This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

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

Stocks in this article: AES

We define adjusted PTC as pre-tax income from continuing operations attributable to AES excluding gains or losses of the consolidated entity due to (a) unrealized gains or losses related to derivative transactions, (b) unrealized foreign currency gains or losses, (c) gains or losses due to dispositions and acquisitions of business interests, (d) losses due to impairments, and (e) costs due to the early retirement of debt. Adjusted PTC also includes net equity in earnings of affiliates on an after-tax basis.

We define adjusted EPS as diluted earnings per share from continuing operations excluding gains or losses of the consolidated entity due to (a) unrealized gains or losses related to derivative transactions, (b) unrealized foreign currency gains or losses, (c) gains or losses due to dispositions and acquisitions of business interests, (d) losses due to impairments, and (e) costs due to the early retirement of debt.

The GAAP measure most comparable to adjusted PTC is income from continuing operations attributable to AES. The GAAP measure most comparable to adjusted EPS is diluted earnings per share from continuing operations. We believe that adjusted PTC and adjusted EPS 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 due to unrealized gains or losses related to derivative transactions, unrealized foreign currency gains or losses, losses due to impairments and strategic decisions to dispose of or acquire business interests or retire debt, which affect results in a given period or periods. In addition, for adjusted PTC, earnings before tax represents the business performance of the Company before the application of statutory income tax rates and tax adjustments, including the effects of tax planning, corresponding to the various jurisdictions in which the Company operates. Adjusted PTC and adjusted EPS should not be construed as alternatives to income from continuing operations attributable to AES and diluted earnings per share from continuing operations, which are determined in accordance with GAAP.

       

Three Months Ended

June 30, 2013

Three Months Ended

June 30, 2012

Six Months Ended

June 30, 2013

Six Months Ended

June 30, 2012

Net of

NCI(1)

 

Per Share

(Diluted) Net

of NCI(1) and Tax

Net of

NCI(1)

 

Per Share

(Diluted) Net

of NCI(1) and Tax

Net of

NCI(1)

 

Per Share

(Diluted) Net

of NCI(1) and Tax

Net of

NCI(1)

 

Per Share

(Diluted) Net

of NCI(1) and Tax

(In millions, except per share amounts)
Income from continuing operations attributable to AES and Diluted EPS $ 164 $ 0.22 $ 70 $ 0.09 $ 270 $ 0.36 $ 411 $ 0.54
Add back income tax expense from continuing operations attributable to AES 16   40   47   231  
Pre-tax contribution $ 180 $ 110 $ 317 $ 642
Adjustments
Unrealized derivative (gains)/ losses (2) $ (65 ) $ (0.06 ) $ 42 $ 0.04 $ (52 ) $ (0.05 ) $ 72 $ 0.07
Unrealized foreign currency transaction (gains)/ losses (3) 15 0.02 41 0.04 42 0.04 12 0.01
Disposition/ acquisition (gains) (23 ) (0.03 ) (4) (4 ) (5) (26 ) (0.03 ) (6) (182 ) (0.14 ) (7)
Impairment losses 17 0.01 (8) 48 0.05 (9) 75 0.07 (10)
Loss on extinguishment of debt 164   0.17   (11)       207   0.21   (12)    
Adjusted pre-tax contribution and Adjusted EPS $ 271   $ 0.32   $ 206   $ 0.18     $ 536   $ 0.58   $ 619   $ 0.55  

_____________________________

(1)     NCI is defined as Noncontrolling Interests
 
(2) Unrealized derivative (gains)/ losses were net of income tax per share of $(0.02) and $0.02 in the three months ended June 30, 2013 and 2012, and of $(0.02) and $0.03 in the six months ended June 30, 2013 and 2012 respectively.
 
(3) Unrealized foreign currency transaction (gains)/losses were net of income tax per share of $0.00 and $0.02 in the three months ended June 30, 2013 and 2012, and of $0.02 and $0.00 in the six months ended June 30, 2013 and 2012 respectively.
 
(4) Amount primarily relates to the gain from the sale of the remaining 20% interest in Cartagena for $20 million ($15 million, or $0.02 per share, net of income tax per share of $0.01).
 
