Exhibit 99.1
|
Press Release
|
|
|
Media Contact: Meghan Dotter 703 682 6670
Investor Contact: Ahmed Pasha 703 682 6451
AES Reports Strong Cash Flow Growth in Third
Quarter
· Third Quarter Earnings Per Share from Continuing Operations up 57% to
$0.22 and Adjusted Earnings Per Share up 47% to $0.25
· Third Quarter Consolidated Free Cash Flow up 9% to $642 million
· 2008 Operating Cash Flow and Free Cash Flow Guidance Reaffirmed
ARLINGTON, VA, November 6,
2008 – The AES
Corporation (NYSE: AES) today reported strong operational results for the third
quarter ended September 30, 2008, benefiting from higher pricing across
all regions and increased demand in Latin America.
“In
the third quarter, our earnings were in line with our expectations when
adjusted for foreign currency transaction impacts. Our cash flows were strong, with Consolidated
Free Cash Flows increasing by nine percent,” said Paul Hanrahan, President and
Chief Executive Officer of The AES Corporation.
“We also recognize that we are operating in an environment with
increased market volatility. As a
result, we are taking aggressive steps to preserve liquidity, prioritize
investments and reduce costs.”
“For
the full year, and taking into consideration the foreign exchange transaction
impacts, we are modifying Adjusted Earnings Per Share (EPS) guidance for 2008
from $1.16 to $1.07. Looking to 2009, we
are lowering our Adjusted EPS guidance by $0.05 to a range of $1.15 to $1.20,
reflecting changes in assumptions about foreign currency exchange rates. However, we are reaffirming 2009 guidance for
Subsidiary Distributions of $1.1 billion to $1.3 billion,” added Mr. Hanrahan.
Results for the quarter and
year-to-date ended September 30, 2008 include the following:
|
|
|
Third Quarter 2008
|
|
Year-to-Date
September 2008
|
|
Full Year 2008
Guidance
|
|
|
Revenue
|
|
$4.3 billion
|
|
$12.6 billion
|
|
n/a
|
|
|
Gross Margin
|
|
$1.0 billion
|
|
$3.0 billion
|
|
$3.7-$3.8 billion
|
|
|
Diluted EPS from Continuing Operations
|
|
$0.22
|
|
$1.87
|
|
$2.07
|
|
|
Adjusted EPS
(a non-GAAP financial measure)
|
|
$0.25
|
|
$0.81
|
|
$1.07
|
|
|
Consolidated Operating Cash Flow
|
|
$784 million
|
|
$1.6 billion
|
|
$2.2 billion
|
|
|
Consolidated Free Cash Flow
(a non-GAAP financial measure)
|
|
$642 million
|
|
$1.1 billion
|
|
$1.4 billion
|
|
“We are well positioned to weather
current market trends,” said Victoria D. Harker, Executive Vice President and
Chief Financial Officer of AES. “As part
of our earlier efforts to improve financial flexibility, including refinancing
$2 billion of parent debt, we have substantially reduced our near-term obligations
and extended their maturities while improving pricing. At the subsidiary level, 93 percent of our
debt is now in the local functional currency, which minimizes risk. As a result of these initiatives, we expect
that the 2009 and 2010 debt maturities will be satisfied by our existing cash
and operating cash flows. We are also
pleased that the credit market recently demonstrated confidence in AES by
providing a $1 billion financing with favorable terms for the Angamos project in
Chile.”
Third Quarter 2008
Financial Highlights (comparisons of Q3 2008 vs Q3 2007):
· Consolidated
Revenues up 25% to $4.3 billion, primarily due to higher prices across all
regions and increased volume in Latin America, as well as favorable foreign
currency translation and recovery of pass-through expenses
· Consolidated
Gross Margin up 13% to $1.0 billion, with improved Latin American performance
and favorable foreign currency translation
· Diluted
Earnings Per Share from Continuing Operations up 57% to $0.22
· Adjusted
EPS from Continuing Operations (a non-GAAP financial measure) up 47% to $0.25
(see Appendix for reconciliation to GAAP), including $0.09 of foreign currency
transaction losses primarily in the Philippines and Chile
· Net
Income up 39% to $145 million or $0.22 per diluted share
· Consolidated
Operating Cash Flow up 3% to $784 million primarily due to improved performance
at our Latin America businesses and decreased net working capital requirements at
our Latin America utility businesses
· Consolidated
Free Cash Flow (a non-GAAP financial measure) up 9% to $642 million due to
improved consolidated operating cash flow and lower maintenance capital
expenditures
Other Highlights and
Recent Developments:
· Closed
a 17 year, non-recourse debt financing of approximately $1 billion, at the
blended cost of LIBOR plus 200 basis points, for the construction of the
Angamos project, a 518 MW coal-fired plant located in northern Chile in October 2008
· In
July 2008 started commercial operations of Buffalo Gap III, a 170 MW wind farm
in Abilene, Texas, and raised approximately $240 million of tax-equity
financing to replace the construction loan in July 2008
· Repurchased
10.7 million shares of common stock at a total cost of approximately $143
million in August and September 2008
Year-to-Date 2008
Financial Highlights (comparison year to date of Q3 2008 vs Q3 2007):
· Consolidated
Revenues up 27% to $12.6 billion, primarily due to higher prices at our
generation businesses across all regions and increased volume in Latin America,
as well as favorable currency translation and recovery of pass-through expenses.
