0000874761-18-000029.txt : 20180321 0000874761-18-000029.hdr.sgml : 20180321 20180321080500 ACCESSION NUMBER: 0000874761-18-000029 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20180321 ITEM INFORMATION: Completion of Acquisition or Disposition of Assets ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20180321 DATE AS OF CHANGE: 20180321 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AES CORP CENTRAL INDEX KEY: 0000874761 STANDARD INDUSTRIAL CLASSIFICATION: COGENERATION SERVICES & SMALL POWER PRODUCERS [4991] IRS NUMBER: 541163725 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-12291 FILM NUMBER: 18703331 BUSINESS ADDRESS: STREET 1: 4300 WILSON BOULEVARD CITY: ARLINGTON STATE: VA ZIP: 22203 BUSINESS PHONE: 7035221315 MAIL ADDRESS: STREET 1: 4300 WILSON BOULEVARD CITY: ARLINGTON STATE: VA ZIP: 22203 FORMER COMPANY: FORMER CONFORMED NAME: AES CORPORATION DATE OF NAME CHANGE: 19930328 8-K 1 masinlocclosing8k.htm 8-K Document

UNITED STATES
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):  March 21, 2018
 
THE AES CORPORATION
(Exact name of registrant as specified in its charter)
 
Delaware
 
1-12291
 
54-1163725
(State or other jurisdiction
 
(Commission File
 
(I.R.S. Employer
of incorporation)
 
Number)
 
Identification Number)
 
 
 
 
 
4300 Wilson Boulevard, Suite 1100,
 
 
Arlington, Virginia
 
22203
(Address of principal executive offices)
 
(zip code)
 
Registrant’s telephone number, including area code: (703) 522-1315
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.):
 
o    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company o 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o


 
Item 2.01
Completion of Acquisition or Disposition of Assets.
 
As previously announced, The AES Corporation (“AES” or the “Company”) entered into a share purchase agreement (the “Agreement”) with SMC Global Power Holdings Corp on December 17, 2017. On March 20, 2018, pursuant to the terms and conditions of the Agreement AES sold its entire 51% equity interest in the 630 MW Masinloc coal-fired power plant in operation, the 335 MW Masinloc 2 coal-fired power plant under construction and the 10 MW Masinloc energy storage project in operation (the “Disposition”). AES completed the sale for approximately $1.05 billion.

Item 9.01
Financial Statements and Exhibits.

 
(b) Pro Forma Financial Information

In accordance with Rule 11-01(a) of Regulation S-X, filed herewith as Exhibit 99.1 is unaudited pro forma condensed consolidated financial information of The AES Corporation, giving effect to certain pro forma events related to the Disposition. The pro forma statement of operations and balance sheet are for the year ended December 31, 2017.

(d) Exhibits
        
Exhibit No.
Description
99.1
Unaudited pro forma condensed consolidated financial information of The AES Corporation consisting of:
 
l Pro forma condensed consolidated statement of operations for the year ended December 31, 2017;
 
l Pro forma condensed consolidated balance sheet as of December 31, 2017; and
 
l Notes to pro forma condensed consolidated financial statements.



 
2



 
SIGNATURE
 
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
 
(Registrant)
 
 
 
 
 
By:
/s/ Thomas M. O’Flynn
 
 
Name:
Thomas M. O’Flynn
 
 
Title:
Executive Vice President and
 
 
  Chief Financial Officer
Date:
March 21, 2018
 
 
 
 
 
 
 
 
3




EXHIBIT INDEX


Exhibit No.
Description
99.1
 
l Pro forma condensed consolidated statement of operations for the year ended December 31, 2017;
 
l Pro forma condensed consolidated balance sheet as of December 31, 2017; and
 
l Notes to pro forma condensed consolidated financial statements.




 EX-99.1 2 ex991masinlocproforma2017.htm EXHIBIT 99.1 Exhibit


Exhibit 99.1
THE AES CORPORATION
UNAUDITED PRO FORMA FINANCIAL INFORMATION

On March 20, 2018, The AES Corporation ("AES" or the "Company") completed the previously announced sale of its entire 51% equity interest in its businesses in the Philippines to SMC Global Power Holdings Corp. for $1.05 billion in proceeds. The sale included AES' equity interest in the 630 MW Masinloc coal-fired power plant in operation, the 335 MW Masinloc 2 coal-fired power plant under construction and the 10 MW Masinloc energy storage project in operation. The Company will use the proceeds from the sale to retire $700 million aggregate principal amount of its 5.50% Senior Unsecured Notes due in 2024 and 2025 that were recently tendered. The remainder of the proceeds will primarily be used to retire approximately $250 million of other Parent debt.
The following unaudited pro forma condensed consolidated financial statements are based upon the historical financial statements for the Company, adjusted to reflect the sale of Masinloc.


