EXHIBIT 99.1
[LOGO]
The Global Power Company NEWS RELEASE
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Contact: Kenneth R. Woodcock
(703) 522 1315
AES REPORTS SECOND QUARTER 2003 INCOME FROM
CONTINUING OPERATIONS OF $0.11 PER SHARE
$991 Million In Parent Company Liquidity Provides Renewed Flexibility
For Delevering And Growth
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ARLINGTON, VA, July 30, 2003 -- The AES Corporation (NYSE: AES) announced today
that income from continuing operations for the quarter ended June 30, 2003, was
$65 million, or $0.11 per diluted share, up from a loss of $(101) million, or
$(0.19) per diluted share for the second quarter of 2002. Income from continuing
operations for the six months ended June 30, 2003, was $142 million, or $0.25
per diluted share, up from income of $11 million, or $0.02 per diluted share,
for the six months ended June 30, 2002.
Net loss for the quarter ended June 30, 2003 was $(129) million, or $(0.22) per
diluted share compared to a loss of $(115) million, or $(0.22) per diluted share
for the second quarter of 2002. Net loss for the six months ended June 30, 2003
was $(35) million, or $(0.06) per diluted share compared to a loss of $(428)
million, or $(0.80) per diluted share, for the six months ended June 30, 2002.
The net losses for all periods included charges for discontinued operations. For
the second quarter of 2003, the charges in discontinued operations primarily
arise from the Company's decision to classify it's businesses in The Republic of
Georgia as held for sale.
Revenues for the quarter ended June 30, 2003 were $2.2 billion, up from $2.0
billion for the quarter ended June 30, 2002. Revenues for the six months ended
June 30, 2003 were $4.4 billion, up from $4.2 billion for the six months ended
June 30, 2002. Operating Income for the quarter ended June 30, 2003 was $459
million, up from $409 million for the quarter ended June 30, 2002. Operating
Income for the six months ended June 30, 2003 was $1.04 billion, down from $1.05
billion for the six months ended June 30, 2002.
AES also announced that consolidated net cash provided by operating activities
for the second quarter of 2003 was $291 million and $737 million for the first
half of 2003. Additionally, its subsidiary distributions to parent and qualified
holding companies for the second quarter of 2003 totaled $300 million and $480
million for the first half of 2003.
Paul Hanrahan, Chief Executive Officer stated, "We are extremely pleased with
the progress we have made in improving the financial situation of the Company.
Looking back over the last 9 months and culminating with yesterday's completion
of our bank loan financing, we have refinanced or raised approximately $5
billion of debt while increasing the average life of our parent maturities from
5.8 years to 7.8 years. During the quarter we also successfully raised $335
million in a common stock offering. In addition, we now have approximately $1
billion of cash on hand which provides renewed flexibility to continue our
deleveraging program and to pursue attractive growth opportunities."
Barry Sharp, Chief Financial Officer, stated, "In addition to the significant
improvement in our maturity profile, we also continued to grow our corporate
liquidity position with total distributions to the parent and qualified holding
companies of $480 million through the first six months of 2003. Along with the
proceeds from asset sales, we have also repaid debt at the parent level by over
$660 million since December 2002 and we plan to continue that progress with our
recently announced intention to call our $198 million 10.25% 2006 notes. For the
full year of 2003 we continue to expect consolidated net cash provided by
operating activities of approximately $1.5 billion, with $737 million generated
through the first six months."
Conference Call Information
This information will be discussed on a conference call to be held on Wednesday
July 30, 2003, at 9:00 am (Eastern Time). You may access the call via a live web
cast which will be available online at http://www.aes.com under the Investor
Relations section. This web cast will be available online until Friday, August
8, 2003. A telephonic replay of the call will also be available from
approximately 12:00 pm on Wednesday, July 30, until 6:00 pm on Friday, August 8
(Eastern Time). Please dial (877) 519 4471. The system will ask for a
reservation number; please enter 4005505 followed by the pound key (#).
