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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

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’ filings with the Securities and Exchange Commission (the “SEC”), including, but not limited to, the risks discussed under Item 1A “Risk Factors” and Item 7: Management’s Discussion & Analysis in AES’ 2012 Annual Report on Form 10-K and in subsequent reports filed with the SEC. Readers are encouraged to read AES’ filings to learn more about the risk factors associated with AES’ business. AES undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Any Stockholder who desires a copy of the Company’s 2012 Annual Report on Form 10-K dated on or about February 26, 2013 with the SEC may obtain a copy (excluding Exhibits) without charge by addressing a request to the Office of the Corporate Secretary, The AES Corporation, 4300 Wilson Boulevard, Arlington, Virginia 22203. Exhibits also may be requested, but a charge equal to the reproduction cost thereof will be made. A copy of the Form 10-K may be obtained by visiting the Company’s website at  www.aes.com.

   

THE AES CORPORATION

Condensed Consolidated Statements of Operations

(Unaudited)

 

Three Months Ended

June 30,

Six Months Ended

June 30,

2013   2012 2013   2012
(in millions, except per share amounts)
Revenue:
Regulated $ 2,093 $ 2,105 $ 4,339 $ 4,589
Non-Regulated 1,975   1,984   3,994   4,086  
Total revenue 4,068   4,089   8,333   8,675  
Cost of Sales:
Regulated (1,738 ) (1,869 ) (3,632 ) (3,925 )
Non-Regulated (1,412 ) (1,527 ) (3,028 ) (2,985 )
Total cost of sales (3,150 ) (3,396 ) (6,660 ) (6,910 )
Gross margin 918   693   1,673   1,765  
General and administrative expenses (59 ) (74 ) (120 ) (161 )
Interest expense (346 ) (384 ) (723 ) (800 )
Interest income 63 82 129 173
Loss on extinguishment of debt (165 ) (212 )
Other expense (18 ) (15 ) (46 ) (43 )
Other income 13 14 81 32
Gain on sale of investments 20 5 23 184
Asset impairment expense (18 ) (48 ) (28 )
Foreign currency transaction losses (17 ) (101 ) (49 ) (102 )
Other non-operating expense   (1 )  

(50

)
INCOME FROM CONTINUING OPERATIONS BEFORE TAXES
AND EQUITY IN EARNINGS OF AFFILIATES 409 201 708 970
Income tax expense (81 ) (75 ) (163 ) (343 )
Net equity in earnings of affiliates 2   11   6   24  
INCOME FROM CONTINUING OPERATIONS 330 137 551 651
Income (loss) from operations of discontinued businesses, net of income tax (benefit) expense of $1, $3, $0, and $5, respectively (5 ) 14 1
Net gain (loss) from disposal and impairments of discontinued businesses, net of income tax (benefit) expense of $(1), $61, $(2), and $61, respectively 3   75   (33 ) 70  
NET INCOME 333 207 532 722
Noncontrolling interests:
Less: Income from continuing operations attributable to noncontrolling interests (166 ) (67 ) (281 ) (240 )
Less: Income from discontinued operations attributable to noncontrolling interests     (2 ) (1 )
Total net income attributable to noncontrolling interests (166 ) (67 ) (283 ) (241 )
NET INCOME ATTRIBUTABLE TO THE AES CORPORATION $ 167   $ 140   $ 249   $ 481  
AMOUNTS ATTRIBUTABLE TO THE AES CORPORATION COMMON STOCKHOLDERS:
Income from continuing operations, net of tax $ 164 $ 70 $ 270 $ 411
Income (loss) from discontinued operations, net of tax 3   70   (21 ) 70  
Net income $ 167   $ 140   $ 249   $ 481  
BASIC EARNINGS PER SHARE:
Income from continuing operations attributable to The AES Corporation common stockholders, net of tax $ 0.22 $ 0.09 $ 0.36 $ 0.54
Income (loss) from discontinued operations attributable to The AES Corporation common stockholders, net of tax   0.09   (0.03 ) 0.09  
NET INCOME ATTRIBUTABLE TO THE AES CORPORATION COMMON STOCKHOLDERS $ 0.22   $ 0.18   $ 0.33   $ 0.63  
DILUTED EARNINGS PER SHARE:
Income from continuing operations attributable to The AES Corporation common stockholders, net of tax $ 0.22 $ 0.09 $ 0.36 $ 0.54
Income (loss) from discontinued operations attributable to The AES Corporation common stockholders, net of tax   0.09   (0.03 ) 0.09  
NET INCOME ATTRIBUTABLE TO THE AES CORPORATION COMMON STOCKHOLDERS $ 0.22   $ 0.18   $ 0.33   $ 0.63  
DIVIDENDS DECLARED PER COMMON SHARE $ 0.08   $   $ 0.08   $  
 
