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AES Reports Adjusted Earnings Per Share Of $0.32 For Second Quarter 2013 And Reaffirms Full Year 2013 Guidance

Stocks in this article: AES

For the six months ended June 30, 2013, Consolidated Net Cash Provided by Operating Activities was $1,185 million, an increase of $71 million from the six months ended June 30, 2012, driven by lower working capital requirements in the Dominican Republic and Brazil, partially offset by lower operating cash flow in Chile and Colombia, as a result of higher working capital requirements.

Discussion of Other Announcements

  • The Company reduced G&A costs by $15 million during second quarter 2013
    • In 2012, the Company reduced G&A costs by $90 million
    • The Company accelerated its 2013 expected cost reductions by $15 million to $45 million for the year
    • On track to achieve $145 million in cumulative annual cost reductions in 2014, including G&A and cost of sales reductions
  • The Company closed two asset sales for $56 million in equity proceeds to AES
    • In June 2013, the Company sold its wind turbine inventory
    • In July 2013, the Company sold its 10% interest in the 720 MW gas-fired plant in Trinidad
    • Since September 2011, the Company has closed 16 asset sales representing $1.1 billion in equity proceeds to AES and exited operations in 7 countries
  • The Company repurchased 5.3 million shares at an average price of $11.81 per share for a total investment of $63 million
    • During second quarter 2013, the Company repurchased 1.6 million shares for a total investment of $18 million; subsequent to June 30, 2013, the Company repurchased an additional 3.7 million shares for a total investment of $45 million
    • Since September 2011, the Company has repurchased 39 million shares for a total investment of $453 million
  • During second quarter 2013, the Company prepaid $300 million of recourse debt and refinanced $750 million of recourse debt to improve its maturity profile and reduce interest expense
    • In July 2013, the Company extended its $800 million revolver by 3.5 years through June 2018
    • Since September 2011, the Company has prepaid more than $800 million of recourse debt and approximately $200 million of non-recourse debt
  • On schedule to complete 2,191 MW of capacity under construction expected to come on-line through 2016
    • In April 2013, the Company commenced construction of the 532 MW coal-fired Cochrane project
    • In May 2013, the Company achieved commercial operations of the 216 MW gas-fired Kribi plant in Cameroon
    • In July 2013, the Company achieved commercial operations of two wind plants (36 MW in total) in the United Kingdom
  • In July 2013, AES Gener signed a partnership agreement with Antofagasta Minerals for a 40% stake in the Alto Maipo 531 MW hydroelectric generation development project in Chile; Antofagasta also agreed to 20-year power purchase agreements for up to 160 MW of output

2013 Guidance

The Company reaffirmed its full year guidance for 2013, which is based on foreign exchange and commodity price forward curves as of June 30, 2013. The Company's guidance reflects an expected unfavorable impact of $0.12 related to low hydrology in Latin America, an increase of $0.06 from the estimated impact of $0.06 included in its prior guidance. The impact of low hydrology was largely offset by a favorable reduction in the expected effective tax rate for 2013. The Company now expects a full year effective tax rate in the 23% to 25% range, compared to previous expectations of 26% to 28%.

Table 3: 2013 Guidance Reconciliation

         
$ in Millions, Except Per Share Amounts      

Full Year 2013

Guidance

Adjusted EPS 1 $1.24 - $1.32
Proportional Free Cash Flow 1 (a) $750 - $1,050
Reconciling Factor 2 (b) $1,750 - $2,050
Consolidated Net Cash Provided by Operating Activities (a + b)       $2,500 - $3,100
1   A non-GAAP financial measure. See “Non-GAAP Financial Measures” for definitions and reconciliations to the most comparable GAAP financial measures.
2 Primarily includes minority interest, maintenance capex and environmental capex. See Appendix for details of the reconciliation.
 

Non-GAAP Financial Measures

See Non-GAAP Financial Measures for definitions of Adjusted Earnings Per Share, Adjusted Pre-Tax Contribution, Proportional Free Cash Flow, as well as reconciliations to the most comparable GAAP financial measure.

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