SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported): April 25, 2002
THE AES CORPORATION
(exact name of registrant as specified in its charter)
DELAWARE 0-19281 54-1163725
(State of Incorporation) (Commission File No.) (IRS Employer ID No.)
1001 North 19th Street, Suite 2000
Arlington, Virginia 22209
(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code:
(703) 522-1315
NOT APPLICABLE
(Former Name or Former Address, if changed since last report)
Item 5. Other Events
The AES Corporation announced earnings from recurring operations of
$194 million or $.36 per share for the first quarter ended March 31. First
quarter revenues rose to $2.7 billion. In the first quarter of 2001, AES
reported earnings from recurring operations of $231 million, or $.43 per
share and revenues of $2.5 billion.
The Company also announced that for the first quarter of 2002 parent company
operating cash flow was $331 million and accordingly reached $1.3 billion for
the twelve months then ended. Comparable amounts for 2001 were $180 million and
$965 million, respectively.
First quarter earnings from recurring operations in 2002 exclude a net after tax
charge of $(.06) per share related to the impacts of foreign currency
transaction gains and losses, FAS 133, the sale of assets and the results of
discontinued operations during the quarter. Including those items, per share
earnings according to generally accepted accounting principles (GAAP) were $.30
per share for the first quarter of 2002 (before the cumulative effect of the
change in the accounting principle related to goodwill) as compared to $.21 per
share for the first quarter of 2001. The Company also recorded a provision of
$(.88) per share to reflect the cumulative effect of change in the accounting
principle for the impairment of goodwill effective as of January 1, 2002. This
one-time charge of $473 million is required under changes in financial
accounting standards that affect all U.S. companies, relates to some of the
Company's operations in South America and has no effect on AES's cash or
liquidity.
Other selected first quarter highlights included:
o AES attained its goal of reducing forecasted parent investments by $500
million.
o Total assets increased to over $40 billion.
o The consolidated cash balances at the end of the first quarter amounted to
approximately $1.3 billion, of which $250 million is at the parent company.
o Approximately 56% of parent company operating cash flow for the last twelve
months was generated from businesses in North America.
o Earnings before tax of AES's Growth Distribution segment, representing
businesses in the Caribbean, Europe, Asia, Africa and South America
increased significantly to $43 million as compared to the first quarter of
2001, despite economic turmoil in Argentina.
o The Company expects to complete additional financing in the near-term
associated with its soon to be completed 454 MW coal-fired plant in Puerto
Rico, that will result in net financing proceeds to AES of approximately
$200 million.
THE AES CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE PERIODS ENDED MARCH 31, 2002 AND 2001
---------------------------------------------------------------------------------
QUARTER QUARTER
ENDED ENDED
($ in millions, except per share amounts) 3/31/2002 3/31/2001
---------------------------------------------------------------------------------
REVENUES:
Sales and services $ 2,719 $ 2,492
OPERATING COSTS AND EXPENSES:
Cost of sales and services 1,990 1,854
Selling, general and administrative expenses 28 15
------- -------
TOTAL OPERATING COSTS AND EXPENSES 2,018 1,869
------- -------
OPERATING INCOME
701 623
OTHER INCOME AND (EXPENSE):
Interest expense, net (411) (349)
Other income (expense), net 24 (11)
Equity in earnings of affiliates (before income tax) 29 50
Loss on sale of investment (57) --
Nonrecurring severance and transaction costs -- (94)
------- -------
INCOME BEFORE INCOME TAXES
AND MINORITY INTEREST 286 219
Income tax provision 106 65
Minority interest (income) expense (12) 32
------- -------
INCOME FROM CONTINUING OPERATIONS 192 122
Loss from operations of discontinued components
(net of income taxes of $13 and $6, respectively) (32) (11)
------- -------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE 160 111
Cumulative effect of accounting change (net of
income taxes of $155) (473) --
------- -------
NET INCOME (LOSS) $ (313) $ 111
======= =======
DILUTED EARNINGS PER SHARE:
Income from continuing operations $ 0.36 $ 0.23
Discontinued operations (0.06) (0.02)
Cumulative effect of accounting change (0.88) --
------- -------
Total $ (0.58) $ 0.21
======= =======
Diluted weighted average
shares outstanding (in millions) 541 544
======= =======
THE AES CORPORATION --- SUPPLEMENTAL SCHEDULE
Reconciliation of GAAP Net Income before discontinued operations and accounting
change to Net Income excluding Brazil, Argentina and Venezuela foreign currency
effects, effects of FAS No. 133 and nonrecurring items.
FOR THE PERIODS ENDED MARCH 31, 2002 AND 2001 - - - - -
---------------------------------------------------------------------------------------------------------
($ in millions, except per share amounts)
---------------------------- -------------------------
QUARTER ENDED 3/31/2002 QUARTER ENDED 3/31/2001
--------------------------- -------------------------
AMOUNT PER AMOUNT PER
AMOUNT SHARE AMOUNT SHARE
------ ----------- ------ -----------
NET INCOME BEFORE DISCONTINUED OPERATIONS
AND ACCOUNTING CHANGE $ 192 $ 0.36 $ 122 $ 0.23
SOUTH AMERICA FOREIGN CURRENCY TRANSACTION
LOSSES, NET (1) 27 0.05 52 0.10
MARK TO MARKET GAINS FROM FAS NO. 133 (2) (75) (0.14) (4) (0.01)
LOSS ON SALE OF INVESTMENT (3) 50 0.09 -- --
TRANSACTION AND SEVERANCE COSTS RELATED TO
IPALCO TRANSACTION -- -- 61 0.11
----- ------- ----- -------
NET INCOME FROM RECURRING OPERATIONS $ 194 $ 0.36 $ 231 $ 0.43
===== ======= ===== =======
DILUTED WEIGHTED SHARES
OUTSTANDING (IN MILLIONS)
541 558
======= =======
(1) South America foreign currency transaction losses, net, consist of the
following in 2002: a loss of approximately $10 million after income tax, or
$0.02 per share, from Brazil; a loss of approximately $82 million after income
tax, or $0.15 per share, from Argentina; and a gain of approximately $65 million
after income tax, or $0.12 per share, from Venezuela. For 2001, South America
foreign currency transaction losses, net, consist of the following: a loss of
approximately $59 million after income tax, or $0.11 per share, from Brazil, and
a gain of approximately $7 million after income tax, or $0.01 per share, from
Venezuela.
