AES Reports Strong Third Quarter Revenue Growth and Increased Net Income; Company Increases Full Year Adjusted Earnings Per Share Guidance.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. -- 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) continued its strong operating performance for the year and today reported third quarter net income of $140 million, or $0.21 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, compared to $76 million, or $0.12 per diluted share, last year. Third Quarter Financial Highlights --Revenues for the quarter increased 9% to $2,423 million, compared to $2,231 million in 2003. --Gross margin increased 8% to $731 million compared to $676 million in 2003. --Income before income taxes and minority interest increased to $263 million from $131 million in 2003. This represents a 28% increase excluding asset impairments of $75 million in 2003. --Diluted earnings per share 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 was $0.20 versus $0.10 in 2003. The 2004 results include an increase in the Company's effective tax rate arising from higher distributions from and earnings of certain non-US subsidiaries. Adjusted earnings per share* for the third quarter of 2004 was $0.21, compared to $0.26 per share for the third quarter 2003 with the difference primarily due to the higher tax rate in 2004. Adjusted earnings per share excludes the effects of gains or losses from risk management mark-to-market Mark-to-market Adjustment of the book value or collateral value of a security to reflect current market value. accounting, certain foreign currency transactions, significant net asset gains or losses and impairments and early retirement of recourse The right of an individual who is holding a Commercial Paper, such as a check or promissory note, to receive payment on it from anyone who has signed it if the individual who originally made it is unable, or refuses, to tender payment. debt. "I am pleased with the strong performance for the first nine months of this year. We're we're Contraction of we are. we're we are achieving double digit Noun 1. double digit - a two-digit integer; from 10 to 99 integer, whole number - any of the natural numbers (positive or negative) or zero; "an integer is a number that is not a fraction" growth in gross margin and adjusted earnings per share and continuing to see improvements in the performance of our businesses," said 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, President and Chief Executive Officer. "We expect this momentum to continue through the rest of 2004 and have increased our guidance accordingly." Updated Financial Guidance AES increased its 2004 adjusted earnings per share guidance to $0.68 from $0.64. It also reaffirmed its 2004 guidance of $0.62 for 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 from continuing operations, excluding the ($0.03) per share impact of the Chile Chile (chĭl`ē, Span. chē`lā), officially Republic of Chile, republic (2005 est. pop. 15,981,000), 292,256 sq mi (756,945 sq km), S South America, west of the continental divide of the Andes Mts. 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). . This results in net guidance of $0.59 per diluted share from continuing operations. The difference of $0.09 per share is attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to gains or losses from risk management mark-to-market accounting, certain foreign currency transactions, significant net asset gains or losses and impairments and early retirement of recourse debt included in diluted earnings per share from continuing operations. Revenue is now expected to increase 11% for the year, compared to prior guidance of 7%. Further information on the Company's updated and prior financial guidance can be found in the AES Third Quarter 2004 Financial Review presentation at www.aes.com. Third Quarter Segment Highlights --Contract Generation revenues grew 11% to $906 million from $817 million in 2003, due primarily to increased contract prices and new projects on line, partially offset by lower volumes related to a plant upgrade underway 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. . Gross margin improved 14% to $372 million from $327 million over the prior quarter. Gross margin as a percent of sales improved to 41% from 40% over the prior quarter. --Competitive Supply revenues grew 15% to $265 million from $230 million in 2003, resulting from increased demand, new projects on line and higher realized prices 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. and 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. that were partially offset by lower prices 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 . Gross margin increased 8% to $64 million from $59 million last year. Gross margin as a percent of sales decreased to 24% from 26% in the prior quarter. --Large Utilities revenues increased 3% to $938 million from $908 million in 2003, driven by 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 increases. Excluding the estimated impacts of foreign currency translation, revenues would have increased approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 7% over the prior quarter. Gross margin declined 4% to $234 million from $244 million in the prior quarter, attributable to higher fixed costs fixed costs, n.pl the costs that do not change to meet fluctuations in enrollment or in use of services (e.g., salaries, rent, business license fees, and depreciation). and negative impacts from foreign currency translation. Gross margin as a percent of sales also declined to 25% from 27% in the prior quarter. --Growth Distribution revenues increased 14% to $314 million compared to $276 million in 2003, helped by increased demand and higher tariffs This is a list of tariffs and trade legislation:
Nine Month Financial Highlights --Revenues increased 13% to $6,943 million from $6,134 million in the prior year, benefiting from higher prices and demand, foreign currency translation effects and new plants on line. Excluding the estimated impacts of foreign currency translation, revenues would have increased approximately 12% year-over-year. --Gross margin showed significant improvement, increasing 15% to $2,059 million compared to $1,789 million in last year's first nine months. This increase was largely attributable to increased revenues and other operating performance improvements. Gross margin as a percent of sales also improved to 30% versus 29% in 2003. --Interest expense declined 6% to $1,423 million compared to $1,518 million in the prior year, reflecting the benefits of financial restructuring and debt retirement, partially offset by higher short-term interest rates Short-term interest rates Interest rates on loan contracts-or debt instruments such as Treasury bills, bank certificates of deposit or commerical paper-having maturities of less than one year. Often called money market rates. and new project debt. --Income before taxes and minority interest was $649 million, up 14% over the $569 million for the prior year, due to higher gross margin and lower interest expense in 2004 as well as asset impairments of $106 million in 2003, partially offset by net foreign currency transaction losses. --The effective tax rate was 31% compared to 28% a year ago reflecting higher US taxes related to distributions from and earnings of certain non-US subsidiaries. --Diluted earnings per share from continuing operations for the nine months ended September September: see month. 30, 2004 were $0.42 compared to $0.56 for the 2003 period. Adjusted earnings per share* for the nine months ended September 30, 2004 increased 16% from $0.45 to $0.52. --Net income was $226 million compared to $40 million in the first nine months of 2003. Net income in the 2003 period was adversely affected by the impact 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. , including several development project write-offs. --Net cash from operating activities was $1,109 million, $23 million higher than in the prior year. Excluding $29 million of cash flows from discontinued operations included in 2003, net cash from operating activities would have increased $52 million from the prior year. In 2004, improved 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. was partially offset by increased working capital which was driven by 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. payments for outstanding payables Payables Related: Accounts payable from the period prior to its debt restructuring Debt Restructuring A method used by companies with outstanding debt obligations to alter the terms of the debt agreements in order to achieve some advantage. Notes: . --Recourse debt has been reduced by $469 million and total recourse and 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 reduced by $1,128 million since the beginning of the year, reflecting completion of several financial restructuring transactions and continued debt repayments. About AES AES is a leading global power company, with 2003 revenues of $8.4 billion. AES operates in 27 countries, generating 45,000 megawatts of electricity through 112 power facilities and delivers electricity through 17 distribution companies. Our 30,000 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 invest@aes.com. * Note: This analysis of adjusted earnings per share involves a non-GAAP financial measure. See the Reconciliation of Adjusted Earnings Per Share. Attachments: Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: Statements of Operations, Segment Information, Condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. Consolidated Balance Sheets consolidated balance sheet A balance sheet in which assets and liabilities of a parent company and its controlled subsidiaries are combined, thereby presenting balance sheet items for the parent and its subsidiaries as if they were a single firm. , Condensed Consolidated Statements of Cash Flows, Reconciliation of Adjusted Earnings per Share, and Parent Financial Information. Conference Call Information: AES will host a conference call today to discuss these results. The call will be held at 10:00 am Eastern Daylight For other uses, see Daylight (disambiguation). Daylight or the light of day is the combination of all direct and indirect sunlight outdoors during the daytime (and perhaps twilight). Time (EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT ). 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 1-877-692-2592. International callers should dial 1-973-582-2700. Please call at least five 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 affiliation (  fil´ēā´sh . The AES
Third Quarter 2004 Financial Review presentation will also be available
at www.aes.com. This presentation includes a summary of updated AES