International callers should dial (973) 341 3080.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act 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 on Form 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 158 facilities totaling
over 55 gigawatts of capacity, in 28 countries. AES's electricity distribution
network sells 108,000 gigawatt 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.
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THE AES CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE QUARTERS ENDED JUNE 30, 2003 AND 2002
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Quarter Quarter
Ended Ended
($ in millions, except per share amounts) 6/30/2003 6/30/2002
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REVENUES:
Sales and services $ 2,192 $ 2,038
OPERATING COSTS AND EXPENSES:
Cost of sales and services 1,701 1,602
Selling, general and administrative expenses 32 27
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Total operating costs and expenses 1,733 1,629
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OPERATING INCOME 459 409
OTHER INCOME AND (EXPENSE):
Interest expense, net (521) (415)
Other income (expense), net 162 (90)
Equity in earnings of affiliates (before income tax) 21 26
Loss on sale of investments - (59)
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INCOME (LOSS) BEFORE INCOME TAXES AND
MINORITY INTEREST 121 (129)
Income tax expense 34 (7)
Minority interest expense (income) 22 (21)
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INCOME (LOSS) FROM CONTINUING OPERATIONS 65 (101)
Income (loss) from operations of discontinued components
(net of income taxes of $0 and $(2), respectively) (194) (141)
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LOSS BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE (129) (242)
Cumulative effect of accounting change
(net of income taxes of $83, respectively) - 127
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NET LOSS $ (129) $ (115)
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DILUTED EARNINGS PER SHARE:
Income from continuing operations $ 0.11 $ (0.19)
Discontinued operations (0.33) (0.27)
Cumulative effect of accounting change - 0.24
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Total $ (0.22) $ (0.22)
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Diluted weighted average
shares outstanding (in millions) 577 535
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THE AES CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2003 AND 2002
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Six Months Six Months
Ended Ended
($ in millions, except per share amounts) 6/30/2003 6/30/2002
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REVENUES:
Sales and services $ 4,385 $ 4,214
OPERATING COSTS AND EXPENSES:
Cost of sales and services 3,283 3,109
Selling, general and administrative expenses 62 54
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Total operating costs and expenses 3,345 3,163
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OPERATING INCOME 1,040 1,051
OTHER INCOME AND (EXPENSE):
Interest expense, net (1,022) (809)
Other income (expense), net 205 (147)
Equity in earnings of affiliates (before income tax) 45 55
Loss on sale of investments - (116)
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INCOME BEFORE INCOME TAXES AND
MINORITY INTEREST 268 34
Income tax expense (benefit) 73 54
Minority interest expense (income) 53 (31)
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INCOME FROM CONTINUING OPERATIONS 142 11
Income (loss) from operations of discontinued components
(net of income taxes of $7 and $43, respectively) (175) (93)
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LOSS BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE (33) (82)
Cumulative effect of accounting change
(net of income taxes of $1 and $72, respectively) (2) (346)
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NET LOSS $ (35) $ (428)
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DILUTED EARNINGS PER SHARE:
Income from continuing operations $ 0.25 $ 0.02
Discontinued operations (0.31) (0.17)
Cumulative effect of accounting change - (0.65)
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Total $ (0.06) $ (0.80)
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Diluted weighted average
shares outstanding (in millions) 569 536
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Business Segment Results
AES's business segments, which include Contract Generation, Large Utilities,
Competitive Supply and Growth Distribution, generated combined income before
income taxes, excluding the Corporate segment, of $205 million for the second
quarter of 2003, as compared with $8 million for the second quarter of 2002.
Total income before income taxes, including the Corporate segment, was $99
million for the second quarter of 2003, as compared with a loss of $(108)
million for the same period in 2002. On a geographic basis, income before income
taxes from the business segments was generated $92 million from North America,
$130 million from South America, $37 million from Asia, $(36) million from
Europe and Africa, and $(18) million from the Caribbean.
