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

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 September 30,  

Nine Months Ended September 30,

2013   2012 2013   2012

(in millions, except per share amounts)

Revenue:
Regulated $ 2,063 $ 2,318 $ 6,175 $ 6,685
Non-Regulated 1,940   2,037   5,933   6,122  
Total revenue 4,003   4,355   12,108   12,807  
Cost of Sales:
Regulated (1,663 ) (1,927 ) (5,082 ) (5,642 )
Non-Regulated (1,403 ) (1,461 ) (4,423 ) (4,445 )
Total cost of sales (3,066 ) (3,388 ) (9,505 ) (10,087 )
Gross margin 937   967   2,603   2,720  
General and administrative expenses (63 ) (64 ) (183 ) (225 )
Interest expense (357 ) (396 ) (1,065 ) (1,182 )
Interest income 85 88 213 261
Loss on extinguishment of debt (212 )
Other expense (15 ) (15 ) (58 ) (56 )
Other income 25 7 106 39
Gain on sale of investments 3 30 26 214
Goodwill impairment expense (58 ) (1,850 ) (58 ) (1,850 )
Asset impairment expense (81 ) (43 ) (129 ) (71 )
Foreign currency transaction gains (losses) 32 (7 ) (16 ) (108 )
Other non-operating expense (122 )   (122 ) (50 )
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE TAXES AND EQUITY IN EARNINGS OF AFFILIATES 386 (1,283 ) 1,105 (308 )
Income tax expense (126 ) (172 ) (285 ) (514 )
Net equity in earnings of affiliates 15   25   21   49  
INCOME (LOSS) FROM CONTINUING OPERATIONS 275 (1,430 ) 841 (773 )
Income from operations of discontinued businesses, net of income tax (benefit) expense of $(2), $2, $2, and $8, respectively 26 30 25 25
Net gain (loss) from disposal and impairments of discontinued businesses, net of income tax (benefit) expense of $0, $(1), $(2), and $60, respectively (78 ) (2 ) (111 ) 68  
NET INCOME (LOSS) 223 (1,402 ) 755 (680 )
Noncontrolling interests:
Less: Income from continuing operations attributable to noncontrolling interests (146 ) (155 ) (431 ) (398 )
Less: Income from discontinued operations attributable to noncontrolling interests (6 ) (11 ) (4 ) (9 )
Total net income attributable to noncontrolling interests (152 ) (166 ) (435 ) (407 )
NET INCOME (LOSS) ATTRIBUTABLE TO THE AES CORPORATION $ 71   $ (1,568 ) $ 320   $ (1,087 )
AMOUNTS ATTRIBUTABLE TO THE AES CORPORATION COMMON STOCKHOLDERS:
Income (loss) from continuing operations, net of tax $ 129 $ (1,585 ) $ 410 $ (1,171 )
Income (loss) from discontinued operations, net of tax (58 ) 17   (90 ) 84  
Net income (loss) $ 71   $ (1,568 ) $ 320   $ (1,087 )
BASIC EARNINGS PER SHARE:
Income (loss) from continuing operations attributable to The AES Corporation common stockholders, net of tax $ 0.17 $ (2.12 ) $ 0.55 $ (1.54 )
Income (loss) from discontinued operations attributable to The AES Corporation common stockholders, net of tax (0.08 ) 0.02   (0.12 ) 0.11  
NET INCOME (LOSS) ATTRIBUTABLE TO THE AES CORPORATION COMMON STOCKHOLDERS $ 0.09   $ (2.10 ) $ 0.43   $ (1.43 )
DILUTED EARNINGS PER SHARE:
Income (loss) from continuing operations attributable to The AES Corporation common stockholders, net of tax $ 0.17 $ (2.12 ) $ 0.55 $ (1.54 )
Income (loss) from discontinued operations attributable to The AES Corporation common stockholders, net of tax (0.08 ) 0.02   (0.12 ) 0.11  
NET INCOME (LOSS) ATTRIBUTABLE TO THE AES CORPORATION COMMON STOCKHOLDERS $ 0.09   $ (2.10 ) $ 0.43   $ (1.43 )
DIVIDENDS DECLARED PER COMMON SHARE $   $ 0.04   $ 0.08   $ 0.04  
 
