AES Reports Record Earnings of $0.83 Per Share -- Pre-Split -- For the Quarter, Before Extraordinary Item.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)--April 27, 2000 Diversified diversified (di·verˑ·s Global Businesses Contribute to Strong Quarter 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) announced today that net income before extraordinary item was $181 million for the quarter ended March 31, 2000, representing a dramatic increase over the net loss of $(13) million for the first quarter of 1999. 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 before extraordinary item were $0.83 for the quarter, compared to a loss of $(0.07) for the same quarter in 1999. Revenues for the quarter were $1.5 billion, an increase of 131% from $638 million in the first quarter of 1999. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. also increased 91% to $390 million, up from $204 million in the first quarter of 1999. Net income was $174 million for the quarter ended March 31, 2000. The extraordinary charge of $7 million after tax this quarter related to the early extinguishment The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. of certain corporate debt and the corresponding 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 deferred financing costs. Barry J. Sharp, Chief Financial Officer, commented, "We are extremely pleased with the record results. Most notably, the 91% increase in operating income to $390 million exhibits the real strength of our first quarter. We also continue to see increasing benefits from our worldwide geographic and business segment diversification Diversification A risk management technique that mixes a wide variety of investments within a portfolio. It is designed to minimize the impact of any one security on overall portfolio performance. Notes: Diversification is possibly the greatest way to reduce the risk. (generation and distribution businesses). This quarter we have also added to this news release a supplemental schedule of information which we believe our investors will find helpful in their efforts to understand our diverse business segments." Dennis W. Bakke, President and Chief Executive Officer, stated, "AES is off to an excellent start in 2000. Most of our existing businesses performed well and new opportunities abound in many parts of the world. This year we hope to continue to expand the ways in which we serve the world, including our newer initiatives in competitive retail and telecom." During the quarter, AES also announced a 2 for 1 common stock split. The record date is May 1, 2000 and the payment date is June 1, 2000. The financial information presented in this news release does not reflect the impact of the stock split. AES also announced the appointment of three new Group Managers: -- Naveed Ismail: Group Manager for Argentina, Uruguay and Peru. -- Rich Bulger and David Travesso: Co-Group Managers for the Sao Paulo region of Brazil. Business development successes in the first quarter of 2000 include the following: -- In March, a subsidiary of AES acquired for $8 million, GeoUtilities Inc., an internet-based superstore su·per·store n. A very large retail store that stocks highly diversified merchandise, such as groceries, toys, and camera equipment, or a wide variety of mechandise in a specific product line, such as computers or sporting goods. for energy, telecom and other vital services. -- In March, a subsidiary of AES completed a financing associated with 823 MW of generating facilities in the Republic of Georgia Georgia, country, Asia Georgia (jôr`jə), Georgian Sakartvelo, Rus. Gruziya, officially Republic of Georgia, republic (2005 est. pop. 4,677,000), c.26,900 sq mi (69,700 sq km), in W Transcaucasia. . The financing included the acquisition of the 600 MW Gardabani thermal plant and the establishment of 25 year concessions for the Khrami I and II hydro hy·dro adj. Hydroelectric. n. pl. hy·dros 1. Hydroelectric power. 2. A hydroelectric power plant. stations, which have a combined capacity of 223 MW. -- In March, a subsidiary of AES, completed a $440 million non-recourse project financing Project financing A form of asset-based financing in which a firm finances a discrete set of assets on a stand-alone basis. for AES Red Oak, an 832 MW natural gas-fired combined cycle A combined cycle is characteristic of a power producing engine or plant that employs more than one thermodynamic cycle. Heat engines are only able to use a portion of the energy their fuel generates (usually less than 50%). The remaining heat from combustion is generally wasted. plant in Sayreville, New Jersey. -- In February, AES announced that it had entered into an agreement to acquire a 59% stake in the 1,000 MW hydroelectric facility of Hidroelectrica Alicura S.A. ("Alicura") in Argentina from Southern Energy, Inc. ("SEI"). -- In February, AES announced that a subsidiary had reached an agreement with the Bulgarian state-owned electric utility NEK NEK Northeast Kingdom (Vermont) NEK Norsk Electroteknisk Komite , that will allow AES to build, own, operate and transfer a $750 million lignite-fired power plant. -- In January, a subsidiary of AES agreed to acquire 59% of the outstanding preferred (non-voting) shares of Eletropaulo S.A. ("Eletropaulo"). -- In January, a subsidiary of AES and Caterpillar caterpillar (kăt`əpĭl'ər, kăt`ər–), common name for the larva of a moth or butterfly. Caterpillars have distinct heads and are segmented and wormlike. Inc. reached a service agreement for multiple energy products that will result in the construction of a 45 MW cogeneration cogeneration In power systems, use of steam for both power generation and heating. High-temperature, high-pressure steam from a boiler and superheater first passes through a turbine to produce power. plant in Mossville, Illinois Illinois, river, United States Illinois, river, 273 mi (439 km) long, formed by the confluence of the Des Plaines and Kankakee rivers, NE Ill., and flowing SW to the Mississippi at Grafton, Ill. It is an important commercial and recreational waterway. . The company's generating assets include interests in one hundred and twenty-five facilities totaling over 44 gigawatts of capacity. AES' electricity distribution network has over 954,000 km of conductor conductor Any of various substances that allow the flow of electric current or thermal energy. A conductor is a poor insulator because it has a low resistance to such flow. and associated rights of way and sells over 114,000 gigawatt gig·a·watt n. Abbr. GW One billion (109) watts. hours per year to over 15 million end-use customers. In addition, through its various retail electricity supply businesses, the company sells electricity to over 154,000 end-use customers. AES is dedicated to providing electricity worldwide in a socially responsible way. For more general information visit our web site at www.aesc.com or contact investor relations Investor relations The process by which the corporation communicates with its investors. at investing@aesc.com. The list aes-pr-announce is an automated au·to·mate v. au·to·mat·ed, au·to·mat·ing, au·to·mates v.tr. 1. To convert to automatic operation: automate a factory. 2. mailing list An automated e-mail system on the Internet, which is maintained by subject matter. There are thousands of such lists that reach millions of individuals and businesses. New users generally subscribe by sending an e-mail with the word "subscribe" in it and subsequently receive all new and can be found on the investing page of our web site. Those who subscribe to Verb 1. subscribe to - receive or obtain regularly; "We take the Times every day" subscribe, take buy, purchase - obtain by purchase; acquire by means of a financial transaction; "The family purchased a new car"; "The conglomerate acquired a new company"; this list will receive updates when AES issues a press release.
THE AES CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE QUARTERS ENDED MARCH 31, 2000 AND 1999
----------------------------------------------------------------------
Quarter Quarter
Ended Ended Percentage
03/31/2000 03/31/1999 Change
----------------------------------------------------------------------
($ in millions,
except per
share amounts)
REVENUES:
Sales and services $ 1,476 $ 638 131%
OPERATING COSTS
AND EXPENSES:
Cost of sales
and services 1,057 418 (153%)
Selling, general and
administrative
expenses 29 16 (81%)
------- -------
Total operating costs
and expenses 1,086 434 (150%)
------- -------
OPERATING INCOME 390 204 91%
OTHER INCOME AND
(EXPENSE):
Interest expense (269) (133) (102%)
Interest and other
income 31 19 63%
Equity in earnings of
affiliates (before
income tax) 118 (91) 230%
------- -------
INCOME BEFORE
INCOME TAXES
AND MINORITY
INTEREST 270 (1) 27,100%
Income tax provision 71 (6) (1,283%)
Minority interest 18 18 -
------- -------
INCOME BEFORE
EXTRAORDINARY ITEM 181 (13) 1,492%
Extraordinary item,
net of tax -
Early extinguishment
of debt (7) - n/a
------- -------
NET INCOME $ 174 $ (13) 1,438%
======= =======
DILUTED EARNINGS
PER SHARE: (1)
Before extraordinary
item 0.83 (0.07) 1,286%
Extraordinary item (0.03) - n/a
------- -------
Total $ 0.80 $ (0.07) 1,243%
======= =======
(1) Diluted earnings per share are calculated before the effect of
the 2 for 1 stock split recently declared by AES. The stock split
will occur on June 1, 2000 for shareholders of record on May 1,
2000.
The AES Corporation
Unaudited Supplemental Data
For the Quarter ended March 31, 2000
--------------------1999------------ 2000
1st 2nd 3rd 4th 1st
Qtr. Qtr. Qtr. Qtr. Year Qtr.
---- ---- ---- ---- ---- ----
GEOGRAPHIC-% of Total
North America
Revenues 27% 31% 45% 39% 37% 37%
EBCIT (1) 35% 35% 40% 32% 35% 28%
So/Cent America
Revenues 38% 41% 33% 32% 35% 27%
EBCIT 17% 28% 36% 32% 29% 35%
Europe
Revenues 14% 9% 9% 17% 13% 25%
EBCIT 23% 9% 9% 23% 17% 28%
Asia
Revenues 21% 19% 13% 12% 15% 11%
EBCIT 25% 28% 15% 13% 19% 9%
SEGMENTS-% of Total
Generation
Revenues 61% 64% 63% 56% 60% 62%
Gross Margin (2) 78% 80% 83% 76% 79% 83%
EBCIT 84% 78% 73% 79% 77% 70%
Distribution
Revenues 39% 36% 37% 44% 40% 38%
Gross Margin 22% 20% 17% 24% 21% 17%
EBCIT 16% 22% 27% 21% 23% 30%
FINANCIAL HIGHLIGHTS-million $, except Total Assets in billion $
Revenues $ 638 $ 640 $ 847 $1,128 $3,253 $1,476
EBCIT $ 147 $ 171 $ 197 $ 245 $ 760 $ 343
Net Income
Excluding
Extraordinary
Items (3) $ 74 $ 84 $ 99 $ 120 $ 377 $ 181
Total Assets
(billions) $ 10 $ 11 $ 12 $ 21 $ 21 $ 23
Deprec./Amort. $ 60 $ 62 $ 72 $ 84 $ 278 $ 112
Parent EBITDA -
LTM (4) $ 360 $ 381 $ 370 $ 403 $ 403 $ 387
(1) EBCIT is net income excluding corporate interest, other
corporate costs and income taxes.
(2) Gross Margin is revenues reduced by cost of sales, including
depreciation and amortization.
(3) In 1999, Net Income Excluding Extraordinary Items also
excludes foreign currency transaction gains and losses.
(4) Parent EBITDA is cash flow earnings distributed to parent less
parent operating expenses.
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