit Loan Bank and each Revolving Credit Loan Bank or, as to any of the Revolving Credit Loan Banks, advice satisfactory to the Agent that such Bank Party has executed this Amendment ;

(b) the Agent shall have received payment of all accrued fees and expenses of the Banks and the Arranger Parties (including the reasonable and accrued fees of counsel to the Agent invoiced on or prior to the date hereof);

(c) each 2016 Departing Revolving Credit Loan Bank and each 2016 Reducing Revolving Credit Loan Bank shall have received payment in full of all accrued interest and fees owing to it under the Credit Agreement with respect to that portion of its Revolving Credit Loan Commitment being sold and assigned on the Amendment Effective Date;

(d) each Bank that executes a counterpart to this Amendment on or before 5:00 p.m. (New York City time) on May 6, 2016, shall have received a commitment fee (based on the percentage set forth below for the original amount such Bank agreed to commit in respect of the Revolving Credit Loan Facility) of the amount of such Bank’s Revolving Credit Loan Commitment (as set forth on Annex A to the Amendment) as follows:



Bank’s Original Committed Amount	Commitment Fee
$75,000,000 or greater	0.50%
$50,000,000 to $74,999,999	0.375%
$25,000,000 to $49,999,999	0.25%

(e) the Agent shall have received a favorable opinion or opinions of counsel to the Borrower addressed to the Agent and the Banks regarding the due authorization, execution and delivery and enforceability of this Amendment and other matters reasonably requested by the Agent;

(f) the Agent shall have received a certificate signed by a duly authorized officer of the Borrower dated the Amendment Effective Date, to the effect that, after giving effect to this Amendment: (i) the representations and warranties contained in each of the Financing Documents are true and correct in all material respects on and as of the Amendment Effective Date as though made on and as of such date (unless stated to relate solely to an earlier date, in which case such representations and warranties are true and correct in all material respects as of such earlier date); and (ii) no Default has occurred and is continuing; and

(g) the Agent shall have received certified copies of (A) the resolutions of the Board of Directors of the Borrower approving this Amendment and the matters contemplated hereby and (B) all other documents evidencing other necessary corporate action and governmental or other third party approvals and consents, if any, with respect to this Amendment and the matters contemplated hereby.

This Amendment is subject to the provisions of Section 10.05 of the Credit Agreement.

SECTION 3. Representations and Warranties . The Borrower represents and warrants as follows:

(a) The representations and warranties contained in each of the Financing Documents, after giving effect to this Amendment, are correct in all material respects on and as of the date of this Amendment, as though made on and as of such date (unless stated to relate solely to an earlier date, in which case such representations and warranties are true and correct in all material respects as of such earlier date).

(b) After giving effect to this Amendment, no Default has occurred and is continuing on the date hereof.

SECTION 4. Reference to and Effect on the Financing Documents . On and after the Amendment Effective Date, each reference in the Credit Agreement to “ this Agreement ”, “ hereunder ”, “ hereof ” or words of like import referring to the Credit Agreement, and each reference in the Notes and each of the other Financing Documents to “ the Agreement ”, “ thereunder ”, “ thereof ”, or words of like import referring to the Credit Agreement shall mean and be a reference to the Credit Agreement, as amended hereby.

(a) The Credit Agreement, the Notes and each of the other Financing Documents, as specifically modified by this Amendment, are and shall continue to be in full force and effect and are hereby in all respects ratified and confirmed. Without limiting the generality of the foregoing, the Collateral Documents and all of the Collateral described therein do and shall continue to secure the payment of all Obligations of the Loan Parties under the Financing Documents, in each case as modified by this Amendment. Each of Borrower and AES BVI II (i) acknowledges and agrees that (A) each Financing Document to which it is a party is hereby confirmed and ratified and shall remain in full force and effect according to its respective terms, as amended pursuant to this Amendment and (B) the Collateral Documents do, and all of the Collateral does, and in each case shall continue to, secure the payment of all Secured Obligations on the terms and conditions set forth in the Collateral Documents, and (ii) hereby ratifies the security interests granted by it pursuant to the Collateral Documents and each of Borrower and AES BVI II hereby confirms and ratifies its continuing unconditional obligations under the Financing Documents with respect to all of the Secured Obligations.

(b) The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of the Banks, nor constitute an amendment or waiver of any provision of the Credit Agreement or the other Financing Documents.

(c) For purposes of determining withholding taxes imposed under FATCA, from and after the Amendment Effective Date, the Borrower and Agent shall treat (and the Credit Parties hereby authorize the Agent to treat) each Loan and the Credit Agreement as not qualifying as a “grandfathered obligation” within the meaning of Treasury Regulation Section 1.1471-2(b)(2)(i).

SECTION 5. GOVERNING LAW . THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

SECTION 6. WAIVER OF JURY TRIAL . EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AMENDMENT OR THE ACTIONS OF THE COLLATERAL TRUSTEES OR THE AGENT IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.

