The AES Corporation Public Lenders Presentation May 17, 2011 - - PowerPoint PPT Presentation

The AES Corporation Public Lenders Presentation

May 17, 2011

Proprietary and Confidential Information

Contains Forward Looking Statements

Safe Harbor Disclosure

2

Certain statements in the following presentation regarding AES’ business operations may constitute “forward-looking statements.” Such forward-looking statements include, but are not limited to, 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 accurate projections of future interest rates, commodity prices and foreign currency pricing, continued normal or better levels of operating performance and electricity demand 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 from investments at investment levels and rates of return consistent with prior experience. For additional assumptions see Slide 40 and the Appendix to this presentation. 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 including but not limited to the risks discussed under Item 1A “Risk Factors” in the AES’ 2010 Annual Report on Form 10- K and the Form 10-Q for the quarter ended March 31, 2011, as well as our other SEC filings. AES undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Contains Forward Looking Statements 3

Agenda

AES Overview Victoria Harker Executive Vice President & Chief Financial Officer Financial Overview Syndication Overview DPL Inc. Acquisition Overview Ned Hall Executive Vice President & President of North America and Global Wind Generation Chip Hoagland Vice President and Treasurer Henrik Dahlback Director, Bank of America Merrill Lynch

Contains Forward Looking Statements 4

AES Overview

Contains Forward Looking Statements 5

Transaction Summary1

 On April 19, 2011, The AES Corporation (“AES” or the “Company”) entered into a definitive agreement under which AES will acquire DPL Inc. (“DPL”) for $30.00 per share in cash  Transaction valued at $4.7 billion on an enterprise basis (the “Acquisition”)2  The proposed Acquisition will provide AES with an attractive regional utility that has a diversified retail customer base and well-positioned generation fleet with strong U.S. cash flows  The combined company in 2010 had total capacity of approximately 44,000 megawatts, 12 million utility customers and generated approximately $18.5 billion of revenue  The Company is seeking commitments on a $1,050 million Senior Secured Term Loan Facility (the “Term Loan”) offered hereby as a source of permanent financing for the acquisition  Subject to market conditions and other factors, the Company also expects to issue $1,000 million

• f Senior Unsecured Notes (the “Notes”) to complete its permanent financing package
• 1. There are risks associated with the transaction. See risk factors in AES’ Form 10-Q for the period ended March 31, 2011.
• 2. There are a number of conditions precedent and termination rights under the Merger Agreement. A description is contained in AES’ Form 10-Q for the period ended March 31, 2011.

Contains Forward Looking Statements 6

AES Offers Compelling Value Proposition

Diverse Operating Portfolio Attractive Growth in Near-Term Earnings and Free Cash Flow Well Positioned to Benefit from Global Trends

 Includes mix of regulated Utilities and unregulated Generation businesses  Benefits from exposure to markets experiencing faster recovery in demand growth  Ability to capitalize on platform of multiple geography and energy sources  Largely contracted and fully financed construction program  Exposure to high growth markets  Attractive M&A opportunities  Cost reduction initiatives  Strong liquidity position allows flexibility  Pursuing balanced approach to capital allocation  Demonstrated track record

• f investing cash at

attractive returns  Mature development pipeline/M&A opportunities

Contains Forward Looking Statements 7

Businesses Utilize Multiple Fuel Types & Technologies

Current Portfolio by Fuel Type (MW1)

• 1. 40,498 MW (gross) in operation under Generation and Utilities businesses.
• 2. Renewables include biomass, hydro, solar and wind.

62% of Our Capacity is in Natural Gas & Renewables

Diesel & Petcoke 3% Natural Gas Coal Renewables2 Oil 2% 38% 33% 24%

Contains Forward Looking Statements

20% 17% 15% 11% 17% 8% 12%

8

Diverse Geographic Portfolio Reduces Risk

2010 Consolidated Gross Margin

($3.9 Billion: 33% Utilities – 67% Generation)

Latin America Generation Latin America Utilities North America Utilities Other North America Generation Asia Generation Europe Generation Latin America Generation Latin America Utilities North America Utilities Other Asia Generation Europe Generation

2010 Distributions from Subsidiaries

($1.2 Billion: 29% Utilities – 71% Generation)

North America Generation

Contains Forward Looking Statements 9

Benefit from Higher Global Electricity Demand Growth

Electricity Demand Across Regions

Latin America Asia

Source: Economist Intelligence Unit.

