Last quarter, there were two pending sales. The first was Indian Queens, which is a 140 megawatt peaking plant, which is used for stability of the UK system. The company completed the sale of that to International Power for $58 million, which resulted in proceeds to AES of $28 million. The other pending sale is a distribution company in Argentina and that sale is still pending the approval of the government.

The company bought additional 25% of the Itabo plant in the Dominican Republic.

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Cartagena is a 1,200 megawatt combined cycle plant uses LNG in self-center long-term contracts to Gaz de France. This plant has experienced delays predominantly with the civil works associated with drilling through a tunnel for the cooling water supply.

The second project in construction is Los Vientos. This is a 120 megawatt peaker in Chile which burn either diesel or gas. This an important plant because it provides reliability to the system where they''ve had problems due to gas shortages coming from Argentina. The company expects this one to be in commercial operations by year end and that will increase the generated capacity in Chile to 2,500 megawatts when it is in operation.

The company continued to build a strong business development pipeline that includes projects focusing on platform expansion and greenfield investments that generally follow the long-term contract generation business model, complemented by continued growth in the alternative energy business.

As of September 30, 2006, the company had almost 2,400 MW of new generation capacity under construction or in advanced engineering and design in Bulgaria, Chile, Panama, Spain, and the U.S. including fossil fuel and renewable energy projects. During the quarter, the company also acquired 73 MW of wind generation assets in California.

Year-to-date Financial Performance

- Revenues increased 14% to $9.17 billion from last year''s $8.05 billion.
- Net cash from operating activities increased 24% to $1.81 billion from last year''s $1.46 billion.
- Net income was $180 million, or 27 cents earnings per share, versus $453 million, or 68 cents earnings per share.

- Net income from continuing operations was $213 million, or 32 cents earnings per share, compared to $423 million, or 64 cents earnings per share.
- Adjusted earnings per share were $1.05 compared to 59 cents.
- Non-recourse debt at the subsidiaries has decreased by $47 million.

Fiscal 2006 Outlook

- The company has increased its guidance for earnings per share from $1.01 to $1.09. The updated adjusted EPS guidance includes an estimated 5 cents per share nonrecurring benefit from the Brasiliana restructuring. This includes the 7 cents per share favorable benefit in the third quarter adjusted EPS results. The benefit is partially offset by an estimated 2 cents per share in the fourth quarter from premiums on some of the Brasiliana holding company debt prepayments that are only partially offset by the remaining tax benefits that will be recorded.
- The guidance for earnings per share from continuing operations is now 28 cents and includes the non-cash impacts related to the Brasiliana restructuring as well as expected costs associated with certain fourth quarter debt refinancing transactions.

- The company increased its guidance for cash flow from operation as well as free cash flow. The updated earnings guidance reflects the expectation that fourth quarter earnings will be lower than the prior-year period. This is partly driven by non-cash impacts related to the Brasiliana restructuring as well as ongoing lower ownership in Electropaulo.
- The company estimates its capital spending projections for environmental projects in the range of $200 to $300 million for 2006 and in the range of $175 to $250 million for 2007.

Key questions and answers from the third quarter earnings call conducted by The AES Corp. on November 06, 2006.

It seems that you are guiding the fourth quarter lower than the third one. What are the factors behind that?

The largest impact at this point appears to be tax. The company is expecting a more normalized tax rate for the fourth quarter, which would be higher than the previous two quarters. AES expects in the fourth quarter some of the changes in the business mix and the timing of some of the distributions from subsidiaries to drive higher tax expense in the quarter. Both of those contribute to a higher tax rate. The company is presuming based on what it is starting to see some increase in terms of the FX head winds. The beginning of that was in the third quarter and AES does not see any change from a fourth quarter perspective. There is a couple of different refinancing that will happen in various parts of the business in that quarter which will affect the results as well.

Can you put any range on the refinancing expenses?

The company does not expect those refinancing to have effect bigger than two or three cents. The company does not want to speculate if there will be other subsidiaries financing as it still considering it.

You said that you intended before the end of the year to update your long-term guidance. Are you still planning to update that guidance before the end of the year?

The company is going into its 2007/2008 budget meetings and will review those with the board in December. AES intentions are to push the updates off until the first quarter call. The company wanted to present it by the end of year, but it makes more sense to wait until the first quarter and introduce a new five-year look.