Contract Generation
($ in millions) 2Q 2Q
2003 2002 Variance
---- ---- --------
Segment revenues $735 $632 $103
% of total revenues 34% 31% 3%
Gross margin $285 $260 $25
% of segment revenues 39% 41% (2)%
Income before income taxes $124 $144 $(20)
% of income before income taxes
from segments 60% 1800% NM
Contract Generation consists of multiple power generation facilities located
around the world that have contractually limited their exposure to commodity
price risks and electricity price volatility by entering into long-term (5 years
or longer) power purchase agreements for 75% or more of their expected output
capacity.
For the second quarter of 2003, Contract Generation revenues were $735 million
and represented 34% of total revenues, an increase of $103 million over the
second quarter of 2002. The most significant contributions continued to be from
North and South America, which in aggregate comprised 60% of Contract Generation
revenue for the quarter as compared to 59% for the same period in 2002. Revenues
were enhanced with the addition of recently completed commercial contract
generation businesses totaling 1,451 mw (added subsequent to the second quarter
of 2002), including Red Oak in New Jersey (832 mw gas), Puerto Rico (454 mw
coal), Kelanitissa in Sri Lanka (165 mw gas), Barka in Oman (427 mw gas), Ras
Laffan in Qatar (750 mw gas) and Andres in the Dominican Republic (310 mw gas).
Revenues also improved at Los Mina in the Dominican Republic, Merida III in
Mexico, Kilroot in Northern Ireland, Tiszai in Hungary and Ebute in Nigeria.
These improvements were offset by declines at Shady Point in Oklahoma due to a
step-down in the contracted capacity payment, Warrior Run in Maryland, Tiete in
Brazil and Lal Pir and Pak Gen in Pakistan.
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The gross margin for the Contract Generation segment was $285 million for the
quarter, an increase of 10% from the second quarter of 2002. Gross margin
increases arose at Uruguaiana and Tiete in Brazil, Los Mina in the Dominican
Republic, Kilroot in Northern Ireland and Ebute in Nigeria. Additionally, new
plants that came online subsequent to the second quarter of 2002 contributed to
the increase. These increases were offset by declines in gross margin at Beaver
Valley and Ironwood in Pennsylvania, Shady Point in Oklahoma, the Southland
plants in California and the Chigen plants in China. As a percentage of
revenues, the gross margin for the Contract Generation segment was 39% in the
second quarter of 2003, a decline from 41% in the second quarter of 2002.
Contract Generation generated $124 million of income before income taxes (or 60%
of the net total) for the second quarter of 2003, a decrease from $144 million
in the second quarter of 2002. South America showed an increase due to Gener in
Chile and Uruguaiana in Brazil offset by a decrease at Tiete in Brazil. North
America experienced declines due to Beaver Valley in Pennsylvania, Warrior Run
in Maryland due to FAS 133 mark-to-market losses and Shady Point in Oklahoma due
to a step-down in the contracted capacity payment. These declines were partially
offset by increases in the Southland plants in California. The Caribbean
experienced an overall decrease due to the write-off of capitalized costs
associated with El Faro, a development project in Honduras that was terminated
during the second quarter of 2003. This decrease was partially offset by the
start of commercial operations at Puerto Rico. Income before taxes was
relatively consistent between periods for Asia and for Europe/Africa.
Competitive Supply
($ in millions) 2Q 2Q
2003 2002 Variance
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Segment revenues $363 $373 $(10)
% of total revenues 17% 18% (1)%
Gross margin $18 $85 $(67)
% of segment revenues 5% 23% (18)%
Loss before income taxes $(31) $(37) $6
% of income before income taxes
from segments (15)% (463)% NM
Competitive Supply consists primarily of the power plants selling electricity
directly to wholesale customers in competitive markets and, as a result, the
profitability of such plants are generally more sensitive to fluctuations in the
market price of electricity, natural gas and coal, in particular.
For the second quarter of 2003, Competitive Supply revenues were $363 million
and represented 17% of total revenues for the quarter. The most significant
contributions
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continued to be from the competitive markets of the U.S. and the UK that in
aggregate comprised 74% of Competitive Supply revenue for the quarter.