SECTION 7. Execution in Counterparts . This Amendment may be executed by one or more of the parties to this Amendment on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Amendment by facsimile or electronic transmission shall be effective as delivery of a manually executed counterpart of this Amendment

SECTION 8. Costs and Expenses . The Borrower hereby agrees to pay all reasonable costs and expenses associated with the preparation, execution, delivery, administration, and enforcement of this Amendment, including, without limitation, the fees and expenses of the Collateral Trustees’ and the Agent’s counsel and other out-of-pocket expenses related hereto.

[ Signature Pages Follow ]

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered by their respective proper and duly authorized officers as of the day and year first above written.

THE AES CORPORATION,
a s Borrower

By:

Title:

GRANTOR:

AES INTERNATIONAL HOLDINGS II, LTD.,
as Grantor

By:

Title:

AGENTS:

CITIBANK, N.A.,
as Agent

By:

Title:

CITIBANK, N.A.,
as Collateral Agent

By:

Title:

as Bank

By:

Name:
Title:

Revolving Credit Loan Commitment under Credit Agreement

immediately prior to Amendment Effective Date:

$__________________________________

Revolving Credit Loan Commitment under Credit Agreement

on Amendment Effective Date:

$__________________________________

ANNEX A

REVOLVING CREDIT LOAN FACILITY

Associated Bank, N.A. $20,000,000

Bank of America, N.A. $70,000,000

Barclays Bank PLC $70,000,000

BNP Paribas $20,000,000

Citibank, N.A. $70,000,000

Crédit Agricole Corporate and Investment Bank $20,000,000

Credit Suisse AG, Cayman Islands Branch $70,000,000

Deutsche Bank AG New York Branch $70,000,000

Goldman Sachs Bank USA $70,000,000

HSBC Bank USA, National Association $20,000,000

JPMorgan Chase Bank, N.A. $70,000,000

Mizuho Bank, Ltd. $70,000,000

Morgan Stanley Bank, N.A. $70,000,000

MUFG Union Bank, N.A. $70,000,000

Société Générale $20,000,000

Press Release

Investor Contact: Ahmed Pasha 703-682-6451

Media Contact: Amy Ackerman 703-682-6399

AES Reports First Quarter 2016 Proportional Free Cash Flow of $253 Million and Adjusted Earnings Per Share of $0.13

Highlights


•	Reaffirming 2016 guidance and 2017-2018 expectations


•	Prepaid $125 million in Parent debt


•	Broke ground on the 335 MW Masinloc 2 expansion project in the Philippines


◦	Total of 5,945 MW under construction, the majority of which is expected to come on-line through 2018


•	In April, received payment of €309 million ($350 million) in outstanding receivables at Maritza in Bulgaria

ARLINGTON, Va., May 9, 2016 – The AES Corporation (NYSE: AES) today reported Proportional Free Cash Flow (a non-GAAP financial measure) for the first quarter of 2016 of $253 million , a decrease of $12 million from the first quarter of 2015. This was driven primarily by lower margins, partially offset by improved working capital. First quarter 2016 Consolidated Net Cash Provided by Operating Activities increased $203 million to $640 million , driven by the favorable timing of working capital in Brazil at Eletropaulo and Tietê.

First quarter 2016 Adjusted Earnings Per Share (Adjusted EPS, a non-GAAP financial measure) decreased $0.12 to $0.13 , due in part to an increase of $0.04 in tax expense, reflecting an adjusted effective tax rate of 50% in the first quarter of 2016, versus 33% in 2015. The Company continues to expect a full year 2016 adjusted effective tax rate of 31% to 33%. First quarter 2016 Adjusted EPS was also driven by the $0.04 impact from the devaluation of foreign currencies in Latin America and Europe. First quarter 2016 Diluted Earnings Per Share from Continuing Operations (Diluted EPS) was $0.19 , a decrease of $0.01 from first quarter 2015 . In addition to the decline in Adjusted EPS described above, Diluted EPS also reflects lower unrealized foreign currency transaction losses, unrealized derivative losses and losses on retirement of debt. First quarter 2016 Diluted EPS was higher than first quarter 2016 Adjusted EPS primarily due to unrealized derivative and asset sale gains.

"We have already delivered on several of our strategic objectives for 2016. Most notably, we received payment for all outstanding receivables at Maritza in Bulgaria. We are on track for the $50 million in cost savings that we expect to achieve this year, ramping up to $150 million by 2018," said Andrés Gluski, AES President and Chief Executive Officer. "Our cost savings initiative, combined with our projects currently under construction, are the largest contributors to our at least 10% annual growth in Proportional and Parent Free Cash Flow through 2018. Beyond 2018, development projects in high-growth markets, including Masinloc 2 in the Philippines, the Colon LNG terminal and CCGT in Panama and the contracted Southland CCGT in California, will drive growth."

"During the quarter, we continued to generate strong free cash flow; however our Adjusted EPS results were weaker, primarily due to timing. With our first quarter performance and our outlook for the remainder of the year, we are reaffirming our 2016 guidance for all metrics. We remain committed to disciplined capital allocation and will continue to invest our free cash flow in dividend growth, de-levering and select high-growth opportunities," said Tom O'Flynn, AES Executive Vice President and Chief Financial Officer. "To that end, we are seeing positive results from our efforts to simplify our portfolio and de-lever, which is reflected in the recent improvement in our credit ratings and outlook."