(2) Mark to market gains from FAS No. 133 consist of the following in 2002: a
gain of approximately $9 million after income tax, or $0.02 per share, from
interest rate instruments, a gain of approximately $4 million after income tax,
or $0.01 per share, from foreign exchange rate instruments, and a gain of $62
million after income tax, or $0.11 per share, from commodity contracts. For
2001, mark to market gains from FAS No. 133 consist of the following: a loss of
approximately $16 million after income tax, or $0.03 per share, from interest
rate instruments, a gain of approximately $15 million after income tax, or $0.03
per share, from foreign exchange rate instruments, and a gain of approximately
$5 million after income tax, or $0.01 per share, from commodity contracts.
(3) Loss on sale of investment relates to the loss realized, net of income tax,
on the sale of CANTV shares in March 2002.
BUSINESS SEGMENT RESULTS
AES's business segments, which include Contract Generation, Large Utilities,
Competitive Supply and Growth Distribution generated combined income from
recurring operations before income taxes (EBT) of $ 419 million for the first
quarter of 2002 as compared to $490 million during the same period last year.
CONTRACT GENERATION
Contract Generation consists of our power plants located around the world that
have contractually limited their exposure to commodity price risks (primarily
electricity prices) for a period of at least five years and for 75% or more of
their expected output capacity.
For the first quarter of 2002, Contract Generation revenues were $641 million
and represented 24% of total revenues for the quarter. The most significant
contributions continued to be from North and South America, which in aggregate
comprised 63% of Contract Generation revenue for the quarter. Revenues were
enhanced with the addition of a global mix of new businesses totaling 2,002 MW
(added subsequent to the first quarter of 2001), including Ironwood in
Pennsylvania (705 MW natural gas), Ebute in Nigeria (290 MW gas), Medina Valley
in Illinois (47 MW natural gas), Haripur in Bangladesh (360 MW natural gas) and
Kelvin in South Africa (600 MW coal).
The operating margin (as a percentage of sales) for our Contract Generation
segment showed continued and growing strength at 42% in the first quarter of
2002, with stronger margins at the Gener plants in Chile, Kilroot in Northern
Ireland, Tisza in Hungary, Lal Pir and Pak Gen in Pakistan and Jiaozuo in China.
Also, better than segment average margin percentages resulted from several new
businesses, including Ironwood, Ebute and Haripur.
As a result, Contract Generation delivered $176 million of EBT (or 42% of the
total) for the first quarter of 2002, a slight increase from 2001 first quarter
EBT of $168 million (or 34%). The margin improvements across the several
businesses mentioned above in 2002 were offset by Tiete in Brazil due to lower
demand resulting from the effects of power rationing (which ended in mid-March
2002) and from Thames in Connecticut, because of contractual price decreases in
2002 as compared to 2001.
COMPETITIVE SUPPLY
Competitive Supply consists of our power plants and retail supply businesses
that sell electricity directly to wholesale and retail customers in competitive
markets and as a result are generally more sensitive to fluctuations in the
market price of electricity, natural gas and coal, in particular.
For the first quarter of 2002, revenues for this segment were $737 million and
represented 27% of total revenues for the quarter. The most significant
contributions continued to be from the competitive markets of North America and
Europe, which in aggregate comprised 86% of Competitive Supply revenue for the
quarter. Growth in revenues was approximately 6% and was driven primarily by a
significant increase at NewEnergy, our competitive retail supplier of commercial
and industrial electricity customers, where revenues doubled over first quarter
2001 along with increases associated with new businesses at Ottana in Italy (140
MW oil) and Delano in California (50 MW gas).
The operating margin (as a percentage of sales) for our Competitive Supply
segment was 17% in the first quarter of 2002, with significant progress in
margins reflected in the retail component, primarily NewEnergy. These
improvements were slightly outweighed by lower competitive wholesale electricity
prices in some regions due to the devaluation of the peso in Argentina, a mild
winter in the Northeastern U.S. and lower prices created by excess generating
capacity in the U.K.
As a result, and notwithstanding lower wholesale prices in several regions
during the first quarter of 2002, Competitive Supply, with the strength of the
retail component, generated $60 million of EBT (or 14% of the total) for the
first quarter of 2002, a variation from the 2001 first quarter EBT of $80
million (or 16%).
LARGE UTILITIES
The Large Utilities segment is comprised of our five large integrated utilities
that serve over 11 million customers in North America, the Caribbean and South
America. Businesses include IPALCO in Indiana, CILCORP in Illinois, EDC in
Venezuela along with CEMIG (an equity affiliate) and Eletropaulo in Brazil.
For the first quarter of 2002, revenues for this segment were nearly $1 billion
at $975 million and represented 36% of total revenues for the quarter. The
significant increase in revenues of 39% resulted from consolidating the results
of Eletropaulo (serving Sao Paulo, Brazil) beginning in February 2002 when AES
acquired control of that business with a 70% ownership interest (increased from
50% prior to that date when Eletropaulo was treated as an equity affiliate).
Mild weather dampened comparable revenues in our North American large utilities.
The operating margin (as a percentage of sales) was 26% and benefited from
improvements at IPALCO during the quarter resulting from cost reductions and
efficiency improvements since AES's acquisition in March 2001.
Large Utilities generated $140 million of EBT (or 34% of the total) for the
first quarter of 2002, down from 2001 first quarter EBT of $242 million (or
50%). The reduction in first quarter 2002 results from reduced contributions
(after associated interest costs) from Eletropaulo and CEMIG (an equity method
affiliate serving Minais Gerais, Brazil) that arise primarily from reduced
demand because of power rationing in Brazil through mid-March 2002.
GROWTH DISTRIBUTION
Our Growth Distribution businesses showed strengthened profitability during the
first quarter of 2002. This segment, serving over 5 million customers consists
of electricity distribution companies that are generally located in developing
countries or regions where the demand for electricity is expected to grow at a
rate higher than in more developed regions.
For the first quarter of 2002, revenues were $366 million and represented 13% of
total revenues for the quarter. The most significant contributions continued to
be from the Caribbean and South America, which in aggregate comprised 75% of
growth Distribution revenue for the quarter.
Growth Distribution revenues increased at Sul in Brazil and Telasi in Georgia as
well as from new distribution companies including Sonel in Cameroon and
Kievoblenergo and Rivnooblenergo in Ukraine. These increases were offset by
reductions in Argentina because of the devaluation of the Argentine peso and the
change to an equity affiliate at Cesco in India in the third quarter of 2001.
