This is a summary of the second quarter fiscal 2007 earnings call conducted by AES Corporation. (AES: chart) on March 17, 2008

Management:

- President and Chief Executive Officer: Paul Hanrahan
- Executive Vice President and Chief Financial Officer: Victoria Harker
- Executive Vice President and Chief Operating Officer: Andrés Gluski

Key Investor Issues:

- Revenues increased by $739 million, or 25%, to $3.7 billion.
- Net income was $8 million, or 1 cent per diluted share, as compared to $15 million or 2 cents per share in 2006, down 47%
- AES went to market in October 2007 with a planned debt offering of $500 million which was up-sized to $2 billion to meet demand

Full Year Highlights:

- Revenues were up 17% to $13.6 billion from $11.6 billion in the prior year.
- Income from continuing operations was $495 million, or 73 cents per diluted share, as compared to $176 million, or 27 cents per share in 2006.
- Gross margin for the year totalled more than $3.4 billion

Fourth Quarter Highlights:

Revenues increased by $739 million, or 25%, to $3.7 billion reflecting higher prices and volumes from the generation businesses of $358 million across regions, as well as favorable foreign currency translation of $258 million.

- It also reflects $57 million from TEG and TEP, two plants the Company acquired in northern Mexico in the first quarter of 2007.
- Gross margin increased by $20 million, or 3%, to $809 million, benefitting from higher prices at the North American and European businesses, favorable foreign currency translation and contributions from new businesses of $149 million.
- These gains were offset by higher fixed costs at Eletropaulo, one of the distribution companies in Brazil, and Sonel, our integrated utility in Cameroon, coupled with the previously anticipated tariff reset at Eletropaulo in July 2007.
- G&A costs decreased by $5 million to $118 million

Interest expense increased by $27 million to $358 million, primarily due to the addition of $600 million in senior debit raised as part of the $2-billion senior unsecured debt financing in October 2007.

- Other expense net of other income decreased by $108 million to $142 million with the higher expense in 2006 due to losses associated with early extinguishment of debt at several of the Latin American businesses.
- Investments increased $124 million due to the Gener secondary share sale in October, while asset impairment expense increased to $358 million largely due to $352-million impairment over Uruguaiana.
- Income from continuing operations was $4 million, or $0.00 per diluted share, versus ($14) million, or 2 cents per diluted share in 2006, with the loss in the prior year driven by higher development and overhead costs related to remediation work.

Excluding the impact of charges, as well as the one-time charges in 2006 the main driver of the year-over-year improvement in income from continuing operations was improved operating performance at the North American and European businesses.

- Net income was $8 million, or 1 cent per diluted share, as compared to $15 million or 2 cents per share in 2006, down 47% due to higher impairment expenses.
- The 2006 results included an 11 cents loss primarily driven by higher development and overhead costs related remediation work, restatement charges in Brazil, and restructuring at the subsidiaries in Latin America.
- Net cash from operating activities was $488 million as compared to $476 million in fourth quarter 2006 attributable to improved operating performance at the North American and European businesses, which more than offset the impact of the sale of EDC.
- Gross capital expenditures were $705 million for the quarter and $2.5 billion for the full year.

Segment Highlights:

- Latin America Generation] revenue increased by $326 million to $1.0 billion, primarily due to higher prices and volume in Chile of $184 million.
- Revenues also increased due to an increase in both sales to Eletropaulo and volume of energy sold to third parties at Tietê in Brazil of $55 million, higher spot market sales in the Dominican Republic of $20 million and favorable foreign currency translation of $13 million.
- Gross margin increased by $51 million to $324 million, primarily due to the increase in Tietê energy sales.

- Latin America Utilities revenue increased by $228 million to $1.4 billion, primarily due to $211 million in favorable foreign currency translation.
- Gross margin decreased by $106 million to $94 million, primarily due to an increase in fixed costs and higher purchased power costs of $107 million at Eletropaulo.
- Approximately $84 million of the increase in fixed costs is associated with an increase in the labor contingency charge recorded in 2007 versus 2006.

- North America Generation revenue increased by $121 million to $543 million, due to $57 million in contributions from the newly acquired TEG and TEP businesses in Mexico and $28 million attributable to higher prices in New York as well as higher volumes due to the planned Somerset outage in 2006.
- Gross margin increased by $65 million to $167 million, primarily due to the higher prices and volumes as well as lower costs at Eastern Energy, an impact of $41 million, and contributions from TEG and TEP of $18 million.

- North America Utilities revenue increased by $4 million to $257 million, due primarily to an increase in wholesale power sales and environmental trackers within Indianapolis Power & Light’s (IPL) rates.
- Gross margin increased by $3 million to $68 million, due in part to lower SO2 allowance purchase costs of $13 million arising from the installation of clean coal technology at IPL’s Harding Street plant, offset by an increase of approximately $12 million in fixed maintenance costs.

- Europe & Africa Generation revenue increased by $30 million to $292 million, primarily due to favorable foreign currency translation of approximately $23 million.
- Increased prices and volumes of $15 million in Kazakhstan and $13 million in Kilroot contributed as well, more than offsetting the decrease in volume at Hungary of $19 million.
- Gross margin increased by $32 million to $108 million, primarily due to higher capacity pricing at Kilroot and increased rates and volume in Kazakhstan.

- Europe & Africa Utilities revenue increased by $30 million to $182 million, primarily due to increased rates of $18 million in Ukraine and $9 million in favorable foreign currency translation.
- Gross margin decreased by $13 million, primarily due to an increase in fixed maintenance costs of $18 million at Sonel in Cameroon.

- Asia Generation revenue increased by $29 million to $203 million, primarily due to higher volume in Sri Lanka and higher dispatch in Pakistan.
- Gross margin decreased by $4 million to $39 million, primarily due to higher fuel costs at Ras Laffan in Oman and higher coal costs in China.
- Increased revenue at the businesses in Sri Lanka and Pakistan had only a modest impact on gross margin due to related increases in fuel costs.