AES Andres - Itabo Results 2Q11

Andres Dominicana and Itabo Dominicana, Earning Release - 1 -

2Q11 Relevant Results

AES Andres B.V. and Subsidiary and Dominican Power Partners and Subsidiary announced a combined Net Income of US$28.1 million in the second quarter 2011.

Despite Itabo reporting a Net Loss of S$1.1 million for the second quarter 2011, the accumulated Net income was US$5.6 million. Santo Domingo, Dominican Republic, August 15th, 2011 – Andres-DPP and Itabo announced today results for the second quarter 2011. All operating and financial information, except where otherwise specified, is expressed in the International Financial Reporting Standards, as of any date of determination, or “IFRS.”. These figures are not audited.

For Andres-DPP the revenues increased 27.2% in the second quarter 2011 compared to the same period of 2010 and in the accumulated results for the period ended in June 2011 increased 16.3% compared to the same period of the previous year. Net Income was US$28.1 million for the second quarter of 2011 and the accumulated Net Income was US$41.9 million against US$24.7 million for the same period 2010.

* Net Income includes interest expenses of US$9.5 million in 2Q11 and 2Q10, related to interest under a subordinated intercompany loan under which AES made its capital injections to finance the development and construction of Andres. AES views this loan as an equity investment and the respective interests are a restricted payment under the indenture.

For Itabo, the revenues increased 21.9% in the second quarter 2011 compared to the same period of 2010 and in the accumulated results for the period ending in June 2011 increased 16.2% compared to the same period of the previous year. Net Loss was US$1.1 million for the second quarter of 2011 and the accumulated Net income was US$5.6 million against a Net loss of US$12.8 million for the same period 2010.

Second Quarter 2011 Relevant Results Santo Domingo, Dominican Republic August 15th, 2011

Contact: Yandery Teran

Investor Relations Director (1) (809) 955-2223

[email protected]

2Q11 2Q10 (Millions of US$) 6M11 6M1056.2 46.1 Revenues 114.6 98.752.9 59.3 Operating costs and expenses 106.5 108.93.3 (13.2) Operating (Loss) income 8.1 (10.2)

5.9% -28.6% Operating (Loss) income margin 7.1% -10.3%

(1.1) (13.8) Net (loss) Income 5.6 (12.8)

3.3 (0.9)Net Cash Provided by Operating Activities (4.4) 23.8

2Q11 2Q10 (Millions of US$) 6M11 6M10113.5 89.2 Revenues 207.2 178.161.5 57.3 Operating costs and expenses 124.3 115.852.0 31.9 Operating income 82.9 62.3

45.8% 35.8% Operating income margin 40.0% 35.0%

28.1 10.9 Net Income (*) 41.9 24.7

(6.2) (5.5)Net Cash Provided by (used in) Operating Activities 23.1 52.4



External Factors1 Dominican Republic’s GDP grew 4.30% in

1Q11.

Inflation stood at 5.85% at the end of June 2011.

The exchange rate as of June 30th, 2011 was RD$38.07 per US dollar (Bid) and RD$38.01 per US dollar (Ask).

Average Nymex Henry Hub natural gas prices were US$4.38 per MMBtu for the second quarter 2011, with a peak of US$4.85 per MMBtu and a low of US$4.04 per MMBtu. 2

Average Coal prices were US$4.65 per MMBtu for the second quarter 2011, with a peak of US$4.80 per MMBtu and a low of US$4.48 per MMBtu.

Total electricity demand as of June 30th, 2011 reached 5,960 GWh, an increase of 2.8 % versus the same period 2010.

Analysis of Andres-DPP Combined3 Financial Results (In IFRS) For Andres-DPP the Revenues increased 27.2% to US$113.5 million in the second quarter 2011 compared to the same period of 2010. This result was mainly driven by: i) US$21.5 million of higher spot electricity sales due to higher volume, prices and energy production; ii) the other sales increased around US$5.5 million mainly from natural gas sales since in February 2010 Andres started the operation of the liquefied natural gas loading terminal, expanding the use of this fuel in the Dominican Republic; and, iii). US$2.7 million lower contracted electricity sales.

As of June 30th, 2011, Revenues totaled US$207.2 million, an increase of 16.3% compared to the same period of 2010. This increase was mainly a result of: (i) higher spot sales by US$27.5 million, due to higher energy volume and spot prices; (ii) lower contracted energy sales by US$8.5 million; and, (ii) higher other sales by US$10.1 million mainly from sales of natural gas.

Andres-DPP’s Revenues consist of the following:

For Andres-DPP the Operating Costs and Expenses increased 7.3%, in the second quarter of 2011 compared to the same period 2010, from US$57.3 million to US$61.5 million. This variance was principally a net result of: (i) higher fuel cost by US$18.7 million due to higher generation and higher fuel prices; (ii) lower energy purchases by US$14.3 million; (iii) US$0.2 million of lower operating and maintenance and general expenses.

Operating Costs and Expenses as of June 30th, 2011, increased 7.3% to US$124.3 million compared to the same period in 2010. This variance was mainly caused by: (i) higher cost of sales by US$6.6 million derived from higher generation, the related increase in LNG consumption (DPP was generating as base load power plant) combined with higher LNG prices that were partially offset by lower electricity purchases; and, (ii) higher operating, maintenance and general expenses by US$1.9 million.