(5) Amount primarily relates to the gain from the sale of St. Patrick, for $4 million ($4 million, or $0.00 per share, net of income tax per share of $0.00).
 
(6) Amount primarily relates to the gain from the sale of the remaining 20% interest in Cartagena for $20 million ($15 million, or $0.02 per share, net of income tax per share of $0.01), the gain from the sale of wind turbines for $3 million ($2 million, or $0.00 per share, net of income tax per share of $0.00) as well as the gain from the sale of Chengdu, an equity method investment in China for $3 million ($2 million, or $0.00 per share, net of income tax per share of $0.00).
 
(7) Amount primarily relates to the gain from the sale of 80% of our interest in Cartagena for $178 million ($106 million, or $0.14 per share, net of income tax per share of $0.09).
 
(8) Amount includes impairments at our St. Patrick business of $11 million ($7 million, or $0.01 per share, net of income tax per share of $0.00) and Kelanitissa of $7 million ($4 million, or $0.01 per share, net of non-controlling interest of $1 million and income tax per share of $0.00).
 
(9) Amount primarily relates to asset impairments at Beaver Valley of $46 million ($34 million, or $0.05 per share, net of income tax per share of $0.02).
 
(10) Amount primarily relates to the other-than-temporary impairment of equity method investments in China of $32 million ($26 million, or $0.03 per share, net of income tax per share of $0.01), and at InnoVent of $17 million ($12 million, or $0.02 per share, net of income tax per share of $0.01), and asset impairments at St. Patrick of $11 million ($7 million or $0.01 per share, net of income tax per share of $0.00) and at Kelanitissa of $12 million ($8 million, or $0.01 per share, net of non-controlling interest of $1 million and income tax per share of $0.00).
 
(11) Amount primarily relates to the loss on early retirement of debt at Corporate of $163 million ($121 million, or $0.16 per share, net of income tax per share of $0.06).
 
(12) Amount primarily relates to the loss on early retirement of debt at Corporate of $165 million ($123 million, or $0.16 per share, net of income tax per share of $0.06), and loss on early retirement of debt at Masinloc of $43 million ($29 million, or $0.04 per share, net of noncontrolling interest of $3 million and of income tax per share of $0.01).
 
 

THE AES CORPORATION

NON-GAAP FINANCIAL MEASURES

(Unaudited)

     
Three Months Ended Six Months Ended
June 30,     June 30,
2013   2012     2013   2012
(in millions)

Calculation of Maintenance Capital Expenditures

for Free Cash Flow (1) Reconciliation Below:

   
Maintenance Capital Expenditures $ 174 $ 219 $ 360 $ 453
Environmental Capital Expenditures 43 25 73 33
Growth Capital Expenditures 353     254       690     597  
Total Capital Expenditures $ 570     $ 498       $ 1,123     $ 1,083  
                   
 
Reconciliation of Proportional Operating Cash Flow (2)
Consolidated Operating Cash Flow $ 567 $ 580 $ 1,185 $ 1,114
Less: Proportional Adjustment Factor (263 )   (197 )     (367 )   (326 )

Proportional Operating Cash Flow (2)

$ 304     $ 383       $ 818     $ 788  
                   
 
Reconciliation of Free Cash Flow (1)
Consolidated Operating Cash Flow $ 567 $ 580 $ 1,185 $ 1,114
 
Less: Maintenance Capital Expenditures, net of reinsurance proceeds (174 ) (209 ) (360 ) (443 )
Less: Environmental Capital Expenditures (43 )   (25 )     (73 )   (33 )
Free Cash Flow (1) $ 350     $ 346       $ 752     $ 638  
                   
 
Reconciliation of Proportional Free Cash Flow (1),(2)
Proportional Operating Cash Flow $ 304 $ 383 $ 818 $ 788
 

Less: Proportional Maintenance Capital

Expenditures, net of reinsurance proceeds and

Proportional Environmental Capital Expenditures

(156 ) (170 ) (318 ) (340 )
Proportional Free Cash Flow (1),(2) $ 148     $ 213       $ 500     $ 448  
 
(1)     Free cash flow (a non-GAAP financial measure) is defined as net cash from operating activities less maintenance capital expenditures (including environmental capital expenditures), net of reinsurance proceeds from third parties. AES believes that free cash flow is a useful measure for evaluating our financial condition because it represents the amount of cash provided by operations less maintenance capital expenditures as defined by our businesses, that may be available for investing or for repaying debt.
 