Competitive market prices increased quarter over quarter in New York, which
resulted in increased revenue in the New York plants. Additionally, other plants
showed revenue improvements, including Parana in Argentina and Ekibastuz in
Kazakhstan. An increase in revenue also resulted from the start of commercial
operations at Granite Ridge in New Hampshire (720 mw gas). These increases were
partially offset by decreased revenues from Deepwater in Texas due to an outage
and from Drax in the UK. Despite increases in its sales volume quarter over
quarter, Drax had lower revenues due to lower prices from the merchant market
than what was received in 2002 under the TXU contract which was terminated
during the fourth quarter of 2002.
Gross margin as a percentage of revenues for the Competitive Supply segment was
5% in the second quarter of 2003, a decrease from 23% in the second quarter of
2002. Overall, the gross margin for Competitive Supply decreased from $85
million to $18 million. Margins and margin percentages were lower at Deepwater
in Texas, Granite Ridge in New Hampshire, Borsod in Hungary, Panama and Drax in
the UK due to lower prices as a result of the termination of the TXU contract
and increased cost of sales due to higher volume. These decreases were partially
offset by increased margins and margin percentages in North and South America,
including the New York plants and Parana.
Competitive Supply had a loss before income taxes of $(31) million (or (15)% of
the net total) for the second quarter of 2003, which represents a $6 million
improvement over the same period in 2002. The Competitive Supply loss before
income taxes remained fairly constant between 2002 and 2003. However, second
quarter 2002 losses included depreciation of the Argentina Peso at Parana, the
write-off of Infovias, and the loss on the CCI Investment, as compared to
appreciation of the Argentina Peso during the second quarter of 2003 and
additional losses at Drax in the UK due to operating in the merchant market in
2003 rather than under the TXU contract in 2002. Additionally Borsod in Hungary,
Deepwater in Texas and Granite Ridge in New Hampshire experienced decreased
income before income taxes in 2003.
Large Utilities
($ in millions) 2Q 2Q
2003 2002 Variance
---- ---- --------
Segment revenues $777 $863 $(86)
% of total revenues 35% 42% (7)%
Gross margin $164 $185 $(21)
% of segment revenues 21% 21% -
Income before income taxes $90 $50 $40
% of income before income taxes
from segments 44% 625% NM
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The Large Utilities segment is comprised of the large integrated utilities that
serve nearly 7 million customers in North America, the Caribbean and South
America. Businesses include IPALCO in Indiana, EDC in Venezuela and Eletropaulo
in Brazil.
For the second quarter of 2003, revenues for Large Utilities were $777 million
and represented 35% of total revenues for the quarter. Revenues for Large
Utilities decreased $86 million, or 7%, from the second quarter of 2002. Despite
an increase in Eletropaulo's electricity sales, revenues for the second quarter
of 2003 decreased when compared to the second quarter of 2002 due to higher
average exchange rates in effect for 2003 compared to 2002. The quarter over
quarter devaluation of the Venezuelan Bolivar negatively impacted the U.S.
Dollar translated revenues of EDC and offset the impact of an increase in
revenues resulting from a tariff increase. IPALCO also had a slight decrease
quarter over quarter due to milder weather in 2003.
The gross margin as a percentage of revenues for the Large Utility segment was
21% for the second quarter of 2003 and 2002. Eletropaulo's gross margin
decreased mainly due to higher average exchange rates in the second quarter of
2003 and higher pension cost compared to the second quarter of 2002.
Additionally, IPALCO experienced a lower margin and margin percentage due to
milder weather and higher operating and maintenance costs in 2003. Overall,
gross margin for Large Utilities declined to $164 million for the second quarter
of 2003 from $185 million in the second quarter of 2002.
Large Utilities generated $90 million of income before income taxes (or 44% of
the net total) for the second quarter of 2003, up from $50 million for the same
period in 2002. The increase relates primarily to appreciation of the month end
Brazilian Real rates from March 31, 2003 to June 30, 2003 and one-time charges
taken in 2002 for the loss on sale of securities at EDC. The increases were
offset by lower gross margin and substantially reduced foreign currency
transaction gains at EDC during 2003, due to the devaluation in the Venezuelan
Bolivar quarter over quarter, and a lower gross margin at IPALCO.