1 Source: Dominican Central Bank, Coordinating Body and FOB, 6300 kcal/kg Puerto Bolivar, Platts International Coal Report. 2 Pricing under the BP Contract is at a premium to the Henry Hub natural gas price per MMbtu on the NYMEX Index. 3 The accompanying combined financial results include the accounts of Andres, DPP and its subsidiary Andres Dominicana.LTD Intercompany balances and transactions have been eliminated in these combined financial statements.

2.97 3.73

4.65

10.2610.97

14.74

4.35 3.97

4.38

0

2

4

6

8

10

12

14

16

2Q10 3Q10 4Q10 1Q11 2Q11

US$

/MM

BTU

Coal

Fuel-Oil #6

Coal, Natural Gas and Fuel-Oil #6Price Evolution

Natural Gas

2Q11 2Q10 Var% (Millions of US$) 6M11 6M10 Var% 66.7 69.4 (3.9) Electricity sales – Contracts 128.5 137.0 (6.2) 40.0 18.5 116.2 Electricity sales – spot market 66.2 38.7 71.1 6.8 1.3 423.1 Natural Gas Sales & Other Sales 12.5 2.4 420.8

113.5 89.2 27.2 Total Revenues 207.2 178.1 16.3



Andres-DPP’s operating costs and expenses consist of the following:

Andres- DPP, total Other Expenses were US$11.1 million in the second quarter 2011 compared to other expenses of US$12.2 million in the same period of 2010. This decrease was mainly a net function of: (i) higher net commercial interest income by US$0.9 million derived from higher accounts receivables; (ii) lower other expenses by US$0.4 million; (iii) lower net financial interest expenses by US$0.1 million; and, (iv) higher Foreign currency loss by US$0.3 million. As of June 30th, 2011, Net Other Expenses increased to US$24.3 million, as compared to total net expenses in the same period of 2010 of US$23.7 million. This increase was mainly a net function of: (i) lower net commercial interest income by US$0.2 million, basically due a new sector agreement eliminated the outstanding interest for the spot market transactions; and, (ii) higher Foreign currency loss US$0.4 million. Andres- DPP Other (Expenses) Income consists of the following:

(**) Interest expenses are those generated by the subordinated intercompany loan under which AES made its capital injections to finance the development and construction of Andres.

For Andres-DPP, Net Cash Used in Operating Activities was US$6.2 million for the second quarter 2011, an increase of 12.7% compared to a Net Cash Used in Operating Activities of US$5.5 million in the same period of 2010, mainly due to the following: (i) Negative impact as result of higher accounts receivables by US$23.1 million basically due to higher sales and higher days of sales outstanding; (ii) higher interest paid by US$22.4 million, basically from intercompany Subordinated Loan, since Andres paid this year the interest from the second semester 2010 and first semester 2011; (iii) higher net income by US$17.2 million; (iv) positive impact from higher accounts payable by US$16.3 million; (v) positive adjustment by US$7.3 million from reconciling net income to net cash used in operations; and, (vi) higher income tax expenses by US$4.0 million. Net Cash Provided by Operating Activities for the semester ended in June 30th, 2011 was US$23.1 million compared to a Net Cash Provided by operating activities of US$52.4 million for the same period in 2010. This variation was primarily the result of: (i) negative impact due to higher accounts receivable by US$55.0 million; (ii) higher net interest paid by US$17.5 million; (iii) higher net income by US$17.1 million derived from higher generation and higher sales; (iv) positive impact due to higher accounts payable by US$21.3 million; (v) US$4.8 million higher positive reconciling adjustments, reconciling net income to net cash provided by operations. Free Cash Flow (a non-IFRS financial measure defined as net cash from operating activities less capital expenditure defined in the accompanying financial statement as Additions to Property, Plant and Equipment and advances to suppliers in purchases of PP&E) was net cash used in US$18.5 million for the second quarter 2011. In addition to the net cash used in Operating Activities of US$6.2 million, during this period, there were additions to property, plant and equipment of US$12.3 million. As of June 30th, 2011, the Free Cash Flow was net cash provided of US$3.2 million. In addition to the net cash provided by operating activities of US$23.1 million, there were additions to property, plant and equipment by US$19.9 million.

2Q11 2Q10 Var% (Millions of US$) 6M11 6M10 Var%

46.3 41.9 10.5 Cost of electricity sales- fuel & electricity purchases 93.1 86.5 7.615.2 15.4 (1.3) Operating, maintenance and general expenses 31.2 29.3 6.561.5 57.3 7.3 Total Operating Cost and Expenses 124.3 115.8 7.3

2Q11 2Q10 Var% (Millions of US$) 6M11 6M10 Var%(4.1) (4.2) (2.4) Interest (expense) – financial - net (8.7) (8.7) 0.02.9 2.0 45.0 Interest income – commercial and others-net 4.1 4.3 (4.7)

(9.5) (9.5) 0.0 Subordinated intercompany loan interest expense (**) (18.9) (18.9) 0.0(0.1) (0.5) (80.0) Other (expenses) (0.6) (0.6) 0.0(0.3) 0.0 0.0 Foreign currency gain (loss) (0.2) 0.2 (200.0)

(11.1) (12.2) (9.0) Total Other (Expenses) (24.3) (23.7) 2.5



Analysis of Itabo’s Consolidated4 Financial Results (In IFRS) For Itabo the Revenues increased 21.9% to US$56.2 million in the second quarter 2011 compared to the same period of 2010. This result was mainly driven by US$10.0 of higher electricity sales that resulted from higher contract prices indexed by higher average coal market prices.