Table 1: Key Financial Results



	First Quarter				Full Year 2016 Guidance
$ in Millions, Except Per Share Amounts	2016		2015		Full Year 2016 Guidance
Proportional Free Cash Flow ¹	$	253	$	265	$1,000-$1,350
Consolidated Net Cash Provided by Operating Activities	$	640	$	437	$2,000-$2,900
Adjusted EPS ¹	$	0.13	$	0.25	$0.95-$1.05
Diluted EPS from Continuing Operations	$	0.19	$	0.20	N/A


¹	A non-GAAP financial measure. See “Non-GAAP Financial Measures” for definitions and reconciliations to the most comparable GAAP financial measures.

Discussion of Drivers of Consolidated Operating Margin, Proportional Free Cash Flow (a non-GAAP financial measure) and Adjusted Pre-Tax Contribution (Adjusted PTC, a non-GAAP financial measure)

The Company manages its portfolio in six market-oriented Strategic Business Units (SBUs): US (United States), Andes (Chile, Colombia and Argentina), Brazil, MCAC (Mexico, Central America and the Caribbean), Europe and Asia.

First quarter 2016 Consolidated Operating Margin decrease d $217 million to $504 million , compared to $721 million in the first quarter of 2015. This decrease was driven primarily by lower contributions from Brazil and the US, as well as the impact from the devaluation of foreign currencies in Latin America and Europe.

Table 2: Proportional Free Cash Flow ¹ and Adjusted PTC ¹



$ in Millions	First Quarter
	Proportional Free Cash Flow ¹									Adjusted PTC ¹
	2016			2015			Variance			2016			2015			Variance
US	$	133		$	155		$	(22	)	$	85		$	106		$	(21	)
Andes	4			17			(13		)	61			91			(30		)
Brazil	34			(47		)	81			(9		)	21			(30		)
MCAC	13			114			(101		)	48			50			(2		)
Europe	76			139			(63		)	69			85			(16		)
Asia	43			4			39			22			12			10
Total SBUs	303			382			(79		)	276			365			(89		)
Corporate & Other	(50		)	(117		)	67			(104		)	(113		)	9
Total	$	253		$	265		$	(12	)	$	172		$	252		$	(80	)
	Adjusted Effective Tax Rate									50		%	33		%
	Diluted Share Count									663			706
	Adjusted EPS ^1,2									$	0.13		$	0.25		$	(0.12	)


¹	A non-GAAP financial measure. See “Non-GAAP Financial Measures” for definitions and reconciliations to the most comparable GAAP financial measures.


²	Includes $6 million and $14 million of after-tax adjusted equity in earnings for first quarter 2016 and first quarter 2015, respectively.

First quarter 2016 Proportional Free Cash Flow decreased $12 million to $253 million and first quarter 2016 Adjusted PTC decreased $80 million to $172 million. Key drivers of this decline included:


•	US


◦	Proportional Free Cash Flow decreased $22 million, primarily due to:


▪	Lower margins: lower wholesale prices and contributions from regulated retail at DPL, lower retail margins driven by unfavorable weather and the impact of the partial sell-down at IPL and the sale of Armenia Mountain in 2015; and


▪	Unfavorable timing of accounts payable at IPL, partially offset by higher collections at DPL.


◦	Adjusted PTC decreased $21 million, primarily driven by lower margins.


•	Andes


◦	Proportional Free Cash Flow decreased $13 million, primarily due to:


▪	Lower margins: the 40% devaluation of the Argentine Peso, the 24% devaluation of the Colombian Peso and lower volumes at Chivor in Colombia, partially offset by lower spot prices for energy and coal purchases and lower fixed costs at Gener in Chile; and


▪	Higher tax payments in Chile, partially offset by higher collections at Chivor in Colombia.


◦	Adjusted PTC decreased $30 million, primarily driven by lower margins and lower equity in earnings at Guacolda in Chile.


•	Brazil


◦	Proportional Free Cash Flow increased $81 million, primarily due to:


▪	Higher collections at Sul and Eletropaulo and the favorable timing of energy purchases at Tietê; and


▪	Lower margins: the impact of the expiration of Tietê's PPA with Eletropaulo, lower demand at Sul and Eletropaulo and the 26% devaluation of the Brazilian Real.


◦	Adjusted PTC decreased $30 million, primarily driven by lower margins.


•	Mexico, Central America and the Caribbean (MCAC)


◦	Proportional Free Cash Flow decreased $101 million, primarily due to:


▪	Lower collections and higher tax payments in the Dominican Republic and lower collections in Puerto Rico.


◦	Adjusted PTC decreased $2 million, primarily driven by lower margins.


•	Europe


◦	Proportional Free Cash Flow decreased $63 million, primarily due to:


▪	Lower margins: the 48% devaluation of the Kazakhstan Tenge and lower dark spreads at Kilroot in the United Kingdom; and


▪	The timing of payments to the fuel supplier at Maritza in Bulgaria, the unfavorable timing of collections at Ballylumford in the United Kingdom and non-recurring cash taxes paid at Kilroot, partially offset by higher collections in Bulgaria.