(2) AES is a holding company that derives its income and cash flows from the activities of its subsidiaries, some of which may not be wholly-owned by the Company. Accordingly, the Company has presented certain financial metrics which are defined as Proportional (a non-GAAP financial measure). Proportional metrics present the Company's estimate of its share in the economics of the underlying metric. The Company believes that the Proportional metrics are useful to investors because they exclude the economic share in the metric presented that is held by non-AES shareholders. For example, Net Cash from Operating Activities (Operating Cash Flow) is a GAAP metric which presents the Company's cash flow from operations on a consolidated basis, including operating cash flow allocable to noncontrolling interests. Proportional Operating Cash Flow removes the share of operating cash flow allocable to noncontrolling interests and therefore may act as an aid in the valuation of the Company. Proportional metrics are reconciled to the nearest GAAP measure. Certain assumptions have been made to estimate our proportional financial measures. These assumptions include: (i) the Company's economic interest has been calculated based on a blended rate for each consolidated business when such business represents multiple legal entities; (ii) the Company's economic interest may differ from the percentage implied by the recorded net income or loss attributable to noncontrolling interests or dividends paid during a given period; (iii) the Company's economic interest for entities accounted for using the hypothetical liquidation at book value method is 100%; (iv) individual operating performance of the Company's equity method investments is not reflected and (v) inter-segment transactions are included as applicable for the metric presented.
 
 
The AES Corporation
Parent Financial Information
Parent only data: last four quarters        
(in millions) Quarters Ended

Total subsidiary distributions & returns of

capital to Parent

June 30,

2013

March 31,

2013

December 31,

2012

September 30,

2012

Actual

  Actual   Actual   Actual
Subsidiary distributions (1) to Parent & QHCs $ 1,291 $ 1,357 $ 1,332 $ 1,252
Returns of capital distributions to Parent & QHCs 75     108     29     143

Total subsidiary distributions & returns of

capital to Parent

$ 1,366     $ 1,465     $ 1,361     $ 1,395
 
Parent only data: quarterly
($ in millions) Quarter Ended

Total subsidiary distributions & returns of

capital to Parent

June 30,

2013

March 31,

2013

December 31,

2012

September 30,

2012

Actual   Actual   Actual   Actual
Subsidiary distributions to Parent & QHCs $ 308 $ 202 $ 450 $ 331
Returns of capital distributions to Parent & QHCs 1     162     -100     12

Total subsidiary distributions & returns of

capital to Parent

$ 309     $ 364     $ 350     $ 343
 

Parent Company Liquidity (2)

($ in millions) Balance at

June 30,

2013

March 31,

2013

December 31,

2012

September 30,

2012

Actual   Actual   Actual   Actual
Cash at Parent & Cash at QHCs (3) $ 111 $ 425 $ 311 $ 444
Availability under credit facilities 797     797     795     795
Ending liquidity $ 908     $ 1,222     $ 1106     $ 1239
 
(1)     Subsidiary distributions should not be construed as an alternative to Net Cash Provided by Operating Activities which are determined in accordance with GAAP. Subsidiary distributions are important to the Parent Company because the Parent Company is a holding company that does not derive any significant direct revenues from its own activities but instead relies on its subsidiaries’ business activities and the resultant distributions to fund the debt service, investment and other cash needs of the holding company. The reconciliation of the difference between the subsidiary distributions and the Net Cash Provided by Operating Activities consists of cash generated from operating activities that is retained at the subsidiaries for a variety of reasons which are both discretionary and non-discretionary in nature. These factors include, but are not limited to, retention of cash to fund capital expenditures at the subsidiary, cash retention associated with non-recourse debt covenant restrictions and related debt service requirements at the subsidiaries, retention of cash related to sufficiency of local GAAP statutory retained earnings at the subsidiaries, retention of cash for working capital needs at the subsidiaries, and other similar timing differences between when the cash is generated at the subsidiaries and when it reaches the Parent Company and related holding companies.
 