 
THE AES CORPORATION
STRATEGIC BUSINESS UNIT (SBU) INFORMATION
(Unaudited)
       

Three Months Ended

June 30,

Six Months Ended

June 30,

2013 2012 2013 2012
(in millions)
REVENUE
US $ 864 $ 894 $ 1,756 $ 1,824
Andes 724 770 1,415 1,504
Brazil 1,481 1,504 3,190 3,340
MCAC (1) 694 642 1,363 1,238
EMEA (2) 433 361 891 968
Asia 143 182 277 364
Corporate, Other and Inter-SBU eliminations (271 ) (264 ) (559 ) (563 )
       
Total Revenue $ 4,068   $ 4,089   $ 8,333   $ 8,675  
 
(1)     MCAC includes El Salvador Utilities which is reported within Corporate and Other in the segment disclosures provided in the notes to the Company's interim financial statements.
 
(2) EMEA includes Africa Utilities which is reported within Corporate and Other in the segment disclosures provided in the notes to the Company's interim financial statements.
 
   

THE AES CORPORATION

Condensed Consolidated Balance Sheets

(Unaudited)

 

  June 30,  

2013

December 31,

2012

(in millions, except share

and per share data)

ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 1,611 $ 1,966
Restricted cash 765 748
Short-term investments 703 696
Accounts receivable, net of allowance for doubtful accounts of $287 and $306, respectively 2,417 2,671
Inventory 763 766
Deferred income taxes 207 222
Prepaid expenses 187 230
Other current assets 1,157 1,103
Current assets of discontinued operations and held for sale assets   63  
Total current assets 7,810   8,465  
NONCURRENT ASSETS
Property, Plant and Equipment:
Land 957 1,007
Electric generation, distribution assets and other 32,058 31,656
Accumulated depreciation (9,747 ) (9,645 )
Construction in progress 2,600   2,783  
Property, plant and equipment, net 25,868   25,801  
Other Assets:
Investments in and advances to affiliates 1,177 1,196
Debt service reserves and other deposits 495 565
Goodwill 1,999 1,999
Other intangible assets, net of accumulated amortization of $200 and $276, respectively 408 429
Deferred income taxes 896 996
Other noncurrent assets 2,183 2,240
Noncurrent assets of discontinued operations and held for sale assets   139  
Total other assets 7,158   7,564  
TOTAL ASSETS $ 40,836   $ 41,830  
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable $ 2,622 $ 2,631
Accrued interest 275 295
Accrued and other liabilities 2,335 2,505
Non-recourse debt, including $287 and $282, respectively, related to variable interest entities 2,923 2,829
Recourse debt 118 11
Current liabilities of discontinued operations and held for sale businesses   48  
Total current liabilities 8,273   8,319  
NONCURRENT LIABILITIES
Non-recourse debt, including $1,172 and $1,076, respectively, related to variable interest entities 12,476 12,554
Recourse debt 5,553 5,951
Deferred income taxes 1,195 1,237
Pension and other post-retirement liabilities 2,203 2,455
Other noncurrent liabilities 3,251 3,705
Noncurrent liabilities of discontinued operations and held for sale businesses   17  
Total noncurrent liabilities 24,678   25,919  
Cumulative preferred stock of subsidiaries 78 78
EQUITY
THE AES CORPORATION STOCKHOLDERS’ EQUITY
Common stock ($0.01 par value, 1,200,000,000 shares authorized; 812,248,090 issued and 745,144,098 outstanding at June 30, 2013 and 810,679,839 issued and 744,263,855 outstanding at December 31, 2012) 8 8
Additional paid-in capital 8,481 8,525
Accumulated deficit (15 ) (264 )
Accumulated other comprehensive loss (2,939 ) (2,920 )
Treasury stock, at cost (67,103,992 shares at June 30, 2013 and 66,415,984 shares at December 31, 2012) (786 ) (780 )
Total AES Corporation stockholders’ equity 4,749 4,569
NONCONTROLLING INTERESTS 3,058   2,945  
Total equity 7,807   7,514  
TOTAL LIABILITIES AND EQUITY $ 40,836   $ 41,830  
 
   