The operating margin (as a percentage of sales) was 22% and showed growing
strength and improvement across most of the segment, particularly at Sul, Telasi
and Ede Este, offset only by reductions from the Argentine businesses.
As a result, Growth Distribution generated $43 million of EBT (or 10% of the
total) for the first quarter of 2002, a significant increase from breakeven in
the first quarter of 2001.
THE AES CORPORATION --- SUPPLEMENTAL DATA
-----------------------2001--------------------------- --2002--
1ST QTR 2ND QTR 3RD QTR 4TH QTR YEAR 1ST QTR
-------- ------- ------- ------- ---- -------
GEOGRAPHIC - % of Total
NORTH AMERICA
Revenues 38% 37% 44% 37% 39% 35%
Income before Taxes (1) 41% 29% 58% 40% 42% 39%
CARIBBEAN (2)
Revenues 21% 22% 19% 17% 20% 15%
Income before Taxes (1) 17% 29% 14% 27% 21% 11%
SOUTH AMERICA
Revenues 17% 20% 17% 21% 19% 28%
Income before Taxes (1) 34% 37% 20% 22% 29% 24%
EUROPE/AFRICA
Revenues 16% 14% 17% 20% 17% 17%
Income before Taxes (1) 4% (2)% 1% 6% 2% 15%
ASIA
Revenues 8% 7% 3% 5% 5% 5%
Income before Taxes (1) 4% 7% 7% 5% 6% 11%
SEGMENTS - % of Total
CONTRACT GENERATION
Revenues 28% 28% 26% 26% 27% 24%
Operating Margin (3) 38% 37% 30% 45% 38% 37%
Income before Taxes (1) 34% 22% 20% 58% 33% 42%
COMPETITIVE SUPPLY
Revenues 28% 27% 33% 30% 29% 27%
Operating Margin (3) 26% 17% 24% 15% 21% 17%
Income before Taxes (1) 16% 4% 22% 3% 12% 14%
LARGE UTILITIES
Revenues 28% 27% 27% 23% 26% 36%
Operating Margin (3) 31% 37% 36% 26% 32% 35%
Income before Taxes (1) 50% 71% 58% 18% 50% 34%
GROWTH DISTRIBUTION BUSINESSES
Revenues 16% 18% 14% 21% 18% 13%
Operating Margin (3) 5% 9% 10% 14% 9% 11%
Income before Taxes (1) -- 3% -- 21% 5% 10%
FINANCIAL HIGHLIGHTS - $ in millions, except Total Assets in billions
Revenues $2,492 $2,187 $2,261 $2,347 $9,287 $2,719
Gross Margin Percentage 26% 21% 23% 29% 25% 27%
Income before Taxes (1) $490 $412 $374 $357 $1,633 $419
Net Income Excluding
Extraordinary and Other Items (4) $231 $178 $158 $159 $726 $194
Total Assets (billions) $36 $36 $36 $37 $37 $40
Deprec./Amort. $204 $210 $222 $221 $857 $192
(1) Income before taxes excludes the Corporate and Business Development
segment. The following items are included in the Corporate and Business
Development segment: corporate interest, other corporate costs, business
development expenses, Brazilian affiliates foreign currency effects, Argentine
affiliates foreign currency effects, Venezuelan affiliates foreign currency
effects, effects of FAS No. 133, nonrecurring items, discontinued operations
and cumulative effect of accounting change.
(2) Includes Venezuela and
Colombia.
(3) Operating Margin is revenues reduced by cost of sales, depreciation and
amortization and other operating expenses.
(4) Net Income excludes Brazilian affiliates foreign currency effects,
Argentine affiliates foreign currency effects, Venezuelan affiliates foreign
currency effects, effects of FAS No. 133, nonrecurring items, discontinued
operations and cumulative effect of accounting change.
THE AES CORPORATION
CONSOLIDATED BALANCE SHEETS
MARCH 31,2002 AND DECEMBER 31, 2001
($ in millions) March 31, 2002 December 31, 2001
--------------- -----------------
ASSETS:
CURRENT ASSETS:
Cash and cash equivalents $ 1,313 $ 922
Short term investments
573 588
Accounts receivable, net of reserves of $443 and $247,
respectively 1,987 1,582
Inventory 550 625
Receivable from affiliates 9 10
Deferred income taxes 289 260
Prepaid expenses and other assets 1,136 606
Current assets of discontinued operations 52 59
------- --------
Total current assets 5,909 4,652
PROPERTY, PLANT AND EQUIPMENT:
Land 1,004 580
Electric generation and distribution assets 23,765 21,263
Accumulated depreciation (4,337) (3,312)
Construction in progress 4,794 4,729
------- --------
Property, plant and equipment, net 25,226 23,260
OTHER ASSETS:
Deferred financing costs, net 435 477
Project development costs 64 68
Investment in and advances to affiliates 1,737 3,100
Debt service reserves and other deposits 396 474
Goodwill, net 3,105 3,208
Long-term assets of discontinued operations 247 427
Other assets 3,082 1,069
------- --------
Total other assets 9,066 8,823
------- --------
TOTAL ASSETS $ 40,201 $ 36,735
------- --------
------- --------
LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 1,388 $ 816
Accrued interest 379 283
Accrued and other liabilities 1,488 1,181
Current liabilities of discontinued operations 240 89
Recourse debt-current portion 425 488
Non-recourse debt-current portion 3,526 2,184
------- --------
Total current liabilities 7,446 5,041
LONG-TERM LIABILITIES
Recourse debt 5,351 4,912
Non-recourse debt 15,268 14,545
Deferred income taxes 2,051 1,905
Long-term liabilities of discontinued operations 8 286
Other long-term liabilities 3,570 1,999
------- --------
Total long-term liabilities 26,248 23,647
MINORITY INTEREST 1,270 1,530
COMPANY OBLIGATED CONVERTIBLE MANDATORILY REDEEMABLE
PREFERRED SECURITIES OF SUBSIDIARY TRUSTS HOLDING
SOLELY JUNIOR SUBORDINATED DEBENTURES OF AES 978 978
STOCKHOLDERS' EQUITY:
Common stock 5 5
Additional paid-in capital 5,232 5,225
Retained earnings 2,496 2,809
Accumulated other comprehensive loss (3,474) (2,500)
------- --------
Total stockholders' equity 4,259 5,539
------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 40,201 $ 36,735
------- --------
------- --------
THE AES CORPORATION
CAPITAL RESOURCES AND OTHER BALANCE SHEET DATA
($ in billions)
MARCH 31, DECEMBER 31,
CAPITALIZATION: 2002 2001
---------- -----------
Recourse debt $ 5.78 $ 5.40
Non-recourse debt 18.79 16.73
------ ------
Total debt 24.57 22.13
Preferred Securities 0.98 0.98
Minority Interest 1.27 1.53
Stockholders' equity 4.26 5.54
------ ------
Total capitalization $31.08 $30.18
====== ======
SELECTED BALANCE SHEET DATA BY GEOGRAPHIC REGION:
PROPERTY, PLANT TOTAL NON-RECOURSE
MARCH 31, 2002 & EQUIPMENT ASSETS DEBT
--------------------------------------------------
North America 30% 25% 28%
Caribbean 19% 17% 17%
South America 25% 34% 35%
Europe/Africa 19% 16% 15%
Asia 7% 7% 5%
Discontinued operations -- -- --