As of June 30th, 2011, Revenues totaled US$114.6 million, an increase of 16.1% compared to the same period of 2010. This increase was mainly a result of: (i) higher electricity sales by US$16.2 million, due to higher contracted prices; partially offset by, (ii) lower other revenues by US$0.3 million.

Itabo’s Revenues consist of the following:

For Itabo the Operating Costs and Expenses decreased 10.8% in the second quarter of 2011 compared to the same period 2010, from US$59.3 million to US$52.9 million. This variance was principally a net result of: (i) lower coal cost by US$1.0 million; (ii) US$5.2 million of lower electricity purchase derived from lower sales in GWh (2Q’11- 429 GWh vs 2Q’10- 445GWh) and higher generation; and, (iii) lower operating, maintenance expenses and general expenses by US$0.2 million.

As of June 30th, 2011, Operating Costs and Expenses decreased 2.2% to US$106.5 million compared to same period of 2010. This variation was mainly caused by the net effect of: (i) lower electricity purchase by US$6.3 million, derived of higher generation and lower sales in GWh (2Q’11- 875GWh vs 2Q’10- 910 GWh); (ii) higher fuel cost by US$3.3 million basically due to higher coal cost and higher generation;; and, ((iii) higher operation maintenance and general expenses cost by US$0.6 million basically from higher depreciation expenses.

Itabo’s Operating Costs and Expenses consist of the following:

For Itabo the total Other Expenses were US$2.6 million in the second quarter 2011 compared to a total other expenses of US$1.8 million in the same period of 2010. This variation was primarily attributable to the net effect of: (i) lower net commercial interest income by US$1.2 million; (ii) lower net financial interest expenses by US$0.7 million due to the reduction of the international debt from US$125 million to US$116.4 million, with a lower interest rate (9.5% Vs 10.875%); (iii) higher net Foreign Currency loss by US$0.2 million; and, (iv) lower other income by US$0.1 million.

As of June 30th, 2011, Net Expenses decreased to US$1.1 million, as compared to the Net Expenses recorded in the same period of 2010 of US$3.7 million. This variance was the net result of: (i) lower net financial interest expenses by US$1.5 million; (ii) higher net commercial interest income by US$1.4 million; (iii) higher other expense by US$0.1 million; and, (iv) higher foreign currency loss by US$0.2 million.

Itabo’s Other (Expenses) Income consists of the following:

4 The accompanying consolidated financial results include the accounts of Itabo, and its subsidiary Itabo Dominicana, LTD. Intercompany balances and transactions have been eliminated in these consolidated financial statements.

2Q11 2Q10 Var% (Millions of US$) 6M11 6M10 Var%

40.3 46.5 (13.3) Cost of Revenues 81.5 84.5 (3.6)12.5 12.7 (1.6) Operating, maintenance and general expenses 24.8 24.2 2.50.1 0.1 0.0 Amortization of contracts 0.2 0.2 0.0

52.9 59.3 (10.8) Total Operating Cost and Expenses 106.5 108.9 (2.2)

2Q11 2Q10 Var% (Millions of US$) 6M11 6M10 Var%(3.0) (3.7) (18.9) Interest (expenses)- financial- net (5.9) (7.4) (20.3)0.6 1.8 (66.7) Interest income- commercial- net 5.1 3.7 37.80.0 0.1 (100.0) Other income (expense) - net (0.1) 0.0 n/a

(0.2) 0.0 n/a Foreign Currency (loss) (0.2) 0.0 n/a(2.6) (1.8) 44.4 Total Other (Expenses) (1.1) (3.7) (70.3)

2Q11 2Q10 Var% (Millions of US$) 6M11 6M10 Var%55.9 45.9 21.8 Electricity sales 114.3 98.1 16.50.3 0.2 50.0 Other revenues 0.3 0.6 (50.0)

56.2 46.1 21.9 Total Revenues 114.6 98.7 16.1



For Itabo the Net Cash Provided by Operating Activities was US$3.3 million for the second quarter 2011 compared to a Net Cash Used in Operating Activities of US$0.9 million in the same period of 2010, resulting in a positive variation of US$4.2 million. This positive variance was mainly a net result of: (i) positive impact form higher net income by US$12.7 million; (ii) negative impact due to lower account payables by US$10.3 million, basically due to energy transactions payments; (iii) positive impact due to lower accounts receivables by US$2.7 million; and, (iv) an impact of US$0.9 million from negative adjustments, reconciling net loss to net cash provided by operation activities.

As of June 30th, 2011, the Net Cash Used in Operating Activities was US$4.4 million against a Net Cash Provided by operating activities of US$23.9 million in the same period of 2010. This variation was primarily the net result of: (i) negative impact due to higher accounts receivables by US$50.6 million due to higher day sale outstanding (DOS); (ii) positive impact due to higher net income by US$18.3 million; (iii US$4.6 million of positive reconciling adjustments, reconciling net income to net cash used in operating activities; and, (iv) lower accounts payables US$0.6 million.

Free Cash Flow (a non-IFRS financial measure defined as net cash from operating activities less capital expenditures defined in the accompanying financial statement as additions to Property, Plant and Equipment and advances to suppliers in purchases of PP&E) was a net cash used of US$0.8 million for the second quarter 2011. During this period, in addition to the net cash provided of US$3.3 million, there were additions to property, plant and equipment by US$4.1 million.

As June 30th, 2011, the Free Cash Flow was net cash used by US$12.5 million. In addition to the net cash used in operating activities of US$4.4 million, there were additions to property, plant and equipment and advances to suppliers in purchases of PP&E by US$8.1 million.

