Basic and diluted earnings per share are based on the weighted average number of shares of common stock and potential common stock outstanding during the period. Potential common stock, for purposes of determining diluted earnings per share, includes the effects of dilutive restricted stock units, stock options and convertible securities. The effect of such potential common stock is computed using the treasury stock method or the if-converted method, as applicable.

The following tables present a reconciliation of the numerator and denominator of the basic and diluted earnings per share computation for income from continuing operations for the three months ended March 31, 2013 and 2012. In the table below, income represents the numerator and weighted-average shares represent the denominator:

			Three Months Ended March 31,
			2013					2012
			Income		Shares	$ per Share		Income		Shares	$ per Share

			(in millions except per share data)
BASIC EARNINGS PER SHARE
	Income from continuing operations attributable
		to The AES Corporation common stockholders	$	106	745	$	0.14	$	341	766	$	0.45
EFFECT OF DILUTIVE SECURITIES
	Convertible securities			-	-		-		6	15		-
	Stock options			-	1		-		-	1		-
	Restricted stock units			-	3		-		-	3		(0.01)
DILUTED EARNINGS PER SHARE			$	106	749	$	0.14	$	347	785	$	0.44

The calculation of diluted earnings per share excluded 8 and 7 million options outstanding at March 31, 2013 and 2012, respectively, that could potentially dilute basic earnings per share in the future. These options were not included in the computation of diluted earnings per share because the exercise price of those options exceeded the average market price during the related period.

The calculation of diluted earnings per share also excluded 1 and 2 million restricted stock units outstanding at March 31, 2013 and 2012, respectively, that could potentially dilute basic earnings per share in the future. These restricted stock units were not included in the computation of diluted earnings per share because the average amount of compensation cost per share attributed to future service and not yet recognized exceeded the average market price during the related period and thus to include the restricted units would have been anti-dilutive.

For the three months ended March 31, 2013 all 15 million convertible debentures were omitted from the earnings per share calculation because they were anti-dilutive. For the three months ended March 31, 2012, all convertible debentures were included in the earnings per share calculation.

During the three months ended March 31, 2013, 1 million shares of common stock were issued under the Company's profit sharing plan.