The third quarter income from continuing operations was $91 million, or $0.14 per diluted share, versus $368 million (restated), or $0.56 per diluted share (restated) in the third quarter of 2006. The third quarter net income was $103 million, or $0.15 per diluted share, versus net loss of $327 million, or $0.50 per diluted share, in the third quarter of 2006.
Adjusted earnings per share (a non-GAAP financial measure) reached $0.18 in the third quarter of 2007 versus $0.30 in the third quarter of 2006. The main driver of the quarter-over-quarter differences in both GAAP and adjusted earnings was the restructuring of certain of the company’s Brazilian subsidiaries in the third quarter of 2006.
This restructuring resulted in a non-cash, after-tax charge to income from continuing operations of $500 million, or $0.76 per diluted share in the third quarter of 2006. It also resulted in a benefit of $0.07 to adjusted earnings per share in the third quarter of 2006. Excluding these one-time impacts, the decrease in the third quarter of 2007 earnings per diluted share and adjusted earnings per share was primarily driven by the company’s operations in Chile and Argentina, which negatively impacted income from continuing operations by approximately $45 million, or $0.07 impact on both diluted and adjusted earnings per share.
Paul Hanrahan, president and CEO of AES, said: We are pleased with our continued progress toward achieving our growth goals, such as winning two strategically important projects in the Philippines and South Africa. These investments will be platforms for further expansion in these two high growth markets. In October, the market gave us a vote of confidence when our $500 million offering of unsecured notes generated significant demand and was successfully upsized to $2 billion. This transaction will help us to achieve more flexibility in our existing capital structure, as we were able to refinance existing debt, and will support our growth program.