· Consolidated
Gross Margin up 17% to $3.0 billion, primarily due to increased volume in Latin
America and higher pricing and volume at our European generation businesses, as
well as favorable foreign currency translation.
· Diluted
Earnings Per Share from Continuing Operations up 156% to $1.87, including $1.31
gain from sale of Northern Kazakhstan businesses in May 2008.
· Adjusted
EPS from Continuing Operations (a non-GAAP financial measure) of $0.81 (see
Appendix for reconciliation to GAAP), including $0.12 of foreign currency
transaction losses primarily in the Philippines and Chile.
· Net
Income increased to $1.3 billion, or $1.87 per diluted share from a loss of
$103 million or ($0.15) per diluted share in 2007. The 2007 result reflects loss on the sale of
a Venezuelan subsidiary, CA La Electricidad de Caracas (EDC), which resulted in
a non-cash, after-tax charge of $676 million or $1.00 per diluted share.
· Consolidated
Operating Cash Flow of $1.6 billion, down from $1.9 billion for the same period
in 2007 (which included a $151 million contribution from EDC, a business sold
in May 2007). The remaining $146 million decrease is primarily due to
higher commodity prices impacting net working capital needs in Asia.
· Consolidated Free Cash Flow (a non-GAAP
financial measure) of $1.1 billion, down from $1.2 billion for the same period
in 2007. Excluding any contribution from
EDC, Free Cash Flow (a non-GAAP financial measure) would have decreased by
approximately $16 million due primarily to lower operating cash flow, offset by
reduced maintenance capital expenditures.
Updated Guidance:
The
Company updated its previously announced guidance as follows:
· For 2008, based on strong operating
performance, the Company reaffirmed its Operating Cash Flow and Free Cash Flow (a
non-GAAP financial measure) guidance, at $2.2 billion and $1.4 billion
respectively. The Company lowered its Adjusted
EPS guidance by $0.09 to $1.07 to reflect non-cash, unrealized mark-to-market
foreign currency transaction losses primarily in the Philippines and Chile. The Company also lowered its guidance for
Diluted Earnings Per Share from Continuing Operations by $0.15 to $2.07
reflecting the change in Adjusted EPS as well as net losses totaling $0.06
related to impairment charges and a loss on a portion of its interest in a
Latin American subsidiary.
· For 2009, the Company lowered its Adjusted
EPS (a non-GAAP financial measure) guidance of $1.15-$1.20 primarily reflecting
changes in assumptions about foreign currency exchange rates. The Company also
reaffirmed its Subsidiary Distribution guidance of $1.1 billion to $1.3
billion.
Additional
details regarding these guidance revisions are set forth in the Appendix to this
press release.
Non-GAAP
Financial Measures
See
Non-GAAP Financial Measures for definitions of Adjusted Earnings Per Share and Free
Cash Flow and reconciliations to the most comparable GAAP financial measure.
Attachments
Consolidated
Statements of Operations, Segment Information, Consolidated Balance Sheets,
Consolidated Statements of Cash Flows, Non-GAAP Financial Measures, Parent
Financial Information, 2008 Financial Guidance, 2009 Financial Guidance
Conference Call Information
AES
will host a conference call on Friday, November 7, 2008 at 10:00 a.m.
Eastern Standard Time (EST). Interested parties may listen to the
teleconference by dialing 1-866-229-5768 at least ten minutes before the start
of the call. International callers
should dial +1-973-200-3007. The
reservation number for this call is 72303884.
Internet access to the conference call and presentation materials will
be available on the AES website at www.aes.com by selecting “Investor
Information.”
A
telephonic replay of the call will be available from approximately 1:00 p.m.
EST on Friday, November 7, 2008 through Friday, November 28,
2008. Callers in the U.S. please dial
1-800-642-1687. International callers
should dial +1-706-645-9291. The system
will ask for a reservation number; please enter 72303884 followed by the pound
key (#). A webcast replay, as well as a
replay in downloadable MP3 format, will be accessible at www.aes.com beginning
shortly after the completion of the call.
About AES
AES
is one of the world’s largest global power companies, with 2007 revenues of USD
13.6 billion. With operations in 29 countries on five continents, AES’s
generation and distribution facilities have the capacity to serve 100 million
people worldwide. Our 14 regulated utilities amass annual sales of approximately
76,000 GWh and our 124 generation facilities have the capacity to generate approximately
43,000 megawatts. Our global workforce of 28,000 people is committed to
operational excellence and meeting the world’s growing power needs. To learn
more about AES, please visit www.aes.com or contact AES media relations at
media@aes.com.
Safe Harbor Disclosure
This
news release contains forward-looking statements within the meaning of the
Securities Act of 1933 and of the Securities Exchange Act of 1934. Such forward-looking statements include, but
are not limited to, those related to future earnings, growth and financial and
operating performance. Forward-looking statements
are not intended to be a guarantee of future results, but instead constitute
AES’s current expectations based on reasonable assumptions. Forecasted financial information is based on
certain material
assumptions. These assumptions include, but are not
limited to, continued normal levels of operating performance and electricity
volume at our distribution companies and operational performance at our
generation businesses consistent with historical levels, as well as
achievements of planned productivity improvements and incremental growth
investments at normalized investment levels and rates of return consistent with
prior experience.
Actual
results could differ materially from those projected in our forward-looking
statements due to risks, uncertainties and other factors. Important factors
that could affect actual results are discussed in AES’s filings with the
Securities and Exchange Commission, including, but not limited to, the risks
discussed under Item 1A “Risk Factors” in AES’s 2007 Annual Report on Form 10-K. Readers are encouraged to read AES’s filings
to learn more about the risk factors associated with AES’s business. AES undertakes no obligation to update or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise.
###
THE AES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
|
September 30,
|
|
September 30,
|
|
|
($ in millions, except per share amounts)
|
|
2008
|
|
2007
|
|
2008
|
|
2007
|
|
|
|
|
|
|
(Restated)
|
|
|
|
(Restated)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
4,345
|
|
$
|
3,484
|
|
$
|
12,595
|
|
$
|
9,915
|
|
|
Cost of sales
|
|
(3,387
|
)
|
(2,637
|
)
|
(9,562
|
)
|
(7,315
|
)
|
|
GROSS MARGIN
|
|
958
|
|
847
|
|
3,033
|
|
2,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative expenses
|
|
(90
|
)
|
(93
|
)
|
(287
|
)
|
(261
|
)
|
|
Interest expense
|
|
(458
|
)
|
(453
|
)
|
(1,362
|
)
|
(1,289
|
)
|
|
Interest income
|
|
157
|
|
122
|
|
406
|
|
359
|
|
|
Other expense
|
|
(18
|
)
|
(24
|
)
|
(128
|
)
|
(79
|
)
|
|
Other income
|
|
63
|
|
26
|
|
258
|
|
324
|
|
|
Gain on sale of investments
|
|
—
|
|
—
|
|
912
|
|
10
|
|
|
Impairment expense
|
|
(22
|
)
|
(38
|
)
|
(94
|
)
|
(38
|
)
|
|
Foreign currency transaction (losses) gains
on net monetary position
|
|
(60
|
)
|
9
|
|
(123
|
)
|
11
|
|
|
Other non-operating expense
|
|
—
|
|
—
|
|
—
|
|
(45
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME FROM CONTINUING OPERATIONS BEFORE
INCOME TAXES, EQUITY IN EARNINGS OF AFFILIATES AND MINORITY INTEREST
|
|
530
|
|
396
|
|
2,615
|
|
1,592
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
(168
|
)
|
(156
|
)
|
(725
|
)
|
(606
|
)
|
|
Net equity in (losses) earnings of
affiliates
|
|
(4
|
)
|
15
|
|
38
|
|
57
|
|
|
Minority interest
|
|
(213
|
)
|
(163
|
)
|
(646
|
)
|
(552
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME FROM CONTINUING OPERATIONS
|
|
145
|
|
92
|
|
1,282
|
|
491
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations of discontinued
businesses, net of tax
|
|
—
|
|
—
|
|
—
|
|
71
|
|
|
Gain (loss) from disposal of discontinued
businesses, net of tax
|
|
—
|
|
12
|
|
(1
|
)
|
(665
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS)
|
|
$
|
145
|
|
$
|
104
|
|
$
|
1,281
|
|
$
|
(103
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
DILUTED EARNINGS (LOSS) PER SHARE
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations, net of
tax
|
|
$
|
0.22
|
|
$
|
0.14
|
|
$
|
1.87
|
|
$
|
0.73
|
|
|
Discontinued operations, net of tax
|
|
—
|
|
0.01
|
|
—
|
|
(0.88
|
)
|
|
DILUTED EARNINGS (LOSS) PER SHARE
|
|
$
|
0.22
|
|
$
|
0.15
|
|
$
|
1.87
|
|
$
|
(0.15
|
)
|
|
Diluted weighted average shares outstanding
(in millions)
|
|
675
|
|
675
|
|
693
|
|
677
|
|
THE AES CORPORATION
SEGMENT INFORMATION (unaudited)
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
|
September 30,
|
|
September 30,
|
|
|
($ in millions)
|
|
2008
|
|
2007
|
|
2008
|
|
2007
|
|
|
|
|
|
|
(Restated)
|
|
|
|
(Restated)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES
|
|
|
|
|
|
|
|
|
|
|
Latin America - Generation
|
|
$
|
1,196
|
|
$
|
918
|
|
$
|
3,578
|
|
$
|
2,474
|
|
|
Latin America - Utilities
|
|
1,618
|
|
1,312
|
|
4,644
|
|
3,789
|
|
|
North America - Generation
|
|
615
|
|
576
|
|
1,705
|
|
1,625
|
|
|
North America - Utilities
|
|
288
|
|
274
|
|
804
|
|
795
|
|
|
Europe & Africa - Generation
|
|
278
|
|
216
|
|
881
|
|
683
|
|
|
Europe & Africa - Utilities
|
|
197
|
|
155
|
|
595
|
|
478
|
|
|
Asia - Generation
|
|
398
|
|
235
|
|
1,054
|
|
686
|
|
|
Corp/Other & eliminations
|
|
(245
|
)
|
(202
|
)
|
(666
|
)
|
(615
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
$
|
4,345
|
|
$
|
3,484
|
|
$
|
12,595
|
|
$
|
9,915
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS MARGIN
|
|
|
|
|
|
|
|
|
|
|
Latin America - Generation
|
|
$
|
385
|
|
$
|
184
|
|
$
|
1,103
|
|
$
|
631
|
|
|
Latin America - Utilities
|
|
232
|
|
254
|
|
725
|
|
771
|
|
|
North America - Generation
|
|
147
|
|
207
|
|
549
|
|
535
|
|
|
North America - Utilities
|
|
82
|
|
86
|
|
194
|
|
245
|
|
|
Europe & Africa - Generation
|
|
49
|
|
35
|
|
240
|
|
167
|
|
|
Europe & Africa - Utilities
|
|
23
|
|
22
|
|
67
|
|
64
|
|
|
Asia - Generation
|
|
35
|
|
47
|
|
126
|
|
154
|
|
|
Corp/Other & eliminations
|
|
5
|
|
12
|
|
29
|
|
33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total gross margin
|
|
$
|
958
|
|
$
|
847
|
|
$
|
3,033
|
|
$
|
2,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME FROM CONTINUING OPERATIONS BEFORE
INCOME TAXES, EQUITY IN EARNINGS OF AFFILIATES AND MINORITY INTEREST
|
|
|
|
|
|
|
|
|
|
|
Latin America - Generation
|
|
$
|
350
|
|
$
|
135
|
|
$
|
907
|
|
$
|
636
|
|
|
Latin America - Utilities
|
|
186
|
|
190
|
|
700
|
|
609
|
|
|
North America - Generation
|
|
111
|
|
95
|
|
389
|
|
441
|
|
|
North America - Utilities
|
|
50
|
|
57
|
|
86
|
|
159
|
|
|
Europe & Africa - Generation
|
|
35
|
|
28
|
|
1,124
|
|
124
|
|
|
Europe & Africa - Utilities
|
|
15
|
|
20
|
|
45
|
|
56
|
|
|
Asia - Generation
|
|
(24
|
)
|
23
|
|
(23
|
)
|
79
|
|
|
Corp/Other & eliminations
|
|
(193
|
)
|
(152
|
)
|
(613
|
)
|
(512
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Total income from continuing operations
before income taxes, equity in earnings of affiliates and minority interest
|
|
$
|
530
|
|
$
|
396
|
|
$
|
2,615
|
|
$
|
1,592
|
|
THE
AES CORPORATION
CONDENSED
CONSOLIDATED BALANCE SHEETS (unaudited)
|
|
|
September 30,
|
|
December 31,
|
|
|
($ in millions, except shares and par value)
|
|
2008
|
|
2007
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
CURRENT ASSETS
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
1,707
|
|
$
|
2,058
|
|
|
Restricted cash
|
|
552
|
|
522
|
|
|
Short-term investments
|
|
1,453
|
|
1,306
|
|
|
Accounts receivable, net of reserves of
$296 and $255, respectively
|
|
2,451
|
|
2,270
|
|
|
Inventory
|
|
597
|
|
480
|
|
|
Receivable from affiliates
|
|
24
|
|
56
|
|
|
Deferred income taxes - current
|
|
188
|
|
286
|
|
|
Prepaid expenses
|
|
202
|
|
137
|
|
|
Other current assets
|
|
1,219
|
|
1,076
|
|
|
Current assets of held for sale and
discontinued businesses
|
|
—
|
|
145
|
|
|
Total current assets
|
|
8,393
|
|
8,336
|
|
|
|
|
|
|
|
|
|
NONCURRENT ASSETS
|
|
|
|
|
|
|
Property, Plant and Equipment:
|
|
|
|
|
|
|
Land
|
|
987
|
|
1,052
|
|
|
Electric generation and distribution assets
and other
|
|
26,041
|
|
24,824
|
|
|
Accumulated depreciation
|
|
(7,937
|
)
|
(7,591
|
)
|
|
Construction in progress
|
|
2,999
|
|
1,774
|
|
|
Property, plant and equipment, net
|
|
22,090
|
|
20,059
|
|
|
|
|
|
|
|
|
|
Other assets:
|
|
|
|
|
|
|
Deferred financing costs, net of
accumulated amortization of $264 and $227, respectively
|
|
370
|
|
352
|
|
|
Investment in and advances to affiliates
|
|
896
|
|
730
|
|
|
Debt service reserves and other deposits
|
|
610
|
|
568
|
|
|
Goodwill
|
|
1,468
|
|
1,416
|
|
|
Other intangible assets, net of accumulated
amortization of $186 and $173, respectively
|
|
501
|
|
466
|
|
|
Deferred income taxes - noncurrent
|
|
563
|
|
647
|
|
|
Other assets
|
|
1,762
|
|
1,698
|
|
|
Noncurrent assets of held for sale and
discontinued businesses
|
|
—
|
|
181
|
|
|
Total other assets
|
|
6,170
|
|
6,058
|
|
|
TOTAL ASSETS
|
|
$
|
36,653
|
|
$
|
34,453
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
1,141
|
|
$
|
1,073
|
|
|
Accrued interest
|
|
351
|
|
255
|
|
|
Accrued and other liabilities
|
|
2,969
|
|
2,638
|
|
|
Non-recourse debt - current portion
|
|
800
|
|
1,142
|
|
|
Recourse debt - current portion
|
|
154
|
|
223
|
|
|
Current liabilities of held for sale and
discontinued businesses
|
|
—
|
|
151
|
|
|
Total current liabilities
|
|
5,415
|
|
5,482
|
|
|
|
|
|
|
|
|
|
LONG-TERM LIABILITIES
|
|
|
|
|
|
|
Non-recourse debt
|
|
12,459
|
|
11,297
|
|
|
Recourse debt
|
|
5,231
|
|
5,332
|
|
|
Deferred income taxes - noncurrent
|
|
1,230
|
|
1,197
|
|