Financial Debt Summary In April, AES Andres opened a Stand-By LC with Banreservas to import a LNG Vaporizer.

AES Andres, BP and Banco BHD agreed a US$15 million Standby LC on May 21st.

In May, Itabo and Andres paid interest on international bonds dated Nov.12, 2010 for US$5.5 million and US$8.0 million, respectively.

On May 27th, Andres paid interest on its Intercompany Loan for US$18.9 million.

(*) (1) After tax rates. (2) The Notes effective rate includes the interest income accrued by the interest debt reserve.

Financial Debt Jun-11 Dec-10(expressed in millions of US$)

Local Currency - - Foreign Currency 168 168Total Debt 168 168

Fixed Rate 100% 100%

Variable Rate 0% 0%

Short Term 0% 0%

Long Term 100% 100%Financing Cost (*) 10.56% 10.56%

Average Life (years) 10 10

Financial Debt Jun-11 Dec-10(expressed in millions of US$)

Local Currency - - Foreign Currency 131 131Total Debt 131 131

Fixed Rate 100% 100%

Variable Rate 0% 0%

Short Term 0% 0%

Long Term 100% 100%Financing Cost (*) 10.21% 10.21%

Average Life (years) 9 9.2

Rating Agency Rating OutlookFitch Ratings (Andres-DPP) Senior Notes 2020 B Positive

Fitch Ratings (Itabo) Senior Notes 2020 B PositiveStandard & Poor's (Andres-DPP) Senior Notes 2020 B- PositiveStandard & Poor's (Itabo) Senior Notes 2020 B- Negative



Liquidity Collections

During the second quarter 2011 the average collection rate for Andres- DPP was 111% against 100% in the same period of 2010 and for Itabo 104% against 91%. The increase is related to the higher collection received on April 2011 since DPP and Itabo received extraordinary collections of late receivables from the Distros for US$19 milion and US$27 million respectively.

YTD June 30th, 2011, the average collection rate for Andres-DPP was 73% against 110% in the same period 2010 and for Itabo 79% against 121%, since during the first semester 2010; the DR Government took a loan under the Standby Agreement with the IMF in order to pay their 2009 debts to the generation companies. Meanwhile, Andres accounts receivables had 17 days sales outstanding (DSO), 103 DSO for DPP and 101 DSO for Itabo compared to 24, 63 and 66 DSO, respectively in December 2010. Although these DSO levels are not according to the FMI guidelines, in July 2011, the companies collected in cash from Distros US$36.7 million of late receivables (DPP: US$15.8 million and Itabo: US$20.8 million), improving these levels.

Operational Results Andres-DPP:

In the second quarter of 2011, the Combined Net Generation was up by 3.8% relative to the second quarter of 2010, from 811 GWh in 1Q10 to 842 GWh in 2Q11, primarily a result of DPP operated as a base load power plant since April 2010 and although Los Mina VI was put out of service for 23 days due to its major maintenance. Total Energy Sold during 2Q11 was 842 GWh, an increase of 3.3% compared with 2Q10, a function of the higher generation mentioned above and more NRU clients.

During the second quarter 2011, Andres’ EAF worsen to 96% from 99% and the EFOR worsen to 0.9% affected for minor failures during the quarter and Its Firm Capacity increased 11.1% to 281MW.

DPP’s Firm Capacity increased to 51MW (a 121.7%), during the second quarter 2011, as a result of higher availability since the operational improvements performed on its units. Besides the EAF has increased to 89.3% since its units has been working as based load plants since 2010.

For the first half 2011, Combined Net Generation was 1,592 GWh, an increase of 4.3% compared to the same period of 2010. The Energy Sold increased 3.8% to 1,598 GWh, basically due higher generation and higher UNRs. Andres’ Firm Capacity increased 12.0% to 281MW, the EAF worsen to 86.7% from 95% and the EFOR increased to 0.5%.

DPP’s Firm Capacity increased to 45MW, during the first semester 2011, as a result of higher availability since the operational improvements performed on its units. Besides the EAF has increased to 90.8% since its units has been working as based load plants since 2010.and although Los Mina V and VI were put out of service due to major maintenances

The following table presents selected operational information for each of the periods indicated:

Average Collections Rate

Days Sales Outstanding (DSO)

111%70%131%69%

100%

104%

142%

60%91% 50%

2Q10 3Q10 4Q10 1Q11 2Q11

Andres - DPP Itabo

101

1724

7369

147

107 66

181

111

63

103

2008 2009 2010 Jun. 11

AES Andres Itabo DPP

As of June 30th, 2011 Andres DPP AggregateInstalled capacity (MW) 319 236 555 Power Generation Units 1 2 3 Effective capacity (MW) 304 236 540 Contracted capacity (MW) 184 210 394



Itabo:

During the second quarter 2011, the Net Generation was 417 GWh, an increase of 9.4% with respect to the same period of 2010. The Energy Sold decreased 3.6% compared to the same period of the previous year. The Heat Rate increased 5.5% basically due to technical limitation in Unit I, the EAF decreased to 80.3% and the EFOR worsen from 1% to 1.5%.

As of June 30th 2011, the Net Generation was 799 GWh, an increase of 4.4% against the same period 2010 primarily due to at the end of June 2010, the Unit II started its major maintenance, meanwhile in 2011 it ocurred after the first semester. The Energy Sold decreased 3.2% when compared to the same period of the previous year due mainly to lower spot sale. The Itabo’s Heat Rate worsen 2.9%, and the EFOR worsen to 4.4% from 1% as of June, 2010.