Corporate -- 1% --
DECEMBER 31, 2001
North America 32% 27% 31%
Caribbean 20% 19% 19%
South America 20% 28% 27%
Europe/Africa 22% 18% 18%
Asia 6% 6% 5%
Discontinued operations -- 1% --
Corporate -- 1% --
SELECTED BALANCE SHEET DATA BY LINE OF BUSINESS:
PROPERTY, PLANT TOTAL NON-RECOURSE
MARCH 31, 2002 & EQUIPMENT ASSETS DEBT
--------------- ------ -------------
Contract Generation 33% 31% 34%
Competitive Supply 30% 24% 22%
Large Utilities 30% 36% 37%
Growth Distribution Businesses 7% 8% 7%
Discontinued operations -- -- --
Corporate -- 1%
DECEMBER 31, 2001
Contract Generation 36% 33% 38%
Competitive Supply 34% 28% 24%
Large Utilities 21% 25% 30%
Growth Distribution Businesses 9% 12% 8%
Discontinued operations -- 1% --
Corporate -- 1% --
Item 9. Regulation FD Disclosure
On April 25, 2002, The AES Corporation issued its press release for the
first quarter of 2002, which is presented below and incorporated herein by
reference.
FOR IMMEDIATE RELEASE
AES REPORTS FIRST QUARTER EARNINGS OF $0.36 PER SHARE FROM RECURRING OPERATIONS
Revenues Rise to $2.7 Billion; Year on Year Parent Operating Cash Flow
Increases 36% to $1.3 Billion
Net Income is $.30 per share before charge of
$(.88) per share for change in Accounting for Goodwill
------------------------------------------------------------------------
ARLINGTON, VA, APRIL 25, 2002 -- The AES Corporation (NYSE: AES), the Global
Power Company with assets exceeding $40 billion, today announced earnings from
recurring operations of $194 million or $.36 per share for the first quarter
ended March 31. First quarter revenues rose to $2.7 billion. In the first
quarter of 2001, AES reported earnings from recurring operations of $231
million, or $.43 per share and revenues of $2.5 billion.
The Company also announced that for the first quarter of 2002 parent company
operating cash flow was $331 million and accordingly reached $1.3 billion for
the twelve months then ended. Comparable amounts for 2001 were $180 million and
$965 million, respectively.
First quarter earnings from recurring operations in 2002 exclude a net after tax
charge of $(.06) per share related to the impacts of foreign currency
transaction gains and losses, FAS 133, the sale of assets and the results of
discontinued operations during the quarter. Including those items, per share
earnings according to generally accepted accounting principles (GAAP) were $.30
per share for the first quarter of 2002 (before the cumulative effect of the
change in the accounting principle related to goodwill) as compared to $.21 per
share for the first quarter of 2001. The Company also recorded a provision of
$(.88) per share to reflect the cumulative effect of change in the accounting
principle for the impairment of goodwill effective as of January 1, 2002. This
one-time charge of $473 million is required under changes in financial
accounting standards that affect all U.S. companies, relates to some of the
Company's operations in South America and has no effect on AES's cash or
liquidity.
Dennis W. Bakke, President and Chief Executive Officer, commented, "We are
encouraged by the resilience of AES's global portfolio during the first quarter.
Earnings and operating cash flow for the period were ahead of our expectations.
This performance was achieved despite adverse weather conditions, low wholesale
electricity prices in the U.S. and Great Britain and economic and political
instability in South America. Significant progress was also made to improve the
efficiency of our operations around the world and to increase our financial
flexibility and balance sheet strength. Additionally, we are ahead of our goal
of reducing operating expenses worldwide by over $100 million in 2002. With a
sustainable and diversified strategy, AES is performing on its promise to
profitably deliver safe, clean, reliable, and reasonably priced electricity in
the global marketplace."
Barry J. Sharp, Chief Financial Officer added, "Our cash flow for the quarter
was on target and we are on track to exceed our cash flow and liquidity
expectations for 2002. By reducing operating costs and improving operating cash
flow, executing the additional financing in Puerto Rico, significantly reducing
parent investments and completing our expected sale of CILCORP, we will continue
to strengthen the liquidity of the Company."
Other selected first quarter highlights included:
o AES attained its goal of reducing forecasted parent investments by $500
million.
o Total assets increased to over $40 billion.
o The consolidated cash balances at the end of the first quarter amounted to
approximately $1.3 billion, of which $250 million is at the parent company.
o Approximately 56% of parent company operating cash flow for the last twelve
months was generated from businesses in North America.
o Earnings before tax of AES's Growth Distribution segment, representing
businesses in the Caribbean, Europe, Asia, Africa and South America
increased significantly to $43 million as compared to the first quarter of
2001, despite economic turmoil in Argentina.
o The Company expects to complete additional financing in the near-term
associated with its soon to be completed 454 MW coal-fired plant in Puerto
Rico, that will result in net financing proceeds to AES of approximately
$200 million.
AES also announced that it currently expects earnings from recurring operations
for 2002 to be between $1.35 and $1.45 per share. This estimate reflects
reductions from including the estimated impacts of recent decisions that have
positive effects on liquidity but that have near-term negative impacts on
earnings (such as additional financing at Puerto Rico), the estimated operating
losses of the Company's operations in Argentina (that were previously excluded)
and continued lower pricing in wholesale merchant markets. The estimate excludes
the potential impacts of foreign currency transaction gains and losses, FAS 133,
the sale of assets and the results of discontinued operations during the year,
as well as the cumulative effect of change in the accounting principle for
goodwill.