(2) Parent Company Liquidity is defined as cash at the Parent Company plus availability under corporate credit facilities plus cash at qualified holding companies (QHCs). 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.
 
(3) The cash held at 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 QHCs is available to the Parent, AES uses the combined measure of subsidiary distributions to Parent and QHCs as a useful measure of cash available to the Parent to meet its international liquidity needs.
 

THE AES CORPORATION 2013 FINANCIAL GUIDANCE ELEMENTS(1)

       
2013 Financial Guidance (as of 8/8/13)
 
Consolidated Proportional
Income Statement Guidance
Adjusted Earnings Per Share $1.24 to $1.32
Cash Flow Guidance
Net Cash Provided by Operating Activities $2,500 to $3,100 million
Free Cash Flow (4) $750 to $1,050 million
Reconciliation of Free Cash Flow Guidance
Net Cash from Operating Activities $2,500 to $3,100 million $1,650 to $1,950 million
Less: Maintenance Capital Expenditures $1,050 to $1,350 million $750 to $1,050 million
Free Cash Flow (4) $1,300 to $1,900 million $750 to $1,050 million
 
(1)     2013 Guidance is based on expectations for future foreign exchange rates and commodity prices as of June 30, 2013.
 
(2) AES is a holding company that derives its income and cash flows from the activities of its subsidiaries, some of which may not be wholly-owned by the Company. Accordingly, the Company has presented certain financial metrics which are defined as Proportional (a non-GAAP financial measure). Proportional metrics present the Company's estimate of its share in the economics of the underlying metric. The Company believes that the Proportional metrics are useful to investors because they exclude the economic share in the metric presented that is held by non-AES shareholders. For example, Net Cash from Operating Activities (Operating Cash Flow) is a GAAP metric which presents the Company's cash flow from operations on a consolidated basis, including operating cash flow allocable to noncontrolling interests. Proportional Operating Cash Flow removes the share of operating cash flow allocable to noncontrolling interests and therefore may act as an aid in the valuation of the Company. Proportional metrics are reconciled to the nearest GAAP measure. Certain assumptions have been made to estimate our proportional financial measures. These assumptions include: (i) the Company's economic interest has been calculated based on a blended rate for each consolidated business when such business represents multiple legal entities; (ii) the Company's economic interest may differ from the percentage implied by the recorded net income or loss attributable to noncontrolling interests or dividends paid during a given period; (iii) the Company's economic interest for entities accounted for using the hypothetical liquidation at book value method is 100%; (iv) individual operating performance of the Company's equity method investments is not reflected and (v) inter-segment transactions are included as applicable for the metric presented.
 
(3) Adjusted earnings per share (a non-GAAP financial measure) is defined as diluted earnings per share from continuing operations excluding gains or losses of the consolidated entity due to (a) unrealized gains or losses related to derivative transactions, (b) unrealized foreign currency gains or losses, (c) gains or losses due to dispositions and acquisitions of business interests, (d) losses due to impairments, and (e) costs due to the early retirement of debt. The GAAP measure most comparable to Adjusted EPS is diluted earnings per share from continuing operations. AES believes that adjusted earnings per share better reflects the underlying business performance of the Company, and is considered in the Company's internal evaluation of financial performance. Factors in this determination include the variability due to unrealized gains or losses related to derivative transactions, unrealized foreign currency gains or losses, losses due to impairments and strategic decisions to dispose or acquire business interests or retire debt, which affect results in a given period or periods. Adjusted earnings per share should not be construed as an alternative to diluted earnings per share from continuing operations, which is determined in accordance with GAAP.
 
(4) Free Cash Flow is reconciled above. Free cash flow (a non-GAAP financial measure) is defined as net cash from operating activities less maintenance capital expenditures (including environmental capital expenditures), net of reinsurance proceeds from third parties. AES believes that free cash flow is a useful measure for evaluating our financial condition because it represents the amount of cash provided by operations less maintenance capital expenditures as defined by our businesses, that may be available for investing or for repaying debt.
 




7 of 8

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,637.86 +23.05 0.14%
S&P 500 1,943.78 +2.50 0.13%
NASDAQ 4,422.6990 +3.2210 0.07%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs