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AES Reports Adjusted Earnings Per Share Of $0.39 For Third Quarter 2013 And Reaffirms Full Year 2013 Guidance

Third quarter 2013 Adjusted PTC increased $7 million. Key operating drivers of Adjusted PTC included:

  • US: An overall decrease of $17 million, primarily driven by customer switching at DP&L, as anticipated.
  • Andes: An overall increase of $1 million. AES Argentina recorded an increase due to higher interest income, which is not expected to recur. Chivor in Colombia declined, as a result of lower water inflows, while Chile decreased due to planned maintenance and lower contract prices.
  • Brazil: Overall flat for the quarter. Eletropaulo increased for the quarter due to higher volumes, lower costs and the annual tariff adjustment implemented in July 2013, while Tietê decreased, as a result of lower generation and unfavorable foreign currency movements.
  • MCAC: An overall increase of $3 million, primarily driven by higher spot sales and generation in the Dominican Republic, partially offset by higher replacement energy purchased due to dry hydrology in Panama.
  • EMEA: An overall increase of $15 million, primarily due to higher dark spreads at Kilroot in the United Kingdom.
  • Asia: An overall decrease of $23 million, due primarily to higher contract volume at Masinloc in the Philippines, as the plant signed a 7-year contract to reduce merchant exposure, and the sale of its China generation businesses in 2012.
  • Corp/Other: An improvement of $28 million, primarily due to lower interest expense on recourse debt.

For the nine months ended September 30, 2013, Adjusted EPS increased $0.11 to $1.01. Adjusted PTC declined as described below, but Adjusted EPS increased as a result of a lower effective tax rate and a lower share count. The unfavorable impact of dry hydrological conditions in Latin America was approximately $0.12 through September 30, 2013.

For the nine months ended September 30, 2013, Adjusted PTC decreased $56 million. Key operating drivers of Adjusted PTC included:

  • US: An overall increase of $16 million, primarily due to the favorable impact of the termination of the PPA at Beaver Valley and higher earnings from wind generation facilities. This was partially offset by a decline at Hawaii, as a result of higher outages and related fixed costs, the impacts of lower capacity prices and customer switching at DP&L, and lower contributions from Southland, due to the one-time restart of operations at Huntington Beach units 3 and 4 in 2012.
  • Andes: An overall increase of $6 million, driven by the contributions from Ventanas 4, which commenced operations in March 2013, higher availability in Chile, and higher interest income in Argentina. Low water inflows and higher energy purchases in Colombia and lower contract prices in Chile offset these positive trends.
  • Brazil: An overall decrease of $43 million, driven by a decline at Sul, as a result of lower demand and the impact of the April 2013 tariff reset. In addition, Tietê declined due to lower generation and higher purchased energy costs, due to low water inflows. These declines were partially offset by the temporary re-start of operations and a favorable reversal of a liability at Uruguaiana after a decision by an arbitration panel and higher volumes and tariffs at Eletropaulo, as described above.
  • MCAC: An overall decrease of $8 million, driven by low volumes and higher purchased energy costs in Panama, due to low water inflows, partially offset by higher spot sales in the Dominican Republic, higher volumes in Puerto Rico and a higher tariff in El Salvador.
  • EMEA: An overall decrease of $52 million, due primarily to a favorable one-time arbitration settlement at Cartagena in Spain in first quarter 2012 and a decline at Ballylumford in the United Kingdom, driven by a step-down in capacity prices in accordance with the contract. These trends were partially offset by favorable dark spreads at Kilroot in the United Kingdom.
  • Asia: An overall decrease of $40 million, due primarily to lower prices and higher contract volumes at Masinloc in the Philippines, as the plant signed a 7-year contract to reduce merchant exposure, and the sale of its generation businesses in China in 2012.
  • Corp/Other: An improvement of $65 million as a result of lower general and administrative expenses and lower interest expense on recourse debt.

Discussion of Diluted Earnings per Share from Continuing Operations

Third quarter 2013 Diluted Earnings Per Share from Continuing Operations increased $2.29 to $0.17, principally due to lower goodwill impairment expense, a lower effective tax rate, lower interest expense, and foreign currency gains, partially offset by higher asset and equity method investment impairments, and lower gross margin.

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