AES Reports Second Quarter Earnings From Recurring Operations of $0.26 Per Share and Latest Twelve Month Parent Company Operating Cash Flow of $1.3 Billion.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)--July 25, 2002 Company Makes Progress Towards Strengthening Balance Sheet and Improving Liquidity Net Loss of $(.22) Per Share for the Quarter After Discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: Operations and Cumulative Effect of Accounting Change and Other Charges 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) reported earnings from 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. operations of $142 million, or 26 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. , for the second quarter ended June June: see month. 30, 2002, down 22% from $181 million, or 33 cents per share, in the year earlier quarter. Earnings from recurring operations for the six months ended June 30, 2002, were $317 million, or 59 cents per share, down 22% from $405 million, or 75 cents per share, for the six months ended June 30, 2001. Parent 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. was $1.3 billion for the twelve months ended June 30, 2002 and $263 million for the second quarter of 2002. Parent company liquidity at June 30, 2002, stood at $359 million and the total consolidated balance of cash and cash equivalents was approximately $1.3 billion at that date. "We are pleased with this quarter's operating results and our demonstrated cash flow," said 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. "In addition to nearly $800 million of asset sales this year, we remain optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about our ability to generate up to an additional $1 billion from asset sales in the next 18 months. Our liquidity expectations continue to improve and we are confident in our ability to perform in this area. However, the economic and political environment in 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. continues to worsen wors·en tr. & intr.v. wors·ened, wors·en·ing, wors·ens To make or become worse. worsen Verb to make or become worse worsening adjn and that will clearly have an impact on our earnings for the remainder of the year." Balance Sheet Strengthening Mr. Hanrahan noted that AES is on target with a number of initiatives to strengthen its balance sheet. AES has previously announced agreements to sell two subsidiaries, CILCORP in 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. and AES NewEnergy. "We are on schedule at the parent to realize over $500 million in cash from the CILCORP sale by the first quarter of 2003, and approximately $240 million by the fourth quarter of 2002 from the sale of NewEnergy," he said. AES further strengthened its balance sheet in the second quarter by completing 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 financings of $215 million associated with AES 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. and $45 million associated with the AES 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. power plant 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. . Proceeds from both of those financings contributed to improved corporate liquidity. "The predictable revenue streams at these contract generation businesses, similar to a significant portion of our operating portfolio, made it possible to obtain attractive long-term financing Long-term financing Liabilities repayable in more than one year plus equity. that does not require parent company credit support," said 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, Chief Financial Officer. 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. Developments AES also stated that 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 Sao Paulo Paulo is the Portuguese form of the given name Paul:
A business that engages in transactions with outsiders. debt that comes due in the second half of 2002. These financings must be rolled over due to delays in receipt of loans from Banco Nacional Banco Nacional was a bank from Brazil. It was taken over by Unibanco in 1995. The Nacional brand is better known as main sponsor of Ayrton Senna during most of his racing career in Formula 1 (1985-1994). de Desenvolvimento Economico e Social (BNDES BNDES Banco Nacional de Desenvolvimento Econômico e Social (Brazilian Development Bank) BNDES Banco Nacional de Desenvolvimento Econômico e Social (Brasil) ) associated with the rationing rationing, allotment of scarce supplies, usually by governmental decree, to provide equitable distribution. It may be employed also to conserve economic resources and to reinforce price and production controls. agreement signed on July July: see month. 4, 2002 and the current lack of available financing in the Brazilian market. Mr. Hanrahan stated, "Given the uncertain regulatory environment in Brazil, we are not willing to inject in·ject v. 1. To introduce a substance, such as a drug or vaccine, into a body part. 2. To treat by means of injection. more capital into our Brazilian businesses. Fundamental market and industry reforms need to be made in Brazil and we decided not to inject capital into the Brazilian sector until such changes are made, even if that means risking our current investment in some of our businesses there. Our commitment to AES lenders and shareholders requires we take this position. All of the debt associated with Eletropaulo, both at the operating company and the holding company levels, is non-recourse to AES and AES has no obligation to make any further investments into Brazil." Second Quarter GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). Results Second quarter 2002 earnings of $.26 per share from recurring operations excludes several non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. aggregating ($.44) per share related to (i) a loss arising from the impact of the unfavorable regulatory action in Brazil related to AES Sul ($.18) per share, (ii) the write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. of impaired telecom investments in Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. ($.10) per share, (iii) net foreign currency transaction losses associated with businesses in Latin America ($.21) per share and (iv) a gain under FAS 133 of $.05 per share. Including those items, the per share loss from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting is ($.18) for the second quarter of 2002 as compared to income of $.27 for the second quarter of 2001. The Company also recorded a loss of ($.27) per share from the results of discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. during the quarter primarily related to telecom investments in Brazil and a gain of $.23 per share from the cumulative effect of the change in accounting principle related to a new FAS 133 interpretation relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. power sales contracts Sales Contract Contract between a seller and buyer for the sale of goods, services, or both. that was effective on April 1, 2002. As a result, the net loss per share after discontinued operations and the cumulative effect of the accounting change for second quarter 2002 was ($.22) per share. Revenues for the second quarter were $2.1 billion, up 14% percent from a year earlier. Executive Office Reorganization AES also announced a reorganization of its Executive Office, which will consist of Paul Hanrahan, who was elected President and Chief Executive Officer on June 18, Chairman of the Board Roger Sant Roger Sant is a television news presenter in the Republic of Trinidad and Tobago. He is currently the head of the sports department and the primary sports anchor for Cable News Channel 3. , General Counsel Bill Luraschi, Chief Financial Officer Barry Sharp and the three Chief Operating Officers Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. - Stu Ryan Ryan may refer to: Places