This information will be discussed on a conference call to be held today,
Thursday April 25, 2002, at 8:00 am (Eastern). You may access the call via a
live webcast which will be available online at http://www.aes.com under the
Investor Relations section. This webcast will be available online until Friday,
May 3, 2002. Also, a telephonic replay of the call will be available from
approx. 10:30 am on Thursday, April 25, until 6:00 pm on Friday, May 3 (Eastern
Time). Please dial (800) 633 8284. The system will ask for a reservation number,
please enter 20449295 followed by the pound key #. International callers should
dial (858) 812 6440.
AES is a leading global power company comprised of competitive generation,
distribution and retail supply businesses in Argentina, Australia, Bangladesh,
Brazil, Cameroon, Canada, Chile, China, Colombia, Czech Republic, Dominican
Republic, El Salvador, Georgia, Germany, Hungary, India, Italy, Kazakhstan, the
Netherlands, Nigeria, Mexico, Oman, Pakistan, Panama, Qatar, Sri Lanka,
Tanzania, Uganda, Ukraine, the United Kingdom, the United States and Venezuela.
The company's generating assets include interests in 181 facilities totaling
over 63 gigawatts of capacity. AES's electricity distribution network has over
946,000 km of conductor and associated rights of way and sells over 135,000
gigawatt hours per year to over 19 million end-use customers.
AES is dedicated to providing electricity worldwide in a socially responsible
way.
This news release includes forward-looking statements. Actual events and results
may differ materially from those projected. Factors that could affect actual
results are discussed in AES's filings with the Securities and Exchange
Commission, and readers are encouraged to read those filings to learn more about
the risk factors associated with AES's businesses.
* * * * *
For more general information visit our web site at www.aes.com or contact
investor relations at investing@aes.com.
THE AES CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE PERIODS ENDED MARCH 31, 2002 AND 2001
---------------------------------------------------------------------------------
QUARTER QUARTER
ENDED ENDED
($ in millions, except per share amounts) 3/31/2002 3/31/2001
---------------------------------------------------------------------------------
REVENUES:
Sales and services $ 2,719 $ 2,492
OPERATING COSTS AND EXPENSES:
Cost of sales and services 1,990 1,854
Selling, general and administrative expenses 28 15
------- -------
TOTAL OPERATING COSTS AND EXPENSES 2,018 1,869
------- -------
OPERATING INCOME
701 623
OTHER INCOME AND (EXPENSE):
Interest expense, net (411) (349)
Other income (expense), net 24 (11)
Equity in earnings of affiliates (before income tax) 29 50
Loss on sale of investment (57) --
Nonrecurring severance and transaction costs -- (94)
------- -------
INCOME BEFORE INCOME TAXES
AND MINORITY INTEREST 286 219
Income tax provision 106 65
Minority interest (income) expense (12) 32
------- -------
INCOME FROM CONTINUING OPERATIONS 192 122
Loss from operations of discontinued components
(net of income taxes of $13 and $6, respectively) (32) (11)
------- -------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE 160 111
Cumulative effect of accounting change (net of
income taxes of $155) (473) --
------- -------
NET INCOME (LOSS) $ (313) $ 111
======= =======
DILUTED EARNINGS PER SHARE:
Income from continuing operations $ 0.36 $ 0.23
Discontinued operations (0.06) (0.02)
Cumulative effect of accounting change (0.88) --
------- -------
Total $ (0.58) $ 0.21
======= =======
Diluted weighted average
shares outstanding (in millions) 541 544
======= =======
THE AES CORPORATION --- SUPPLEMENTAL SCHEDULE
Reconciliation of GAAP Net Income before discontinued operations and accounting
change to Net Income excluding Brazil, Argentina and Venezuela foreign currency
effects, effects of FAS No. 133 and nonrecurring items.
FOR THE PERIODS ENDED MARCH 31, 2002 AND 2001 - - - - -
---------------------------------------------------------------------------------------------------------
($ in millions, except per share amounts)
---------------------------- -------------------------
QUARTER ENDED 3/31/2002 QUARTER ENDED 3/31/2001
--------------------------- -------------------------
AMOUNT PER AMOUNT PER
AMOUNT SHARE AMOUNT SHARE
------ ----------- ------ -----------
NET INCOME BEFORE DISCONTINUED OPERATIONS
AND ACCOUNTING CHANGE $ 192 $ 0.36 $ 122 $ 0.23
SOUTH AMERICA FOREIGN CURRENCY TRANSACTION
LOSSES, NET (1) 27 0.05 52 0.10
MARK TO MARKET GAINS FROM FAS NO. 133 (2) (75) (0.14) (4) (0.01)
LOSS ON SALE OF INVESTMENT (3) 50 0.09 -- --
TRANSACTION AND SEVERANCE COSTS RELATED TO
IPALCO TRANSACTION -- -- 61 0.11
----- ------- ----- -------
NET INCOME FROM RECURRING OPERATIONS $ 194 $ 0.36 $ 231 $ 0.43
===== ======= ===== =======
DILUTED WEIGHTED SHARES
OUTSTANDING (IN MILLIONS)
541 558
======= =======
(1) South America foreign currency transaction losses, net, consist of the
following in 2002: a loss of approximately $10 million after income tax, or
$0.02 per share, from Brazil; a loss of approximately $82 million after income
tax, or $0.15 per share, from Argentina; and a gain of approximately $65 million
after income tax, or $0.12 per share, from Venezuela. For 2001, South America
foreign currency transaction losses, net, consist of the following: a loss of
approximately $59 million after income tax, or $0.11 per share, from Brazil, and
a gain of approximately $7 million after income tax, or $0.01 per share, from
Venezuela.
(2) Mark to market gains from FAS No. 133 consist of the following in 2002: a
gain of approximately $9 million after income tax, or $0.02 per share, from
interest rate instruments, a gain of approximately $4 million after income tax,
or $0.01 per share, from foreign exchange rate instruments, and a gain of $62
million after income tax, or $0.11 per share, from commodity contracts. For
2001, mark to market gains from FAS No. 133 consist of the following: a loss of
approximately $16 million after income tax, or $0.03 per share, from interest
rate instruments, a gain of approximately $15 million after income tax, or $0.03
per share, from foreign exchange rate instruments, and a gain of approximately
$5 million after income tax, or $0.01 per share, from commodity contracts.