|
Pension liabilities and other
post-retirement liabilities
|
|
769
|
|
921
|
|
|
Other long-term liabilities
|
|
3,615
|
|
3,754
|
|
|
Long-term liabilities of held for sale and
discontinued businesses
|
|
—
|
|
65
|
|
|
Total long-term liabilities
|
|
23,304
|
|
22,566
|
|
|
|
|
|
|
|
|
|
MINORITY INTEREST
|
|
3,705
|
|
3,241
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
Common stock ($.01 par value, 1,200,000,000
shares authorized; 672,857,157 issued and 662,165,890 outstanding at
September 30, 2008 and 670,339,855 shares issued and outstanding at
December 31, 2007)
|
|
7
|
|
7
|
|
|
Additional paid-in capital
|
|
6,826
|
|
6,776
|
|
|
Retained earnings (Accumulated deficit)
|
|
40
|
|
(1,241
|
)
|
|
Accumulated other comprehensive loss
|
|
(2,500
|
)
|
(2,378
|
)
|
|
Treasury stock, at cost (10,691,267 and 0
shares at September 20, 2008 and December 31, 2007, respectively)
|
|
(144
|
)
|
—
|
|
|
Total stockholders’ equity
|
|
4,229
|
|
3,164
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
$
|
36,653
|
|
$
|
34,453
|
|
THE AES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
|
September 30,
|
|
September 30,
|
|
|
($ in millions)
|
|
2008
|
|
2007
|
|
2008
|
|
2007
|
|
|
|
|
|
|
(Restated)
|
|
|
|
(Restated)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
145
|
|
$
|
104
|
|
$
|
1,281
|
|
$
|
(103
|
)
|
|
Adjustments to net income (loss):
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
260
|
|
237
|
|
760
|
|
694
|
|
|
Loss (gain) from sale of investments and
impairment expense
|
|
18
|
|
51
|
|
(832
|
)
|
91
|
|
|
(Gain) loss on disposal and impairment
write-down - discontinued operations
|
|
—
|
|
(12
|
)
|
—
|
|
665
|
|
|
Provision for deferred taxes
|
|
88
|
|
33
|
|
296
|
|
148
|
|
|
Minority interest expense
|
|
212
|
|
162
|
|
645
|
|
567
|
|
|
Other
|
|
124
|
|
70
|
|
24
|
|
(44
|
)
|
|
Changes in operating assets and
liabilities:
|
|
|
|
|
|
|
|
|
|
|
Increase in accounts receivable
|
|
(120
|
)
|
(108
|
)
|
(363
|
)
|
(246
|
)
|
|
Increase in inventory
|
|
(22
|
)
|
(3
|
)
|
(101
|
)
|
(26
|
)
|
|
Decrease (increase) in prepaid expenses and
other current assets
|
|
148
|
|
(31
|
)
|
(46
|
)
|
(100
|
)
|
|
(Increase) decrease in other assets
|
|
(109
|
)
|
60
|
|
(246
|
)
|
209
|
|
|
Increase (decrease) in accounts payable and
accrued liabilities
|
|
157
|
|
147
|
|
204
|
|
(46
|
)
|
|
(Decrease) increase in income taxes and
other income tax payables, net
|
|
(1
|
)
|
89
|
|
88
|
|
117
|
|
|
Decrease in other liabilities
|
|
(116
|
)
|
(41
|
)
|
(135
|
)
|
(54
|
)
|
|
Net cash provided by operating activities
|
|
784
|
|
758
|
|
1,575
|
|
1,872
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
(578
|
)
|
(613
|
)
|
(1,963
|
)
|
(1,729
|
)
|
|
Acquisitions–net of cash acquired
|
|
2
|
|
(1
|
)
|
(1,135
|
)
|
(316
|
)
|
|
Proceeds from the sale of businesses
|
|
—
|
|
54
|
|
1,093
|
|
835
|
|
|
Proceeds from the sale of assets
|
|
22
|
|
5
|
|
102
|
|
10
|
|
|
Proceeds from the sale of short-term
investments
|
|
1,233
|
|
909
|
|
4,121
|
|
1,663
|
|
|
Purchase of short-term investments
|
|
(1,375
|
)
|
(626
|
)
|
(4,262
|
)
|
(1,811
|
)
|
|
(Increase) decrease in restricted cash
|
|
(59
|
)
|
79
|
|
(57
|
)
|
(100
|
)
|
|
Decrease (increase) in debt service
reserves and other assets
|
|
22
|
|
(46
|
)
|
(38
|
)
|
56
|
|
|
Equity investments and advances to
affiliates
|
|
(57
|
)
|
(2
|
)
|
(205
|
)
|
(3
|
)
|
|
Loan advances
|
|
—
|
|
—
|
|
(173
|
)
|
—
|
|
|
Other investing
|
|
(13
|
)
|
69
|
|
79
|
|
68
|
|
|
Net cash used in investing activities
|
|
(803
|
)
|
(172
|
)
|
(2,438
|
)
|
(1,327
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
Borrowings (repayments) under the revolving
credit facilities, net
|
|
183
|
|
100
|
|
382
|
|
(61
|
)
|
|
Issuance of recourse debt
|
|
—
|
|
—
|
|
625
|
|
—
|
|
|
Repayments of recourse debt
|
|
—
|
|
—
|
|
(1,037
|
)
|
—
|
|
|
Issuance of non-recourse debt
|
|
342
|
|
371
|
|
1,908
|
|
1,169
|
|
|
Repayments of non-recourse debt
|
|
(363
|
)
|
(539
|
)
|
(1,037
|
)
|
(1,157
|
)
|
|
Payments for deferred financing costs
|
|
(26
|
)
|
(15
|
)
|
(62
