AES Reports $0.56 EPS from Continuing Operations for 2003.Business Editors ARLINGTON Arlington, county, United States Arlington, county (1990 pop. 170,936), N Va., across the Potomac River from Washington, D.C. Arlington is a residential and commercial suburb of Washington. , Va.--(BUSINESS WIRE)--Feb. 5, 2004 The AES Corporation AES Corporation AES (NYSE) is a Fortune 1000 company that generates and distributes electrical power. It was founded on January 28, 1981 by Roger Sant from the US Federal Energy Administration and Dennis Bakke from the Office of Management and Budget. (NYSE NYSE See: New York Stock Exchange :AES): Consolidated Net Cash From Operating Activities $1.6 Billion Company Expects Double-Digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. Growth in 2004 The AES Corporation (NYSE: AES) today reported 2003 income from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the of $336 million, or diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of of $0.56. These results compare to a 2002 loss from continuing operations of $(1.609) billion, or $(2.99) per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share. Sales for the full year were $8.415 billion, an increase of 14% over 2002 sales of $7.380 billion. Consolidated net cash provided by operating activities increased 9% to $1.576 billion, with subsidiary distributions to parent and qualified holding companies of $1.054 billion for the year, in line with the Company's 2003 target. For the fourth quarter of 2003, the Company reported income from continuing operations of $4 million, or $0.01 per diluted share, compared to a loss from continuing operations of $(1.407) billion or $(2.58) per diluted share in the fourth quarter of 2002. Fourth quarter sales increased 22% to $2.281 billion compared to the year-ago period. For the quarter, consolidated net cash provided by operating activities was $490 million, substantially above last year's result. Subsidiary distributions to parent and qualified holding companies were $255 million, slightly lower than distributions in the fourth quarter of 2002. Results from continuing operations for the 2003 fourth quarter and full year reflect the Company' intention to dispose of To determine the fate of; to exercise the power of control over; to fix the condition, application, employment, etc. of; to direct or assign for a use. See also: Dispose two gas-fired gas-fired adj → de gas gas-fired adj → au gaz gas-fired adj (heater etc) → Gas- merchant generation facilities in the U.S., a gas-fired generation facility in Colombia Colombia (kəlŭm`bēə, Span. kōlōm`byä), officially Republic of Colombia, republic (2005 est. pop. 42,954,000), 439,735 sq mi (1,138,914 sq km), NW South America. Bogotá is the capital and largest city. , and a distribution business in the Dominican Republic Dominican Republic (dəmĭn`ĭkən), republic (2005 est. pop. 8,950,000), 18,700 sq mi (48,442 sq km), West Indies, on the eastern two thirds of the island of Hispaniola. The capital and largest city is Santo Domingo. , having determined they no longer fit with the Company's business strategy. As a result, these operations have been recorded as discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. in the fourth quarter and full year 2003 results. Comparisons with prior periods have been adjusted to exclude results from those operations. Including the costs for discontinued operations and an accounting change, the company reported sharply narrower losses. For 2003, the company had a net loss of $(403) million, or $(0.67) per diluted share, compared to a net loss of $(3.509) billion or $(6.51) per diluted share in 2002. The company reported a fourth quarter net loss of $(444) million or $(0.71) per diluted share, compared to a net loss of $(2.766) billion or $(5.08) per diluted share in the fourth quarter of 2002. Commenting on the results, President and Chief Executive Officer Paul Paul, 1901–64, king of the Hellenes (1947–64), brother and successor of George II. He married (1938) Princess Frederika of Brunswick. During Paul's reign Greece followed a pro-Western policy, and the Cyprus question was temporarily resolved. Hanrahan said, "We have met our financial restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). and performance goals for 2003. We enter 2004 a stronger company with increased financial flexibility, and we look to further strengthen our credit quality in the future. With the planned asset disposals announced today and the recently completed Brazil Brazil (brəzĭl`), Port. Brasil, officially Federative Republic of Brazil, republic (2005 est. pop. 186,113,000), 3,286,470 sq mi (8,511,965 sq km), E South America. restructuring, we have repositioned the AES business portfolio to improve earnings stability through reduced exposure to the U.S. merchant market and to exchange rate fluctuations in Brazil. Combined with our focus on improving the operating performance of our businesses, this sets the stage to leverage our strengths for disciplined growth in attractive markets going forward." Added Chief Financial Officer Barry Barry, Welsh Barri, town (1991 pop. 45,053) and port, Vale of Glamorgan, S Wales, on the Bristol Channel. Once a major coal-exporting port, its more diversified export products include cement, flour, and steel products. Sharp, "In 2003 we generated strong cash flow and improved our business performance in a challenging operating environment In computing, an operating environment is the environment in which users run programs, whether in a command line interface, such as in MS-DOS or the Unix shell, or in a graphical user interface, such as in the Macintosh operating system. in many parts of the world. We demonstrated our ability to improve parent company liquidity, strengthen the balance sheet, and refinance Refinance 1. When a business or person revises their payment schedule for repaying debt. 2. Replacing an older loan with a new loan offering better terms. Notes: When a business refinances they typically extend the maturity date. significant portions of our debt portfolio at attractive rates and for longer tenors. We are in an excellent position to use our operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. to support further debt reduction and our capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. program." Forward-Looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. Guidance for 2004 AES expects its 2004 diluted earnings per share from continuing operations to be $0.62, under generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting . Net consolidated cash flow from operating activities is expected to be between $1.6 and $1.7 billion. The company noted that discontinued operations are included, pending disposal, in net cash flow from operating activities, but not in diluted earnings per share, under generally accepted accounting principles. This is expected to result in greater diluted earnings per share from continuing operations growth than cash flow growth in 2004. The operating scenario underlying this guidance assumes a number of market factors, including foreign exchange rates, commodity prices, interest rates, asset impairments or disposals, as well as other significant factors could make actual results vary from this guidance. Additional guidance elements are presented in the company's 2003 Financial Review and 2004 Outlook presentation. 2003 Financial Review and 2004 Outlook Conference Call Information AES will host a conference call today to discuss these results and the outlook for 2004. The call will be held at 9:00am Eastern Standard Time (EST EST electroshock therapy. EST abbr. electroshock therapy ). The call may be accessed via a live webcast which will be available at www.aes.com, or by telephone in listen-only mode at (877) 691-0877. International callers should dial (973) 582-2741. Please call at least fifteen minutes before the scheduled start time. You will be requested to provide your name, e-mail address See Internet address. e-mail address - electronic mail address , and affiliation. The company's 2003 Financial Review and 2004 Outlook presentation is available at www.aes.com. A replay of the conference call will be available at www.aes.com, or by telephone from approximately 12:00pm EST on Thursday Thursday: see week. , February February: see month. 5, 2004 until 6:00pm EST on Friday Friday: see Sabbath; week. Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant , February 13, 2004. Callers should dial (877) 519-4471 and when prompted provide reservation number 4410785, followed by the pound (#) key. International dialers should dial (973) 341-3080. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Disclosure Information contained in this release constitutes forward-looking information statements within the meaning of the Securities Act of 1933 and of the Securities Exchange Act of 1934. These statements are not intended to be a guarantee of performance, but instead constitute AES's current expectation based on reasonable assumptions. Actual events and results may differ materially from those projected. In addition to those listed below, important factors that could affect actual results are discussed in AES's filings with the Securities Exchange Commission, and readers are encouraged to read those filings to learn more about the risk factors associated with AES's businesses. "Safe Harbor" Statement under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995: This news release may contain "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " regarding The AES Corporation's business. These statements are not historical facts, but statements that involve risks and uncertainties. Actual results could differ materially from those projected in these forward-looking statements. For a discussion of such risks and uncertainties, see "Risk Factors" in the Company's Annual Report or Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the most recently ended fiscal year. About AES AES is a leading global power company, with 2003 sales of $8.4 billion. AES delivers 45,000 megawatts of electricity to customers in 27 countries through 116 power facilities and 17 distribution companies. Our 32,000 people are committed to operational excellence and meeting the world's growing power Growing Power is an urban agriculture organization headquartered in Milwaukee, Wisconsin. It runs the last functional farm within the Milwaukee city limits and also organizes activities in Chicago. needs. To learn more about AES, please visit www.aes.com or contact AES investor relations Investor relations The process by which the corporation communicates with its investors. at investing@aes.com.
THE AES CORPORATION
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CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE QUARTERS ENDED DECEMBER 31, 2003 AND 2002
----------------------------------------------------------------------
Quarter Quarter
Ended Ended
($ in millions, except per share amounts) 12/31/2003 12/31/2002
----------------------------------------------------------------------
REVENUES:
Sales and services $2,281 $1,866
OPERATING COSTS AND EXPENSES:
Cost of sales and services 1,637 1,455
Corporate and business development office
expenses 59 48
Other operating expense, net 16 23
Goodwill impairment expense 11 675
Asset impairment expense 43 127
---------------------------
Total operating costs and expenses 1,766 2,328
---------------------------
OPERATING INCOME (LOSS) 515 (462)
OTHER INCOME AND (EXPENSE):
Interest expense, net (395) (379)
Other nonoperating expense, net (7) (3)
Foreign currency transaction losses (27) (16)
Loss on sale of investments (52) -
Equity in earnings (losses) of affiliates 37 (238)
---------------------------
INCOME (LOSS) BEFORE INCOME TAXES AND
MINORITY INTEREST 71 (1,098)
Income tax expense 34 302
Minority interest expense (income) 33 7
---------------------------
INCOME (LOSS) FROM CONTINUING OPERATIONS 4 (1,407)
Loss from operations of discontinued
components (net
of income tax benefit of $72 and $423,
respectively) (490) (1,359)
---------------------------
LOSS BEFORE CUMULATIVE EFFECT OF
ACCOUNTING CHANGE (486) (2,766)
Cumulative effect of accounting change
net of income taxes of $23) 42 -
---------------------------
NET LOSS $(444) $(2,766)
===========================
DILUTED EARNINGS PER SHARE:
Income from continuing operations $0.01 $(2.58)
Discontinued operations (0.79) (2.50)
Cumulative effect of accounting change 0.07 -
---------------------------
Total $(0.71) $(5.08)
===========================