The following table presents selected operational information for each of the periods indicated:

Operational Developments During the second quarter 2011, Andres received three vessels with 9.0 TBTU of natural gas and Itabo received four coal

vessels containing 163,946 MT.

On May 22nd, Los Mina VI was put out of service due to its annual Programmed maintenance until June 14th, 2011.

As of June 30th, Andres had a total of 44 NRU contracts, totaling 133.5 MW.

On July 1st, Itabo I was put out of service due to a major maintenance for 50 days period.

As of June 30th, 2011Installed capacity (MW) 260Power Generation Units 2Effective capacity (MW) 260

2Q11 2Q10 Var.% Operating Data 6M11 6M10 Var.%

855 823 3.9 Gross generation GWh 1,615 1,550 4.2 (13) (12) 8.3 Internal consumption GWh (23) (24) (4.2)

842 811 3.8 Net Generation GWh 1,592 1,526 4.3

842 815 3.3 Total Energy Sold GWh 1,598 1,539 3.8 281 253 11.1 Andres' Firm Capacity MW 281 251 12.0

7,744 7,592 2.0 Andres Heat Rate Btu/KWh 7,782 7,621 2.1 96.0 99.0 (3.0) Andres EAF % 86.7 95.0 (8.7)

0.9 0.0 100.0 Andres EFOR % 0.5 0.0 100.0 51 23 121.7 DPP's Firm Capacity MW 45 22 107.0

89.3 79.0 13.0 DPP EAF % 90.8 70.5 28.8 0.1 0.1 0.0 DPP EFOR % 0.04 0.6 (92.7)

2Q11 2Q10 Var.% 6M11 6M10 Var.%

458 422 8.5 Gross generation GWh 878 846 3.8 (41) (41) 0.0 Internal consumption GWh (79) (81) (2.5) 417 381 9.4 Net Generation GWh 799 765 4.4 429 445 (3.6) Total Energy Sold (*) GWh 881 910 (3.2) 226 226 0.0 Firm Capacity MW 226 226 0.0

11,326 10,737 5.5 Heat Rate Btu/KWh 11,089 10,781 2.9 80.3 81 (0.9) EAF % 78.6 86 (8.1) 1.5 1 50.0 EFOR % 4.4 1 n/a



Other Relevant Information On July 15th, the Executive Board of the International Monetary Fund (IMF) completed the pending fifth and sixth reviews of

the Dominican Republic’s economic performance under its current 28-month, US$1.7 billion Stand-By Arrangement (SBA). Completion of this reviews allowed the immediate disbursement of US$348 million. The IMF welcomed the government’s commitment to introduce a cost-recovery technical tariff and adopt a flexible tariff mechanism for electricity to reduce reliance on elevated official subsidy.

The CDEEE and Andres reached a friendly agreement in relation with the dispute of their PPA agreement.

Safety Indicators During the quarter, Andres, DPP and Itabo do not have Lost Time Incidents (LTI) or fatalities.

Andres, DPP and Itabo celebrated the Security Day for the AES companies. During three days the employees and contractors analyzed the achievements and the improvement opportunities in the companies, in relation with the security topics..

As part of the Safety Program, the companies continue with the training in security matters, among all employees and contractors.

In Itabo, we performed an audit to the electricity system, in order to develop a program in electricity security to the employees and contractors.

Environmental Matters During the second quarter 2011, Andres, DPP and Itabo have complied with all environmental requirements.

During the values day celebration, was treated the theme "Our Values-Our Environment: Growing together". It signifies the commitment of our people and our business to create and maintain a healthy environment for the communities in which we operate.



(*) Interest expenses are those generated by the subordinated intercompany loan under which AES made its capital injections to finance the development and construction of Andres.

(**)Net Income includes interest expenses of US$9.5 million in 2Q11 and 2Q10, related to interest under a subordinated intercompany loan under which AES made its capital injections to finance the development and construction of Andres. AES views this loan as an equity investment and the respective interests are a restricted payment under the indenture.

The results presented in this report have not been audited and were prepared in Dollars in conformity with the International Financial Reporting Standards, as of any date of determination, or “IFRS.”


AES Andres B. V. and subsidiary, andDominican Power Partners and subsidiary(Indirect Wholly-Owned Subsidiaries of The AES Corporation)UNAUDITED COMBINED STATEMENTS OF INCOME(Expressed in thousandsUS$)

2Q11 2Q10 6M11 6M10

REVENUES

66,712 69,322 Electricity sales – contracts 128,514 136,932 39,960 18,514 Electricity sales – spot market 66,135 38,737 6,766 1,302 Natural gas sales 12,483 2,372

13 13 Other sales 26 27 113,451 89,151 Total revenues 207,157 178,068

OPERATING COSTS AND EXPENSES

(41,655) (41,792) Cost of sales – electricity purchases and fuel costs used for generation (84,383) (85,719) (4,609) (143) Cost of sales – fuel and fuel related costs purchased for resale (8,677) (826)

(15,246) (15,357) Operating, maintenance and general expenses (31,248) (29,214)

(61,511) (57,292) Total operating costs and expenses (124,308) (115,759)

51,941 31,860 OPERATING INCOME 82,850 62,309

OTHER INCOME (LOSS) (1,223) (2,245) Interest (expense) – net (4,652) (4,436) (9,530) (9,530) Intercompany loan interest (expense) (*) (18,955) (18,955)

