AES Expects Full Year 2023 Adjusted EPS to be in the Top Half of Guidance Range of $1.65 to $1.75

"We expect to be in the top half of our Adjusted EPS⁴ guidance range for 2023 and we are reaffirming all of our short- and long-term financial guidance metrics.  Our hedging programs and low-risk commercial structure ensure that we continue to have limited exposure to interest rates," said Stephen Coughlin, AES Executive Vice President and Chief Financial Officer.  "We have already secured our asset sale proceeds target and external financing needs for the year, further strengthening our balance sheet.  Additionally, we are accelerating and increasing our asset sale program to eliminate any need for new equity until at least 2026."

Q3 2023 Financial Results

Third quarter 2023 Net Income was $291 million, a decrease of $155 million compared to third quarter 2022.  This decrease is the result of lower contributions from LNG transactions versus 2022 at the Energy Infrastructure Strategic Business Unit (SBU), partially offset by favorable contributions at the Utilities, Renewables, and New Energy Technologies SBUs.

Third quarter 2023 Adjusted EBITDA⁵ (a non-GAAP financial measure) was $990 million, an increase of $59 million compared to third quarter 2022, primarily driven by higher contributions at the Utilities SBU, favorable weather conditions and new businesses at the Renewables SBU, higher revenues under a PPA termination agreement at the Energy Infrastructure SBU, and improved margins at Fluence at the New Energy Technologies SBU.  These positive drivers were partially offset by favorable LNG transactions in 2022 at the Energy Infrastructure SBU.

During the third quarter of 2023, the Company realized Tax Attributes⁶ of $18 million, a decrease of $42 million compared to third quarter 2022.

Third quarter 2023 Diluted Earnings Per Share from Continuing Operations (Diluted EPS) was $0.32, a decrease of $0.27 compared to third quarter 2022, primarily reflecting higher long-lived asset impairments in 2023 and lower earnings at the Energy Infrastructure SBU mainly due to unrealized foreign currency losses and favorable LNG transactions in 2022.  These negative drivers were partially offset by higher contributions at the Utilities SBU due to the 2022 recognition of previously deferred fuel and energy purchases and favorable weather conditions and new businesses at the Renewables SBU.

Third quarter 2023 Adjusted Earnings Per Share⁷ (Adjusted EPS, a non-GAAP financial measure) was $0.60, a decrease of $0.03, compared to third quarter 2022, mainly driven by lower contributions from the Energy Infrastructure SBU, higher Parent interest, and a higher adjusted tax rate, partially offset by higher contributions at the Utilities SBU.

Strategic Accomplishments

• As of today, the Company's backlog, which consists of projects with signed contracts, but which are not yet operational, is 13,138 MW, including 5,761 MW under construction.
• In year-to-date 2023, the Company completed the construction or acquisition of 1,314 MW of wind, solar and energy storage and expects to complete a total of 3.5 GW by year-end 2023.
• In year-to-date 2023, the Company has signed 3,740 MW of contracts for new renewables.
• In September 2023, the Company agreed to minority sell-downs of its businesses in the Dominican Republic and Panama, for a total of $190 million in asset sale proceeds.

Guidance and Expectations^7,8

The Company is reaffirming its 2023 guidance for Adjusted EBITDA⁸ of $2,600 to $2,900 million, and its expectation for annualized growth in Adjusted EBITDA⁸ of 3% to 5% through 2027, from a base of its reaffirmed 2023 guidance.  Excluding the Company's Energy Infrastructure SBU, annualized growth in Adjusted EBITDA⁸ is expected to be 17% to 20% through 2027, from a base of 2023 guidance.

The Company now expects full year 2023  Adjusted EPS⁷ to be in the top half of the guidance range of $1.65 to $1.75.  Growth in 2023 is expected to be primarily driven by new renewables expected to come online.  This growth is expected to be partially offset by lower margins from the Company's LNG business, due to normalization of LNG prices and the roll-off of a gas supply contract, lower contract margins in Chile, and higher interest expense in Colombia. 

The Company is reaffirming its annualized growth target for Adjusted EPS⁷ of 7% to 9% through 2025, from a base year of 2020.  The Company is also reaffirming its annualized growth target for Adjusted EPS⁷ of 6% to 8% through 2027, from a base of its reaffirmed 2023 guidance of $1.65 to $1.75. 

The Company's 2023 guidance is based on foreign currency and commodity forward curves as of September 30, 2023.

Non-GAAP Financial Measures

See Non-GAAP Measures for definitions of Adjusted Earnings Per Share, Adjusted Pre-Tax Contribution, and Adjusted EBITDA, as well as reconciliations to the most comparable GAAP financial measures.

Attachments

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

Conference Call Information

AES will host a conference call on Friday, November 3, 2023 at 10:00 a.m. Eastern Time (ET).  Interested parties may listen to the teleconference by dialing 1-833-470-1428 at least ten minutes before the start of the call. International callers should dial +1-404-975-4839.  The Participant Access Code for this call is 309600.  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 500 global energy company accelerating the future of energy.  Together with our many stakeholders, we're improving lives by delivering the greener, smarter energy solutions the world needs.  Our diverse workforce is committed to continuous innovation and operational excellence, while partnering with our customers on their strategic energy transitions and continuing to meet their energy needs today.  For more information, visit www.aes.com.

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 expectations regarding 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 the execution of PPAs, conversion of our backlog and growth investments at normalized investment levels, rates of return consistent with prior experience and the COVID-19 pandemic.

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' 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, except where required by law.

Any Stockholder who desires a copy of the Company's 2022 Annual Report on Form 10-K filed March 1, 2023 with the SEC may obtain a copy (excluding the exhibits thereto) 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 Annual Report on Form 10-K may be obtained by visiting the Company's website at www.aes.com.

Website Disclosure

AES uses its website, including its quarterly updates, as channels of distribution of Company information.  The information AES posts through these channels may be deemed material.  Accordingly, investors should monitor our website, in addition to following AES' press releases, quarterly SEC filings and public conference calls and webcasts.  In addition, you may automatically receive e-mail alerts and other information about AES when you enroll your e-mail address by visiting the "Subscribe to Alerts" page of AES' Investors website.  The contents of AES' website, including its quarterly updates, are not, however, incorporated by reference into this release.

THE AES CORPORATION
Condensed Consolidated Statements of Operations (Unaudited)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(in millions, except per share amounts)
Revenue:
Non-Regulated	$           2,571		$      2,651		$           7,051		$           6,944
Regulated	863		976		2,649		2,613
Total revenue	3,434		3,627		9,700		9,557
Cost of Sales:
Non-Regulated	(1,813)		(1,839)		(5,392)		(5,237)
Regulated	(703)		(896)		(2,298)		(2,335)
Total cost of sales	(2,516)		(2,735)		(7,690)		(7,572)
Operating margin	918		892		2,010		1,985
General and administrative expenses	(64)		(51)		(191)		(149)
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