THE AES CORPORATION

Condensed Consolidated Statements of Cash Flows

(Unaudited)

 

Three Months Ended

June 30,

Six Months Ended

June 30,

2013   2012 2013   2012
(in millions) (in millions)
OPERATING ACTIVITIES:
Net income $ 333 $ 207 $ 532 $ 722
Adjustments to net income:
Depreciation and amortization 332 346 661 706
Gain from sale of investments and impairment expense (13 ) 21 46 (71 )
Deferred income taxes (59 ) (29 ) (46 ) 72
Provisions for contingencies 10 18 36 35
Loss on the extinguishment of debt 165 212
(Gain) loss on disposals and impairments - discontinued operations (7 ) (131 ) 31 (131 )
Other (33 ) 90 23 50
Changes in operating assets and liabilities
(Increase) decrease in accounts receivable 149 14 191 (175 )
(Increase) decrease in inventory (8 ) (32 ) (12 ) (43 )
(Increase) decrease in prepaid expenses and other current assets 247 135 55 18
(Increase) decrease in other assets (102 ) (137 ) (147 ) (293 )
Increase (decrease) in accounts payable and other current liabilities (426 ) (38 ) (252 ) 228
Increase (decrease) in income tax payables, net and other tax payables (11 ) (88 ) (134 ) (249 )
Increase (decrease) in other liabilities (10 ) 204   (11 ) 245  
Net cash provided by operating activities 567   580   1,185   1,114  
INVESTING ACTIVITIES:
Capital Expenditures (1) (465 ) (492 ) (866 ) (1,071 )
Acquisitions - net of cash acquired (3 ) (13 ) (3 ) (13 )
Proceeds from the sale of businesses, net of cash sold 134 269 135 332
Proceeds from the sale of assets 37 (2 ) 43 2
Sale of short-term investments 976 2,100 2,311 3,605
Purchase of short-term investments (889 ) (1,406 ) (2,381 ) (3,261 )
Decrease (increase) in restricted cash 49 (101 ) 14 (73 )
Decrease in debt service reserves and other assets 28 6 18 26
Proceeds from government grants for asset construction 32 1 117
Other investing 8   (20 ) 22   (16 )
Net cash (used in) provided by investing activities (125 ) 373   (706 ) (352 )
FINANCING ACTIVITIES:
Borrowings (repayments) under the revolving credit facilities, net 18 (29 ) 33 (310 )
Issuance of recourse debt 750 750
Issuance of non-recourse debt 892 76 2,383 579
Repayments of recourse debt (1,204 ) (2 ) (1,206 ) (5 )
Repayments of non-recourse debt (1,162 ) (177 ) (2,169 ) (328 )
Payments for financing fees (94 ) (5 ) (127 ) (17 )
Distributions to noncontrolling interests (180 ) (559 ) (211 ) (578 )
Contributions from noncontrolling interests 21 7 76 12
Dividends paid on AES common stock (30 ) (60 )
Financed capital expenditures (1) (105 ) (6 ) (257 ) (12 )
Purchase of treasury stock (18 ) (231 ) (18 ) (231 )
Other financing 3   27   7   28  
Net cash used in financing activities (1,109 ) (899 ) (799 ) (862 )
Effect of exchange rate changes on cash (31 ) (22 ) (39 ) 3
Decrease (increase) in cash of discontinued and held for sale businesses 8   (2 ) 4   97  
Total (decrease) increase in cash and cash equivalents (690 ) 30 (355 )
Cash and cash equivalents, beginning 2,301   1,658   1,966   1,688  
Cash and cash equivalents, ending $ 1,611   $ 1,688   $ 1,611   $ 1,688  
SUPPLEMENTAL DISCLOSURES:
Cash payments for interest, net of amounts capitalized $ 466 $ 492 $ 700 $ 783
Cash payments for income taxes, net of refunds $ 137 $ 200 $ 432 $ 525
 
(1)     $145 million of cash used for capital expenditures in the 3 months ended March 31, 2013 have been reclassified from investing to financing activities for the six months ended June 30, 2013.
 

THE AES CORPORATION NON-GAAP FINANCIAL MEASURES (Unaudited)

RECONCILIATION OF ADJUSTED PRE-TAX CONTRIBUTION (PTC) AND ADJUSTED EPS

Adjusted pre-tax contribution (“adjusted PTC”) and Adjusted earnings per share (“adjusted EPS”) are non-GAAP supplemental measures that are used by management and external users of our consolidated financial statements such as investors, industry analysts and lenders.

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