(3) Loss on sale of investment relates to the loss realized, net of income tax,
on the sale of CANTV shares in March 2002.
BUSINESS SEGMENT RESULTS
AES's business segments, which include Contract Generation, Large Utilities,
Competitive Supply and Growth Distribution generated combined income from
recurring operations before income taxes (EBT) of $ 419 million for the first
quarter of 2002 as compared to $490 million during the same period last year.
CONTRACT GENERATION
Contract Generation consists of our power plants located around the world that
have contractually limited their exposure to commodity price risks (primarily
electricity prices) for a period of at least five years and for 75% or more of
their expected output capacity.
For the first quarter of 2002, Contract Generation revenues were $641 million
and represented 24% of total revenues for the quarter. The most significant
contributions continued to be from North and South America, which in aggregate
comprised 63% of Contract Generation revenue for the quarter. Revenues were
enhanced with the addition of a global mix of new businesses totaling 2,002 MW
(added subsequent to the first quarter of 2001), including Ironwood in
Pennsylvania (705 MW natural gas), Ebute in Nigeria (290 MW gas), Medina Valley
in Illinois (47 MW natural gas), Haripur in Bangladesh (360 MW natural gas) and
Kelvin in South Africa (600 MW coal).
The operating margin (as a percentage of sales) for our Contract Generation
segment showed continued and growing strength at 42% in the first quarter of
2002, with stronger margins at the Gener plants in Chile, Kilroot in Northern
Ireland, Tisza in Hungary, Lal Pir and Pak Gen in Pakistan and Jiaozuo in China.
Also, better than segment average margin percentages resulted from several new
businesses, including Ironwood, Ebute and Haripur.
As a result, Contract Generation delivered $176 million of EBT (or 42% of the
total) for the first quarter of 2002, a slight increase from 2001 first quarter
EBT of $168 million (or 34%). The margin improvements across the several
businesses mentioned above in 2002 were offset by Tiete in Brazil due to lower
demand resulting from the effects of power rationing (which ended in mid-March
2002) and from Thames in Connecticut, because of contractual price decreases in
2002 as compared to 2001.
COMPETITIVE SUPPLY
Competitive Supply consists of our power plants and retail supply businesses
that sell electricity directly to wholesale and retail customers in competitive
markets and as a result are generally more sensitive to fluctuations in the
market price of electricity, natural gas and coal, in particular.
For the first quarter of 2002, revenues for this segment were $737 million and
represented 27% of total revenues for the quarter. The most significant
contributions continued to be from the competitive markets of North America and
Europe, which in aggregate comprised 86% of Competitive Supply revenue for the
quarter. Growth in revenues was approximately 6% and was driven primarily by a
significant increase at NewEnergy, our competitive retail supplier of commercial
and industrial electricity customers, where revenues doubled over first quarter
2001 along with increases associated with new businesses at Ottana in Italy (140
MW oil) and Delano in California (50 MW gas).
The operating margin (as a percentage of sales) for our Competitive Supply
segment was 17% in the first quarter of 2002, with significant progress in
margins reflected in the retail component, primarily NewEnergy. These
improvements were slightly outweighed by lower competitive wholesale electricity
prices in some regions due to the devaluation of the peso in Argentina, a mild
winter in the Northeastern U.S. and lower prices created by excess generating
capacity in the U.K.
As a result, and notwithstanding lower wholesale prices in several regions
during the first quarter of 2002, Competitive Supply, with the strength of the
retail component, generated $60 million of EBT (or 14% of the total) for the
first quarter of 2002, a variation from the 2001 first quarter EBT of $80
million (or 16%).
LARGE UTILITIES
The Large Utilities segment is comprised of our five large integrated utilities
that serve over 11 million customers in North America, the Caribbean and South
America. Businesses include IPALCO in Indiana, CILCORP in Illinois, EDC in
Venezuela along with CEMIG (an equity affiliate) and Eletropaulo in Brazil.
For the first quarter of 2002, revenues for this segment were nearly $1 billion
at $975 million and represented 36% of total revenues for the quarter. The
significant increase in revenues of 39% resulted from consolidating the results
of Eletropaulo (serving Sao Paulo, Brazil) beginning in February 2002 when AES
acquired control of that business with a 70% ownership interest (increased from
50% prior to that date when Eletropaulo was treated as an equity affiliate).
Mild weather dampened comparable revenues in our North American large utilities.
The operating margin (as a percentage of sales) was 26% and benefited from
improvements at IPALCO during the quarter resulting from cost reductions and
efficiency improvements since AES's acquisition in March 2001.
Large Utilities generated $140 million of EBT (or 34% of the total) for the
first quarter of 2002, down from 2001 first quarter EBT of $242 million (or
50%). The reduction in first quarter 2002 results from reduced contributions
(after associated interest costs) from Eletropaulo and CEMIG (an equity method
affiliate serving Minais Gerais, Brazil) that arise primarily from reduced
demand because of power rationing in Brazil through mid-March 2002.
GROWTH DISTRIBUTION
Our Growth Distribution businesses showed strengthened profitability during the
first quarter of 2002. This segment, serving over 5 million customers consists
of electricity distribution companies that are generally located in developing
countries or regions where the demand for electricity is expected to grow at a
rate higher than in more developed regions.
For the first quarter of 2002, revenues were $366 million and represented 13% of
total revenues for the quarter. The most significant contributions continued to
be from the Caribbean and South America, which in aggregate comprised 75% of
growth Distribution revenue for the quarter.
Growth Distribution revenues increased at Sul in Brazil and Telasi in Georgia as
well as from new distribution companies including Sonel in Cameroon and
Kievoblenergo and Rivnooblenergo in Ukraine. These increases were offset by
reductions in Argentina because of the devaluation of the Argentine peso and the
change to an equity affiliate at Cesco in India in the third quarter of 2001.
The operating margin (as a percentage of sales) was 22% and showed growing
strength and improvement across most of the segment, particularly at Sul, Telasi
and Ede Este, offset only by reductions from the Argentine businesses.
As a result, Growth Distribution generated $43 million of EBT (or 10% of the
total) for the first quarter of 2002, a significant increase from breakeven in
the first quarter of 2001.