Growth Distribution
($ in millions) 2Q 2Q
2003 2002 Variance
---- ---- --------
Segment revenues $317 $170 $147
% of total revenues 14% 8% 6%
Gross margin $24 $(94) $118
% of segment revenues 8% (55)% 63%
Income (loss) before income taxes $22 $(149) $171
% of income before income taxes
from segments 11% (1863)% NM
The Growth Distribution segment, serving nearly 5 million customers, consists of
electricity distribution companies that are generally located in developing
countries or
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regions where the demand for electricity is expected to grow at a rate higher
than in more developed regions.
For the second quarter of 2003, revenues were $317 million, an 86% increase over
the second quarter of 2002, and represented 14% of total revenues for the
quarter. The Caribbean represents the most significant contributor with 38% of
Growth Distribution revenues, while South America represents 35% and
Europe/Africa contributes the remaining 27%. The increase in revenues is due
primarily to the one-time charge taken in 2002 for the MAE write-off at Sul.
Operationally, there were increases in revenues at Eden & Edes and Edelap in
Argentina, Sonel in Cameroon, Clesa and Caess in El Salvador. These were
partially offset by reductions at Sul in Brazil because of the higher average
exchange rates during the second quarter of 2003 and Ede Este in the Dominican
Republic.
The gross margin as a percentage of revenues for the Growth Distribution segment
was 8% in the second quarter of 2003, an increase from (55)% in the second
quarter of 2002. Gross margin and gross margin percentages declined at Ede Este
in the Dominican Republic and Sonel in Cameroon. These declines were offset by
an increased gross margin at Caess in El Salvador and the one-time adjustment
taken in 2002 for the MAE write-off at Sul. Overall, the gross margin for the
Growth Distribution segment increased to $24 million for the second quarter of
2003.
Growth Distribution businesses generated $22 million of income before income
taxes for the second quarter of 2003, an increase of $171 million from a loss
before income taxes of $(149) million for the second quarter of 2002. Income
before income taxes increased at Sul in Brazil, Eden & Edes in Argentina and
Caess in El Salvador. These increases were partially offset by decreases at Ede
Este in the Dominican Republic due, in part, to foreign exchange transaction
losses caused by the devaluation of the Dominican Peso during the second quarter
of 2003 as well as lower operating margins.
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THE AES CORPORATION --- Supplemental Data
($ in millions, except Total Assets in billions)
2002 2003
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1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year 1st Qtr 2nd Qtr
------- ------- ------- ------- ---- ------- -------
GEOGRAPHIC:
North America
Revenues $ 491 $ 492 $ 570 $ 539 $ 2,092 $ 552 $ 516
Income before Income Taxes (4) $ 136 $ 138 $ 5 $ (4) $ 275 $ 117 $ 92
Caribbean (1)
Revenues $ 373 $ 365 $ 334 $ 383 $ 1,455 $ 400 $ 410
Income before Income Taxes (4) $ 59 $ 73 $ 41 $ (62) $ 111 $ 13 $ (18)
South America
Revenues $ 787 $ 708 $ 713 $ 688 $ 2,896 $ 679 $ 800
Income before Income Taxes (4) $ (10) $ (265) $ (289) $ (960) $(1,524) $ 55 $ 130
Europe/Africa
Revenues $ 425 $ 365 $ 369 $ 450 $ 1,609 $ 455 $ 359
Income before Income Taxes (4) $ 76 $ 23 $ 4 $(1,135) $(1,032) $ 28 $ (36)
Asia
Revenues $ 100 $ 108 $ 88 $ 97 $ 393 $ 107 $ 107
Income before Income Taxes (4) $ 36 $ 39 $ 23 $ 18 $ 116 $ 41 $ 37
Corporate (3)
Income before Income Taxes (4) $ (124) $ (116) $ (96) $ (144) $ (480) $ (137) $ (106)
SEGMENTS:
Contract Generation
Revenues $ 652 $ 632 $ 599 $ 668 $ 2,551 $ 716 $ 735
Gross Margin (2) $ 272 $ 260 $ 242 $ 291 $ 1,065 $ 291 $ 285
Income before Income Taxes (4) $ 181 $ 144 $ 144 $ 148 $ 617 $ 154 $ 124
Competitive Supply
Revenues $ 409 $ 373 $ 394 $ 452 $ 1,628 $ 459 $ 363
Gross Margin (2) $ 88 $ 85 $ 93 $ (137) $ 129 $ 113 $ 18
Income before Income Taxes (4) $ (41) $ (37) $ (166) $(1,286) $(1,530) $ 33 $ (31)
Large Utilities
Revenues $ 768 $ 863 $ 783 $ 736 $ 3,150 $ 703 $ 777
Gross Margin (2) $ 232 $ 185 $ 199 $ 71 $ 687 $ 165 $ 164
Income before Income Taxes (4) $ 134 $ 50 $ (175) $ (951) $ (942) $ 69 $ 90
Growth Distribution
Revenues $ 347 $ 170 $ 298 $ 301 $ 1,116 $ 315 $ 317
Gross Margin (2) $ 77 $ (94) $ 48 $ (14) $ 17 $ 42 $ 24
Income before Income Taxes (4) $ 23 $ (149) $ (19) $ (54) $ (199) $ (2) $ 22
Corporate (3)
Income before Income Taxes (4) $ (124) $ (116) $ (96) $ (144) $ (480) $ (137) $ (106)
ADDITIONAL INFORMATION:
Revenues $ 2,176 $ 2,038 $ 2,074 $ 2,157 $ 8,445 $ 2,193 $2,192
Gross Margin (2) $ 669 $ 436 $ 582 $ 211 $ 1,898 $ 611 $ 491
Gross Margin Percentage (2) 31% 21% 28% 10% 22% 28% 22%
Income before Income Taxes (4) $ 173 $ (108) $ (312) $(2,287) $(2,534) $ 117 $ 99
Total Assets (billions) $ 40 $ 39 $ 37 $ 34 $ 34 $ 33 $ 34
Depreciation and Amortization $ 195 $ 198 $ 191 $ 197 $ 781 $ 176 $ 188
FAS 133 Gain (Loss)(5) $ 17 $ 25 $ (6) $ (48) $ (12) $ (14) $ (24)
Foreign Exchange Gain (Loss) from Brazil(5) $ (10) $ (85) $ (203) $ 46 $ (252) $ 22 $ 82
Foreign Exchange Gain (Loss) from Argentina(5) $ (82) $ (52) $ -- $ (5) $ (139) $ 33 $ 21
Foreign Exchange Gain (Loss) from Venezuela(5) $ 65 $ 25 $ 21 $ (72) $ 39 $ 4 $ (17)
Foreign Exchange Gain (Loss) from Dominican
Republic(5) $ (3) $ (2) $ (7) $ (12) $ (24) $ (23) $ (13)
(1) Includes Venezuela and Colombia.
(2) Gross Margin is revenues reduced by cost of sales and services.
(3) Corporate consists of interest expense and selling, general and
administrative expenses. Revenue and Gross Margin for Corporate equal zero.
(4) Amount is net of pre-tax minority interest.
(5) Amount is net of the income tax effect.
