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 table presents a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations for income from continuing operations. In the table below, income represents the numerator (in millions) and shares represent the denominator (in millions):

			December 31, 2012					December 31, 2011					December 31, 2010
			Income		Shares	$ per Share		Income		Shares	$ per Share		Income		Shares	$ per Share
BASIC EARNINGS PER SHARE
	Income (loss) from continuing operations
		attributable to The AES Corporation
		common stockholders	$	(915)	755	$	(1.21)	$	492	778	$	0.63	$	496	769	$	0.64
EFFECT OF DILUTIVE SECURITIES
	Convertible securities			-	-		-		-	-		-		-	-		-
	Stock options			-	-		-		-	2		-		-	2		-
	Restricted stock units			-	-		-		-	3		-		-	3		-
DILUTED EARNINGS PER SHARE			$	(915)	755	$	(1.21)	$	492	783	$	0.63	$	496	774	$	0.64

The calculation of diluted earnings per share excluded 7, 6 and 17 million options outstanding at December 31, 2012, 2011 and 2010, 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 their exercise price exceeded the average market price during the related period.

The calculation of diluted earnings per share also excluded 1 million options outstanding at December 31, 2012, that could potentially dilute earnings per share in the future. These options were not included in the computation of diluted earnings per share for the year ended December 31, 2012 because their inclusion would be anti-dilutive given the loss from continuing operations in the period. Had the Company generated income from continuing operations in the year ended December 31, 2012, 1 million of potential common shares of common stock related to the options would have been included in diluted average shares outstanding.

The calculation of diluted earnings per share also excluded 1 million restricted stock units outstanding at December 31, 2012, 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. The calculation of diluted earnings per share also excluded 6 million restricted stock units outstanding at December 31, 2012, that could potentially dilute earnings per share in the future. These restricted units were not included in the computation of diluted earnings per share for the year ended December 31, 2012, because their impact would be anti-dilutive given the loss from continuing operations. Had the Company generated income from continuing operations in the year ended December 31, 2012, 4 million of potential common shares of common stock related to the restricted stock units would have been included in diluted average shares outstanding.

For the years ended December 31, 2012, 2011 and 2010 all convertible debentures were omitted from the earnings per share calculation because they were anti-dilutive.

During the twelve months ended December 31, 2012, 1 million shares of common stock were issued under the Company's profit sharing plan and 2 million shares of common stock were issued upon the exercise of stock options.