THE AES CORPORATION --- SUPPLEMENTAL DATA
-----------------------2001--------------------------- --2002--
1ST QTR 2ND QTR 3RD QTR 4TH QTR YEAR 1ST QTR
-------- ------- ------- ------- ---- -------
GEOGRAPHIC - % of Total
NORTH AMERICA
Revenues 38% 37% 44% 37% 39% 35%
Income before Taxes (1) 41% 29% 58% 40% 42% 39%
CARIBBEAN (2)
Revenues 21% 22% 19% 17% 20% 15%
Income before Taxes (1) 17% 29% 14% 27% 21% 11%
SOUTH AMERICA
Revenues 17% 20% 17% 21% 19% 28%
Income before Taxes (1) 34% 37% 20% 22% 29% 24%
EUROPE/AFRICA
Revenues 16% 14% 17% 20% 17% 17%
Income before Taxes (1) 4% (2)% 1% 6% 2% 15%
ASIA
Revenues 8% 7% 3% 5% 5% 5%
Income before Taxes (1) 4% 7% 7% 5% 6% 11%
SEGMENTS - % of Total
CONTRACT GENERATION
Revenues 28% 28% 26% 26% 27% 24%
Operating Margin (3) 38% 37% 30% 45% 38% 37%
Income before Taxes (1) 34% 22% 20% 58% 33% 42%
COMPETITIVE SUPPLY
Revenues 28% 27% 33% 30% 29% 27%
Operating Margin (3) 26% 17% 24% 15% 21% 17%
Income before Taxes (1) 16% 4% 22% 3% 12% 14%
LARGE UTILITIES
Revenues 28% 27% 27% 23% 26% 36%
Operating Margin (3) 31% 37% 36% 26% 32% 35%
Income before Taxes (1) 50% 71% 58% 18% 50% 34%
GROWTH DISTRIBUTION BUSINESSES
Revenues 16% 18% 14% 21% 18% 13%
Operating Margin (3) 5% 9% 10% 14% 9% 11%
Income before Taxes (1) -- 3% -- 21% 5% 10%
FINANCIAL HIGHLIGHTS - $ in millions, except Total Assets in billions
Revenues $2,492 $2,187 $2,261 $2,347 $9,287 $2,719
Gross Margin Percentage 26% 21% 23% 29% 25% 27%
Income before Taxes (1) $490 $412 $374 $357 $1,633 $419
Net Income Excluding
Extraordinary and Other Items (4) $231 $178 $158 $159 $726 $194
Total Assets (billions) $36 $36 $36 $37 $37 $40
Deprec./Amort. $204 $210 $222 $221 $857 $192
(1) Income before taxes excludes the Corporate and Business Development
segment. The following items are included in the Corporate and Business
Development segment: corporate interest, other corporate costs, business
development expenses, Brazilian affiliates foreign currency effects, Argentine
affiliates foreign currency effects, Venezuelan affiliates foreign currency
effects, effects of FAS No. 133, nonrecurring items, discontinued operations
and cumulative effect of accounting change.
(2) Includes Venezuela and
Colombia.
(3) Operating Margin is revenues reduced by cost of sales, depreciation and
amortization and other operating expenses.
(4) Net Income excludes Brazilian affiliates foreign currency effects,
Argentine affiliates foreign currency effects, Venezuelan affiliates foreign
currency effects, effects of FAS No. 133, nonrecurring items, discontinued
operations and cumulative effect of accounting change.
THE AES CORPORATION
CONSOLIDATED BALANCE SHEETS
MARCH 31,2002 AND DECEMBER 31, 2001
($ in millions) March 31, 2002 December 31, 2001
--------------- -----------------
ASSETS:
CURRENT ASSETS:
Cash and cash equivalents $ 1,313 $ 922
Short term investments
573 588
Accounts receivable, net of reserves of $443 and $247,
respectively 1,987 1,582
Inventory 550 625
Receivable from affiliates 9 10
Deferred income taxes 289 260
Prepaid expenses and other assets 1,136 606
Current assets of discontinued operations 52 59
------- --------
Total current assets 5,909 4,652
PROPERTY, PLANT AND EQUIPMENT:
Land 1,004 580
Electric generation and distribution assets 23,765 21,263
Accumulated depreciation (4,337) (3,312)
Construction in progress 4,794 4,729
------- --------
Property, plant and equipment, net 25,226 23,260
OTHER ASSETS:
Deferred financing costs, net 435 477
Project development costs 64 68
Investment in and advances to affiliates 1,737 3,100
Debt service reserves and other deposits 396 474
Goodwill, net 3,105 3,208
Long-term assets of discontinued operations 247 427
Other assets 3,082 1,069
------- --------
Total other assets 9,066 8,823
------- --------
TOTAL ASSETS $ 40,201 $ 36,735
------- --------
------- --------
LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 1,388 $ 816
Accrued interest 379 283
Accrued and other liabilities 1,488 1,181
Current liabilities of discontinued operations 240 89
Recourse debt-current portion 425 488
Non-recourse debt-current portion 3,526 2,184
------- --------
Total current liabilities 7,446 5,041
LONG-TERM LIABILITIES
Recourse debt 5,351 4,912
Non-recourse debt 15,268 14,545
Deferred income taxes 2,051 1,905
Long-term liabilities of discontinued operations 8 286
Other long-term liabilities 3,570 1,999
------- --------
Total long-term liabilities 26,248 23,647
MINORITY INTEREST 1,270 1,530
COMPANY OBLIGATED CONVERTIBLE MANDATORILY REDEEMABLE
PREFERRED SECURITIES OF SUBSIDIARY TRUSTS HOLDING
SOLELY JUNIOR SUBORDINATED DEBENTURES OF AES 978 978
STOCKHOLDERS' EQUITY:
Common stock 5 5
Additional paid-in capital 5,232 5,225
Retained earnings 2,496 2,809
Accumulated other comprehensive loss (3,474) (2,500)
------- --------
Total stockholders' equity 4,259 5,539
------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 40,201 $ 36,735
------- --------
------- --------
THE AES CORPORATION
CAPITAL RESOURCES AND OTHER BALANCE SHEET DATA
($ in billions)
MARCH 31, DECEMBER 31,
CAPITALIZATION: 2002 2001
---------- -----------
Recourse debt $ 5.78 $ 5.40
Non-recourse debt 18.79 16.73
------ ------
Total debt 24.57 22.13
Preferred Securities 0.98 0.98
Minority Interest 1.27 1.53
Stockholders' equity 4.26 5.54
------ ------
Total capitalization $31.08 $30.18
====== ======
SELECTED BALANCE SHEET DATA BY GEOGRAPHIC REGION:
PROPERTY, PLANT TOTAL NON-RECOURSE
MARCH 31, 2002 & EQUIPMENT ASSETS DEBT