 
THE AES CORPORATION
Strategic Business Unit (SBU) Information
(Unaudited)
                         
Three Months Ended September 30,      

Nine Months Ended September 30,

2013       2012       2013       2012

(in millions)

REVENUE
US $ 970 $ 1,018 $ 2,726 $ 2,842
Andes 628 775 2,044 2,279
Brazil 1,496 1,716 4,686 5,056
MCAC (1) 684 657 2,047 1,895
EMEA 333 268 970 998
Asia 113 191 388 553
Corporate, Other and Inter-SBU eliminations (221 ) (270 ) (753 ) (816 )
                         
Total Revenue $ 4,003         $ 4,355         $ 12,108         $ 12,807  
 
(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.
 
   

THE AES CORPORATION

Condensed Consolidated Balance Sheets
(Unaudited)
 
September 30, 2013 December 31, 2012

(in millions, except share

and per share data)

ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 2,031 $ 1,909
Restricted cash 620 738
Short-term investments 898 693
Accounts receivable, net of allowance for doubtful accounts of $140 and $195, respectively 2,326 2,542
Inventory 711 722
Deferred income taxes 172 199
Prepaid expenses 199 223
Other current assets 836 1,074
Current assets of discontinued operations and held-for-sale assets 458   365  
Total current assets 8,251   8,465  
NONCURRENT ASSETS
Property, Plant and Equipment:
Land 952 1,005
Electric generation, distribution assets and other 30,835 30,451
Accumulated depreciation (9,531 ) (9,195 )
Construction in progress 2,826   2,511  
Property, plant and equipment, net 25,082   24,772  
Other Assets:
Investments in and advances to affiliates 1,025 1,196
Debt service reserves and other deposits 485 511
Goodwill 1,941 1,999
Other intangible assets, net of accumulated amortization of $151 and $222, respectively 325 395
Deferred income taxes 821 940
Other noncurrent assets 2,169 2,190
Noncurrent assets of discontinued operations and held-for-sale assets 1,151   1,362  
Total other assets 7,917   8,593  
TOTAL ASSETS $ 41,250   $ 41,830  
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable $ 2,156 $ 2,547
Accrued interest 396 288
Accrued and other liabilities 2,116 2,350
Non-recourse debt, including $267 and $275, respectively, related to variable interest entities 2,385 2,495
Recourse debt 118 11
Current liabilities of discontinued operations and held-for-sale businesses 838   628  
Total current liabilities 8,009   8,319  
NONCURRENT LIABILITIES
Non-recourse debt, including $939 and $858, respectively, related to variable interest entities 12,981 12,286
Recourse debt 5,552 5,951
Deferred income taxes 1,116 1,192
Pension and other post-retirement liabilities 2,138 2,418
Other noncurrent liabilities 3,042 3,562
Noncurrent liabilities of discontinued operations and held-for-sale businesses 368   510  
Total noncurrent liabilities 25,197   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; 813,077,875 issued and 742,245,268 outstanding at September 30, 2013 and 810,679,839 issued and 744,263,855 outstanding at December 31, 2012) 8 8
Additional paid-in capital 8,497 8,525
Retained earnings (accumulated deficit) 56 (264 )
Accumulated other comprehensive loss (2,918 ) (2,920 )
Treasury stock, at cost (70,832,607 shares at September 30, 2013 and 66,415,984 shares at December 31, 2012) (830 ) (780 )
Total AES Corporation stockholders’ equity 4,813 4,569
NONCONTROLLING INTERESTS 3,153   2,945  
Total equity 7,966   7,514  
TOTAL LIABILITIES AND EQUITY $ 41,250   $ 41,830  
 