◦	Adjusted PTC decreased $16 million, primarily driven by lower margins.


•	Asia


◦	Proportional Free Cash Flow increased $39 million, primarily due to:


▪	Higher margins: commencement of operations at Mong Duong in Vietnam in April 2015; and


▪	Lower working capital requirements at Mong Duong in 2016.


◦	Adjusted PTC increased $10 million, primarily driven by higher margins.


•	Corp/Other


◦	Proportional Free Cash Flow increased $67 million, primarily due to the timing of premiums received at the Company's captive insurance business and lower Parent interest expense as a result of the prepayment and refinancing of debt.


◦	Adjusted PTC increased $9 million, primarily driven by lower Parent interest expense.

Table 3: Guidance & Expectations



$ in Millions, Except Per Share Amounts	Reaffirming Full Year 2016 Guidance	Reaffirming 2017-2018 Expectations
Proportional Free Cash Flow ¹	$1,000-$1,350	At least 10% average annual growth off 2016 base
Consolidated Net Cash Provided by Operating Activities	$2,000-$2,900	N/A
Adjusted EPS ¹	$0.95-$1.05	Expect higher end of 12%-16% growth off 2016 base


¹	A non-GAAP financial measure. See “Non-GAAP Financial Measures” for definitions and reconciliations to the most comparable GAAP financial measures.

2016 Guidance and 2017-2018 Expectations


•	The Company's 2016 guidance and 2017-2018 expectations are based on foreign currency and commodity forward curves as of April 30, 2016.


•	The Company is reaffirming its 2016 Proportional Free Cash Flow guidance range of $1,000-$1,350 million.


◦	The Company is reaffirming its 2016 Parent Free Cash Flow expectation of $525-$625 million.

•

The Company is reaffirming its 2016 Adjusted EPS guidance range of $0.95-$1.05. The Company expects to earn 70% to 75% of its 2016 Adjusted EPS in the second half of the year, compared to 2015, when the Company earned 59% of its Adjusted EPS in the second half of the year. In 2016, the stronger second half will be partly due to a lower adjusted effective tax rate and fewer plant outages at certain businesses.


•	The Company is reaffirming its growth rate expectations for 2017-2018 for both Proportional Free Cash Flow and Adjusted EPS.

Additional Highlights


•	In April, the Company received payment of €309 million ($350 million) in outstanding receivables at Maritza in Bulgaria. Maritza will use the majority of the proceeds to pay the local coal mine that supplies the plant, as well as repay the lenders of the plant's non-recourse debt.


•	Year-to-Date 2016, the Company has repurchased 9 million shares for $79 million, at an average price of $9.07 per share.


•	Year-to-Date 2016, the Company prepaid $125 million in Parent debt.


•	The Company currently has 5,945 MW of capacity under construction and expected to come on-line through the first half of 2019.


◦	In March 2016, the Company broke ground on the 335 MW Masinloc 2 expansion project in the Philippines. The project is expected to come on-line in the first half of 2019.


•	In the first quarter of 2016, the Company received $249 million in asset sale proceeds.


◦	In March 2016, the Company received $134 million from La Caisse de depot et placement du Quebec (CDPQ), completing CDPQ's investment in IPALCO, the Parent Company of IPL in the United States, bringing its direct and indirect interests in IPALCO to 30%.


◦	In February 2016, the Company also sold a 24% interest in IPP4, one of its generation businesses in Jordan, for $21 million.


◦	In January 2016, the Company sold Kelanitissa, its generation business in Sri Lanka, for $18 million, and exited Sri Lanka.


◦	In January 2016, the Company sold DPLER, its retail energy business in the United States, for $76 million.

Non-GAAP Financial Measures

See Non-GAAP Financial Measures for definitions of Proportional Free Cash Flow, Adjusted Earnings Per Share, Adjusted Pre-Tax Contribution, as well as reconciliations to the most comparable GAAP financial measures.

Attachments

Consolidated Statements of Operations, Consolidated Balance Sheets, Segment Information, Consolidated Statements of Cash Flows, Non-GAAP Financial Measures, Parent Financial Information and 2016 Financial Guidance Elements.

Conference Call Information

AES will host a conference call on Monday, May 9, 2016 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 5577696. 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 200 global power company. We provide affordable, sustainable energy to 17 countries through our diverse portfolio of distribution businesses as well as thermal and renewable generation facilities. Our workforce of 21,000 people is committed to operational excellence and meeting the world’s changing power needs. Our 2015 revenues were $15 billion and we own and manage $37 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 achievements of planned productivity improvements and incremental growth investments at normalized investment levels and rates of return consistent with prior experience.