--------------------------------------------------
North America 30% 25% 28%
Caribbean 19% 17% 17%
South America 25% 34% 35%
Europe/Africa 19% 16% 15%
Asia 7% 7% 5%
Discontinued operations -- -- --
Corporate -- 1% --
DECEMBER 31, 2001
North America 32% 27% 31%
Caribbean 20% 19% 19%
South America 20% 28% 27%
Europe/Africa 22% 18% 18%
Asia 6% 6% 5%
Discontinued operations -- 1% --
Corporate -- 1% --
SELECTED BALANCE SHEET DATA BY LINE OF BUSINESS:
PROPERTY, PLANT TOTAL NON-RECOURSE
MARCH 31, 2002 & EQUIPMENT ASSETS DEBT
--------------- ------ -------------
Contract Generation 33% 31% 34%
Competitive Supply 30% 24% 22%
Large Utilities 30% 36% 37%
Growth Distribution Businesses 7% 8% 7%
Discontinued operations -- -- --
Corporate -- 1%
DECEMBER 31, 2001
Contract Generation 36% 33% 38%
Competitive Supply 34% 28% 24%
Large Utilities 21% 25% 30%
Growth Distribution Businesses 9% 12% 8%
Discontinued operations -- 1% --
Corporate -- 1% --
THE AES CORPORATION
Parent Operating Cash Flow and Interest Coverage Information
--------------------------------------------------------------------------------
Parent Operating Cash Flow, formerly described as "Parent EBITDA", for
the twelve months ended March 31, 2002 was $1.31 billion; a 36% increase
compared with the $965 million reported for the twelve months ended March 31,
2001. Parent Operating Cash Flow reflects cash payments to the holding company
(the "Parent Company") from its subsidiary operating businesses (consisting of
dividends, consulting and management fees, tax sharing payments and interest
income), less Parent operating expenses.
Parent Operating Cash Flow is measured after payment of principal and
interest on non-recourse debt as well as maintenance capital expenditures at
those businesses. As a result, it represents the cash flow that is available to
service the Parent Company's liquidity needs, including debt service.
For more detailed information regarding Parent Operating Cash Flow and
consolidated cash flows see the tables and notes below.
YEAR ENDED DECEMBER 31, 12 MONTHS 12 MONTHS
ENDED ENDED
MAR 31, MAR 31,
PARENT ONLY DATA 1998 1999 2000 2001 2002 2001
-------- -------- -------- -------- -------- --------
In millions, except percentages and ratios
Parent Operating Cash Flow (1) $ 360 $ 403 $ 871 $1,163 $1,314 $ 965
Parent Interest Charges (2) $ 118 $ 164 $ 216 $ 391 $ 428 $ 254
Interest Coverage Ratio (3) 3.05x 2.46x 4.03x 2.97x 3.07x 3.80x
PARENT OPERATING CASH FLOW BY REGION:
-------------------------------------
North America 48% 60% 39% 54% 56% 37%
Caribbean 6% 7% 29% 17% 11% 20%
South America 25% 8% 17% 12% 15% 27%
Europe 20% 19% 11% 9% 8% 13%
Asia 1% 6% 4% 8% 10% 3%
PARENT OPERATING CASH FLOW BY LINE OF BUSINESS
----------------------------------------------
Contract Generation 67% 67% 44% 39% 46% 40%
Large Utilities 14% 3% 39% 31% 36% 35%
Competitive Supply 13% 24% 12% 28% 17% 21%
Growth Distribution Businesses 6% 6% 5% 2% 1% 4%
------------------------------------------------------------------------------------------------------------------------------
PARENT ONLY DATA 3 MONTHS ENDED
(QUARTERLY): JUN 30, SEPT. 30, DEC. 31, MAR. 31, MAR. 31,
2001 2001 2001 2002 2001
-------- -------- -------- ------- --------
Parent Operating Cash Flow $258 $335 $390 $331 $180
Parent Interest Charges $ 80 $112 $120 $116 $ 79
Interest Coverage Ratio 3.23x 2.99x 3.25x 2.85x 2.28x
--------------------------------------------------------------------------------
12 MONTHS ENDED
(LAST FOUR QUARTERS): JUN 30, SEPT. 30, DEC. 31, MAR. 31, MAR. 31,
2001 2001 2001 2002 2001
-------- -------- -------- ------- --------
Parent Operating Cash Flow $1,004 $1,160 $1,163 $1,314 $ 965
Parent Interest Charges $ 267 $ 338 $ 391 $ 428 $ 254
Interest Coverage Ratio 3.76x 3.43x 2.97x 3.07x 3.80x
Notes:
(1) Our Parent Operating Cash Flow, formerly titled "Parent EBITDA", definition
may differ from that, or similarly titled measures, used by other companies.
Parent Operating Cash Flow is not a substitute for cash flows from operating
activities as defined by generally accepted accounting principles, or as an
indicator of operating performance or as a measure of liquidity. Parent
Operating Cash Flow includes the following amounts (determined without
duplication) received in cash by the Parent Company from operating subsidiaries
and affiliates less Parent operating expenses:
(A) Dividends.
(B) Consulting and management fees.
(C) Tax sharing payments.
(D) Interest and other distributions paid during the period with respect
to cash and other temporary cash investments.
Parent Operating Cash Flow does not include the following cash payments made to
the Parent Company by its subsidiaries and affiliates:
(A) Returns of invested capital.
(B) Repayments of debt principal.
(C) Payments released from debt service reserve accounts upon the issuance
of letters of credit for the benefit of subsidiaries or affiliates.
(2) Parent Interest Charges include interest payments both expensed and
capitalized. It excludes distributions paid for trust preferred securities. This
definition may differ from that, or similarly titled measures, used by other
companies.
(3) Parent Interest Coverage Ratio is defined as the ratio of Parent Operating
Cash Flow for such period to Parent Interest Charges for such period.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
THE AES CORPORATION
DATE: April 26, 2002 by: /s/ William R. Luraschi
Vice President and Secretary