                         

THE AES CORPORATION

Condensed Consolidated Statements of Cash Flows

(Unaudited)

 

Three Months Ended September 30,

Nine Months Ended September 30,
2013   2012 2013   2012
(in millions) (in millions)
OPERATING ACTIVITIES:
Net income (loss) $ 223 $       (1,402 ) $ 755 $       (680 )
Adjustments to net income (loss):
Depreciation and amortization 321 332 982 1,038
Gain from sale of investments and impairment expense 267 1,873 313 1,802
Deferred income taxes (36 ) 29 (82 ) 101
Provisions for contingencies (3 ) 16 33 51
Loss on the extinguishment of debt 212
Loss (gain) on disposals and impairments - discontinued operations 77 1 108 (130 )
Other (49 ) (40 ) (26 ) 10
Changes in operating assets and liabilities
(Increase) decrease in accounts receivable (56 ) (16 ) 135 (191 )
(Increase) decrease in inventory 6 33 (6 ) (10 )
(Increase) decrease in prepaid expenses and other current assets 348 72 403 90
(Increase) decrease in other assets (2 ) (86 ) (149 ) (379 )
Increase (decrease) in accounts payable and other current liabilities (326 ) 75 (578 ) 303
Increase (decrease) in income tax payables, net and other tax payables 68 98 (66 ) (151 )
Increase (decrease) in other liabilities 17   30   6   275  
Net cash provided by operating activities 855   1,015   2,040   2,129  
INVESTING ACTIVITIES:
Capital Expenditures (464 ) (510 ) (1,330 ) (1,581 )
Acquisitions - net of cash acquired (5 ) (3 ) (18 )
Proceeds from the sale of businesses, net of cash sold 32 100 167 432
Proceeds from the sale of assets 9 2 52 4
Sale of short-term investments 1,064 1,511 3,375 5,116
Purchase of short-term investments (1,257 ) (1,503 ) (3,638 ) (4,764 )
Decrease in restricted cash, debt service reserves and other assets 43 82 75 35
Proceeds from government grants for asset construction 3 1 120
Other investing 12   (4 )   34     (20 )
Net cash used in investing activities (561 ) (324 )   (1,267 )   (676 )
FINANCING ACTIVITIES:
Repayments under the revolving credit facilities, net (55 ) (12 ) (22 ) (322 )
Issuance of recourse debt 750
Issuance of non-recourse debt 699 243 3,082 822
Repayments of recourse debt (2 ) (3 ) (1,208 ) (8 )
Repayments of non-recourse debt (119 ) (431 ) (2,288 ) (759 )
Payments for financing fees (21 ) (7 ) (148 ) (24 )
Distributions to noncontrolling interests (174 ) (163 ) (385 ) (741 )
Contributions from noncontrolling interests 81 157 12
Dividends paid on AES common stock (29 ) (89 )
Payments for financed capital expenditures (179 ) (18 ) (436 ) (30 )
Purchase of treasury stock (45 ) (70 ) (63 ) (301 )
Other financing 8   (20 ) 15   8  
Net cash provided by (used in) financing activities 164 (481 ) (635 ) (1,343 )
Effect of exchange rate changes on cash 2 6 (37 ) 9
Decrease in cash of discontinued and held for sale businesses 15   1   21   140  
Total increase in cash and cash equivalents 475 217 122 259
Cash and cash equivalents, beginning 1,556   1,674   1,909   1,632  
Cash and cash equivalents, ending $ 2,031   $ 1,891   $ 2,031   $ 1,891  
SUPPLEMENTAL DISCLOSURES: 0
Cash payments for interest, net of amounts capitalized $ 223 $ 241 $ 923 $ 1,024
Cash payments for income taxes, net of refunds $ 74 $ 55 $ 506 $ 580
 




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