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THE AES CORPORATION
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2003 AND DECEMBER 31, 2002
($ in millions) June 30, 2003 December 31, 2002
------------- -----------------
ASSETS:
Current assets:
Cash and cash equivalents $ 1,653 $ 767
Restricted cash 498 160
Short term investments 216 209
Accounts receivable, net of reserves of
$362 and $375, respectively 1,127 1,082
Inventory 396 368
Receivable from affiliates 15 25
Deferred income taxes - current 127 130
Prepaid expenses 82 66
Other current assets 752 929
Current assets of held for sale and discontinued
businesses 453 613
----------- -------------
Total current assets 5,319 4,349
Property, Plant and Equipment:
Land 764 702
Electric generation and distribution assets 20,409 18,347
Accumulated depreciation (4,577) (4,051)
Construction in progress 2,430 3,212
----------- - ------------
Property, plant and equipment, net 19,026 18,210
Other assets:
Deferred financing costs, net 442 398
Project development costs 6 15
Investment in and advances to affiliates 704 678
Debt service reserves and other deposits 393 508
Goodwill, net 1,374 1,388
Deferred income taxes - noncurrent 1,038 939
Long-term assets of held for sale and
discontinued businesses 3,769 6,055
Other assets 2,087 1,690
----------- -------------
Total other assets 9,813 11,671
----------- -------------
Total Assets $ 34,158 $ 34,230
=========== =============
Liabilities and Stockholders' Equity:
Current liabilities:
Accounts payable $ 1,180 $ 1,115
Accrued interest 528 361
Accrued and other liabilities 1,405 1,122
Current liabilities of held for sale and
discontinued businesses 2,682 588
Recourse debt-current portion 3 26
Non-recourse debt-current portion 4,545 3,299
----------- -------------
Total current liabilities 10,343 6,511
Long-term liabilities:
Recourse debt 5,585 5,778
Non-recourse debt 9,800 10,635
Deferred income taxes 849 981
Long-term liabilities of held for sale and
discontinued businesses 1,480 5,109
Pension liabilities 1,357 1,166
Other long-term liabilities 2,765 2,595
----------- -------------
Total long-term liabilities 21,836 26,264
Minority interest, including discontinued
operations of $41 in 2002 863 818
Company obligated convertible mandatorily redeemable
preferred securities of subsidiary trusts holding
solely junior subordinated debentures of AES 910 978
Stockholders' equity (deficit):
Common stock 6 6
Additional paid-in capital 5,688 5,312
Accumulated deficit (735) (700)
Accumulated other comprehensive loss (4,753) (4,959)
----------- -------------
Total stockholders' equity (deficit) 206 (341)
----------- -------------
Total Liabilities and Stockholders'
Equity (Deficit) $ 34,158 $ 34,230
=========== =============
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THE AES CORPORATION
CAPITAL RESOURCES AND OTHER BALANCE SHEET DATA
($ in billions)
June 30, December 31,
Capitalization: 2003 2002
---------------- ----------------
Recourse debt $ 5.59 $ 5.80
Non-recourse debt 14.35 13.93
---------------- ----------------
Total debt 19.94 19.73
Preferred Securities 0.91 0.98
Minority Interest 0.86 0.82
Stockholders' equity 0.21 (0.34)
---------------- ----------------
Total capitalization $ 21.92 $ 21.19
================ ================
Selected Balance Sheet Data by Geographic Region:
Property, Plant Total Non-recourse
June 30, 2003 & Equipment Assets Debt
---------------------------------------------------
North America $ 6.09 $ 7.46 $ 4.24
Caribbean 4.68 5.98 2.46
South America 5.28 10.25 5.40
Europe/Africa 1.38 5.90 0.82
Asia 1.59 2.53 1.43
Discontinued Operations - 0.81 -
Corporate 0.01 1.23 -
December 31, 2002
North America $ 6.13 $ 7.41 $ 4.26
Caribbean 5.13 6.54 2.90
South America 4.26 8.69 4.97
Europe/Africa 1.30 5.68 0.74
Asia 1.38 2.20 1.06
Discontinued Operations - 3.31 -
Corporate 0.01 0.40 -
Selected Balance Sheet Data by Line of Business:
Property, Plant Total Non-recourse
June 30, 2003 & Equipment Assets Debt
---------------------------------------------------
Contract Generation $ 9.07 $ 13.37 $ 7.33
Competitive Supply 2.43 6.68 1.32
Large Utilities 5.93 9.12 4.61
Growth Distribution 1.59 2.95 1.09
Discontinued Operations - 0.81 -
Corporate 0.01 1.23 -
December 31, 2002
Contract Generation $ 8.06 $ 12.09 $ 6.55