Any Stockholder who desires a copy of the Company’s 2015 Annual Report on Form 10-K dated on or about February 23, 2016 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,
	2016			2015
	(in millions)
Revenue:
Regulated	$	1,776		$	2,080
Non-Regulated	1,695			1,904
Total revenue	3,471			3,984
Cost of Sales:
Regulated	(1,672		)	(1,807		)
Non-Regulated	(1,295		)	(1,456		)
Total cost of sales	(2,967		)	(3,263		)
Operating margin	504			721
General and administrative expenses	(48		)	(55		)
Interest expense	(364		)	(363		)
Interest income	130			90
Gain (loss) on extinguishment of debt	4			(23		)
Other expense	(8		)	(20		)
Other income	13			15
Gain on sale of businesses	47			1
Asset impairment expense	(159		)	(8		)
Foreign currency transaction gains (losses)	43			(23		)
Other non-operating expense	(2		)	—
INCOME FROM OPERATIONS BEFORE TAXES AND EQUITY IN EARNINGS OF AFFILIATES	160			335
Income tax expense	(92		)	(96		)
Net equity in earnings of affiliates	6			15
NET INCOME	74			254
Less: Net loss (income) attributable to noncontrolling interests	52			(112		)
NET INCOME ATTRIBUTABLE TO THE AES CORPORATION	$	126		$	142
BASIC EARNINGS PER SHARE:
NET INCOME ATTRIBUTABLE TO THE AES CORPORATION COMMON STOCKHOLDERS	$	0.19		$	0.20
DILUTED EARNINGS PER SHARE:
NET INCOME ATTRIBUTABLE TO THE AES CORPORATION COMMON STOCKHOLDERS	$	0.19		$	0.20
DILUTED SHARES OUTSTANDING	663			706
DIVIDENDS DECLARED PER COMMON SHARE	$	0.11		$	—



THE AES CORPORATION
Strategic Business Unit (SBU) Information
(Unaudited)

	Three Months Ended March 31,
(in millions)	2016			2015
REVENUE
US	$	855		$	997
Andes	622			612
Brazil	1,040			1,330
MCAC	519			598
Europe	246			330
Asia	194			119
Corporate, Other and Inter-SBU eliminations	(5		)	(2		)
Total Revenue	$	3,471		$	3,984

THE AES CORPORATION

Condensed Consolidated Balance Sheets (Unaudited)



	March 31, 2016			December 31, 2015
	(in millions, except share and per share data)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	1,185		$	1,262
Restricted cash	294			295
Short-term investments	628			484
Accounts receivable, net of allowance for doubtful accounts of $103 and $95, respectively	2,581			2,473
Inventory (see Note 2)	682			675
Prepaid expenses	116			108
Other current assets	1,461			1,449
Assets of held-for-sale businesses	—			96
Total current assets	6,947			6,842
NONCURRENT ASSETS
Property, Plant and Equipment:
Land	751			711
Electric generation, distribution assets and other	28,997			28,491
Accumulated depreciation	(9,768		)	(9,449		)
Construction in progress	3,436			3,063
Property, plant and equipment, net	23,416			22,816
Other Assets:
Investments in and advances to affiliates (see Note 6)	611			610
Debt service reserves and other deposits	415			565
Goodwill	1,157			1,157
Other intangible assets, net of accumulated amortization of $100 and $97, respectively	209			214
Deferred income taxes	599			543
Service concession assets, net of accumulated amortization of $52 and $34, respectively	1,505			1,543
Other noncurrent assets	2,041			2,180
Total other assets	6,537			6,812
TOTAL ASSETS	$	36,900		$	36,470
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable	$	1,739		$	1,721
Accrued interest	333			251
Accrued and other liabilities	2,280			2,436
Recourse debt	—			—
Non-recourse debt, including $247 and $261, respectively, related to variable interest entities (see Note 7)	2,220			2,505
Liabilities of held-for-sale businesses	—			13
Total current liabilities	6,572			6,926
NONCURRENT LIABILITIES
Recourse debt (see Note 7)	4,924			4,966
Non-recourse debt, including $1,503 and $1,539, respectively, related to variable interest entities (see Note 7)	13,413			12,956
Deferred income taxes	1,118			1,090
Pension and other post-retirement liabilities (see Note 9)	985			927
Other noncurrent liabilities	3,032			2,896
Total noncurrent liabilities	23,472			22,835
Commitments and Contingencies (see Note 8)
Redeemable stock of subsidiaries	672			538
EQUITY (see Note 10)
THE AES CORPORATION STOCKHOLDERS’ EQUITY
Common stock ($0.01 par value, 1,200,000,000 shares authorized; 815,894,592 issued and 658,997,660 outstanding at March 31, 2016 and 815,846,621 issued and 666,808,790 outstanding at December 31, 2015)	8			8
Additional paid-in capital	8,706			8,718
Retained earnings	198			143
Accumulated other comprehensive loss	(3,807		)	(3,883		)
Treasury stock, at cost (156,896,932 shares at March 31, 2016 and 149,037,831 at December 31, 2015)	(1,904		)	(1,837		)
Total AES Corporation stockholders’ equity	3,201			3,149
NONCONTROLLING INTERESTS	2,983			3,022
Total equity	6,184			6,171
TOTAL LIABILITIES AND EQUITY	$	36,900		$	36,470

THE AES CORPORATION

Condensed Consolidated Statements of Cash Flows

(Unaudited)