(75) (494) Other (expense) (592) (533) (250) 53 Exchange gain (loss) (110) 210

40,863 19,644 INCOME BEFORE TAXES 58,541 38,595

(12,783) (8,735) Income tax (16,690) (13,883)

28,080 10,909 NET INCOME (**) 41,851 24,712




AES Andres B. V. and subsidiaries, andDominican Power Partners and subsidiary(Indirect Wholly-Owned Subsidiaries of The AES Corporation)UNAUDITED COMBINED STATEMENTS OF FINANCIAL POSITION(Expressed in thousands US$)

June 30th, 2011 Dec. 31st, 2010

ASSETS

CURRENT ASSETSCash and cash equivalents 131,669 119,652 Short term investment 10,207 - Customer 91,816 73,631 Related parties 44,211 39,503 Other receivables 3,033 2,016 Other - related parties 2,659 3,343 Intercompany loan - 19,269 Inventories 24,455 18,338 Income tax receivable 423 - Prepaid expenses 5,230 6,095 Deferred income tax 79 - Derivative asset 118 -

Total current assets 313,900 281,847

PROPERTY, PLANT AND EQUIPMENT Land 15,784 15,784 Property, plant and equipment 697,806 688,335 Less accumulated depreciation (190,912) (186,548)

Total Property, plant and equipment 522,678 517,571

OTHER ASSETS Intangible assets – net - Accounts receivables non curent 21,120 22,465 Debt service reserves 7,959 7,959 Contractual assets 18,848 20,508 Other assets 4,040 2,997 Restricted cash 155 9 Total ther assets 52,122 53,938

TOTAL ASSETS 888,700 853,356

LIABILITIES AND SHAREHOLDER'S EQUITY

CURRENT LIABILITIES

Accounts payable 9,100 10,198 Related parties 20,109 5,955 Interest related parties - 19,269 Interest payable 2,136 2,289 Income tax payable 9,097 9,112 Derivative current 2,402 - Deferred income tax - short term - Accrued expenses and other liabilities 8,995 11,910

Total current liabilities 51,839 58,733

LONG TERM LIABILITIESDeferred income tax 69,938 69,428 Intercompany loan 413,153 413,153 Notes payable 163,890 163,773 Derivative non current 869 860 Long term compensation 50 82 Other non current liabil ities 1,010 1,287

Total long term liabilities 648,910 648,583

SHAREHOLDER'S EQUITY

Common stock 15,019 15,019 Contributed capital 109,222 109,204 Additional paid–in capital 620 579 Accumulated other comprehensive loss (36) (37) Restricted retained earnings 36,852 36,852 Accumulated (defic it) earnings 26,274 (15,577)

Total shareholder's equity 187,951 146,040

TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY 888,700 853,356




AES Andres B. V. and subsidiary, andDominican Power Partners and Subsidiaries(Indirect Wholly-Owned Subsidiaries of The AES Corporation)UNAUDITED COMBINED STATEMENTS OF CASH FLOWS(Expressed in thousands US$)

2Q11 2Q10 6M11 6M10

CASH FLOW FROM OPERATING ACTIVITIES:

28,080 10,909 Net income 41,851 24,712 Adjustments to reconcile net income to net cash used in

operating activities:6,549 6,357 Depreciation and amortization 12,529 12,711 1,406 953 Derivative instruments 3,530 1,366

12,783 8,735 Income tax expense 16,690 13,883 1 1,035 Loss on asset disposal 597 1,035

206 114 Long term compensation 442 223 Subordinated intercompany loan interest expense - -

10,753 11,775 Interest expense – net 23,606 23,392 102 (150) Foreign exchange gain (206) (303)

- - (2,646) (850) (Increase) decrease in accounts receivable (23,636) 10,902 3,142 22,369 Decrease in accounts receivable – related parties 13,377 31,498

3 1,615 (Increase) decrease in other receivable (1,041) 1,387 (47) 370 Decrease (Increase) in other receivable – related parties 529 410

(1,134) (2,339) (Increase) decrease in inventories (5,962) 617 (679) (4,064) Decrease (increase) in prepaid insurance 865 (3,099)

- 761 Increase (decrease) in deferred tax assets - (1,399) (11,642) (6,715) (Decrease) increase in accounts payable and accrued liabilities (3,783) 8,421

502 (20,692) (Decrease) increase in accounts payable – related parties (3,931) (37,400) (215) (438) (Decrease) increase in accrued and other liabilities (352) 1,574

47,165 29,746 Cash generated from operations 75,104 89,931

3,326 6,285 Interest received 9,431 7,611 (45,151) (25,753) Interest paid (46,100) (26,737) (11,529) (15,764) Income taxes paid (15,375) (18,415) (6,190) (5,486) Net cash (used in) provided by operating activities 23,061 52,390

CASH FLOW FROM INVESTING ACTIVITIES:

(13,260) (4,124) Additions to property, plant and equipment (18,328) (6,077) 983 (723) Advances to suppliers in purchase of PP&E (1,633) (834)

4 1,200 Decrease (increase) in restricted cash (146) 1,200 372 - Decrease (increase) in short term investment 372 -

(10,579) - Purchase of short term investment (10,579) - 19,269 - Loans made to other parties 19,269 - (3,211) (3,647) Net cash (used in) investing activities (11,045) (5,711)

CASH FLOW FROM FINANCING ACTIVITIES:

- - Principal payments – notes payable - (5,000) - - Net cash (used in) provided by financing activities - (5,000)