Diluted weighted average
shares outstanding (in millions) 628 545
===========================
THE AES CORPORATION
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CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002
----------------------------------------------------------------------
Year Year
Ended Ended
($ in millions, except per share amounts) 12/31/2003 12/31/2002
----------------------------------------------------------------------
REVENUES:
Sales and services $8,415 $7,380
OPERATING COSTS AND EXPENSES:
Cost of sales and services 5,982 5,430
Corporate and business development office
expenses 157 112
Other operating expense (income), net 46 (37)
Goodwill impairment expense 11 675
Asset impairment expense 148 295
--------------------------
Total operating costs and expenses 6,344 6,475
--------------------------
OPERATING INCOME 2,071 905
OTHER INCOME AND (EXPENSE):
Interest expense, net (1,706) (1,485)
Other nonoperating income, net 107 13
Foreign currency transaction gains (losses) 127 (459)
Equity in earnings (losses) of affiliates 94 (203)
Loss on sale or write-down of investments (53) (115)
--------------------------
INCOME (LOSS) BEFORE INCOME TAXES AND
MINORITY INTEREST 640 (1,344)
Income tax expense 194 285
Minority interest expense (income) 110 (20)
--------------------------
INCOME (LOSS) FROM CONTINUING OPERATIONS 336 (1,609)
Loss from operations of discontinued
components (net of
income tax benefit of $72 and $407,
respectively) (780) (1,554)
--------------------------
LOSS BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE (444) (3,163)
Cumulative effect of accounting change
(net of income taxes of $22 and $72) 41 (346)
--------------------------
NET LOSS $(403) $(3,509)
==========================
DILUTED EARNINGS PER SHARE:
Income from continuing operations $0.56 $(2.99)
Discontinued operations (1.30) (2.88)
Cumulative effect of accounting change 0.07 (0.64)
--------------------------
Total $(0.67) $(6.51)
==========================
Diluted weighted average
shares outstanding (in millions) 598 539
==========================
Business Segment Results AES's business segments, which include Contract Generation, Large Utilities, Competitive Supply and Growth Distribution, generated combined income before income taxes and minority interest, excluding the Corporate segment, of $1,234 million for 2003, as compared with a loss of $(863) million for 2002. Total income before income taxes and minority interest, including the Corporate segment, was $640 million for 2003, as compared with a loss of $(1,344) million for 2002. On a geographic basis, income before income taxes and minority interest from the business segments was generated $475 million from North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , $328 million from South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. , $160 million from Asia, $55 million from Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). and Africa and $216 million from the Caribbean.During the fourth quarter of 2003, AES decided to exit Wolf Hollow hollow 1. a depression. 2. contains a cavity. hollow back backbone has a downward curvature in the center. hollow horn a mythical disease of cattle in primitive communities; treated by removal of the horns. , a 730 MW gas plant in Texas, Granite granite, coarse-grained igneous rock of even texture and light color, composed chiefly of quartz and feldspars. It usually contains small quantities of mica or hornblende, and minor accessory minerals may be present. Ridge, a 720 MW gas plant in New Hampshire New Hampshire, one of the New England states of the NE United States. It is bordered by Massachusetts (S), Vermont, with the Connecticut R. forming the boundary (W), the Canadian province of Quebec (NW), and Maine and a short strip of the Atlantic Ocean (E). , and Termomamonal, a 90 MW gas plant in Colombia, all of which were previously reported in the competitive supply. Additionally, AES decided to exit Ede Este Este, Italian noble family Este (ĕs`tā), Italian noble family, rulers of Ferrara (1240–1597) and of Modena (1288–1796) and celebrated patrons of the arts during the Renaissance. , a distribution company in the Dominican Republic which was previously reported in the growth distribution segment. All amounts have been restated to reflect discontinued operations that have occurred in the current and prior periods. Contract Generation
($ in millions) 2003 2002 Variance
---------------------------
Segment revenues $3,108 $2,550 $558
% of total revenues 37% 35% 2%
Gross margin $1,267 $1,065 $202
% of segment revenues 41% 42% (1)%
Income before income taxes and minority
interest $599 $665 $(66)
% of income before income taxes and
minority interest from segments 49% 77% (28)%
Contract Generation consists of multiple power generation facilities located around the world that generally have contractually limited their exposure to commodity price risks and electricity price volatility by entering into long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. (5 years or longer) power purchase agreements for 75% or more of their expected output capacity. For 2003, Contract Generation revenues were $3,108 million and represented 37% of total revenues, an increase of $558 million over 2002. The most significant contributions came from North and South America, which in aggregate comprised 58% of Contract Generation revenue for the year as compared to 67% for the same period in 2002. Revenues were enhanced with the addition of recently completed contract generation businesses totaling 1,451 mw, including Red Oak in New Jersey (832 mw gas), Puerto Rico Puerto Rico (pwār`tō rē`kō), island (2005 est. pop. 3,917,000), 3,508 sq mi (9,086 sq km), West Indies, c.1,000 mi (1,610 km) SE of Miami, Fla. (454 mw coal), Kelanitissa in Sri Lanka Sri Lanka (srē läng`kə) [Sinhalese,=resplendent land], formerly Ceylon, ancient Taprobane, officially Democratic Socialist Republic of Sri Lanka, island republic (2005 est. pop. (165 mw gas), Barka Barka may refer to:
Mexico or Mexico City, Span. Ciudad de México (Méjico), city (1990 pop. 8,236,960; 1991 met. area est. 20,899,000), central Mexico, capital and largest city of Mexico. , Tiszai in Hungary Hungary, Hung. Magyarország, officially Republic of Hungary, republic (2005 est. pop. 10,007,000), 35,919 sq mi (93,030 sq km), central Europe. , Gener GENER. A son-in-law. Dig. 50, 16, 156. in Chile and Tiete Tie·tê A river, about 805 km (500 mi) long, of southeast Brazil flowing generally northwest to the Paraná River. in Brazil. These improvements were offset by declines at Shady Point in Oklahoma Oklahoma (ōkləhō`mə), state in SW United States. It is bordered by Missouri and Arkansas (E); Texas, partially across the Red R. (S, W); New Mexico, across the narrow edge of the Oklahoma Panhandle (W); and Colorado and Kansas (N). due to a step-down in the contracted capacity payment and at Lal Pir and Pak Gen in Pakistan Pakistan (păk`ĭstăn', päkĭstän`), officially Islamic Republic of Pakistan, republic (2005 est. pop. 162,420,000), 310,403 sq mi (803,944 sq km), S Asia. . The gross margin for the Contract Generation segment was $1,267 million for 2003, an increase of 19% from 2002. Gross margin increases were attributable to Tiete in Brazil, and Ebute in Nigeria Nigeria (nījĭr`ēə), officially Federal Republic of Nigeria, republic (2006 provisional pop. 140,003,542), 356,667 sq mi (923,768 sq km), W Africa. . Additionally, new plants that came online contributed to the increase. These increases were partially offset by declines in gross margin at Beaver beaver, either of two large aquatic rodents, Castor fiber and Castor canadensis, known for their engineering feats. They were once widespread in N and central Eurasia except E Siberia, and in North America from the arctic tree line to the S United Valley and Ironwood ironwood: see hornbeam. ironwood Any of numerous trees and shrubs, found worldwide, that have exceptionally tough or hard wood useful for timber, fence posts, and tool handles. in Pennsylvania Pennsylvania (pĕnsəlvā`nyə), one of the Middle Atlantic states of the United States. It is bordered by New Jersey, across the Delaware River (E), Delaware (SE), Maryland (S), West Virginia (SW), Ohio (W), and Lake Erie and New York , Shady Point in Oklahoma, Kilroot Kilroot is a small village in County Antrim, Northern Ireland, on the eastern outskirts of Carrickfergus, east of Belfast on the north shore of Belfast Lough. It lies within the Carrickfergus Borough Council area. in Northern Ireland Northern Ireland: see Ireland, Northern. Northern Ireland Part of the United Kingdom of Great Britain and Northern Ireland occupying the northeastern portion of the island of Ireland. Area: 5,461 sq mi (14,144 sq km). Population (2001): 1,685,267. and the Chigen plants in China. As a percentage of revenues, the gross margin for the Contract Generation segment was 41% for 2003 compared to 42% for 2002. Contract Generation generated $599 million of income before income taxes and minority interest (or 49% of the net total) for 2003, a decrease from $665 million for 2002. South America showed an increase due to Tiete in Brazil. North America experienced declines due to Beaver Valley in Pennsylvania, Warrior Warrior, river, Ala.: see Black Warrior. Run in Maryland Maryland (mâr`ələnd), one of the Middle Atlantic states of the United States. It is bounded by Delaware and the Atlantic Ocean (E), the District of Columbia (S), Virginia and West Virginia (S, W), and Pennsylvania (N). due to significant FAS 133 mark-to-market Mark-to-market Adjustment of the book value or collateral value of a security to reflect current market value. gains in 2002 related to their power purchase agreement, Shady Point in Oklahoma due to a step-down in the contracted capacity payment in 2003 and Hawaii Hawaii, island, United States Hawaii, island (1990 pop. 120,217), 4,037 sq mi (10,456 sq km), largest and southernmost island of the state of Hawaii and coextensive with Hawaii co.; known as the Big Island. due to write-offs of deferred financing and swap breakage costs of $22 million related to their non-recourse debt Non-Recourse Debt A loan that is secured by some sort of collateral, usually property. The issuer can seize the collateral if the borrower defaults. Notes: These types of projects are characterized by high capital expenditures, long loan periods, and uncertain revenue refinancing Refinancing An extension and/or increase in amount of existing debt. during 2003. These declines were partially offset by increases in the Southland south·land or South·land n. A region in the south of a country or an area. south  land·er n.Noun 1. plants in California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). . The Caribbean experienced an overall increase due to the start of commercial operations at Andres in the Dominican Republic and Puerto Rico offset slightly by the write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of project development costs related to El Faro Faro, town, Portugal Faro (fä`rō), town (1991 pop. 31,966), capital of Faro dist. and of Algarve, S Portugal. The southernmost town in Portugal, it is a seaport from which fish, fruit (especially dried figs), wine, and cork are , a terminated ter·mi·nate v. ter·mi·nat·ed, ter·mi·nat·ing, ter·mi·nates v.tr. 1. To bring to an end or halt: business development project in Honduras Honduras (hŏnd r`əs, –dyr`–; Span., ōnd .
Europe/Africa experienced a significant decrease due to the $76 million
write-off of previously capitalized CapitalizedRecorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. costs of Bujagali, a construction project in Uganda Uganda (y  gän`də, gän`dä), officially Republic of Uganda, republic (2005 est. pop. that the company decided to terminate Terminate (terminat.exe) was a shareware modem terminal and host program for MS-DOS and compatible operating systems developed from the early to the late 1990s by the Dane Bo Bendtsen. The last release (5. during the third
quarter of 2003 and Zeg, a construction project in Poland Poland, Pol. Polska, officially Republic of Poland, republic (2005 est. pop. 38,635,000), 120,725 sq mi (312,677 sq km), central Europe. It borders on Germany in the west, on the Baltic Sea and the Kaliningrad region of Russia in the north, on Lithuania, that the
company decided to terminate during the fourth quarter of 2003. Asia had
overall decreases due to declines at Lal Pir and Pak Gen in Pakistan and
Chigen in China which were partially offset by the start of commercial