Mark Fitzpatrick (born November 13, 1968 in Toronto, Ontario) is a former professional ice hockey goaltender. . The structure of the organization assigns Individuals to whom property is, will, or may be transferred by conveyance, will, Descent and Distribution, or statute; assignees. The term assigns is often found in deeds; for example, "heirs, administrators, and assigns to denote the assignable nature of geographic responsibilities among the three Chief Operating Officers. Mark Fitzpatrick has responsibility for Latin America. Stu Ryan is responsible for 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. , now defined to include Puerto Rico and Mexico Mexico, city, Mexico 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. . John Ruggirello has responsibilities for 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). , Africa, the
Middle East, the Commonwealth of Independent States Commonwealth of Independent States (CIS), community of independent nations established by a treaty signed at Minsk, Belarus, on Dec. 8, 1991, by the heads of state of Russia, Belarus, and Ukraine. Between Dec. 8 and Dec. (CIS Cis (sĭs), same as Kish (1.) (1) (CompuServe Information Service) See CompuServe. (2) (Card Information S ) and Asia. He will also have responsibility for company-wide assignments including, currently, cost cutting and benchmarking efforts. "Given the nature of our business, geographic areas of responsibility make the most sense for our Chief Operating Officers," said Mr. Hanrahan. "Each of our COO's has the broad experience necessary to deal with the mix of operational, regulatory, and political issues that present themselves in our global business. 2002 Guidance The economic and political environments in Latin America - and the impact on currency exchange rates, electricity prices and demand - as well as the current turbulence turbulence, state of violent or agitated behavior in a fluid. Turbulent behavior is characteristic of systems of large numbers of particles, and its unpredictability and randomness has long thwarted attempts to fully understand it, even with such powerful tools as in the US energy and capital markets underscore The underscore character (_) is often used to make file, field and variable names more readable when blank spaces are not allowed. For example, NOVEL_1A.DOC, FIRST_NAME and Start_Routine. (character) underscore - _, ASCII 95. the uncertainty and risk inherent in forward looking statements about earnings. Because of this uncertainty, AES must make certain assumptions to provide earnings guidance for the second-half of 2002. These assumptions include second-half average and year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. exchange rates 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. to the U.S. Dollar of 2.92 and 3.00, respectively; and second-half average and year-end exchange rates for the Venezuelan Bolivar to the U.S. Dollar of 1,650 and 1,950, respectively. Based upon these and other assumptions, AES currently expects that earnings from recurring operations for 2002, derived from our existing portfolio of businesses, will be between $1.00 and $1.10 per share. The reduction in this estimate from previous guidance primarily reflects our estimates of continued and sustained weakening weak·en tr. & intr.v. weak·ened, weak·en·ing, weak·ens To make or become weak or weaker. weak  en·er n. of the
Brazilian Real and Venezuelan Bolivar relative to the U.S. Dollar,
reduced economic activity in Brazil and 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. , as well as slower
than anticipated recovery of electricity demand to pre-rationing levels
in Brazil.AES also anticipates that a further 10% change in the average exchange rates for the rest of 2002 will result in a change in anticipated earnings for 2002 of approximately $.02 per share for every such change in the Real and $.01 per share for every such change in the Bolivar. AES is also pursuing potential asset sale transactions, and the potential impacts of these, if any, are not included in these 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. . The revised expectations exclude foreign currency transaction gains and losses at our businesses in South America, gains and losses arising from the application of Financial Accounting Standards Board Financial Accounting Standards Board (FASB) Board composed of independent members who create and interpret Generally Accepted Accounting Principles (GAAP). Statement No. 133, gains and losses from the sale or write-down of investments, the unfavorable regulatory action in Brazil mentioned above, the results of our discontinued operations, and gains and losses arising from the adoption of new accounting pronouncements in 2002. Other Information This information will be discussed on a conference call to be held today, Thursday Thursday: see week. July 25, 2002, at 9:00 am (Eastern Daylight Time). You may access the call via a live webcast which will be available online at http://www.aes.com under the Investor Relations Investor relations The process by which the corporation communicates with its investors. section. This webcast will be available online until Friday Friday: see Sabbath; week. Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant , August 2, 2002. Also, a telephonic replay of the call will be available from approx. 11:30 am on Thursday, July 25, until 6:00 pm on Friday, August 2 (Eastern Time). Please dial (800) 633 8284. The system will ask for a reservation number, please enter 20737707 followed by the pound key #. International callers should dial (858) 812 6440. "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. " 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" 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. AES is a leading global power company comprised of contract generation, competitive supply, large utilities and growth distribution businesses. The company's generating assets include interests in 177 facilities totaling over 59 gigawatts of capacity, in 33 countries. AES's electricity distribution network sells over 108,000 gigawatt gig·a·watt n. Abbr. GW One billion (109) watts. hours per year to over 16 million end-use customers. For more general information visit our web site at www.aes.com or contact investor relations at investing@aes.com.
THE AES CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE QUARTERS ENDED JUNE 30, 2002 AND 2001
----------------------------------------------------------------------
Quarter Quarter
($ in millions, except per Ended Ended
share amounts) 06/30/2002 06/30/2001
----------------------------------------------------------------------
REVENUES:
Sales and services $2,131 $1,877
OPERATING COSTS AND EXPENSES:
Cost of sales and services 1,691 1,417
Selling, general and administrative expenses 28 41
-------- -------
Total operating costs and expenses 1,719 1,458
-------- -------
OPERATING INCOME 412 419
OTHER INCOME AND (EXPENSE):
Interest expense, net (418) (307)
Other income (expense), net (89) 42
Equity in earnings of affiliates (before
income tax) 26 99
Loss on sale or write-down of investments (59) -
--------- ------
INCOME (LOSS) BEFORE INCOME TAXES
AND MINORITY INTEREST (128) 253
Income tax (benefit) provision (9) 81
Minority interest (income) expense (21) 26
--------- ------
INCOME (LOSS) FROM CONTINUING
OPERATIONS (98) 146
Loss from operations of discontinued
components (net of income taxes of
$9 and $19, respectively) (144) (31)
---------- -------
INCOME (LOSS) BEFORE CUMULATIVE
EFFECT OF ACCOUNTING CHANGE (242) 115
Cumulative effect of accounting change
(net of income taxes of $83) 127 -
---------- -------
NET INCOME (LOSS) $(115) $115
========== =======
DILUTED EARNINGS PER SHARE:
Income (loss) from continuing
operations $(0.18) $0.27
Discontinued operations (0.27) (0.06)
Cumulative effect of accounting change 0.23 -
----------- -------
Total $(0.22) $0.21
============= =======
Diluted weighted average
shares outstanding (in millions) 535 543
=== ===
THE AES CORPORATION --- Supplemental Schedule
Reconciliation of GAAP Net income (loss) before discontinued
operations and accounting change to Net income excluding Brazil,
Argentina and Venezuela foreign currency effects, effects of FAS No.