forward-looking for·ward-look·ingadj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. guidance. A replay of the conference call will be available at www.aes.com and by telephone at 1-877-519-4471, using reservation A clause in a deed of real property whereby the grantor, one who transfers property, creates and retains for the grantor some right or interest in the estate granted, such as rent or an Easement ,a right of use over the land of another. number 5265527 until 6:00pm Eastern Standard Time on Thursday Thursday: see week. November November: see month. 4, 2004. International callers should dial 1-973-341-3080 and use the same reservation number. 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: This news release contains 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. within the meaning of the Securities Act of 1933 and of the Securities Exchange Act of 1934. Such forward-looking statements include, but are not limited to, those related to future earnings, growth, financial and operating performance. Forward-looking statements are not intended to be a guarantee of future results, but instead constitute AES's current expectations based on reasonable assumptions. Forecasted financial information is based on certain material assumptions. These assumptions include, but are not limited to continued normal levels of operating performance and electricity demand at our distribution companies and operational performance at our contract generation businesses consistent with historical levels, as well as achievements of planned productivity improvements and incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. growth from investments at investment levels and rates of return consistent with prior experience. Actual results could differ materially from those projected in our forward-looking statements due to risks, uncertainties and other factors. Important factors that could affect actual results are discussed in AES's filings with the Securities and Exchange Commission, including, but not limited to the risks discussed under the caption "Cautionary Statements and Risk Factors" in AES's most recent annual report on 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. . Readers are encouraged to read AES's filings to learn more about the risk factors associated with AES's business. AES undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
AES CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
Quarter Nine Months
Ended Ended
($ in millions, except per share September 30, September 30,
amounts) 2004 2003 2004 2003
---------------- ----------------
Revenues $2,423 $2,231 $6,943 $6,134
Cost of sales (1,692) (1,555) (4,884) (4,345)
------- ------- ------- -------
GROSS MARGIN 731 676 2,059 1,789
General and administrative expenses (40) (36) (130) (97)
Other operating expense, net (10) (5) (5) (29)
Asset impairment expense - (75) - (106)
------- ------- ------- -------
OPERATING INCOME 681 560 1,924 1,557
Interest expense (470) (500) (1,423) (1,518)
Interest income 52 82 191 207
Other nonoperating (expense) income,
net (2) 12 (20) 112
Foreign currency transaction (losses)
gains (16) (35) (79) 154
Loss on sale of investments - - (1) -
Equity in earnings of affiliates 18 12 57 57
------- ------- ------- -------
INCOME BEFORE INCOME TAXES AND
MINORITY INTEREST 263 131 649 569
Income tax expense (78) (33) (201) (160)
Minority interest expense, net (52) (36) (174) (77)
------- ------- ------- -------
INCOME FROM CONTINUING OPERATIONS 133 62 274 332
Income (loss) from operations of
discontinued components (net
of income tax benefit (expense) of
$4, $(28), $8, and $0,
respectively) 7 14 (48) (290)
------- ------- ------- -------
INCOME BEFORE CUMULATIVE EFFECT OF
ACCOUNTING CHANGE 140 76 226 42
Cumulative effect of accounting
change (net of income tax benefit of
$1) - - - (2)
------- ------- ------- -------
NET INCOME $140 $76 $226 $40
======= ======= ======= =======
DILUTED EARNINGS PER SHARE
Income from continuing operations $0.20 $0.10 $0.42 $0.56
Discontinued operations 0.01 0.02 (0.07) (0.49)
Cumulative effect of accounting
change - - - -
------- ------- ------- -------
Total $0.21 $0.12 $0.35 $0.07
======= ======= ======= =======
Diluted weighted average shares
outstanding (in millions) 651 624 643 588
======= ======= ======= =======
AES CORPORATION
SEGMENT INFORMATION
Quarter Nine Months
Ended Ended
September 30, September 30,
($ in millions) 2004 2003 2004 2003
----------------- ----------------
BUSINESS SEGMENTS
REVENUES
Contract Generation $906 $817 $2,642 $2,268
Competitive Supply 265 230 756 655
Large Utilities 938 908 2,590 2,388
Growth Distribution 314 276 955 823
------- ------- ------- -------
Total revenues $2,423 $2,231 $6,943 $6,134
GROSS MARGIN
Contract Generation $372 $327 $1,057 $903
Competitive Supply 64 59 181 173
Large Utilities 234 244 635 572
Growth Distribution 61 46 186 141
------- ------- ------- -------
Total gross margin $731 $676 $2,059 $1,789
INCOME BEFORE INCOME TAXES AND
MINORITY INTEREST
Contract Generation $211 $103 * $609 $414
Competitive Supply 47 37 140 148
Large Utilities 119 127 329 291
Growth Distribution 47 12 86 107
Corporate (161) (148) (515) (391)
------- ------- ------- -------
Total income before income taxes
and minority interest $263 $131 $649 $569
----------------------------------------------------------------------
GEOGRAPHIC SEGMENTS
REVENUES
North America $586 $581 $1,666 $1,634
Caribbean 401 387 1,198 1,107
South America 1,022 907 2,810 2,378
Europe/Africa 235 218 748 663
Asia 179 138 521 352
------- ------- ------- -------
Total revenues $2,423 $2,231 $6,943 $6,134
INCOME BEFORE INCOME TAXES AND
MINORITY INTEREST
North America $146 $134 $387 $353
Caribbean 37 82 150 159
South America 150 64 303 276
Europe/Africa 38 (54)* 143 31
Asia 53 53 181 141
Corporate (161) (148) (515) (391)
------- ------- ------- -------
Total income before income taxes
and minority interest $263 $131 $649 $569
*Includes a $76 million asset impairment charge.