operations at Barka and Ras Laffan.Competitive Supply
($ in millions) 2003 2002 Variance
---------------------------
Segment revenues $880 $812 $68
% of total revenues 10% 11% (1)%
Gross margin $220 $183 $37
% of segment revenues 25% 23% 2%
Income (loss) before income taxes and
minority interest $140 $(357) $497
% of income before income taxes and
minority interest from segments 11% (41)% 52%
Competitive Supply consists primarily of the power plants selling electricity directly to wholesale customers in competitive markets and, as a result, the profitability of such plants are generally more sensitive to fluctuations in the market price of electricity, natural gas and coal, in particular. For 2003, Competitive Supply revenues were $880 million and represented 10% of total revenues for the year. The most significant contributions were from the competitive markets of the U.S., which comprised 51% of Competitive Supply revenue for 2003 and 2002. Competitive market prices increased year over year in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , which resulted in increased revenue in the New York plants. Additionally, other plants showed revenue improvements, including Alicura and Parana in Argentina Argentina (ärjəntē`nə, Span. ärhāntē`nä), officially Argentine Republic, republic (2005 est. pop. 39,538,000), 1,072,157 sq mi (2,776,889 sq km), S South America. , Panama Panama, country, Central America Panama (păn`əmä'), Span. Panamá, officially Republic of Panama, republic (2005 est. pop. in the Caribbean and Ekibastuz Ekibastuz (ĕkēbäst s`), city (1990 pop. 134,627), N Kazakhstan. It is the industrial center of a bituminous coal-mining basin, which has coal reserves estimated at 8 billion in Asia. These
increases were partially offset by decreased revenues from Deepwater Deepwater or Deep Water may refer to:
n. 1. A quantity or portion of something lacking after delivery or storage. 2. A temporary suspension of operation, especially of electric power. during the third quarter of 2003 and from Borsod Borsod was the name of a historic administrative county (comitatus) of the Kingdom of Hungary in present-day north-eastern Hungary. The capital of the county was Miskolc. After World War II, the county was merged with the Hungarian parts of Abaúj-Torna and Zemplén counties to form in Hungary. Gross margin as a percentage of revenues for the Competitive Supply segment was 25% for 2003, an increase from 23% for 2002. Overall, the gross margin for Competitive Supply increased to $220 million from $183 million. Margins and margin percentages were higher at the New York plants, CTSN CTSN Crimson Tide Sports Network CTSN Seaman, Cryptologic Technician Striker (Naval Rating) and Parana in South America and Altai Altai or Altay (both: ăltī`, äl–, ăl`tī, Rus. əltī`), geologically complex mountain system of central Asia; largely in the Altai Republic, Russia, and in Kazakhstan, but extending into W in Asia. These increases were partially offset by lower margins and margin percentages at Deepwater in Texas and Borsod. Competitive Supply generated $140 million of income before income taxes and minority interest (or 11% of the net total) for 2003, which represents a $497 million improvement over the same period in 2002. The increase is primarily due to the write-off of $168 million of construction costs associated with Greystone, a project in Tennessee Tennessee, state, United States Tennessee (tĕn`əsē', tĕn'əsē`), state in the south-central United States. , and $83 million of construction costs during 2002 related to Lake Worth, a project in Florida Florida, state, United States Florida (flôr`ĭdə, flŏr`–), state in the extreme SE United States. A long, low peninsula between the Atlantic Ocean (E) and the Gulf of Mexico (W), Florida is bordered by Georgia and . Operationally, during 2003 increases at CTSN in Argentina and the New York plants were partially offset by decreases at Parana in Argentina, Panama, Borsod in Hungary and Deepwater in Texas. Large Utilities
($ in millions) 2003 2002 Variance
----------------------------
Segment revenues $3,301 $3,150 $151
% of total revenues 39% 43% (4)%
Gross margin $762 $687 $75
% of segment revenues 23% 22% 1%
Income (loss) before income taxes and
minority interest $380 $(978) $1,358
% of income before income taxes and
minority interest from segments 31% (113)% 144%
The Large Utilities segment is comprised of the large integrated utilities that serve nearly 7 million customers in North America, the Caribbean and South America. The Large Utility businesses include IPALCO IPALCO Indianapolis Power and Light Company in Indiana Indiana, state, United States Indiana, midwestern state in the N central United States. It is bordered by Lake Michigan and the state of Michigan (N), Ohio (E), Kentucky, across the Ohio R. (S), and Illinois (W). , EDC EDC See: Export Development Corp. in Venezuela Venezuela (vĕnəzwā`lə, Span. vānāswā`lä), officially the Bolivarian Republic of Venezuela, republic (2005 est. pop. 25,375,000), 352,143 sq mi (912,050 sq km), N South America. and Eletropaulo AES Eletropaulo (also known simply as Eletropaulo) is a major Brazilian power distributor in the state of São Paulo. The company's full name is Eletropaulo Metropolitana Eletricidade de São Paulo. Eletropaulo has around 5 million customers. in Brazil. For 2003, revenues for Large Utilities were $3,301 million and represented 39% of total revenues for the year. Revenues for Large Utilities increased $151 million, or 5%, compared to 2002. Eletropaulo's revenues for the year increased due to appreciation of the Brazilian Real The real (IPA: [xe'aw] or [ʁe'aɫ], symbol: R$, ISO 4217 code: BRL, plural: reais) is the currency of Brazil. It is also the name of the earliest Brazilian currency (see from the Colonial period to 1942. compared to the same quarter of 2002. EDC's revenues decreased due to devaluation devaluation, decreasing the value of one nation's currency relative to gold or the currencies of other nations. It is usually undertaken as a means of correcting a deficit in the balance of payments. of the Venezuelan Bolivar partially offset by a higher demand and a tariff tariff, tax on imported and, more rarely, exported goods. It is also called a customs duty. Tariffs may be distinguished from other taxes in that their predominant purpose is not financial but economic—not to increase a nation's revenue but to protect domestic increase. IPALCO had a slight increase year over year. The gross margin as a percentage of revenues for the Large Utility segment was 23% for 2003 compared to 22% for 2002. The South America gross margin increased mainly due to an impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charge taken for Cemig in the fourth quarter of 2002. EDC's gross margin increased due to higher demand and increased tariffs This is a list of tariffs and trade legislation:
Large Utilities generated $380 million of income before income taxes and minority interest (or 31% of the net total) for 2003, up from a loss of $(978) million for the same period in 2002. The increase relates primarily to impairment charges taken in 2002 for Eletropaulo and Cemig, which were not recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. in 2003. Growth Distribution
($ in millions) 2003 2002 Variance
----------------------------
Segment revenues $1,126 $868 $258
% of total revenues 13% 12% 1%
Gross margin $184 $15 $169
% of segment revenues 16% 2% 14%
Income (loss) before income taxes and
minority interest $115 $(193) $308
% of income before income taxes and
minority interest from segments 9% (22)% 31%
The Growth Distribution segment, serving nearly 4 million customers, consists of electricity distribution companies that are generally located in developing countries or regions where the demand for electricity is expected to grow at a rate higher than in more developed regions. For 2003, revenues were $1,126 million, a 1% increase over 2002, and represented 13% of total revenues for the year. The Caribbean and South America represent the most significant contributors with 67% of Growth Distribution revenues, while Europe/Africa contributes the remaining 33%. There were increases in revenues at Eden & Edes and Edelap in Argentina, Sonel in Cameroon Cameroon, country Cameroon (kăm'ər n`), Fr. Cameroun, officially Republic of Cameroon, republic (2005 est. pop. and Clesa and Caess in El
Salvador El Salvador (ĕl sälväthōr`), officially Republic of El Salvador, republic (2005 est. pop. 6,705,000), 8,260 sq mi (21,393 sq km), Central America. . These were partially offset by reductions at Sul in Brazil.The gross margin as a percentage of revenues for the Growth Distribution segment was 16% for 2003, an increase from 2% for 2002. Gross margin and gross margin percentages increased at Sonel in Cameroon and Caess in El Salvador. Additionally, there was a nonrecurring charge Nonrecurring Charge An expense occurring only once on a company's financial statement. Notes: An extraordinary item is an example of a nonrecurring charge. Also known as "nonrecurring item". taken in 2002 for the write-off of $141 million related to MAE (1) (Metropolitan Area Exchange) Originally known as Metropolitan Area Ethernets, MAEs are junction points on the Internet where data is exchanged between carriers. See IXP and NAP. settlements at Sul in Brazil that was not recurring in 2003. These increases were partially offset by decreased gross margins at Eden, Edes and Edelap in Argentina. Overall, the gross margin for the Growth Distribution segment increased to $184 million for 2003. Growth Distribution businesses generated $115 million of income before income taxes and minority interest for 2003, an increase of $308 million from a loss before income taxes of $(193) million for 2002. Income before income taxes and minority interest increased at Sul in Brazil and Caess in El Salvador. These increases were partially offset by lower operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: at Eden & Edes in Argentina. Additionally, the charge taken in 2002 for the write-off of $141 million related to MAE settlements at Sul in Brazil contributed to the change.
THE AES CORPORATION --- Supplemental Data
($ in millions, except Total Assets in billions)
--------------------2002-------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year
-------------------------------------------
North America
Revenues $489 $491 $569 $538 $2,087
Income before Income Taxes
and Minority Interest $137 $139 $6 $(2) $280
Caribbean (1)
Revenues $313 $296 $271 $314 $1,194
Income before Income Taxes
and Minority Interest $72 $91 $59 $(51) $171
South America
Revenues $786 $706 $710 $684 $2,886
Income before Income Taxes
and Minority Interest $(38) $(307) $(285) $(983) $(1,613)
Europe/Africa
Revenues $217 $176 $194 $234 $821
Income before Income Taxes
and Minority Interest $56 $30 $18 $62 $166
Asia
Revenues $100 $108 $88 $96 $392
Income before Income Taxes
and Minority Interest $41 $46 $26 $20 $133
Corporate (3)
Income before Income Taxes
and Minority Interest $(124) $(117) $(96) $(144) $(481)
Contract Generation
Revenues $652 $632 $598 $668 $2,550
Gross Margin (2) $272 $260 $242 $291 $1,065
Income before Income Taxes
and Minority Interest $190 $166 $155 $154 $665
Competitive Supply
Revenues $192 $177 $214 $229 $812
Gross Margin (2) $33 $35 $53 $62 $183
Income before Income Taxes
and Minority Interest $(104) $(49) $(130) $(74) $(357)
Large Utilities
Revenues $768 $863 $783 $736 $3,150
Gross Margin (2) $232 $186 $199 $70 $687
Income before Income Taxes
and Minority Interest $169 $39 $(192) $(994) $(978)
Growth Distribution
Revenues $293 $105 $237 $233 $868
Gross Margin (2) $75 $(93) $45 $(12) $15
Income before Income Taxes
and Minority Interest $13 $(157) $(9) $(40) $(193)
Corporate (3)
Income before Income Taxes
and Minority Interest $(124) $(117) $(96) $(144) $(481)
Revenues $1,905 $1,777 $1,832 $1,866 $7,380
Gross Margin (2) $612 $388 $539 $411 $1,950
Gross Margin Percentage (2) 32% 22% 29% 22% 26%
Income before Income Taxes
and Minority Interest $144 $(118) $(272)$(1,098) $(1,344)
Diluted EPS from Continuing
Operations(4) $0.17 $(0.18) $(0.37) $(2.58) $(2.99)
Total Assets (billions) $40 $39 $37 $34 $34
Depreciation and
Amortization $168 $169 $162 $165 $664
FAS 133 Gain (Loss)(5) $4 $43 $- $(45) $2
Foreign Exchange Gain
(Loss) from Brazil(5) $(10) $(85) $(203) $46 $(252)
Foreign Exchange Gain
(Loss) from Argentina(5) $(82) $(52) $- $(5) $(139)
Foreign Exchange Gain
(Loss) from Venezuela(5) $65 $25 $21 $(72) $39
(1) Includes Venezuela and Colombia.
(2) Gross Margin is revenues reduced by cost of sales and
services.
(3) Corporate consists of interest expense and corporate and
business development expenses. Revenue and Gross Margin for
Corporate equal zero.
(4) The sum of these amounts do not equal the annual amount due to
rounding or because the quarterly calculations are based on
varying numbers of shares outstanding.
(5) Amount is net of the income tax effect.
--------------2003------------------
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year
----------------------------------------------------------------------
North America
Revenues $546 $507 $581 $525 $2,159
Income before Income Taxes and
Minority Interest $120 $100 $134 $121 $475
Caribbean (1)
Revenues $347 $373 $387 $421 $1,528
Income before Income Taxes and
Minority Interest $56 $20 $83 $57 $216
South America
Revenues $675 $796 $908 $929 $3,308
Income before Income Taxes and
Minority Interest $68 $143 $64 $53 $328
Europe/Africa
Revenues $236 $209 $217 $252 $914
Income before Income Taxes and
Minority Interest $64 $22 $(55) $24 $55
Asia
Revenues $107 $107 $138 $154 $506
Income before Income Taxes and
Minority Interest $42 $46 $53 $19 $160
Corporate (3)
Income before Income Taxes and
Minority Interest $(137) $(106) $(148) $(203) $(594)
Contract Generation
Revenues $716 $735 $817 $840 $3,108
Gross Margin (2) $291 $285 $327 $364 $1,267
Income before Income Taxes and
Minority Interest $169 $142 $103 $185 $599
Competitive Supply
Revenues $229 $196 $230 $225 $880
Gross Margin (2) $69 $45 $59 $47 $220
Income before Income Taxes and
Minority Interest $70 $41 $37 $(8) $140
Large Utilities
Revenues $702 $778 $908 $913 $3,301
Gross Margin (2) $165 $163 $244 $190 $762
Income before Income Taxes and
Minority Interest $73 $91 $127 $89 $380
Growth Distribution
Revenues $264 $283 $276 $303 $1,126
Gross Margin (2) $50 $45 $46 $43 $184
Income before Income Taxes and
Minority Interest $38 $57 $12 $8 $115
Corporate (3)
Income before Income Taxes and
Minority Interest $(137) $(106) $(148) $(203) $(594)
Revenues $1,911 $1,992 $2,231 $2,281 $8,415
Gross Margin (2) $575 $538 $676 $644 $2,433
Gross Margin Percentage (2) 30% 27% 30% 28% 29%
Income before Income Taxes and
Minority Interest $213 $225 $131 $71 $640
Diluted EPS from Continuing
Operations(4) $0.23 $0.24 $0.10 $0.01 $0.56
Total Assets (billions) $33 $34 $30 $30 $30
Depreciation and Amortization $173 $182 $196 $187 $738
FAS 133 Gain (Loss)(5) $(8) $(18) $(11) $(3) $(40)
Foreign Exchange Gain (Loss) from
Brazil(5) $22 $82 $(19) $- $85
Foreign Exchange Gain (Loss) from
Argentina(5) $33 $21 $(23) $(7) $24
Foreign Exchange Gain (Loss) from
Venezuela(5) $4 $(18) $10 $5 $1
(1) Includes Venezuela and Colombia.
(2) Gross Margin is revenues reduced by cost of sales and
services.
(3) Corporate consists of interest expense and corporate and
business development expenses. Revenue and Gross Margin for
Corporate equal zero.
(4) The sum of these amounts do not equal the annual amount due to
rounding or because the quarterly calculations are based on
varying numbers of shares outstanding.
(5) Amount is net of the income tax effect.
THE AES CORPORATION
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2003 AND 2002
($ in millions) December 31, December 31,
2003 2002
----------------------------
Assets:
Current assets:
Cash and cash equivalents $1,737 $792
Restricted cash 394 158
Short term investments 189 177
Accounts receivable, net of reserves of
$291 and $310, respectively 1,211 1,001
Inventory 376 353
Receivable from affiliates 3 25
Deferred income taxes - current 136 138
Prepaid expenses 64 27
Other current assets 677 923
Current assets of held for sale and
discontinued businesses 205 763
----------------------------
Total current assets 4,992 4,357
Property, Plant and Equipment:
Land 733 687
Electric generation and distribution
assets 21,152 18,176
Accumulated depreciation (4,954) (4,031)
Construction in progress 1,278 2,349
----------------------------
Property, plant and equipment, net 18,209 17,181
Other assets:
Deferred financing costs, net 430 390
Investment in and advances to affiliates 648 678
Debt service reserves and other deposits 428 508
Goodwill, net 1,378 1,373
Deferred income taxes - noncurrent 781 967
Long-term assets of held for sale and
discontinued businesses 750 7,332
Other assets 1,992 1,482
----------------------------
Total other assets 6,407 12,730
----------------------------
Total Assets $29,608 $34,268
============================
Liabilities and Stockholders' Equity:
Current liabilities:
Accounts payable $1,245 $1,018
Accrued interest 561 331
Accrued and other liabilities 1,156 1,091
Current liabilities of held for sale and
discontinued businesses 699 763
Recourse debt-current portion 77 26
Non-recourse debt-current portion 2,769 3,277
----------------------------
Total current liabilities 6,507 6,506
Long-term liabilities:
Recourse debt 5,862 6,755
Non-recourse debt 11,015 10,044
Deferred income taxes 1,051 1,186
Long-term liabilities of held for sale and
discontinued businesses 94 5,738
Pension liabilities 947 1,166
Other long-term liabilities 2,702 2,557
----------------------------
Total long-term liabilities 21,671 27,446
Minority Interest, including discontinued
businesses of $12 and $41 in 2003 and
2002 805 657
Stockholders' equity (deficit):
Common stock 6 6
Additional paid-in capital 5,737 5,312
Accumulated deficit (1,103) (700)