133 and nonrecurring items.
FOR THE QUARTERS ENDED JUNE 30, 2002 AND 2001
----------------------------------------------------------------------
($ in millions, except per share amounts)
Quarter ended Quarter ended
6/30/2002 6/30/2001
Amount Amount
Amount per share Amount per share
-----------------------------------------------
Net income (loss) before
discontinued operations
and accounting change $(98) $(0.18) $146 $0.27
South America foreign
currency transaction
losses, net(1) 112 0.21 42 0.07
Mark to market gains
from FAS No. 133(2) (25) (0.05) (7) (0.01)
Loss on sale or write-down
of investments(3) 54 0.10 - -
Provision for
regulatory decision
in Brazil(4) 99 0.18 - -
-----------------------------------------------
Net income from
recurring
operations $142 $0.26 $181 $0.33
===============================================
Diluted weighted
average shares
outstanding
(in millions) 541 543
====== =====
(1) South America foreign currency transaction losses, net,
consist of the following in 2002: a loss of approximately $85 million
after income tax, or $0.16 per share, from Brazil; a loss of
approximately $52 million after income tax, or $0.10 per share, from
Argentina; and a gain of approximately $25 million after income tax,
or $0.05 per share, from Venezuela. For 2001, South America foreign
currency transaction losses, net, consist of the following: a loss of
approximately $47 million after income tax, or $0.08 per share, from
Brazil, and a gain of approximately $5 million after income tax, or
$0.01 per share, from Venezuela.
(2) Mark to market gains from FAS No. 133 consist of the following
in 2002: a loss of approximately $16 million after income tax, or
$0.03 per share, from interest rate instruments, a gain of
approximately $26 million after income tax, or $0.05 per share, from
foreign exchange rate instruments, and a gain of $15 million after
income tax, or $0.03 per share, from commodity contracts. For 2001,
mark to market gains from FAS No. 133 consist of the following: a loss
of approximately $19 million after income tax, or $0.03 per share,
from interest rate instruments, a gain of approximately $13 million
after income tax, or $0.02 per share, from foreign exchange rate
instruments, and a gain of approximately $13 million after income tax,
or $0.02 per share, from commodity contracts.
(3) Amount consists of a loss of $40 million after income tax, or
$0.07 per share, resulting from an impairment charge related to an
equity method investment in a Latin American telecommunications
company, and a loss of $14 million after income tax, or $0.03 per
share, related to the loss on sale of an equity method investment in a
Latin American telecommunications company.
(4) The Company has recorded the retroactive regulatory decision
by the Brazilian regulator depriving AES Sul of amounts the Company
believes it was entitled to receive as a reduction in revenue. Pro
forma revenues for the quarter ended June 30, 2002, approximate $2.3
billion.
THE AES CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001
----------------------------------------------------------------------
Six Months Six Months
Ended Ended
($ in millions, except per share
amounts) 06/30/2002 06/30/2001
----------------------------------------------------------------------
REVENUES:
Sales and services $4,391 $3,961
OPERATING COSTS AND EXPENSES:
Cost of sales and services 3,266 2,890
Selling, general and administrative expenses 56 56
-----------------------------
Total operating costs and expenses 3,322 2,946
-----------------------------
OPERATING INCOME 1,069 1,015
OTHER INCOME AND (EXPENSE):
Interest expense, net (812) (643)
Other income (expense), net (66) 31
Equity in earnings of affiliates (before
income tax) 55 149
Loss on sale or write-down of investments (116) -
Nonrecurring severance and transaction costs - (94)
-----------------------------
INCOME BEFORE INCOME TAXES
AND MINORITY INTEREST 130 458
Income tax provision 87 142
Minority interest (income) expense (31) 56
----------------------------
INCOME FROM CONTINUING OPERATIONS 74 260
Loss from operations of discontinued
components (net of income taxes of
$12 and $20, respectively) (156) (34)
----------------------------
INCOME (LOSS) BEFORE CUMULATIVE
EFFECT OF ACCOUNTING CHANGE (82) 226
Cumulative effect of accounting change
(net of income taxes of $72) (346) -
----------------------------
NET INCOME (LOSS) $(428) $226
============================
DILUTED EARNINGS PER SHARE:
Income from continuing operations $0.14 $0.48
Discontinued operations (0.29) (0.06)
Cumulative effect of accounting change (0.65) -
----------------------------
Total $(0.80) $0.42
============================
Diluted weighted average
shares outstanding
(in millions) 536 544
THE AES CORPORATION --- Supplemental Schedule
Reconciliation of GAAP Net income before discontinued operations
and accounting change to Net income excluding Brazil, Argentina and
Venezuela foreign currency effects, effects of FAS No. 133 and
nonrecurring items.