(9,401) (9,133) EFFECT OF EXCHANGE RATE CHANGES ON CASH - -

141,070 112,643 NET INCREASE IN CASH 12,017 41,679 CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD 119,652 61,831

131,669 103,510 CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD 131,669 103,510




EMPRESA GENERADORA DE ELECTRICIDAD ITABO, S. A. AND SUBSIDIARY

(An indirectly subsidiary of The AES Corporation)CONSOLIDATED STATEMENTS OF OPERATIONS(Amounts expressed in thousands of US dollars)

2Q11 2Q10 6M11 6M10

55,895 45,852 114,357 98,083 295 271 272 593

56,190 46,123 114,629 98,676

(40,349) (46,462) (81,529) (84,443) (12,463) (12,751) Operating, maintenance and general expenses (24,804) (24,206)

(117) (117) Amortization of contracts (235) (235)

(52,929) (59,330) Total operating costs and expenses (106,568) (108,884)

3,261 (13,207) Operating income (expense) 8,061 (10,208)

Other income (expense):(2,362) (1,950) Interest (expense), net (794) (3,770)

35 96 Other Income (expenses) – net (255) 54 (251) (44) Exchange (loss), net (71) (85)

683 (15,105) INCOME (LOSS) BEFORE INCOME TAX 6,941 (14,009)

(1,792) 1,293 Income tax expense (1,373) 1,241

(1,109) (13,812) NET INCOME (LOSS) 5,568 (12,768)

OPERATING COSTS AND EXPENSESCost of revenues

REVENUES:Electricity salesOther revenues

Total revenues




EMPRESA GENERADORA DE ELECTRICIDAD ITABO, S. A. AND SUBSIDIARY(An indirectly subsidiary of The AES Corporation)CONSOLIDATED BALANCE SHEETS(Amounts expressed in thousands of US dollars)

June 30, 2011 Dec. 31, 2010ASSETS

CURRENT ASSETSCash and cash equivalents 58,907 71,482 Restricted cash and cash equivalents 328 267 Accounts receivable -

Clients 3,070 3,422 Related companies 84,158 56,573 Other receivable 109 51 Other receivable – related parties 1,752 1,456

Inventory 25,109 22,185 Prepaid Tax 19,737 20,888 Prepaid Expenses 732 688

Total current assets 193,902 177,012

PROPERTY, PLANT AND EQUIPMENTProperty, plant and equipment 568,580 566,159 Accumulated depreciation and amortization (256,177) (245,618) Construction in progress 14,027 11,547 Land 16,953 16,953

Net property, plant and equipment 343,383 349,041

OTHER ASSETSLong term receivables from customers 30,709 32,690 other 17,720 14,550

TOTAL OTHER ASSETS 48,429 47,240

TOTAL ASSET 585,714 573,293

LIABILITIES AND STCOKHOLDERS'EQUITY

CURRENT PAYABLES:Accounts payable

Supplies 23,226 19,011 Related parties 49,295 42,893

Dividends 612 - Accrued liabilities 3,061 6,820

Total current liabilities 76,194 68,724

LONG TERM LIABILITIESNotes payable - long term 128,675 128,564 Deferred income tax liability 40,733 40,301 Other long - term liabilities 69 16

Total long term liabilities 169,477 168,881

STOCKHOLDERS' EQUITY

Common stock (56,355,556shares autorized and outstanding) 355,556 355,556

Additional paid-in-capital 218 207 Accumulated losses (108,480) (112,824) Restricted Accumulated losses 92,749 92,749 Total stockholders' equity 340,043 335,688

Total liabilities and stockholders' equity 585,714 573,293




EMPRESA GENERADORA DE ELECTRICIDAD ITABO, S. A. AND SUBSIDIARY(An indirectly subsidiary of The AES Corporation)CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Amounts expressed in thousands of US dollars)

2Q11 2Q10 6M11 6M10

(1,109) (13,812) 5,568 (12,768)

5,495 6,579 11,270 11,499 117 117 Amortization of contracts 235 235

1,792 (1,293) Income tax 1,373 (1,241) 3 12 Long-term compensation 11 32

(167) - Loss on asset disposal 199 - 2,362 1,950 Interest expense – net 794 3,770 8,494 (6,447) 19,451 1,527

Changes in assets and liabilities:3,381 59 (Increase) decrease in accounts receivable (5,723) (13,316)

236 333 Decrease (increase) accounts receivable – related parties (27,585) 28,422 (11) 1,258 Decrease (increase) in other receivable (58) 183 693 - Decrease (increase) in other receivable - related parties (296) 1,653

4,859 10,271 Decrease (increase) in inventories (2,924) 8,562 (271) (11,404) (Increase) decrease in prepaid expenses 1,107 (10,360)

(8,640) 1,167 Increase (Decrease) in accounts payable suppliers 2,306 2,093 (1,160) (693) Increase (decrease) in accounts payable - related parties 5,790 6,644 1,167 2,542 Increase in accrued expenses and other liabilities 2,131 (539) 8,747 (2,914) (5,802) 24,869

1,053 3,237 Interest received 8,056 8,005 (6,498) (1,182) Interest paid (6,685) (9,001)

3,302 (859) Net cash provided by (used in) operating activities (4,431) 23,873

CASH FLOWS FROM INVESTING ACTIVITIES:(2,604) (174) Additions to property, plant and equipment (4,678) (2,166) (1,521) (2,489) Advances to suppliers in purchase of PP&E (3,405) (2,725)