Accumulated other comprehensive loss (4,015) (4,959)
----------------------------
Total stockholders' equity (deficit) 625 (341)
----------------------------
Total Liabilities and Stockholders' Equity
(Deficit) $29,608 $34,268
============================
THE AES CORPORATION
CAPITAL RESOURCES AND OTHER BALANCE SHEET DATA
($ in billions)
December 31, December 31,
Capitalization: 2003 2002
----------------------------
Recourse debt $5.94 $6.78
Non-recourse debt 13.78 13.32
----------------------------
Total debt 19.72 20.10
Minority Interest 0.81 0.66
Stockholders' equity 0.63 (0.34)
----------------------------
Total capitalization $21.16 $20.42
============================
Selected Balance Sheet Data by Geographic
Region:
Property,
Plant Total Non-recourse
December 31, 2003 & Equipment Assets Debt
------------------------------------------
North America $5.21 $6.44 $3.86
Caribbean 4.68 5.83 2.49
South America 5.14 10.00 5.21
Europe/Africa 1.50 2.75 0.89
Asia 1.66 2.49 1.34
Discontinued Operations - 0.96 -
Corporate 0.02 1.14 -
December 31, 2002
North America $5.26 $6.53 $3.77
Caribbean 5.00 6.07 2.79
South America 4.23 8.66 4.96
Europe/Africa 1.30 2.32 0.74
Asia 1.38 2.19 1.06
Discontinued Operations - 8.10 -
Corporate 0.01 0.40 -
Selected Balance Sheet Data by Line of Business:
Property,
Plant Total Non-recourse
December 31, 2003 & Equipment Assets Debt
------------------------------------------
Contract Generation $9.12 $13.45 $7.62
Competitive Supply 1.47 2.14 0.51
Large Utilities 6.03 9.05 4.55
Growth Distribution 1.57 2.87 1.10
Discontinued Operations - 0.96 -
Corporate 0.02 1.14 -
December 31, 2002
Contract Generation $8.06 $12.09 $6.54
Competitive Supply 2.13 2.80 1.07
Large Utilities 5.64 8.49 4.65
Growth Distribution 1.34 2.39 1.06
Discontinued Operations - 8.10 -
Corporate 0.01 0.40 -
The AES Corporation
Parent Financial Information
----------------------------------------------------------------------
Parent only data: last four quarters
($ in millions)
4 Quarters Ended
March June September December
Total subsidiary distributions & 31, 30, 30, 31,
returns of capital to Parent 2003 2003 2003 2003
--------------------------------- Actual Actual Actual Actual
------------------------------
Subsidiary distributions to
Parent $658 $773 $909 $1,008
Net distributions to/(from) QHCs
(1) 286 208 139 46
-----------------------------
Subsidiary distributions 944 981 1,048 1,054
Returns of capital distributions
to Parent 43 54 248 242
Net returns of capital
distributions to/(from) QHCs (1) 0 6 (1) 0
-----------------------------
Returns of capital distributions 43 60 247 242
Combined distributions & return
of capital received 987 1,041 1,295 1,296
Less: combined net distributions &
returns of capital to/(from) QHCs (1) (286) (214) (138) (46)
-----------------------------
Total subsidiary distributions &
returns of capital to Parent $701 $827 $1,157 $1,250
=============================
Parent only data: quarterly
($ in millions)
Quarters Ended
March June September December
Total subsidiary distributions & 31, 30, 30, 31,
returns of capital to Parent 2003 2003 2003 2003
--------------------------------- Actual Actual Actual Actual
-----------------------------
Subsidiary distributions to
Parent $136 $312 $312 $248
Net distributions to/(from) QHCs
(1) 44 (12) 7 7
-----------------------------
Subsidiary distributions 180 300 319 255
Returns of capital distributions
to Parent 2 24 199 17
Net returns of capital
distributions to/(from) QHCs (1) 0 6 (7) 1
-----------------------------
Returns of capital distributions 2 30 192 18
Combined distributions & return
of capital received 182 330 511 273
Less: combined net distributions &
returns of capital to/(from) QHCs (1) (44) 6 0 (8)
-----------------------------
Total subsidiary distributions &
returns of capital to Parent $138 $336 $511 $265
=============================
Liquidity (2) Balance at
---------------------------------
($ in millions) December March June September December
31, 31, 30, 30, 31,
2002 2003 2003 2003 2003
Actual Actual Actual Actual Actual
-------------------------------------
Cash at Parent $188 $395 $923 $525 $865
Availability under revolver 18 28 39 172 180
Cash at QHCs (1) 10 66 29 41 26
-------------------------------------
Ending liquidity $216 $489 $991 $738 $1,071
=====================================
(1) The cash held at qualifying holding companies (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
qualifying holding companies is available to the parent, AES
uses the combined measure of subsidiary distributions to
parent and qualified holding companies as a useful measure of
cash available to the parent to meet its international
liquidity needs.
(2) 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.
Certain statements regarding AES's business operations may
constitute "forward looking statements" as defined by the Securities
and Exchange Commission.
Such statements are not historical facts, but are predictions
about the future which inherently involve risks and uncertainties,
which could cause our actual results to differ from those contained in
the forward looking statement. We urge investors to read our
descriptions and discussions of these risks that are contained under
the section "Risk Factors" in AES's Annual Report on Form 10-K for the
year ended December 31, 2002.
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