FOR THE SIX MONTHS ENDED JUNE 30, 2002 AND 2001
----------------------------------------------------------------------
($ in millions, except per share amounts)
Six Months ended Six Months ended
6/30/2002 6/30/2001
Amount Amount per Amount Amount per
share share
Net income before
discontinued
operations
and accounting
change $74 $0.14 $260 $0.48
South America foreign
currency transaction
losses, net(1) 139 0.26 94 0.18
Mark to market gains
from FAS No.133(2) (99) (0.18) (10) (0.02)
Loss on sale or
write-down
of investments(3) 104 0.19 - -
Provision for regulatory
decision in Brazil(4) 99 0.18 - -
Transaction and severance
costs related to
IPALCO transaction - - 61 0.11
------------------------------------------------
Net income from
recurring operations $317 $0.59 $405 $0.75
================================================
Diluted weighted
average shares
outstanding
(in millions) 541 544
========== ==========
(1) South America foreign currency transaction losses, net,
consist of the following in 2002: a loss of approximately $95 million
after income tax, or $0.18 per share, from Brazil; a loss of
approximately $134 million after income tax, or $0.25 per share, from
Argentina; and a gain of approximately $90 million after income tax,
or $0.17 per share, from Venezuela. For 2001, South America foreign
currency transaction losses, net, consist of the following: a loss of
approximately $106 million after income tax, or $0.20 per share, from
Brazil, and a gain of approximately $12 million after income tax, or
$0.02 per share, from Venezuela.
(2) Mark to market gains from FAS No. 133 consist of the following
in 2002: a loss of approximately $8 million after income tax, or $0.01
per share, from interest rate instruments, a gain of approximately $30
million after income tax, or $0.05 per share, from foreign exchange
rate instruments, and a gain of $77 million after income tax, or $0.14
per share, from commodity contracts. For 2001, mark to market gains
from FAS No. 133 consist of the following: a loss of approximately $35
million after income tax, or $0.06 per share, from interest rate
instruments, a gain of approximately $27 million after income tax, or
$0.05 per share, from foreign exchange rate instruments, and a gain of
approximately $18 million after income tax, or $0.03 per share, from
commodity contracts.
(3) Amount consists of a loss of $40 million after income tax, or
$0.07 per share, resulting from an impairment charge related to an
equity method investment in a Latin American telecommunications
company, and a loss of $14 million after income tax, or $0.03 per
share, related to the loss on sale of an equity method investment in a
Latin American telecommunications company. Additionally, amount
includes a loss of $50 million after income tax, or $0.09 per share,
related to the loss recognized on the sale of CANTV shares.
(4) The Company has recorded the retroactive regulatory decision
by the Brazilian regulator depriving AES Sul of amounts the Company
believes it was entitled to receive as a reduction in revenue. Pro
forma revenues for the six months ended June 30, 2002, approximate
$4.6 billion.
Business Segment Results AESs business segments, which include Contract Generation, Large Utilities, Competitive Supply and Growth Distribution generated combined income before income taxes (EBT EBT See: Earnings Before Taxes ) of $345 million for the second quarter of 2002 as compared to $420 million during the same period last year. On a geographic basis, EBT for the second quarter of 2002 was generated 37% from North America, 26% from South America, 9% from the Caribbean, 14% from Asia and 14% from Europe and Africa. Contract Generation Contract Generation consists of our power plants located around the world that have contractually limited their exposure to commodity price risks (primarily electricity prices) for a period of at least five years and for 75% or more of their expected output capacity. For the second quarter of 2002, Contract Generation revenues were $646 million, a slight increase over 2001, and represented 28% of total revenues for the quarter. The most significant contributions continued to be from North and South America, which in aggregate comprised 62% of Contract Generation revenue for the quarter as compared to 65% for the second quarter of 2001. Revenues were enhanced with the addition of a global mix of new businesses totaling 1,684 mw (added subsequent to the second quarter of 2001), including 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 (705 mw natural gas), Mendota Mendota can refer to any of the following places in the United States:
A unit of measurement of temperature. in South Africa South Africa, Afrikaans Suid-Afrika, officially Republic of South Africa, republic (2005 est. pop. 44,344,000), 471,442 sq mi (1,221,037 sq km), S Africa. (600 mw coal). Revenues also improved at Tisza Tisza (tĭs`ə), Serbian Tisa (tē`sä), Rus. Tissa or Tisa (both: tĭs`ə), Ger. Theiss (tīs), river, c. 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. , Tiete Tie·tê A river, about 805 km (500 mi) long, of southeast Brazil flowing generally northwest to the Paraná River. in Brazil, Haripur
A city of east-central China north-northwest of Zhengzhou. It is a coal-mining center. Population: 468,000. in China and Ecogen in Australia Australia (ôstrāl`yə), smallest continent, between the Indian and Pacific oceans. With the island state of Tasmania to the south, the continent makes up the Commonwealth of Australia, a federal parliamentary state (2005 est. pop. , offset by declines at the Gener GENER. A son-in-law. Dig. 50, 16, 156. plants in Chile, Southland south·land or South·land n. A region in the south of a country or an area. south land·er n.Noun 1. in California, Kilroot in Northern Ireland and Merida in Mexico. The operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: (as a percentage of sales) for our Contract Generation segment showed continued and growing strength at 40% for the second quarter of 2002, which represents an improvement from 28% during the second quarter of 2001. Stronger margins and margin percentages arose during the quarter at Uruguaiana Uruguaiana is an municipality in the Brazilian state of Rio Grande do Sul. It is located on the left-hand (eastern) shore of the Uruguay River that forms the border with Argentina. and Tiete in Brazil (due to the discontinuance Cessation; ending; giving up. The discontinuance of a lawsuit, also known as a dismissal or a non-suit, is the voluntary or involuntary termination of an action. DISCONTINUANCE, pleading. A chasm or interruption in the pleading. 2. of electricity rationing in 2002), Southland in California, 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 in Pennsylvania and 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). , Merida in Mexico, 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. and Jiaozuo and Hefei Hefei or Hofei (both: hô-fā), city (1994 est. pop. 866,800), capital of Anhui prov., China. A rapidly growing industrial city, it has textile mills, ironworks and steelworks, chemical and food processing plants, and a in China. Also, better than segment average margin percentages resulted from several new businesses, including Ironwood and Ebute. As a result, Contract Generation delivered $154 million of EBT (or 45% of the total) for the second quarter of 2002, an increase of 69% over the second quarter of 2001 EBT of $91 million (22% of the total). All geographic regions showed increases in EBT within the contract generation segment except for a slight decrease in the Caribbean region due to EBT declines from the contract generation plants 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. . Competitive Supply Competitive Supply consists primarily of our power plants selling electricity directly to wholesale customers in competitive markets and as a result are generally more sensitive to fluctuations in the market price of electricity, natural gas and coal, in particular. During the second quarter, AES announced the sale of NewEnergy, a competitive retail supply business for approximately $240 million. As a result of the pending sale, NewEnergys results are included in the income statement for both 2001 and 2002 periods as a discontinued operation discontinued operation A segment of a business that has been abandoned or sold or for which plans for one or another of these actions have been approved. See also continuing operations. and are therefore excluded from the discussion below. For the second quarter of 2002, revenues for this segment were $421 million and represented 18% of total revenues for the quarter. The most significant contributions continued to be from the competitive markets of the UK and the U.S. that in aggregate comprised 72% of Competitive Supply revenue for the quarter. Competitive market prices declined 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. due to the 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 Peso in January January: see month. 2002 and prices were also lower 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 , California and the UK compared to 2001 and as a result total revenue decreased 5% from the second quarter of 2001. Certain plants showed offsetting revenue improvements including Tiszapalkonya Tiszapalkonya is a village in Borsod-Abaúj-Zemplén county, Hungary. External links