AES CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
September December
30, 31,
($ in millions, except per share amounts) 2004 2003
-------- --------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $1,582 $1,737
Restricted cash 357 288
Short term investments 139 189
Accounts receivable, net of reserves of $253 and
$291, respectively 1,317 1,211
Inventory 388 376
Receivable from affiliates 2 3
Deferred income taxes - current 159 136
Prepaid expenses 115 64
Other current assets 801 677
Current assets of held for sale and discontinued
businesses 250 205
-------- --------
Total current assets 5,110 4,886
PROPERTY, PLANT AND EQUIPMENT
Land 748 733
Electric generation and distribution assets 21,969 21,076
Accumulated depreciation and amortization (5,087) (4,587)
Construction in progress 827 1,278
-------- --------
Property, plant and equipment, net 18,457 18,500
OTHER ASSETS
Deferred financing costs, net 486 430
Investment in and advances to affiliates 683 648
Debt service reserves and other deposits 598 617
Goodwill, net 1,376 1,378
Deferred income taxes - noncurrent 778 781
Long-term assets of held for sale and discontinued
businesses 683 750
Other assets 1,785 1,976
-------- --------
Total other assets 6,389 6,580
-------- --------
TOTAL ASSETS $29,956 $29,966
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $1,027 $1,225
Accrued interest 447 561
Accrued and other liabilities 1,372 1,156
Current liabilities of held for sale and
discontinued businesses 769 699
Recourse debt-current portion - 77
Non-recourse debt-current portion 1,778 2,769
-------- --------
Total current liabilities 5,393 6,487
LONG-TERM LIABILITIES
Recourse debt 5,470 5,862
Non-recourse debt 11,262 10,930
Deferred income taxes 1,122 1,113
Long-term liabilities of held for sale and
discontinued businesses 19 94
Pension liabilities 900 947
Other long-term liabilities 3,134 3,083
-------- --------
Total long-term liabilities 21,907 22,029
Minority Interest, including discontinued
businesses of $0 and $12, respectively 1,226 805
STOCKHOLDERS' EQUITY
Common stock 6 6
Additional paid-in capital 5,497 5,737
Accumulated deficit (877) (1,103)
Accumulated other comprehensive loss (3,196) (3,995)
-------- --------
Total stockholders' equity 1,430 645
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $29,956 $29,966
======== ========
AES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months
Ended
September 30,
($ in millions) 2004 2003
------- -------
OPERATING ACTIVITIES
Net income $226 $40
Adjustments:
Depreciation and amortization -- continuing and
discontinued operations 609 581
Other non-cash charges 543 165
(Increase) decrease in working capital (269) 300
------- -------
Net cash provided by operating activities 1,109 1,086
INVESTING ACTIVITIES
Property additions and project development costs (598) (878)
Net proceeds from the sale of assets 64 707
Sale (purchase) of short-term investments 42 (25)
Affiliate advances and equity investments 6 -
(Increase) in restricted cash (19) (322)
(Increase) decrease in debt service reserves and
other assets (13) 108
Other investing (4) (16)
------- -------
Net cash used in investing activities (522) (426)
FINANCING ACTIVITIES
(Repayments) under the revolving credit facilities,
net - (228)
Issuance of non-recourse debt and other coupon
bearing securities 1,980 4,120
Repayments of non-recourse debt and other coupon
bearing securities (2,565) (4,200)
Payments for deferred financing costs (81) (106)
(Distributions to) contribution by minority
interests, net (79) 7
Proceeds from sale of common stock 7 335
Other financing (3) (2)
------- -------
Net cash used in financing activities (741) (74)
Effect of exchange rate changes on cash (9) 34
------- -------
Total (decrease) increase in cash and cash
equivalents (163) 620
Decrease in cash and cash equivalents of discontinued
operations and businesses held for sale 8 62
Cash and cash equivalents, beginning 1,737 792
------- -------
Cash and cash equivalents, ending $1,582 $1,474
======= =======
AES CORPORATION
RECONCILIATION OF ADJUSTED EARNINGS PER SHARE (1)
Quarter Nine Months
Ended Ended
September 30, September 30,
($ per share) 2004 2003 2004 2003
----------------- ----------------
Adjusted Earnings Per Share $ 0.21 $ 0.26 $ 0.52 $ 0.45
FAS 133 Mark-to-Market
Gains/(Losses)(2) (0.02) (0.02) (0.07) (0.06)
Currency Transaction Gains/(Losses) 0.01 (0.05) (0.01) 0.19
Net Asset Gains/(Losses and
Impairments) - (0.10) - (0.14)
Debt Retirement Gains/(Losses) - 0.01 (0.02) 0.12
------- ------- ------- -------
Diluted EPS From Continuing
Operations $ 0.20 $ 0.10 $ 0.42 $ 0.56
======= ======= ======= =======
(1) Adjusted earnings per share (a non-GAAP financial measure) is
defined as diluted earnings per share from continuing operations
excluding gains or losses associated with (a) mark-to-market
amounts related to FAS 133 derivative transactions, (b) foreign
currency transaction impacts on the net monetary position related
to Brazil, Venezuela, and Argentina, (c) significant asset gains
or losses due to disposition transactions and impairments, and (d)
early retirement of recourse debt. AES believes that adjusted
earnings per share better reflect the underlying business
performance of the Company, and are considered in the Company's
internal evaluation of financial performance. Factors in this
determination include the variability associated with
mark-to-market gains or losses related to certain derivative
transactions, and periodic strategic decisions to dispose of
certain assets which may influence results in a given period.