(2) (271) Change in restricted cash (61) 5

(4,127) (2,934) Net cash used in investing activities (8,144) (4,886)

CASH FLOWS FROM FINANCING ACTIVITIES:

- (20,000) Dividends paid - (33,774) - (20,000) Net cash used in financing activities - (33,774)

(825) (23,793) Net (decrease) in cash and cash equivalents (12,575) (14,787)

59,732 87,880 Cash and cash equivalents at the beginning of the quarter 71,482 78,874

58,907 64,087 Cash and cash equivalents at the end of the semester 58,907 64,087

CASH FLOWS FROM OPERATING ACTIVITIES:Net (loss) incomeAdjustments to reconcile net income to net cash (used in) provided by operating activities:

Depreciation and amortization



Andres-DPP and Itabo are controlled and managed by subsidiaries of AES. Itabo owns the lowest-cost thermal power generation units in the Dominican Republic. Itabo operates power generation units that in the aggregate have 260 MW of effective and installed capacity. Itabo also has the only loading dock with the capacity to service Panamax vessels and to unload to 60,000 tons of solid fuels in bulk. Andres and DPP, own and operate power generation units that in the aggregate have 555 MW of installed capacity, which represent approximately 18.7% of the current total installed capacity, in the Dominican Republic. Andres also has the only liquefied natural gas, or LNG, shipment receiving terminal in the Dominican Republic, a degasification facility and a storage facility, or LNG facility, and a natural gas pipeline to Santo Domingo.

The unaudited pro forma combined balance sheet and statement of operations presented in this report have not been audited and were derived from the unaudited consolidated financial statements of Andres and the unaudited consolidated financial statements of DPP. The information provided by the consolidated financial statements of Andres and the consolidated financial statements of DPP and for Itabo has been prepared in accordance with International Financial Reporting Standards (IFRS) as established in the Offering Memorandum of the USD$284 million notes units. The unaudited pro forma combined financial information described above is being provided for illustrative purposes only. Andres and DPP may have performed differently if they had actually been combined during the periods presented. This unaudited proforma combined financial information should be read in conjunction with the unaudited consolidated financial statements as of and for the periods ended on June 30th, 2011 and 2010, and notes thereto, of each of Andres and DPP. You should not rely on the pro forma combined financial information as being indicative of the historical results that would have been achieved by Andres and DPP if they had always been combined.

The AES Corporation (NYSE: AES) is a Fortune 500 global power company with generation and distribution businesses. Through our diverse portfolio of thermal and renewable fuel sources, we provide affordable and sustainable energy to 29 countries. Our workforce of 27,000 people is committed to operational excellence and meeting the world's changing power needs. Our 2010 revenues were $17 billion and we own and manage $41 billion in total assets. To learn more, please visit www.aes.com.

This report may contain forward-looking statements speculative in nature based on the information, operational plans and forecasts currently available about future trends and facts. As such, they are subject to risks and uncertainties. A wide variety of factors may cause future real facts to differ significantly from the issues presented or anticipated in this report, including, among others, changes in general economic, political, government and business conditions. In the event of materializing any of these risks or uncertainties, or if underlying assumptions prove to be mistaken, future real facts may vary significantly. Itabo is not bound to update or correct the information contained in this report.

Please address any questions or comments related to this report to Investor Relations, email address: [email protected]



Glossary of key terms

Btu: British thermal units of measurement. It is a unit of heat in the English European System. Its equivalence in the International System (IS) is the Calorie. The prices of Natural Gas are usually expressed in US$/MMBtu. 1 Btu is equivalent to 252 calories.

CDEEE: Corporación Dominicana de Empresas Eléctricas Estatales. Previously known as CDE.

Coordinating Body:

Deregulated Users (NRU):

“OC” or Organismo Coordinador. Whose function is to plan and coordinate the economic operations of the power providers with those of the transmission, distribution and commercialization system that form the SENI.

The user of the electrical service which monthly demand exceeds the limits established by Superintendence in order to be classified as an unregulated user under the General Electricity Law.

EAF: Equivalent Availability Factor

Effective Capacity: The currently available capacity, as of any date of determination, for generation of a unit or the amount of MW that a power generation unit can reliably generate.

EFOR: Equivalent Forced Outage Rate

Firm Capacity: The amount of capacity assigned by the Coordinating Body to each power generation unit for being available to cover the demand in peak hours.

FX: Foreign exchange, a banking term for changing money from one currency into another.

GDP:

Henry Hub:

The gross domestic product (GDP) is one of the measures of national income and output for a given country's economy. GDP is defined as the total market value of all final goods and services produced within the country in a given period of time (usually a calendar year).

The specific pricing point for natural gas future contracts on the New York Mercantile Exchange, or NYMEX.

Installed capacity:

Liquid Natural Gas (LNG):

The amount of MW a turbine is designed to produce upon installment (name-plate capacity).

Natural Gas processed to be transported in liquid form. It is the best alternative for transporting and storage because when transformed into liquid at atmospheric pressure and -163° C, the liquefaction process reduces the volume of gas by 600 times.

Platts: Is a provider of energy information around the world that has been in business in various forms for more than a century and is now a division of The McGraw-Hill Companies. Products include Platts Energy Economist, industry news and price benchmarks for the oil, natural gas, electricity, nuclear power, coal, petrochemical and metals markets.

PPA: Power Purchase Agreement.

SENI: Sistema Eléctrico Nacional Interconectado or the National Interconnected Electrical System.

AES Andres - Itabo Results 2Q11

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