There are a number of stories which try to explain who the Indian Queen was. in the UK, Chivor Chivor is a town and municipality in the Colombian Department of Boyacá, part of the the subregion of the Eastern Boyacá Province. • • 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 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 Kazakhstan Kazakhstan or Kazakstan (kä'zäkstän`), officially Republic of Kazakhstan, republic (2005 est. pop. 15,186,000), c.1,050,000 sq mi (2,719,500 sq km), central Asia. . Year on year increases associated with new businesses in 2002 included Parana in Argentina (845 mw gas), Delano Delano (dĕl`ənō), city (1990 pop. 22,762), Kern co., S central Calif., in the fertile San Joaquin valley; inc. 1915. The city's economy is based on agriculture (grain and fruit) and related enterprises, especially vineyards and wineries. in California (50 mw gas) and Ottana in Italy (140 mw oil). The operating margin (as a percentage of sales) for our Competitive Supply segment was 22% in the second quarter of 2002, an increase from 19% in the second quarter of 2001. Improvements in margins and margin percentages were most significant at Drax in the UK where the margin percentage increased by 7% year over year as well as increases in both factors at Chivor in Colombia, Panama and Altai in Kazakhstan. These improvements were partially offset by lower margins at all plants in Argentina, except for the coal fired plant at San Nicholas, and lower margins at the New York plants arising from lower market prices in that region. Overall, operating margin for competitive supply improved 8% to $92 million for the second quarter of 2002. As a result of these improved margins, and notwithstanding lower wholesale prices in several regions during the second quarter of 2002, Competitive Supply generated $45 million of EBT (or 13% of the total) for the second quarter of 2002, a significant increase from the 2001 second quarter EBT of $17 million (or 4%). Large Utilities The Large Utilities segment is comprised of our four large integrated utilities that serve nearly 11 million customers in North America, the Caribbean and South America. 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 along with CEMIG CEMIG Companhia Energética de Minas Gerais (Brazil) (an equity affiliate) and Eletropaulo in Brazil. During the second quarter, AES announced the sale of CILCORP, a large utility business serving Central Illinois Central Illinois is a region of the U.S. state of Illinois that consists of the entire central section of the state, divided in thirds from north to south. It is an area of mostly flat prairie. for an enterprise value of approximately $1.4 billion. As a result of the pending sale, CILCORPs results are included in the income statement for both 2001 and 2002 periods as a discontinued operation and are therefore excluded from the discussion below. For the second quarter of 2002, revenues for this segment were $892 million and represented 39% of total revenues for the quarter. The significant increase in revenues of 109% resulted from consolidating the results of Eletropaulo (serving Sao Paulo, Brazil) beginning in February 2002 when AES acquired control of that business with a 68% voting interest Voting interest in business and accounting is a percentage of voting stock owned. This notion is different from economic interest that refers to a percentage of all the equity issued, including preferred stock, warrants, and so on. (increased from 49% prior to that date when Eletropaulo was treated as an equity affiliate). Additional revenues from Eletropaulo of $529 million were offset by a 5% decrease in revenues at IPALCO to $197 million due primarily to milder weather in 2002 and a 24% decrease in revenues at EDC to $165 million primarily due to the devaluation of the Bolivar during 2002. The operating margin was $199 million for the quarter, an increase of 23% over 2001 due to the consolidation of Eletropaulo and an improvement in the margin at IPALCO. These increases were offset by a decline in the operating margin at EDC. As a percentage of sales the operating margin for large utilities was 22%, down from 38% for the second quarter of 2001 because of the reductions in margin at EDC resulting in part from the devaluation of the Bolivar as well as lower than average segment margins at Eletropaulo during the second quarter of 2002 because of slower than anticipated recovery of electricity demand from the effects of rationing in Brazil in that ended in March 2002. Large Utilities generated $128 million of EBT (or 37% of the total) for the second quarter of 2002, down from the second quarter EBT for 2001 of $300 million (or 71%). The reduction in second quarter 2002 was caused by reduced contributions (after associated interest costs) from Eletropaulo and EDC because of the factors discussed above. Growth Distribution Our Growth Distribution businesses continued to show strengthened profitability during the second quarter of 2002. This segment, serving over 5 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 the second quarter of 2002, revenues were $332 million and represented 15% of total revenues for the quarter. The Caribbean represents the most significant contributor representing 42% of growth distribution revenues, while South America represents and 33% and Europe and Africa contributing the remaining 25% for the quarter. Growth Distribution revenues increased at EDE E·de A city of western Nigeria northeast of Ibadan. A center of Yoruba culture, it is in a cocoa-growing region. Population: 248,000. Este in the Dominican Republic, Telasi in 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. , Kievoblenergo and Rivnooblenergo in the Ukraine as well as from Sonel in Cameroon, which was acquired during the third quarter of 2001. These increases were offset by reductions in Argentina because of the devaluation of the Argentine peso The peso (originally established as the nuevo peso argentino or peso convertible) is the currency of Argentina. Its ISO 4217 code is ARS, and the symbol used locally for it is $ (to avoid confusion, Argentines frequently use US$, , reductions at Sul because of the devaluation during the quarter of the Brazilian real, reductions in revenues at our 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. distribution businesses and the change to reflect CESCO in India as an equity affiliate in the second quarter of 2001. The operating margin (as a percentage of sales) was 15% and showed growing strength and improvement across most of the segment, especially at Telasi and EDE Este. Despite the reductions in revenue and operating margin arising from the devaluation of the Argentine peso during 2002, the margin percentages in the Argentine Argentine having some relationship with the country Argentina. Argentine tick margaropuswinthemi. Argentine tortoise geochelonechilensis. distribution businesses remained stable as compared to the second quarter of 2001. As a result, Growth Distribution generated $18 million of EBT (or 5% of the total) for the second quarter of 2002, a significant increase from $12 million in the second quarter of 2001.