Certain reclassifications have been made to prior-period amounts
to conform to the 2004 presentation.
(2) The Nine Months Ended September 30, 2004 includes $(0.03) related
to Chile debt restructuring costs included in interest expense in
the first quarter of 2004.
NOTE: AES revised the definition of adjusted EPS in the second quarter
of 2004 to focus greater attention on only three key currencies
resulting in foreign currency transaction gains or losses on net
monetary positions (those of Brazil, Venezuela, and Argentina).
The prior definition included the effects of all foreign
currencies. In addition, only significant asset gains or losses
due to disposition transactions and impairments are included. The
prior definition included all asset gains or losses due to
disposition transactions and impairments. Finally, the revised
definition reflects the specific tax impact of each amount. The
result is no net effect on the adjusted earnings per share for the
first half of either 2003 or 2004, with some minor reallocation to
the first quarter of both 2003 and 2004, and a $0.03 increase in
the annual adjusted EPS for 2003 from $0.53 to $0.56.
The AES Corporation
Parent Financial Information
----------------------------------------------------------------------
Parent only data: last four quarters
($ in millions) 4 Quarters Ended
September June March December
Total subsidiary distributions & 30, 30, 31, 31,
returns of capital to Parent 2004 2004 2004 2003
------------------------------------ Actual Actual Actual Actual
-------- ------- ------- --------
Subsidiary distributions to Parent $ 953 $1,056 $1,076 $1,008
Net distributions to/(from) QHCs (1) 29 24 2 46
------ ------ ------ ------
Subsidiary distributions 982 1,080 1,078 1,054
Returns of capital distributions to
Parent 130 219 243 242
Net returns of capital distributions
to/(from) QHCs (1) 12 (6) - -
------ ------ ------ ------
Returns of capital distributions 142 213 243 242
Combined distributions & return of
capital received 1,124 1,293 1,321 1,296
Less: combined net distributions &
returns of capital to/(from) QHCs(1) (41) (18) (2) (46)
------ ------ ------ ------
Total subsidiary distributions &
returns of capital to Parent $1,083 $1,275 $1,319 $1,250
====== ====== ====== ======
Parent only data: quarterly
($ in millions) Quarter Ended
September June March December
Total subsidiary distributions & 30, 30, 31, 31,
returns of capital to Parent 2004 2004 2004 2003
------------------------------------ Actual Actual Actual Actual
-------- ------- ------- --------
Subsidiary distributions to Parent $ 209 $ 292 $ 204 $ 248
Net distributions to/(from) QHCs (1) 12 10 - 7
------ ------ ------ ------
Subsidiary distributions 221 302 204 255
Returns of capital distributions to
Parent 110 - 3 17
Net returns of capital distributions
to/(from) QHCs (1) 11 - - 1
------ ------ ------ ------
Returns of capital distributions 121 - 3 18
Combined distributions & return of
capital received 342 302 207 273
Less: combined net distributions &
returns of capital to/(from) QHCs (1) (23) (10) - (8)
------ ------ ------ ------
Total subsidiary distributions &
returns of capital to Parent $ 319 $ 292 $ 207 $ 265
====== ====== ====== ======
Liquidity (2) Balance at
------------------------------------
($ in millions) September June March December
30, 30, 31, 31,
2004 2004 2004 2003
Actual Actual Actual Actual
-------- ------- ------- --------
Cash at Parent $ 525 $ 310 $ 268 $ 865
Availability under revolver 325 331 371 180
Cash at QHCs (1) 13 15 17 26
------ ------ ------ ------
Ending liquidity $ 863 $ 656 $ 656 $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.
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