|
)
|
(36
|
)
|
|
Distributions to minority interests
|
|
(206
|
)
|
(305
|
)
|
(450
|
)
|
(571
|
)
|
|
Contributions from minority interests
|
|
246
|
|
25
|
|
407
|
|
359
|
|
|
Financed capital expenditures
|
|
(1
|
)
|
(19
|
)
|
(52
|
)
|
(27
|
)
|
|
Purchase of treasury stock
|
|
(143
|
)
|
—
|
|
(143
|
)
|
—
|
|
|
Other financing
|
|
4
|
|
9
|
|
21
|
|
39
|
|
|
Net cash provided by (used in) financing
activities
|
|
36
|
|
(373
|
)
|
562
|
|
(285
|
)
|
|
Effect of exchange rate changes on cash
|
|
(53
|
)
|
(4
|
)
|
(50
|
)
|
46
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total (decrease) increase in cash and cash
equivalents
|
|
(36
|
)
|
209
|
|
(351
|
)
|
306
|
|
|
Cash and cash equivalents, beginning
|
|
1,743
|
|
1,455
|
|
2,058
|
|
1,358
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, ending
|
|
$
|
1,707
|
|
$
|
1,664
|
|
$
|
1,707
|
|
$
|
1,664
|
|
THE AES CORPORATION
NON-GAAP FINANCIAL MEASURES (unaudited)
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
|
September 30,
|
|
September 30,
|
|
|
($ in millions, except per share amounts)
|
|
2008
|
|
2007
|
|
2008
|
|
2007
|
|
|
|
|
|
|
(Restated)
|
|
|
|
(Restated)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Adjusted Earnings Per
Share (6),(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS From Continuing Operations
|
|
$
|
0.22
|
|
$
|
0.14
|
|
$
|
1.87
|
|
$
|
0.73
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FAS 133 Mark-to-Market (Gains)/Losses
|
|
0.01
|
|
—
|
|
(0.07
|
)
|
0.01
|
|
|
Currency Transaction (Gains)/Losses
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
Net Asset (Gains)/Losses and Impairments
|
|
0.02
|
(1)
|
0.03
|
(2)
|
(1.24
|
)(3)
|
0.09
|
(4)
|
|
Debt Retirement (Gains)/Losses
|
|
—
|
|
—
|
|
0.25
|
(5)
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Earnings Per Share (6),(7)
|
|
$
|
0.25
|
|
$
|
0.17
|
|
$
|
0.81
|
|
$
|
0.83
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of Maintenance Capital
Expenditures for Free Cash Flow(8) Reconciliation Below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maintenance Capital Expenditures
|
|
$
|
142
|
|
$
|
168
|
|
$
|
505
|
|
$
|
679
|
|
|
Growth Capital Expenditures
|
|
437
|
|
464
|
|
1,510
|
|
1,077
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Capital Expenditures
|
|
$
|
579
|
|
$
|
632
|
|
$
|
2,015
|
|
$
|
1,756
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Free Cash Flow
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Cash from Operating Activities
|
|
$
|
784
|
|
$
|
758
|
|
$
|
1,575
|
|
$
|
1,872
|
|
|
Less: Maintenance Capital Expenditures
|
|
142
|
|
168
|
|
505
|
|
679
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free Cash Flow (8)
|
|
$
|
642
|
|
$
|
590
|
|
$
|
1,070
|
|
$
|
1,193
|
|
|
(1)
|
|
Amount
includes: South Africa peaker development cost write-off of $11 million or
$0.02. There is no tax benefit associated with these impairments.
|
|
|
|
|
|
(2)
|
|
Amount
includes: Placerita impairment of $25 million ($15 million net of taxes or
$0.02) and Coal Creek impairment of $10 million ($6 million net of taxes or
$0.01) in Q3 2007.
|
|
|
|
|
|
(3)
|
|
Amount
includes: South Africa peaker development cost write-off of $31 million ($29
million net of taxes or $0.04), Uruguaiana impairment of $36 million ($17
million net of minority interest or $0.03), and nontaxable net gain on
Kazakhstan sale of $908 million or $1.31. There is no tax benefit associated with
the Uruguaiana impairment.
|
|
|
|
|
|
(4)
|
|
In addition
to Q3 2007 items referenced in footnote (2), amount includes: AgCert
investment impairments of $34 million or $0.05 in Q1 2007 and $6 million or
$0.01 in Q2 2007. There is no tax benefit associated with these impairments.
|
|
|
|
|
|
(5)
|
|
Amount
includes: $55 million ($34 million net of tax or $0.05) loss on the
retirement of Corporate debt, $131 million or $0.19 tax impact on
repatriation of a portion of the Kazakhstan sale proceeds that were used to fund
the early retirement of corporate debt, and $14 million ($9 million net of
taxes or $0.01) of debt refinancing at IPALCO in Q2 2008.