• 1. In Vietnam, AES has a 1,200 MW coal-fired project in development.

North America

1

Contains Forward Looking Statements

Construction Program Contributes Near-Term Growth; Funding Already In Place

10

2,060 MW On-Line by Year1 2,060 MW On-Line by Geography1

• 1. As of May 6, 2011. The MW totals represent some of AES’ construction projects. The above information and timing are estimates and actual results may differ. See “Risk Factors” in the

AES’ Form 10-K for the year ended December 31, 2010 for a discussion of risks associated with development.

Contains Forward Looking Statements

Update on Construction Program1

 2,010 MW2 under construction  1,711 MW3 expected to come on-line during balance of 2011

 Maritza East (670 MW, coal, Bulgaria)4

• Commissioning underway with plans to obtain full design capacity by year-end
• Recently completed successful capacity testing at 420 MW

 Angamos (518 MW, coal, Chile)

• Unit 1 was fully commissioned ahead of schedule
• Unit 2 is expected on-line 2H 2011 as scheduled

 Changuinola (223 MW, hydro, Panama)

• Dam and powerhouse are approximately 95% complete
• Project is expected on-line 2H 2011

 AES Wind Generation (274 MW in China, France, India and the U.S.)

 Post 2011

 Drone Hill (28.6 MW, wind, United Kingdom)

• Reached financial close and construction began during Q1 2011 and is expected on-line 2H 2012

 Campiche (270 MW, coal, Chile)

• Construction is progressing and expected on-line 1H 2013

1. See “Risk Factors” in the AES’ Form 10-K for the year ended December 31, 2010 for a discussion of risks associated with development. As a result of these risks, there can be no assurance that AES will be able to complete these projects on schedule. The examples above are some of AES’ construction projects. Other projects not currently on the table, whether developed through acquisitions or otherwise, may be brought on-line before these projects. Some of these projects may not be completed or may be delayed due to uncertainty inherent in the development process. 2. Includes: 670 MW Maritza, 518 MW Angamos, 270 MW Campiche, 223 MW Changuinola, 97.6 MW Laurel Mountain, 49.5 MW Chen Qi, 49 MW Mountain View IV, 39.2 MW InnoVent, 39 MW Saurashtra, 28.6 MW Drone Hill and 26 MW AES Solar. 3. Includes: 670 MW Maritza, 518 MW Angamos, 223 MW Changuinola, and 300 MW of wind and solar. 4. See Item 1A “Risk Factors” in the AES’ 2010 Annual Report on Form 10-K and the Form 10-Q for the quarter ended Match 31, 2011, as well as other AES’ SEC filings for further discussion of the Maritza project.

11

Contains Forward Looking Statements

Advancing Our Development Pipeline – Recent Events

Poland and UK

April-May 2010: Acquired wind development pipeline

• f more than 1,000 MW in

Poland and UK

• Includes 358 MW advanced

development pipeline, expected to close before December 2011

• AES equity requirement of

approximately $575 million to complete pipeline, including $200 million relating to the advanced pipeline

China

June 2010: Acquired 35% interest in China small hydro joint venture; additional 14% pending Chinese government approvals and projected to close by December 31, 2010

• Increases AES’ hydropower capacity in

China from 25 MW to 266 MW in operation

• AES equity requirement of approximately

$49 million total

Vietnam

April 2010: Signed 25-year Power Purchase Agreement for 1,200 MW coal-fired plant in Vietnam

• USD-denominated tariff, with fuel

pass-throughs

• Expected financial

close 1H 2011 and commercial

• perations in

2H 2014

• AES equity

requirement of approximately $400 million

Italy

April-May 2010: Raised $273 million long-term non-recourse financing to build 51 MW solar PV projects in Italy

• Commercial operations

projected in 2H 2010

• Long-term contracts

Northern Ireland

August 2010: Acquired 1,246 MW gas-fired Ballylumford project in Northern Ireland

• Largely-contracted, with fuel

pass-throughs

• AES investment of approximately

$160 million

Note: Some of these examples may not close as anticipated due to uncertainty inherent in the development process.

12

Contains Forward Looking Statements

Update on Development Pipeline

 AES Wind Generation

 Reached financial close and began construction of our 28.6 MW Drone Hill project in UK

 India

 Signed PPA for our 1,320 MW coal fired expansion of OPGC in the state of Orissa  Signed PPA and closed on debt financing for our 5 MW solar project in the state of Rajasthan

 Mong Duong, 1,200 MW coal project in Vietnam

 Selected Doosan as EPC contractor  Agreed to sell 49% stake in project to CIC and POSCO

 Turkey

 Signed partnership with Turkish conglomerate Koç Holding

13 Note: Includes examples of some of the more advanced greenfield projects in our pipeline. Other projects, whether developed through acquisitions or otherwise, may be brought on-line before these projects. In addition, some of these examples may not be completed or may be delayed due to uncertainty inherent in the development process.

Contains Forward Looking Statements 14

DPL Inc. Acquisition Overview

Contains Forward Looking Statements

Summary of AES’ Acquisition of DPL Inc.

 Attractive regional utility with well positioned generation fleet  Cash flow and earnings accretive1  Enhanced returns through synergies and tax attributes  Builds upon our successful ownership and management of IPL  Leverages global scale for increased purchasing power

15

1. Excluding acquisition costs beginning in year after acquisition. See risk factors associated with the transaction in AES’ Form 10-Q for the period ended March 31, 2011.

Contains Forward Looking Statements 16

Key Terms of AES’ Acquisition of DPL Inc.

 Acquisition of DPL Inc. (NYSE: DPL)  Transaction value of $4.7 billion with a cash purchase price of $3.5 billion and the assumption of $1.2 billion of net debt  $0.05-$0.07 anticipated annual earnings per share accretion beginning in first year after close (excluding acquisition costs)  Expected to provide subsidiary distributions of $200-$300 million on average per year

Transaction Economics Timing

 Expected to close in 6-9 months1

Approvals

 DPL shareholder vote; Federal approval from FERC (Federal Power Act) and DOJ (HSR); State approval from Public Utilities Commission of Ohio (PUCO)

Offer Price & Consideration Transaction

 100% cash consideration at $30.00 per share  Implied acquisition P/E of 12.4x based on midpoint of DPL’s 2011 guidance

Credit

 B1/BB- corporate family ratings at AES Corp.  Targeting BBB- issuer rating at DPL Inc.  Targeting A3/BBB+ senior secured debt ratings at Dayton Power & Light

1. There are a number of termination rights and conditions precedent to the transaction closing. These could impact whether the deal closes and/or actual timing of closing, which could differ from estimates provided here.

Contains Forward Looking Statements

Ohio Regulatory Structure

 History of constructive regulation for electric utilities  Adjustment mechanisms for fuel, capacity, transmission, environmental investments and other costs  Hybrid market  Transmission and distribution follow traditional cost of service model  Retail choice for generation since 2001

• Non-regulated providers are called Competitive Retail Energy Service (CRES)

providers

• Regulated utility product called Electric Security Plan (ESP)

 Utilities are subject to significantly excessive earnings test (SEET)

17

Contains Forward Looking Statements

DPL Business Drivers

DPL Inc. T&D Generation Electric Security Plan (ESP) Retail Competitive Retail

18

 Traditional rate base driven regulated utility  ~515,000 distribution customers  ~$800 million net plant  Utility owned generation sells into PJM  2,830 MW base load coal units; 432 MW peaker  556 MW gas- fired non- regulated generation  Standard service offer as utility acts as Provider of Last Resort  Regulated tariff structure

Source: DPL company filings.

 Services customers that switch from ESP and acquires

• ff-system

customers

Contains Forward Looking Statements

T&D: Overview

 Traditional cost of service regulation – FERC and PUCO  Approximately $800 million net T&D plant1  Expect earnings growth from ongoing T&D investment  Opportunities to leverage AES utility platform sourcing

19

1. Source: FERC Form 1 as of December 31, 2009.

Contains Forward Looking Statements 20

 Totals 3,818 MW of generating capacity

 Coal: 2,830 MW  Other: 988 MW of peaking assets

 99% of DPL’s energy is produced with coal  Diversified generation fleet with partners:

 Over 65% of generating capacity is owned in combination with other utilities  Diversifies operational risk  DP&L operates and purchases coal for 2 of 7 plants in which it has co-ownership. (Approximately 50% of total coal consumed at these plants)

 DP&L operates and purchases coal for Hutchings, a wholly-owned plant

Generation: Overview

Source: DPL company filings and investor presentations.

DPL Service Territory Key Highlights

NY005YQG_1.wor NY005YQG_1.wor NY005YQG_1.wor NY005YQG_1.wor NY005YQG_1.wor NY005YQG_1.wor Lake Erie Lake Erie Lake Erie Lake Erie Lake Erie Lake Erie Lake Erie Lake Erie Lake Erie

Ohio Ohio Ohio Ohio Ohio Ohio Ohio Ohio Ohio Michigan Michigan Michigan Michigan Michigan Michigan Michigan Michigan Michigan Indiana Indiana Indiana Indiana Indiana Indiana Indiana Indiana Indiana Kentucky Kentucky Kentucky Kentucky Kentucky Kentucky Kentucky Kentucky Kentucky West Virginia West Virginia West Virginia West Virginia West Virginia West Virginia West Virginia West Virginia West Virginia

Ohio River Ohio River Ohio River Ohio River Ohio River Ohio River Ohio River Ohio River Ohio River Beckjord Beckjord Beckjord Beckjord Beckjord Beckjord Beckjord Beckjord Beckjord Stuart Stuart Stuart Stuart Stuart Stuart Stuart Stuart Stuart Montpelier Montpelier Montpelier Montpelier Montpelier Montpelier Montpelier Montpelier Montpelier East Bend East Bend East Bend East Bend East Bend East Bend East Bend East Bend East Bend Columbus Columbus Columbus Columbus Columbus Columbus Columbus Columbus Columbus Tait Tait Tait Tait Tait Tait Tait Tait Tait Conesville Conesville Conesville Conesville Conesville Conesville Conesville Conesville Conesville Hutchings Hutchings Hutchings Hutchings Hutchings Hutchings Hutchings Hutchings Hutchings Miami Fort Miami Fort Miami Fort Miami Fort Miami Fort Miami Fort Miami Fort Miami Fort Miami Fort Zimmer Zimmer Zimmer Zimmer Zimmer Zimmer Zimmer Zimmer Zimmer Killen Killen Killen Killen Killen Killen Killen Killen Killen Coal Fired Generating Plants Natural Gas Peaking Units DP&L Service Area

Contains Forward Looking Statements 21

Generation: Fleet is Well Positioned for Changing Environmental Regulation

 45% of PJM coal capacity is significantly at-risk under proposed EPA regulations  Environmental construction program completed on majority of base load coal units  Under Electric Security Plan (ESP), DP&L can seek recovery of future costs associated with climate change, carbon legislation, and/or other environmental regulations

FGD + SCR No Controls

DPL’s Coal Generation Fleet (2,830 MW)

Source: DPL investor presentation. 1. Credit Suisse, “Growth from Subtraction,” September 23, 2010.

PJM Coal Capacity (1) (~80 GW)

FGD + SCR No Controls SCR Only FGD Only

Contains Forward Looking Statements

Electric Security Plan (ESP) Retail: Overview

 ESP includes the regulated, standard service offer for generation customers  DP&L’s last ESP filing was made in October 2008; settlement among interested parties approved in June 2009  ESP components  Residual generation charge  Fuel and purchased power adjustment clauses  Environmental investment rider  Capacity and transmission riders  New standard service offer required to be filed by March 31, 2012  Subject to SEET in 2013 (based on 2012 results)

22

Contains Forward Looking Statements

Competitive Retail: Overview

 Aggressively compete to retain customers in franchise service territory where name recognition for both DP&L and DPLER are high  Retail operations provide natural market for DP&L and DPLE generation

23

Source: DPL Management.

Dayton Energy Resources “DPLER” Retail Strategy Switching in DPL Service Territory in 2010

DP&L Customer Switching % DPLER % of Switched Load

Contains Forward Looking Statements 24

Financing Overview1

Acquisition Funding Sources

 $3.5 billion purchase price  $2.25 equity contribution by AES Corp.  $1.25 billion debt raised at DPL Inc.

Permanent Financing

 AES Corp:  Issue $1.05 billion Senior Secured Term Loan (offered hereby)  Issue $1.00 billion Senior Unsecured Notes  Expect to issue debt on an opportunistic basis during the regulatory process  The Dayton Power and Light Company (“DP&L”)  No incremental debt at DP&L  DPL Inc.:  Issue $1.25 billion of Senior Unsecured Notes at DPL Inc.  Expect to issue debt at Merge Co., through the use of an escrow account, on an

• pportunistic basis during the regulatory process but not effective until closing

 Structure a legal ring-fence around DPL Inc. to meet S&P requirements to maintain investment grade at DP&L

1. There are risks associated with the financing of the Acquisition. A discussion is included in AES’ Form 10-Q for the period ended March 31, 2011.