	Three Months Ended March 31,
	2016			2015

OPERATING ACTIVITIES:
Net income	74			$	254
Adjustments to net income:
Depreciation and amortization	290			298
Gain on sale of businesses	(47		)	(1		)
Impairment expenses	161			8
Deferred income taxes	31			(12		)
(Reversals of) provisions for contingencies	(1		)	14
(Gain) loss on extinguishment of debt	(4		)	23
Other	(3		)	65
Changes in operating assets and liabilities
(Increase) decrease in accounts receivable	37			(337		)
(Increase) decrease in inventory	(24		)	(35		)
(Increase) decrease in prepaid expenses and other current assets	274			68
(Increase) decrease in other assets	(21		)	(290		)
Increase (decrease) in accounts payable and other current liabilities	(72		)	273
Increase (decrease) in income tax payables, net and other tax payables	(148		)	(15		)
Increase (decrease) in other liabilities	93			124
Net cash provided by operating activities	640			437
INVESTING ACTIVITIES:
Capital Expenditures	(640		)	(619		)
Acquisitions, net of cash acquired	(6		)	(17		)
Proceeds from the sale of businesses, net of cash sold	115			—
Sale of short-term investments	1,603			1,076
Purchase of short-term investments	(1,708		)	(1,054		)
Decrease (increase) in restricted cash, debt service reserves and other assets	96			(75		)
Other investing	(8		)	(31		)
Net cash used in investing activities	(548		)	(720		)
FINANCING ACTIVITIES:
Borrowings under the revolving credit facilities	248			101
Repayments under the revolving credit facilities	(116		)	(62		)
Repayments of recourse debt	(116		)	(336		)
Issuance of non-recourse debt	161			574
Repayments of non-recourse debt	(248		)	(269		)
Payments for financing fees	(11		)	(9		)
Distributions to noncontrolling interests	(78		)	(19		)
Contributions from noncontrolling interests	28			67
Proceeds from the sale of redeemable stock of subsidiaries	134			247
Dividends paid on AES common stock	(73		)	(70		)
Payments for financed capital expenditures	(10		)	(42		)
Purchase of treasury stock	(79		)	(35		)
Other financing	(20		)	(34		)
Net cash (used in) provided by financing activities	(180		)	113
Effect of exchange rate changes on cash	7			(27		)
Increase (decrease) in cash of held-for-sale businesses	4			(5		)
Total decrease in cash and cash equivalents	(77		)	(202		)
Cash and cash equivalents, beginning	1,262			1,539
Cash and cash equivalents, ending	$	1,185		$	1,337
SUPPLEMENTAL DISCLOSURES:
Cash payments for interest, net of amounts capitalized	$	228		$	242
Cash payments for income taxes, net of refunds	$	182		$	103
SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
Assets acquired through capital lease and other liabilities	$	3		$	5
Dividends declared but not yet paid	$	75		$	—

THE AES CORPORATION

NON-GAAP FINANCIAL MEASURES

(Unaudited)

Proportional metrics are reconciled to the nearest GAAP measure. Certain assumptions have been made to estimate our proportional financial measures. These assumptions include: (i) the Company's economic interest has been calculated based on a blended rate for each consolidated business when such business represents multiple legal entities; (ii) the Company's economic interest may differ from the percentage implied by the recorded net income or loss attributable to noncontrolling interests or dividends paid during a given period; (iii) the Company's economic interest for entities accounted for using the hypothetical liquidation at book value method is 100%; (iv) individual operating performance of the Company's equity method investments is not reflected and (v) inter-segment transactions are included as applicable for the metric presented.

The Company's non-GAAP metrics are Proportional Free Cash Flow, Adjusted pre-tax contribution (“adjusted PTC”) and Adjusted earnings per share (“adjusted EPS”) used by management and external users of our consolidated financial statements such as investors, industry analysts and lenders.

Proportional Free Cash Flow is defined as cash flows from operating activities (adjusted for service concession asset capital expenditures), less maintenance capital expenditures (including non-recoverable environmental capital costs and net of reinsurance proceeds) adjusted for the estimated impact of noncontrolling interests. Proportional Free Cash Flow in each SBU includes the effect of intercompany transactions with other SBUs except for interest, tax sharing, charges for management fees and transfer pricing. The proportionate share of cash flows and related adjustments attributable to noncontrolling interest in our subsidiaries comprise the proportional adjustment factor presented in the reconciliation below.

The GAAP measure most comparable to Proportional Free Cash Flow is Net Cash Flows from Operating Activities. We believe that Proportional Free Cash Flow better reflects the underlying business performance of the Company, as it measures the cash generated by the business, after the funding of maintenance capital expenditures, that may be available for investing or repaying debt or other purposes. Factors in this determination include the impact of noncontrolling interest, where AES consolidates the results of a subsidiary that is not wholly-owned by the Company.



	Three Months Ended
	March 31,
	2016			2015
	(in millions)
Calculation of Maintenance Capital Expenditures for Free Cash Flow ⁽¹⁾ Reconciliation Below:
Maintenance Capital Expenditures	$	162		$	149
Environmental Capital Expenditures	87			48
Growth Capital Expenditures	401			464
Total Capital Expenditures	$	650		$	661

Reconciliation of Proportional Operating Cash Flow ⁽²⁾
Consolidated Operating Cash Flow	$	640		$	437
Add: Capital Expenditures Related to Service Concession Assets ⁽³⁾	24			20
Less: Proportional Adjustment Factor ^{(2) (5)}	(289		)	(72		)
Proportional Operating Cash Flow ⁽²⁾	$	375		$	385

Reconciliation of Free Cash Flow ⁽¹⁾
Consolidated Operating Cash Flow	$	640		$	437
Add: Capital Expenditures Related to Service Concession Assets ⁽³⁾	24			20
Less: Maintenance Capital Expenditures, net of reinsurance proceeds	(162		)	(149		)
Less: Non-Recoverable Environmental Capital Expenditures	(12		)	(10		)
Free Cash Flow ⁽¹⁾	$	490		$	298

Reconciliation of Proportional Free Cash Flow ^{(1) (2)}
Proportional Adjusted Operating Cash Flow ⁽²⁾	$	375		$	385
Less: Proportional Maintenance Capital Expenditures, net of reinsurance proceeds ⁽²⁾	(112)			(113		)
Less: Proportional Non-Recoverable Environmental Capital Expenditures ^{(2) (4)}	(10)			(7		)
Proportional Free Cash Flow ^{(1) (2)}	$	253		$	265


⁽¹⁾	Free cash flow (a non-GAAP financial measure) is proportional free cash flow as defined above but inclusive of noncontrolling interest impacts.

⁽²⁾

The proportional adjustment factor, proportional maintenance capital expenditures (net of reinsurance proceeds) and proportional non-recoverable environmental capital expenditures are calculated by multiplying the percentage owned by noncontrolling interests for each entity by its corresponding consolidated cash flow metric and are totaled to the resulting figures. For example, Parent Company A owns 80% of Subsidiary Company B, a consolidated subsidiary. Thus, Subsidiary Company B has a 20% noncontrolling interest. Assuming a consolidated net cash flow from operating activities of $100 from Subsidiary B, the proportional adjustment factor for Subsidiary B would equal ($20), or $100 x (20%). The Company calculates the proportional adjustment factor for each consolidated business in this manner and then sums these amounts to determine the total proportional adjustment factor used in the reconciliation. The proportional adjustment factor may differ from the proportion of income attributable to noncontrolling interests as a result of (a) non-cash items which impact income but not cash and (b) AES' ownership interest in the subsidiary where such items occur.

THE AES CORPORATION

NON-GAAP FINANCIAL MEASURES

(Unaudited)


⁽³⁾	Service concession asset expenditures excluded from free cash flow and proportional free cash flow non-GAAP metric due to the adoption of service concession accounting effective January 1, 2015.


⁽⁴⁾	Excludes IPALCO’s proportional recoverable environmental capital expenditures of $ 56 million and $ 37 million for the three months ended March 31, 2016 and March 31, 2015 , respectively.


⁽⁵⁾	Includes proportional adjustment amount for service concession asset expenditures of $12 million and $ 10 million for the three months ended March 31, 2016 . The Company adopted service concession accounting effective January 1, 2015.

THE AES CORPORATION

NON-GAAP FINANCIAL MEASURES

(Unaudited)

RECONCILIATION OF ADJUSTED PRE-TAX CONTRIBUTION (PTC) AND ADJUSTED EPS

Adjusted PTC 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 due to dispositions and acquisitions of business interests, (d) losses due to impairments, and (e) 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.

Adjusted EPS 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 due to dispositions and acquisitions of business interests, (d) losses due to impairments, and (e) costs due to the early retirement of debt.

The GAAP measure most comparable to adjusted PTC is income from continuing operations attributable to AES. The GAAP measure most comparable to adjusted EPS is diluted earnings per share from continuing operations. We believe that adjusted PTC and 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. 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 and 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.



	Three Months Ended March 31, 2016							Three Months Ended March 31, 2015
	Net of NCI ⁽¹⁾			Per Share (Diluted) Net of NCI ⁽¹⁾ and Tax				Net of NCI ⁽¹⁾			Per Share (Diluted) Net of NCI ⁽¹⁾ and Tax

Income (Loss) from Continuing Operations Attributable to AES and Diluted EPS	$	126		$	0.19			$	142		$	0.20
Add: Income Tax Expense (Benefit) from Continuing Operations Attributable to AES	56							50
Pre-Tax Contribution	$	182						$	192
Adjustments
Unrealized Derivative (Gains)/Losses ⁽²⁾	$	(34	)	$	(0.03	)		$	(15	)	$	(0.01	)
Unrealized Foreign Currency Transaction (Gains)/Losses ⁽³⁾	(8		)	(0.01		)		47			0.03
Disposition/Acquisition (Gains)/Losses	(19		)	(0.02		)	⁽⁴⁾	(5		)	(0.01		)
Impairment Losses	50			—			⁽⁵⁾	6			0.01
Loss on Extinguishment of Debt	1			—				27			0.03			⁽⁶⁾
Adjusted PTC and Adjusted EPS	$	172		$	0.13			$	252		$	0.25

_____________________________


⁽¹⁾	NCI is defined as Noncontrolling Interests.


⁽²⁾	Unrealized derivative (gains) losses were net of income tax per share of ($0.02) and ($0.01) in the three months ended March 31, 2016 and 2015 , respectively.