|
|
|
|
|
|
(6)
|
|
Adjusted
earnings per share (a non-GAAP financial measure) is defined as diluted
earnings per share from continuing operations excluding gains or losses
associated with (a) mark-to-market amounts related to FAS 133 derivative
transactions, (b) foreign currency transaction impacts on the net
monetary position related to Brazil and Argentina, (c) significant asset
gains or losses due to disposition transactions and impairments, and (d) costs
related to the early retirement of debt. AES believes that adjusted earnings
per share better reflects the underlying business performance of the Company,
and is considered in the Company’s internal evaluation of financial
performance. Factors in this determination include the variability associated
with mark-to-market gains or losses related to certain derivative
transactions, currency gains or losses, periodic strategic decisions to
dispose of certain assets which may influence results in a given period, and
the early retirement of debt.
|
|
|
|
|
|
(7)
|
|
Effective
January 1, 2008, the Company now includes in its definition of adjusted
earnings per share, costs associated with early retirement of non-recourse
debt, in addition to recourse debt. There would be no impact to 2007 reported
adjusted EPS as a result of this change.
|
|
|
|
|
|
(8)
|
|
Free cash
flow (a non-GAAP financial measure) is defined as net cash from operating
activities less maintenance capital expenditures (including environmental
capital expenditures). AES believes that free cash flow is a useful measure
for evaluating our financial condition because it represents the amount of
cash provided by operations less maintenance capital expenditures as defined
by our businesses, that may be available for investing or for repaying debt.
|
The AES Corporation
Parent
Financial Information (unaudited)
Parent only data: last four quarters
($ in millions)
|
|
|
4 Quarters Ended
|
|
|
|
|
Sept. 30,
|
|
June 30,
|
|
Mar. 31,
|
|
Dec. 31,
|
|
|
|
|
2008
|
|
2008
|
|
2008
|
|
2007
|
|
|
Total subsidiary distributions & returns of capital to Parent
|
|
Actual
|
|
Actual
|
|
Actual
|
|
Actual
|
|
|
Subsidiary distributions(1) to
Parent & QHCs
|
|
$
|
1,017
|
|
$
|
1,194
|
|
$
|
1,183
|
|
$
|
1,099
|
|
|
Returns of capital distributions to
Parent & QHCs
|
|
127
|
|
140
|
|
91
|
|
106
|
|
|
Total subsidiary distributions &
returns of capital to Parent
|
|
$
|
1,144
|
|
$
|
1,334
|
|
$
|
1,274
|
|
$
|
1,205
|
|
Parent only data: quarterly
($ in millions)
|
|
|
Quarter Ended
|
|
|
|
|
Sept. 30,
|
|
June 30,
|
|
Mar. 31,
|
|
Dec. 31,
|
|
|
|
|
2008
|
|
2008
|
|
2008
|
|
2007
|
|
|
Total subsidiary distributions & returns of capital to Parent
|
|
Actual
|
|
Actual
|
|
Actual
|
|
Actual
|
|
|
Subsidiary distributions(1) to
Parent & QHCs
|
|
$
|
184
|
|
$
|
269
|
|
$
|
221
|
|
$
|
343
|
|
|
Returns of capital distributions to
Parent & QHCs
|
|
24
|
|
81
|
|
1
|
|
21
|
|
|
Total subsidiary distributions &
returns of capital to Parent
|
|
$
|
208
|
|
$
|
350
|
|
$
|
222
|
|
$
|
364
|
|
Parent Company Liquidity(2)
($
in millions)
|
|
|
Balance at
|
|
|
|
|
Sept. 30,
|
|
June 30,
|
|
Mar. 31,
|
|
Dec. 31,
|
|
|
|
|
2008
|
|
2008
|
|
2008
|
|
2007
|
|
|
|
|
Actual
|
|
Actual
|
|
Actual
|
|
Actual
|
|
|
Cash at Parent & Cash at QHCs(3)
|
|
$
|
455
|
|
$
|
695
|
|
$
|
737
|
|
$
|
1,315
|
|
|
Availability under revolver
|
|
690
|
|
815
|
|
786
|
|
838
|
|
|
Ending liquidity
|
|
$
|
1,145
|
|
$
|
1,510
|
|
$
|
1,523
|
|
$
|
2,153
|
|
|
(1)Subsidiary
distributions should not be construed as an alternative to Net Cash Provided
by Operating Activities which are determined in accordance with GAAP.
Subsidiary distributions are important to the Parent Company because the
Parent Company is a holding company that does not derive any significant
direct revenues from its own activities but instead relies on its
subsidiaries’ business activities and the resultant distributions to fund the
debt service, investment and other cash needs of the holding company. The
reconciliation of difference between the subsidiary distributions and the Net
Cash Provided by Operating Activities consists of cash generated from
operating activities that is retained at the subsidiaries for a variety of
reasons which are both discretionary and non-discretionary in nature. These
factors include, but are not limited to, retention of cash to fund capital
expenditures at the subsidiary, cash retention associated with non-recourse
debt covenant restrictions and related debt service requirements at
the subsidiaries, retention of cash related to sufficiency of local GAAP
statutory retained earnings at the subsidiaries, retention of cash for
working capital needs at the subsidiaries, and other similar timing differences between when the cash is
generated at the subsidiaries and when it reaches the Parent Company and
related holding companies.
|
|
|
|
(2) Liquidity is
defined as cash at the Parent Company plus availability under corporate
revolver plus cash at qualifying holding companies (QHCs). AES believes that
unconsolidated Parent Company liquidity is important to the liquidity
position of AES as a Parent Company because of the non-recourse nature of
most of AES’s indebtedness.