Contains Forward Looking Statements 25

Financial Overview

Contains Forward Looking Statements 26

Strong Financial Performance & Position

Sound Liquidity Position Strong & Stable Subsidiary Distributions Improving Credit Metrics Manageable Parent Debt Maturities

   

Contains Forward Looking Statements

Sound Liquidity Position

27

 Total Parent liquidity1 was ~$1.3 billion as of March 31, 2011  In March 2010, AES closed on the $1.58 billion sale of equity to CIC, and has used a portion of the proceeds to temporarily reduce debt before making a permanent investment into the business  AES will have used approximately $1.4 billion of the CIC proceeds to temporarily reduce debt through August 2011  $690 million 2nd Lien Note redemption in 2010  $214 million of Unsecured Note maturities in 2010  Approximately $500 million of Unsecured Note and existing Term Loan maturities in 2011

1. See definitions.

Contains Forward Looking Statements

Strong & Stable Subsidiary Distributions

1. See definitions. $0m $200m $400m $600m $800m $1,000m $1,200m

2003 2004 2005 2006 2007 2008 2009 2010 Subsidiary Distributions

Contract Generation Regulated Utilities Competitive Supply

Subsidiary Distributions1 From Utilities and Contract Generation – AES Standalone

83% 83% 83% 74% 80% 80% 72% 75%

28

% Subsidiary Distributions from Utilities and Contract Generation

Contains Forward Looking Statements

Parent Cash Inflows from Subsidiaries Compared to Parent Debt

• 1. See definitions. Excludes returns of capital.
• 2. Subsidiary distributions are based on last twelve months.

$0m $1,000m $2,000m $3,000m $4,000m $5,000m $6,000m

2003 2004 2005 2006 2007 2008 2009 2010 Recourse Debt

0% 5% 10% 15% 20% 25% 30%

Subsidiary Distributions / Recourse Debt

Recourse Debt Subsidiary Distributions / Recourse Debt

Subsidiary Distributions1 / Recourse Debt2 – AES Standalone

29

Contains Forward Looking Statements

Parent Cash Inflows from Subsidiaries Compared to Parent Interest

• 1. See definitions. Excludes returns of capital.
• 2. Recourse cash interest and subsidiary distributions are based on last twelve months.

$0m $200m $400m $600m $800m $1,000m $1,200m

2003 2004 2005 2006 2007 2008 2009 2010 Subsidiary Distributions

0.0x 0.5x 1.0x 1.5x 2.0x 2.5x 3.0x

Subsidiary Distributions / Recourse Cash Interest

Subsidiary Distributions Subsidiary Distributions / Recourse Cash Interest

Subsidiary Distributions1 / Recourse Cash Interest2 – AES Standalone

30

Contains Forward Looking Statements

Recourse Debt Outstanding as of March 31, 2011: $4,377 million

(USD $ millions)

$200m $500m $500m $535m $1,500m $625m $517m $1,000m $1,050m $0m $200m $400m $600m $800m $1,000m $1,200m $1,400m $1,600m

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2029

Parent Debt Maturities Are Manageable

Term Loan Maturity Potential Maturity for Future Unsecured Note Issuance

31

Contains Forward Looking Statements 32

Syndication Overview

Contains Forward Looking Statements 33

Pro Forma Organizational Structure

1. Based on $1,142 million total subsidiary distributions for the twelve months ending March 31, 2011 and an expected $250 million subsidiary distribution from DPL as the mid-range. 2. AES Recourse Debt is gross of Unamortized Discounts of $27 million. 3. As of March 31, 2011. AES Shareholders DPL Inc. Pro Forma $1,392 mm subsidiary distribution (1) $15,102 mm Non-Recourse Debt (existing) (3) $1,050 mm new AES Senior Secured Term Loan Facility

• ffered hereby

Estimated $200 mm

• $300 mm of

annual subsidiary distribution $1,250 mm DPL Bridge Facility; non-recourse to AES $1,142 mm subsidiary distribution The AES Corporation $1,221 mm Non-Recourse Debt (existing) (3) $4,377 mm Recourse Debt (existing) (2) $1,000 mm new AES Senior Unsecured Notes Current AES Subsidiaries Borrower Existing AES Subsidiary New AES Subsidiary

Contains Forward Looking Statements 34

Pro Forma Debt Capitalization

• 1. AES Recourse Debt is gross of Unamortized Discounts of $27 million.
• 2. The subsidiary businesses of AES fund the debt service, investment and other cash needs of the holding company. Does not take account for overhead expenses
• 3. Estimated average subsidiaries distributions from DPL to AES (note: midpoint of public guidance).

AES Debt Capitalization As of Issue Rate Maturity Mar-31-2011 Adj. Pro Forma Revolver ($800) L+ 300 bps Jan-15 – – Existing Senior Secured Term Loan L+ 175 bps Aug-11 $200 $200 New Senior Secured Term Loan – $1,050 1,050 AES Secured Recourse Debt $200 $1,250 Senior Notes 7.750% Mar-14 $500 $500 Senior Notes 7.750% Oct-15 500 500 Senior Notes 9.750% Apr-16 535 535 Senior Notes 8.000% Oct-17 1,500 1,500 Senior Notes 8.000% Jun-20 625 625 Term Convertible Trusts 6.750% Oct-29 517 517 New Senior Unsecured Notes – 1,000 1,000 AES Recourse Debt (1) $4,377 $6,427 Total Non-Recourse Debt Various $15,102 2,471 $17,573 Total Recourse and Non-Recourse Debt $19,479 $24,000 Total Subsidiary Distributions (2) $1,142 $250 (3) $1,392 Recourse Debt / Total Subsidiary Distributions on AES Standlone 3.8x 5.6x Recourse Debt / Total Subsidiary Distributions Pro Forma for the Acquisition (3)

• 4.6x

Contains Forward Looking Statements 35

Summary of Terms

Senior Secured Term Loan Facility Borrower: The AES Corporation (“AES”, the “Company”, and the “Borrower”) Amount: $1,050 million Security: The Term Loan will be secured by a first priority lien on (i) all of the capital stock owned by the Borrower and the capital stock owned by AES International Holdings II, Ltd. (limited to 65% of voting stock in material first- tier foreign subsidiaries), (ii) intercompany receivables owed to the Borrower, (iii) certain debt owed to the Borrower, and (iv) assignments of certain tax sharing agreements of the Borrower. The Term Loan will be pari passu with the Existing Credit Agreement with respect to the Collateral Maturity: 7 years Amortization: 1.00% per annum Incremental: $750 million, subject to 50 bps MFN Use of Proceeds: The proceeds from the Term Loan shall be used for general corporate purposes, including, but not limited to, at the Borrower’s election the financing of a portion of the purchase price and related expenses in connection with the Borrower’s contemplated acquisition of DPL Inc. Credit Ratings: Corporate Family: B1 / BB- Senior Secured: Ba1 / BB+ Mandatory Prepayments: − Asset Sales − Change of Control Optional Repayment: 101 soft call in year 1 Financial Covenants: None Negative Covenants: To be based on the Borrower’s existing 2016 Senior Notes and will include the following: − Limitations on mergers similar to those of the existing 2016 Senior Notes − Limitations on secured debt (including secured hedge arrangements); provided that the existing 2016 Senior Notes’ restriction on secured debt exceeding 15% of the consolidated net assets of the Borrower, shall be replaced with a restriction on secured debt exceeding $3.0 billion − Restrictions on sales and leasebacks similar to those of the existing 2016 Senior Notes Joint Lead Arrangers: Bank of America Merrill Lynch, J.P. Morgan, and Morgan Stanley

Contains Forward Looking Statements

Senior Secured Term Loan Timeline

Syndication Event Bank Holiday

May 17 Lenders Conference Call Week of May 23 Commitments Due Week of May 23 Term Loan Pricing Week of June 6 Closing

36

May 2011 June 2011 Sun Mon Tue Wed Thu Fri Sat Sun Mon Tue Wed Thu Fri Sat 1 2 3 4 5 6 7 1 2 3 4 8 9 10 11 12 13 14 5 6 7 8 9 10 11 15 16 17 18 19 20 21 12 13 14 15 16 17 18 22 23 24 25 26 27 28 19 20 21 22 23 24 25 29 30 31 26 27 28 29 30

Contains Forward Looking Statements 37

Q&A

Contains Forward Looking Statements 38

Appendix

Contains Forward Looking Statements

Reconciliation of Subsidiary Distributions and Parent Liquidity1

• 1. See definitions.
• 2. Qualified Holding Company. See assumptions.