⁽³⁾	Unrealized foreign currency transaction (gains) losses were net of income tax per share of ($0.01) and $0.03 in the three months ended March 31, 2016 and 2015 , respectively.


⁽⁴⁾	Amount primarily relates to the gain from the sale of DPLER of $22 million ( $12 million , or $0.02 per share, net of income tax expense per share of $0.01 ).


⁽⁵⁾	Amount primarily relates to the asset impairment at Buffalo Gap II of $159 million , of which $49 million was attributable to AES; offset by a tax benefit of $51 million (net impact of $2 million , or $0.00 per share).


⁽⁶⁾	Amount primarily relates to the loss on early retirement of debt at the Parent Company of $26 million ( $18 million , or $0.03 per share, net of income tax per share of $0.01 ).



The AES Corporation
Parent Financial Information
Parent only data: last four quarters
(in millions)	Quarters Ended
Total subsidiary distributions & returns of capital to Parent	March 31, 2016		December 31, 2015		September 30, 2015		June 30, 2015
	Actual		Actual		Actual		Actual
Subsidiary distributions ⁽¹⁾ to Parent & QHCs	$	968	$	1,057	$	917	$	1,119
Returns of capital distributions to Parent & QHCs	24		8		26		57
Total subsidiary distributions & returns of capital to Parent	$	992	$	1,065	$	943	$	1,176
Parent only data: quarterly
($ in millions)	Quarter Ended
Total subsidiary distributions & returns of capital to Parent	March 31, 2016		December 31, 2015		September 30, 2015		June 30, 2015
	Actual		Actual		Actual		Actual
Subsidiary distributions to Parent & QHCs	$	85	$	555	$	93	$	235
Returns of capital distributions to Parent & QHCs	16		0		0		8
Total subsidiary distributions & returns of capital to Parent	$	101	$	555	$	93	$	243
Parent Company Liquidity ⁽²⁾
($ in millions)	Balance at
	March 31, 2016		December 31, 2015		September 30, 2015		June 30, 2015
	Actual		Actual		Actual		Actual
Cash at Parent & Cash at QHCs ⁽³⁾	$	17	$	400	$	6	$	40
Availability under credit facilities	658		738		625		739
Ending liquidity	$	675	$	1,138	$	631	$	779

⁽¹⁾

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 the 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.


⁽²⁾	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.

⁽³⁾

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.

THE AES CORPORATION

2016 FINANCIAL GUIDANCE ELEMENTS ^{(1), (2)}



	2016 Financial Guidance
	As of 5/9/16
	Consolidated	Proportional
Income Statement Guidance
Adjusted Earnings Per Share (3)	$0.95-$1.05
Cash Flow Guidance
Net Cash Provided by Operating Activities	$2,000-$2,900 million
Free Cash Flow (4)		$1,000-$1,350 million
Reconciliation of Free Cash Flow Guidance
Net Cash from Operating Activities	$2,000-$2,900 million	$1,500-$1,850 million
Less: Maintenance Capital Expenditures	$600-$800 million	$400-$600 million
Free Cash Flow (4)	$1,300-$2,200	$1,000-$1,350


⁽¹⁾	2016 Guidance is based on expectations for future foreign exchange rates and commodity prices as of April 30, 2016.

⁽²⁾

AES is a holding company that derives its income and cash flows from the activities of its subsidiaries, some of which may not be wholly-owned by the Company. Accordingly, the Company has presented certain financial metrics which are defined as Proportional (a non-GAAP financial measure). Proportional metrics present the Company's estimate of its share in the economics of the underlying metric. The Company believes that the Proportional metrics are useful to investors because they exclude the economic share in the metric presented that is held by non-AES shareholders. For example, Net Cash from Operating Activities (Operating Cash Flow) is a GAAP metric which presents the Company's cash flow from operations on a consolidated basis, including operating cash flow allocable to noncontrolling interests. Proportional Operating Cash Flow removes the share of operating cash flow allocable to noncontrolling interests and therefore may act as an aid in the valuation of the Company. Beginning in Q1 2015, the definition was revised to also exclude cash flows related to service concession assets. Proportional metrics are reconciled to the nearest GAAP measure. Certain assumptions have been made to estimate our proportional financial measures. These assumptions include: (i) the Company's economic interest has been calculated based on a blended rate for each consolidated business when such business represents multiple legal entities; (ii) the Company's economic interest may differ from the percentage implied by the recorded net income or loss attributable to noncontrolling interests or dividends paid during a given period; (iii) the Company's economic interest for entities accounted for using the hypothetical liquidation at book value method is 100%; (iv) individual operating performance of the Company's equity method investments is not reflected and (v) inter-segment transactions are included as applicable for the metric presented.

⁽³⁾

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) unrealized gains or losses related to derivative transactions, (b) unrealized foreign currency gains or losses, (c) gains or losses due to dispositions and acquisitions of business interests, (d) 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 unrealized gains or losses related to derivative transactions, unrealized foreign 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.

⁽⁴⁾

Free Cash Flow is reconciled above. 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 provided by operations less maintenance capital expenditures as defined by our businesses, that may be available for investing or for repaying debt.