The condensed consolidated financial statements included in Item 1.-Financial Statements of this Form 10-Q and the discussions contained herein should be read in conjunction with our 2021 Form 10-K.

Forward-Looking Information

The following discussion may contain forward-looking statements regarding us, our business, prospects and our results of operations, including our expectations regarding the impact of the COVID-19 pandemic on our business, that are subject to certain risks and uncertainties posed by many factors and events that could cause our actual business, prospects and results of operations to differ materially from those that may be anticipated by such forward-looking statements. These statements include, but are not limited to, statements regarding management's intents, beliefs, and current expectations and typically contain, but are not limited to, the terms "anticipate," "potential," "expect," "forecast," "target," "will," "would," "intend," "believe," "project," "estimate," "plan," and similar words. Forward-looking statements are not intended to be a guarantee of future results, but instead constitute current expectations based on reasonable assumptions. Factors that could cause or contribute to such differences include, but are not limited to, those described in Item 1A.-Risk Factors of this Form 10-Q, Item 1A.-Risk Factors and Item 7.-Management's Discussion and Analysis of Financial Condition and Results of Operations of our 2021 Form 10-K and subsequent filings with the SEC.

Readers are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date of this report. We undertake no obligation to revise any forward-looking statements in order to reflect events or circumstances that may subsequently arise. If we do update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements. Readers are urged to carefully review and consider the various disclosures made by us in this report and in our other reports filed with the SEC that advise of the risks and factors that may affect our business.

Overview of Our Business

We are a diversified power generation and utility company organized into the following four market-oriented SBUs: US and Utilities (United States, Puerto Rico and El Salvador); South America (Chile, Colombia, Argentina and Brazil); MCAC (Mexico, Central America and the Caribbean); and Eurasia (Europe and Asia). For additional information regarding our business, see Item 1.-Business of our 2021 Form 10-K.

We have two lines of business: generation and utilities. Each of our SBUs participates in our first business line, generation, in which we own and/or operate power plants to generate and sell power to customers, such as utilities, industrial users, and other intermediaries. Our US and Utilities SBU participates in our second business line, utilities, in which we own and/or operate utilities to generate or purchase, distribute, transmit and sell electricity to end-user customers in the residential, commercial, industrial, and governmental sectors within a defined service area. In certain circumstances, our utilities also generate and sell electricity on the wholesale market.

Executive Summary

Compared with last year, first quarter diluted earnings per share from continuing operations increased $0.38, from a loss of $0.22 to earnings of $0.16. This increase reflects lower impairments in the current period, partially offset by prior year net gains from early contract terminations at Angamos, higher income tax expense, the prior year impact of realized gains on de-designated interest rate swaps, and the prior year gain on remeasurement of our interest in sPower's development platform.

Adjusted EPS, a non-GAAP measure, decreased $0.07 to $0.21, mainly due to the prior year impact of realized gains on de-designated interest rate swaps and lower contributions from our MCAC SBU, partially offset by higher contributions from our South America SBU and newly operational projects at our U.S. renewables businesses.

--------------------------------------------------------------------------------

28 | The AES Corporation | March 31, 2022 Form 10-Q



                     [[Image Removed: aes-20220331_g2.jpg]]

(1) See Item 2.-Management's Discussion and Analysis of Financial Condition and Results of Operations-SBU Performance Analysis-Non-GAAP Measures for reconciliation and definition. (2) GWh sold in 2021.

--------------------------------------------------------------------------------

29 | The AES Corporation | March 31, 2022 Form 10-Q Overview of Strategic Performance

AES is leading the industry's transition to clean energy by investing in clean power growth and innovative technology businesses. The Company is well-positioned to benefit from very favorable trends in clean power generation, distribution, and supporting technologies.

•In the first quarter of 2022, the Company signed or was awarded 1,087 MW of renewables and energy storage under long-term PPAs, primarily including 1,019 MW of solar and energy storage in the U.S.

© Edgar Online, source Glimpses