THE AES CORPORATION --- Supplemental Data
----------------------------------------------------------------------
2001 2002
1st 2nd 3rd 4th Year 1st 2nd
Qtr Qtr Qtr Qtr Qtr Qtr
----------------------------------------------------------------------
GEOGRAPHIC - % of Total
North America
Revenues(5) 26% 26% 32% 24% 27% 22% 21%
Income before
Taxes(1) 40% 31% 56% 34% 40% 34% 37%
Caribbean(2)
Revenues(5) 26% 25% 24% 20% 24% 18% 17%
Income before
Taxes(1) 17% 29% 14% 30% 22% 13% 9%
South America
Revenues (5) 20% 24% 21% 25% 22% 34% 38%
Income before
Taxes(1) 34% 36% 22% 24% 29% 26% 26%
Europe/Africa
Revenues(5) 19% 17% 20% 24% 20% 21% 18%
Income before
Taxes(1) 5% (2)% 1% 6% 3% 16% 14%
Asia
Revenues(5) 9% 8% 3% 7% 7% 5% 6%
Income before
Taxes(1) 4% 6% 7% 6% 6% 11% 14%
SEGMENTS - % of Total
Contract Generation
Revenues(5) 33% 33% 32% 32% 32% 28% 28%
Operating Margin(3) 39% 37% 32% 48% 40% 39% 43%
Income before Taxes(1) 35% 22% 21% 64% 34% 45% 45%
Competitive Supply
Revenues(5) 27% 23% 28% 24% 26% 21% 18%
Operating Margin(3) 28% 19% 26% 16% 22% 15% 16%
Income before Taxes(1) 17% 4% 23% 1% 12% 9% 13%
Large Utilities
Revenues(5) 20% 23% 23% 19% 21% 35% 39%
Operating Margin(3) 28% 35% 32% 21% 28% 34% 33%
Income before Taxes(1) 48% 71% 56% 12% 49% 35% 37%
Growth Distribution
Businesses
Revenues(5) 20% 21% 17% 25% 21% 16% 15%
Operating Margin(3) 5% 9% 10% 15% 10% 12% 8%
Income before Taxes(1) - 3% - 23% 5% 11% 5%
FINANCIAL HIGHLIGHTS
- $ in millions,
except Total Assets
in billions
Revenues(5) $2,084 $1,877 $1,846 $1,954 $7,761 $2,260 $2,291
Gross Margin
Percentage 29% 25% 26% 33% 28% 30% 26%
Income before
Taxes(1) $478 $420 $358 $325 $1,581 $390 $345
Net Income
Excluding
Extraordinary and
Other Items(4) $224 $181 $149 $128 $682 $175 $142
Total Assets
(billions) $36 $36 $36 $37 $37 $40 $39
Deprec./Amort. $181 $186 $198 $196 $761 $200 $202
(1) Income before taxes excludes the Corporate and Business
Development segment. The following items are included in the Corporate
and Business Development segment: corporate interest, other corporate
costs, business development expenses, Brazilian affiliates foreign
currency effects, Argentine affiliates foreign currency effects,
Venezuelan affiliates foreign currency effects, effects of FAS No.
133, nonrecurring items, discontinued operations and cumulative effect
of accounting change.
(2) Includes Venezuela and Colombia.
(3) Operating Margin is revenues reduced by cost of sales,
depreciation and amortization and other operating expenses.
(4) Net income excludes Brazilian affiliates foreign currency
effects, Argentine affiliates foreign currency effects, Venezuelan
affiliates foreign currency effects, effects of FAS No. 133,
nonrecurring items, discontinued operations and cumulative effect of
accounting change.
(5) Revenues and amounts calculated using revenues for the second
quarter of 2002 exclude the effect of the provision related to the
Brazilian regulatory decision recorded by AES Sul.