Competitive Supply 3.06 7.16 1.57
Large Utilities 5.65 8.45 4.64
Growth Distribution 1.43 2.82 1.17
Discontinued Operations - 3.31 -
Corporate 0.01 0.40 -
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The AES Corporation
Parent Financial Information
- -----------------------------------------------------------------------------------------------------------------------------------
Parent only data: last four quarters
($ in millions) 4 Quarters Ended
December 31, March 31, June 30, December 31,
Total subsidiary distributions & returns of capital to Parent 2002 2003 2003 2003
- --------------------------------------------------------------- Actual Actual Actual Forecast (1)
----------- --------- --------- -----------
Subsidiary distributions to Parent $ 804 $ 658 $ 773 $ 1,054
Net distributions to/(from) QHCs (2) 291 286 208 5
----------- --------- --------- -----------
Subsidiary distributions 1,095 944 981 1,059
Returns of capital distributions to Parent 84 43 54 298
Net returns of capital distributions to/(from) QHCs (2) 0 0 6 6
----------- --------- --------- -----------
Returns of capital distributions 84 43 60 304
Combined distributions & return of capital received 1,179 987 1,041 1,363
Less: combined net distributions & returns of capital to/(from) QHCs (2) (291) (286) (214) (11)
----------- --------- --------- -----------
Total subsidiary distributions & returns of capital to Parent $ 888 $ 701 $ 827 $ 1,352
=========== ========= ========= ===========
- ------------------------------------------------------------------------------------------------------------------------------------
Parent only data: quarterly
($ in millions) Quarter Ended
June 30, September 30,December 31, March 31, June 30,
Total subsidiary distributions & returns of capital to Parent 2002 2002 2002 2003 2003
- --------------------------------------------------------------- Actual Actual Actual Actual Actual
--------- --------- ---------- ---------- ---------
Subsidiary distributions to Parent $ 197 $ 176 $ 149 $ 136 $ 312
Net distributions to/(from) QHCs (2) 66 76 100 44 (12)
--------- --------- ---------- ---------- ---------
Subsidiary distributions 263 252 249 180 300
Returns of capital distributions to Parent 14 4 23 2 24
Net returns of capital distributions to/(from) QHCs (2) 0 0 0 0 6
--------- --------- ---------- ---------- ---------
Returns of capital distributions 14 4 23 2 30
Combined distributions & return of capital received 277 256 272 182 330
Less: combined net distributions & returns of capital to/(from) QHCs (2) (66) (76) (100) (44) 6
--------- --------- ---------- ---------- ---------
Total subsidiary distributions & returns of capital to Parent $ 211 $ 180 $ 172 $ 138 $ 336
========= ========= ========== ========== =========
Liquidity (3) Balance at
- ---------
($ in millions) June 30, September 30, December 31, March 31, June 30,
2002 2002 2002 2003 2003
Actual Actual Actual Actual Actual
---------- ------------- ------------ --------- ----------
Cash at Parent $ 288 $ 384 $ 188 $ 395 $ 922
Availability under revolver 69 5 18 28 39
Cash at QHCs (2) 2 6 10 66 29
---------- ----------- ---------- --------- ----------
Ending liquidity $ 359 $ 395 $ 216 $ 489 $ 991
========== =========== ========== ========= ==========
(1) Forecasted financial information is based on certain material assumptions.
Such assumptions include, but are not limited to the following:
a. We assume continued normal levels of operating performance and
electricity demand at our distribution companies.
b. We assume operational performance at our contract generation
businesses consistent with historical levels and in accordance with
the provisions of the relevant contracts.
c. Our assumptions about asset sales include transactions that are
supported by signed agreements and that have been previously
announced.
(2) 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.
(3) AES believes that unconsolidated parent company liquidity is important to
the liquidity position of AES as a Parent company because of the non-recourse
nature of most of AES's indebtedness.
Certain statements regarding AES's ("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 Company's Annual Report/Form
10K for the year ended December 31, 2002.
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