$ in Millions Year Ended 2010 2009 2008 2007 2006 2005 2004 2003 Total Subsidiary Distributions1 to Parent & QHCs2 1,219 1,255 1,060 1,099 971 993 1,004 1,054 Total Return of Capital Distributions to Parent & QHCs2 171 167 150 106 72 57 126 242 Total Subsidiary Distributions1 & Returns of Capital to Parent 1,390 1,422 1,210 1,205 1,043 1,050 1,130 1,296 39 $ in Millions March 31, 2011 December 31, 2010 September 30, 2010 June 30, 2010 Cash at Parent and QHCs2 546 1,122 1,418 1,776 Availability under Credit Facilities 772 715 679 458 Ending Parent Company Liquidity1 1,318 1,837 2,097 2,234

Contains Forward Looking Statements

Forecasted financial information is based on certain material assumptions. Such assumptions include, but are not limited to: (a) no unforeseen external events such as wars, depressions, or economic or political disruptions occur; (b) businesses continue to operate in a manner consistent with or better than prior operating performance, including achievement of planned productivity improvements including benefits of global sourcing, and in accordance with the provisions of their relevant contracts or concessions; (c) new business opportunities are available to AES in sufficient quantity to achieve its growth objectives; (d) no material disruptions or discontinuities occur in GDP, foreign exchange rates, inflation or interest rates during the forecast period; and (e) material business-specific risks as described in the Company’s SEC filings do not

• ccur individually or cumulatively. In addition, benefits from global sourcing include avoided costs, reduction in capital

project costs versus budgetary estimates, and projected savings based on assumed spend volume which may or may not actually be achieved. Also, improvement in certain KPIs such as equivalent forced outage rate and commercial availability may not improve financial performance at all facilities based on commercial terms and conditions. These benefits will not be fully reflected in the Company’s consolidated financial results. The cash held at qualified holding companies (“QHCs”) represents cash sent to subsidiaries of the Company domiciled

• utside of the U.S. Such subsidiaries had no contractual restrictions on their ability to send cash to AES, the Parent

Company, however, cash held at qualified holding companies does not reflect the impact of any tax liabilities that may result from any such cash being repatriated to the Parent Company in the U.S. Cash at those subsidiaries was used for investment and related activities outside of the U.S. These investments included equity investments and loans to other foreign subsidiaries as well as development and general costs and expenses incurred outside the U.S. Since the cash held by these QHCs is available to the Parent, AES uses the combined measure of subsidiary distributions to Parent and QHCs as a useful measure of cash available to the Parent to meet its international liquidity needs. AES believes that unconsolidated parent company liquidity is important to the liquidity position of AES as a parent company because of the non-recourse nature of most of AES’ indebtedness.

Assumptions

40

Contains Forward Looking Statements

Definitions

Non-GAAP Financial Measures

41

Parent Company Liquidity (a non-GAAP financial measure) is defined as cash at the Parent Company plus availability under corporate credit facilities plus cash at qualified holding companies (“QHCs”). AES believes that unconsolidated Parent Company liquidity is important to the liquidity position of AES as a Parent Company because of the non-recourse nature of most of AES’ indebtedness. Subsidiary Distributions should not be construed as an alternative to Net Cash Provided by Operating Activities which is determined in accordance with GAAP. Subsidiary Distributions are important to the Parent Company because the Parent Company is a holding company that does not derive any significant direct revenues from its own activities but instead relies on its subsidiaries’ business activities and the resultant distributions to fund the debt service, investment and other cash needs of the holding company. The reconciliation of difference between the Subsidiary Distributions and Net Cash Provided by Operating Activities consists of cash generated from operating activities that is retained at the subsidiaries for a variety of reasons which are both discretionary and non-discretionary in nature. These factors include, but are not limited to, retention of cash to fund capital expenditures at the subsidiary, cash retention associated with non-recourse debt covenant restrictions and related debt service requirements at the subsidiaries, retention of cash related to sufficiency of local GAAP statutory retained earnings at the subsidiaries, retention of cash for working capital needs at the subsidiaries, and other similar timing differences between when the cash is generated at the subsidiaries and when it reaches the Parent Company and related holding companies.