THE AES CORPORATION
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2002 AND DECEMBER 31, 2001
($ in millions) June 30, 2002 December 31, 2001
------------------------------------
Current assets:
Cash and cash equivalents,
including restricted
cash of $260 and $264,
respectively $1,288 $1,186
Short term investments 328 308
Accounts receivable, net of
reserves of $377 and $240,
respectively 1,485 1,322
Inventory 510 562
Receivable from affiliates 10 10
Deferred income taxes 294 244
Prepaid expenses and other assets 909 602
Current assets of discontinued
operations 581 458
-------------------------------------
Total current assets 5,405 4,692
Property, Plant and Equipment:
Land 834 567
Electric generation and
distribution assets 21,989 20,175
Accumulated depreciation (4,180) (3,177)
Construction in progress 4,984 4,550
-------------------------------------
Property, plant and
equipment, net 23,627 22,115
Other assets:
Deferred financing costs, net 423 438
Project development costs 52 68
Investment in and advances to
affiliates 1,298 3,100
Debt service reserves and other
deposits 390 472
Goodwill, net 2,262 2,415
Long-term assets of discontinued
operations 2,244 2,600
Other assets 2,974 912
-------------------------------------
Total other assets 9,643 10,005
-------------------------------------
Total Assets $38,675 $36,812
=====================================
Current liabilities:
Accounts payable $1,258 $736
Accrued interest 398 281
Accrued and other liabilities 1,270 799
Current liabilities of discontinued
operations 697 573
Recourse debt-current portion 1,134 488
Non-recourse debt-current portion 3,201 2,051
-------------------------------------
Total current liabilities 7,958 4,928
Long-term liabilities
Recourse debt 4,627 4,913
Non-recourse debt 14,579 13,789
Deferred income taxes 1,649 1,695
Long-term liabilities of
discontinued operations 1,282 1,413
Other long-term liabilities 3,139 2,027
--------------------------------------
Total long-term liabilities 25,276 23,837
Minority interest, including
discontinued operations
of $51 and $124, respectively 952 1,530
Company obligated convertible
mandatorily redeemable
preferred securities of
subsidiary trusts holding
solely junior subordinated
debentures of AES 978 978
Stockholders' equity:
Common stock 5 5
Additional paid-in capital 5,250 5,225
Retained earnings 2,381 2,809
Accumulated other comprehensive
loss (4,125) (2,500)
----------------------------------------
Total stockholders' equity 3,511 5,539
----------------------------------------
Total Liabilities and
Stockholders' Equity $38,675 $36,812
========================================
THE AES CORPORATION
CAPITAL RESOURCES AND OTHER BALANCE SHEET DATA
($ in billions)
June 30, December 31,
Capitalization: 2002 2001
---------------------------------
Recourse debt $5.76 $5.40
Non-recourse debt 17.78 15.84
---------------------------------
Total debt 23.54 21.24
Preferred Securities 0.98 0.98
Minority Interest 0.95 1.53
Stockholders' equity 3.51 5.54
--------------------------------
Total capitalization $28.98 $29.29
================================
Selected Balance Sheet Data
by Geographic Region:
Property, Plant Total Non-recourse
June 30, 2002 & Equipment Assets Debt
-----------------------------------------
North America 29% 21% 25%
Caribbean 21% 18% 19%
South America 21% 29% 33%
Europe/Africa 22% 18% 17%
Asia 7% 7% 6%
Discontinued operations - 6% -
Corporate - 1% -
December 31, 2001
North America 30% 21% 28%
Caribbean 21% 19% 20%
South America 20% 27% 28%
Europe/Africa 23% 18% 19%
Asia 6% 6% 5%
Discontinued operations - 8% -
Corporate - 1% -
Selected Balance Sheet Data by Line of Business:
Property, Plant Total Non-recourse
June 30, 2002 & Equipment Assets Debt
-------------------------------------------
Contract Generation 36% 33% 38%
Competitive Supply 32% 24% 22%
Large Utilities 25% 28% 33%
Growth Distribution
Businesses 7% 8% 7%
Discontinued operations - 6% -
Corporate - 1% -
December 31, 2001
Contract Generation 36% 33% 40%
Competitive Supply 35% 26% 25%
Large Utilities 19% 20% 26%
Growth Distribution Businesses 10% 12% 9%
Discontinued operations - 8% -
Corporate - 1% -
The AES Corporation
Historical Parent Operating Cash Flow
and Interest Coverage Information
----------------------------------------------------------------------
Parent Operating Cash Flow reflects cash payments to the holding
company (the "Parent Company") from its subsidiary operating
businesses (consisting of dividends, consulting and management fees,
tax sharing payments and interest income), less Parent operating
expenses. Parent Operating Cash Flow is measured after payment of
principal and interest on non-recourse debt as well as maintenance
capital expenditures at those businesses. As a result, it represents
the cash flow that is available to service the Parent Company's
liquidity needs, including debt service.
In the forecast tables below, historical (actual) information is
denoted with an "A" next to the year and forecasted information is
denoted with an "F" next to the year. For more detailed information
regarding Parent Operating Cash Flow, see the notes below.