|
|
|
|
(3) The cash held at
QHCs represents cash sent to subsidiaries of the company domiciled outside of
the US. Such subsidiaries had no contractual restrictions on their ability to
send cash to AES, the Parent Company. Cash at those subsidiaries was used for
investment and related activities outside of the US. These investments
included equity investments and loans to other foreign subsidiaries as well
as development and general costs and expenses incurred outside the US. Since
the cash held by these QHCs is available to the Parent, AES uses the combined
measure of subsidiary distributions to Parent and QHCs as a useful measure of
cash available to the Parent to meet its international liquidity needs.
|
AES CORPORATION
2008 FINANCIAL GUIDANCE
|
|
|
Revised
|
|
Previous
|
|
|
|
|
2008 Guidance
|
|
2008 Guidance (1)
|
|
|
|
|
|
|
|
|
|
Income Statement Elements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Margin
|
|
$3.7 to 3.8 billion
|
|
$3.7 to 3.8 billion
|
|
|
|
|
|
|
|
|
|
Income Before Tax and Minority Interest (2)
|
|
$3.1 to 3.2 billion
|
|
$3.1 to 3.2 billion
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per Share From Continuing
Operations (2)
|
|
$2.07
|
|
$2.22
|
|
|
|
|
|
|
|
|
|
Adjusted Earnings Per Share Factors (3)
|
|
($1.00) (4)
|
|
($1.06) (5)
|
|
|
|
|
|
|
|
|
|
Adjusted Earnings Per Share (3)
|
|
$1.07
|
|
$1.16
|
|
|
|
|
|
|
|
|
|
Cash Flow Elements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Cash From Operating Activities
|
|
$2.2 billion
|
|
$2.2 billion
|
|
|
|
|
|
|
|
|
|
Maintenance Capital Expenditures
|
|
$0.8 billion
|
|
$0.8 billion
|
|
|
|
|
|
|
|
|
|
Free Cash Flow (6)
|
|
$1.4 billion
|
|
$1.4 billion
|
|
|
|
|
|
|
|
|
|
Growth Capital Expenditures
|
|
$2.4 to 2.5 billion
|
|
$2.4 to 2.5 billion
|
|
|
|
|
|
|
|
|
|
Subsidiary Distributions (7)
|
|
$1.0 to 1.1 billion
|
|
$1.0 to 1.1 billion
|
|
|
Notes:
|
|
|
|
|
|
(1)
|
|
Guidance
provided on August 8, 2008.
|
|
|
|
|
|
(2)
|
|
Includes net
gain of approximately $908 million or $1.31 per share primarily from sale of
two indirectly owned subsidiaries in Kazakhstan.
|
|
|
|
|
|
(3)
|
|
Non-GAAP
financial measure as reconciled in the table.
|
|
|
|
|
|
(4)
|
|
Adjustment
factors include: net gain of approximately $908 million or $1.31 per share
from sale of two indirectly owned subsidiaries in Kazakhstan; tax expense of
approximately $131 million or $0.19 per share related to the repatriation of
a portion of the Kazakhstan sale proceeds; approximately $69 million or $0.06
in losses on the retirement of debt at the Parent in connection with a
refinancing in May 2008 and at one of our North American subsidiaries
associated with a $375 million refinancing in April 2008; and South Africa
peaker development cost write-off of $11 million or $0.02 per share; and loss
on sale of a portion of its interest in a Latin American subsidiary of $25
million or $0.04 per share.
|
|
|
|
|
|
(5)
|
|
Adjustment
factors include: net gain of approximately $908 million or $1.31 per share
from sale of two indirectly owned subsidiaries in Kazakhstan; tax expense of
approximately $131 million or $0.19 per share related to the repatriation of
a portion of the Kazakhstan sale proceeds; and approximately $69 million or
$0.06 in losses on the retirement of debt at the Parent in connection with a
refinancing in May 2008 and at one of our North American subsidiaries
associated with a $375 million refinancing in April 2008.
|
|
|
|
|
|
(6)
|
|
Non-GAAP
financial measure as reconciled in the table. Maintenance capital
expenditures reflect total capital expenditures of $3.2 to $3.3 billion less
growth capital expenditures of $2.4 to $2.5 billion including certain growth
projects not yet awarded.
|
|
|
|
|
|
(7)
|
|
See footnote
(1) on Parent Financial Information for definition.
|
AES
CORPORATION
2009 FINANCIAL GUIDANCE
|
|
|
Revised
2009 Guidance
|
|
Previous
2009 Guidance (1)
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per Share From Continuing
Operations
|
|
$1.09-$1.14
|
|
$1.20-$1.25
|
|
|
|
|
|
|
|
|
|
Adjusted Earnings Per Share Factors (2)
|
|
$0.06
|
|
—
|
|
|
|
|
|
|
|
|
|
Adjusted Earnings Per Share (2)
|
|
$1.15-$1.20
|
|
$1.20-$1.25
|
|
|
|
|
|
|
|
|
|
Subsidiary Distributions (3)
|
|
$1.1
to $1.3 billion
|
|
$1.1
to $1.3 billion
|
|
Notes:
(1) Guidance provided on March 17,
2008.
(2) Non-GAAP financial measure
as reconciled in the table. Adjustment
factors include: net FAS 133 mark-to-market derivative losses of $0.06 per
share; foreign currency transaction losses of $0.02 per share; and gain on
disposition of assets of $0.02 per share related to Hefei settlement.
(3) See footnote (1) on Parent Financial
Information for definition.