----------------------------------------------------------------------
Parent Only Data 12 Months Ended
(Last Four Quarters):
June 30, June 30,
(actual $ in millions) 1998 1999 2000 2001 2002 2001
------------------------------------------
Parent Operating Cash
Flow(1) $360 $403 $871 $1,163 $1,319 $1,004
Parent Interest
Charges(2) $118 $164 $216 $391 $453 $267
Interest Coverage
Ratio(3) 3.05x 2.46x 4.03x 2.97x 2.91x 3.76x
Parent Operating
Cash Flow(1) 360 403 871 1,163 1,319 1,004
less: Development Costs
and Corporate Taxes (74) (48) (103) (112) (74) (117)
less: Total Interest Costs
(including SELLs &
Trust Preferred) (150) (198) (305) (391) (503) (318)
-------------------------------------------
Parent Free Cash
Flow(4) $136 $157 $463 $660 $742 $569
Parent Operating Cash
Flow by Region:
North America 48% 60% 39% 54% 53% 43%
Caribbean 6% 7% 29% 17% 15% 27%
Asia 1% 6% 4% 8% 12% 3%
South America 25% 8% 17% 12% 11% 16%
Europe 20% 19% 11% 9% 9% 11%
Parent Operating Cash Flow
by Line of Business
Contract Generation 67% 67% 44% 39% 52% 33%
Large Utilities 14% 3% 39% 31% 30% 44%
Competitive Supply 13% 24% 12% 28% 16% 21%
Growth Distribution
Businesses 6% 6% 5% 2% 2% 2%
(Quarterly): 3 Months Ended
(actual $ in millions) Q3 Q4 Q1 Q2 Q2
2001 2001 2002 2002 2001
---------------------------------------
Parent Operating Cash Flow(1) $335 $390 $331 $263 $258
Parent Interest Charges(2) $112 $120 $116 $105 $80
Interest Coverage Ratio(3) 2.99x 3.25x 2.85x 2.50x 3.23x
Parent Operating Cash Flow(1) 335 390 331 263 258
less: Development Costs
and Corporate Taxes (25) (24) (14) (11) (26)
less: Total Interest Costs
(including SELLs &
Trust Preferred) (112) (115) (136) (140) (80)
-----------------------------------------
Parent Free Cash Flow(4) $198 $251 $181 $112 $152
(Last Four Quarters): 12 Months Ended
(actual $ in millions) Sept. 30, Dec. 31, Mar. 31, June 30, June 30,
2001 2001 2002 2002 2001
----------------------------------------------
Parent Operating Cash
Flow(1) $1,160 $1,163 $1,314 $1,319 $1,004
Parent Interest
Charges(2) $338 $391 $428 $453 $267
Interest Coverage
Ratio(3) 3.43x 2.97x 3.07x 2.91x 3.76x
The AES Corporation
Forecasted Parent Operating Cash Flow and Liquidity 2002-2003
----------------------------------------------------------------------
Parent Only Data
($ in millions) Q1 Q2 Q3 Q4 YE YE
2002A 2002A 2002F 2002F 2002F 2003F
---------------------------------------------
Parent Operating Cash
Flow(1) $331 $263 $259 $322 $1,175 $1,200
Parent Interest
Charges(2) $116 $105 $126 $126 $473 $439
Interest Coverage
Ratio(3) 2.85x 2.50x 2.06x 2.56x 2.48x 2.73x
Parent Operating Cash
Flow by Region:
North America 58% 46% 63% 50% 54% 46%
Caribbean 4% 20% 8% 24% 13% 18%
Asia 13% 13% 24% 11% 15% 14%
Europe 10% 15% 5% 9% 10% 14%
South America 15% 6% 0% 6% 8% 8%
Parent Operating Cash Flow
by Line of Business
Contract Generation 54% 61% 47% 50% 53% 44%
Large Utilities 31% 34% 30% 38% 34% 29%
Competitive Supply 14% 4% 16% 8% 10% 21%
Growth Distribution 1% 1% 7% 4% 3% 6%
Parent Sources & Uses
Q1 Q2 Q3 Q4 YE YE
($ in millions) 2002A 2002A 2002F 2002F 2002F 2003F
---------------------------------------------
Sources
Distributions from
Subsidiaries $340 $269 $271 $335 $1,215 $1,250
less: Corporate Overhead (9) (6) (12) (13) (40) (50)
---------------------------------------------
Parent Operating
Cash Flow(1) 331 263 259 322 1,175 1,200
less: Development Costs
and Corporate Taxes (14) (11) (10) (7) (42) (40)
less: Total Interest Costs
(including SELLs & Trust
Preferred) (136) (140) (149) (125) (550) (525)
----------------------------------------------
Parent Free Cash
Flow(4) 181 112 100 190 583 635
Agreed Asset Sales - - - 240 240 510
Additional Asset Sales - - - - - 500
Project Financing Proceeds - 239 - 66 305 -
Bank Loan Renewals - - - - - 1,275
Beginning Liquidity 565 285 359 322 565 350
----------------------------------------------
Total Sources $746 $636 $459 $818 $1,693 $3,270
==============================================
Uses
Bank Loan Maturities $ - $ - $ - $ - $ - $850
Bond Maturities - - - 300 300 200
Term Loan Maturities 63 63 63 - 189 425
Acquisition Loan Payments - - - 163 163 263
Committed Investments 398 214 74 5 691 200
Ending Liquidity 285 359 322 350 350 1,332
----------------------------------------------
Total Uses $746 $636 $459 $818 $1,693 $3,270
==============================================
Notes:
(1) Our Parent Operating Cash Flow, formerly titled "Parent
EBITDA", definition may differ from that, or similarly titled
measures, used by other companies. Parent Operating Cash Flow is not a
substitute for cash flows from operating activities as defined by
generally accepted accounting principles, or as an indicator of
operating performance or as a measure of liquidity. Parent Operating
Cash Flow includes the following amounts (determined without
duplication) received in cash by the Parent Company from operating
subsidiaries and affiliates less Parent operating expenses:
(A) Dividends.
(B) Consulting and management fees.
(C) Tax sharing payments.
(D) Interest and other distributions paid during the period with
respect to cash and other temporary cash investments.
Parent Operating Cash Flow does not include the following cash
payments made to the Parent Company by its subsidiaries and
affiliates:
(A) Returns of invested capital.
(B) Repayments of debt principal.
(C) Payments released from debt service reserve accounts upon
the issuance of letters of credit for the benefit of
subsidiaries or affiliates.
(2) Parent Interest Charges include interest payments both
expensed and capitalized. It excludes distributions paid for trust
preferred securities. This definition may differ from that, or
similarly titled measures, used by other companies.
(3) Parent Interest Coverage Ratio is defined as the ratio of
Parent Operating Cash Flow for such period to Parent Interest Charges
for such period.
(4) Parent Free Cash Flow is defined as Parent Operating Cash Flow
less development costs, taxes, and Total Interest costs (including
interest on SELLs and trust preferred securities dividends).
Certain statements regarding AESs ("the Company'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
the Companys Annual Report/Form 10K for the year ended December 31,
2001.
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