THE AES CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
YEAR ENDED DECEMBER 31, 2017
 
Historical
 
Pro Forma Adjustments(a)
 
Pro Forma
 
(in millions, except per share amounts)
Revenue:
 
 
 
 
 
Regulated
$
3,109

 
$
—

 
$
3,109

Non-Regulated
7,421

 
(449
)
 
6,972

Total revenue
10,530

 
(449
)
 
10,081

Cost of Sales:
 
 
 
 
 
Regulated
(2,656
)
 
—

 
(2,656
)
Non-Regulated
(5,410
)
 
303

 
(5,107
)
Total cost of sales
(8,066
)
 
303

 
(7,763
)
Operating margin
2,464

 
(146
)
 
2,318

General and administrative expenses
(215
)
 
3

 
(212
)
Interest expense
(1,170
)
 
18

 
(1,152
)
Interest income
244

 
—

 
244

Loss on extinguishment of debt
(68
)
 
—

 
(68
)
Other expense
(57
)
 
—

 
(57
)
Other income
120

 
(2
)
 
118

Loss on disposal and sale of businesses
(52
)
 
—

 
(52
)
Asset impairment expense
(537
)
 
—

 
(537
)
Foreign currency transaction gains (losses)
42

 
(14
)
 
28

INCOME FROM CONTINUING OPERATIONS BEFORE TAXES AND EQUITY IN EARNINGS OF AFFILIATES
771

 
(141
)
 
630

Income tax expense
(990
)
 
49

 
(941
)
Net equity in earnings of affiliates
71

 
—

 
71

INCOME (LOSS) FROM CONTINUING OPERATIONS
(148
)
 
(92
)
 
(240
)
Less: Income from continuing operations attributable to noncontrolling interests and redeemable stock of subsidiaries
(359
)
 
48

 
(311
)
Income (loss) from continuing operations attributable to The AES Corporation common stockholders, net of tax
$
(507
)
 
$
(44
)
 
$
(551
)
EARNINGS PER SHARE:
 
 
 
 
 
Income (loss) from continuing operations attributable to The AES Corporation common stockholders, net of tax
 
 
 
 
 
Basic
$
(0.77
)
 
$
(0.07
)
 
$
(0.84
)
Diluted
(0.77
)
 
$
(0.07
)
 
(0.84
)
Weighted-average shares of common stock outstanding (in millions)
 
 
 
 
 
Basic
660

 
 
 
660

Diluted
660

 
 
 
660

See Notes to Pro Forma Condensed Consolidated Financial Statements.






THE AES CORPORATION
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
DECEMBER 31, 2017
 
Historical
 
Pro Forma Adjustments
 
Pro Forma
 
(in millions, except share and per share data)
ASSETS
 
 
 
 
 
CURRENT ASSETS
 
 
 
 
 
Cash and cash equivalents
$
949

 
1,050

(b) 
$
1,999

Restricted cash
274

 
—

 
274

Short-term investments
424

 
—

 
424

Accounts receivable, net
1,463

 
—

 
1,463

Inventory
562

 
—

 
562

Prepaid expenses
62

 
—

 
62

Other current assets
630

 
—

 
630

Current assets of discontinued operations and held-for-sale businesses
2,034

 
(1,444
)
(c) 
590

Total current assets
6,398

 
(394
)
 
6,004

NONCURRENT ASSETS
 
 
 
 
 
Property, Plant and Equipment:
 
 
 
 
 
Land
502

 
—

 
502

Electric generation, distribution assets and other
24,119

 
—

 
24,119

Accumulated depreciation
(7,942
)
 
—

 
(7,942
)
Construction in progress
3,617

 
—

 
3,617

Property, plant and equipment, net
20,296

 
—

 
20,296

Other Assets:
 
 
 
 
 
Investments in and advances to affiliates
1,197

 
—

 
1,197

Debt service reserves and other deposits
565

 
—

 
565

Goodwill
1,059

 
—

 
1,059

Other intangible assets, net of
366

 
—

 
366

Deferred income taxes
130

 
—

 
130

Service concession assets, net
1,360

 
—

 
1,360

Other noncurrent assets
1,741

 
—

 
1,741

Noncurrent assets of discontinued operations and held-for-sale businesses
—

 
—

 
—

Total other assets
6,418

 
—

 
6,418

TOTAL ASSETS
$
33,112

 
(394
)
 
$
32,718

LIABILITIES AND EQUITY
 
 
 
 
 
CURRENT LIABILITIES
 
 
 
 
 
Accounts payable
$
1,371

 
—

 
$
1,371

Accrued interest
228

 
—

 
228

Accrued and other liabilities
1,232

 
36

(d) 
1,268

Non-recourse debt
2,164

 
—

 
2,164

Current liabilities of discontinued operations and held-for-sale businesses
1,033

 
(952
)
(c) 
81

Total current liabilities
6,028

 
(916
)
 
5,112

NONCURRENT LIABILITIES
 
 
 
 
 
Recourse debt
4,625

 
—

 
4,625

Non-recourse debt
13,176

 
—

 
13,176

Deferred income taxes
1,006

 
—

 
1,006

Pension and other postretirement liabilities
230

 
—

 
230

Other noncurrent liabilities
2,365

 
—

 
2,365

Noncurrent liabilities of discontinued operations and held-for-sale businesses
—

 
—

 
—

Total noncurrent liabilities
21,402

 
—

 
21,402

Commitments and Contingencies
 
 
 
 
 
Redeemable stock of subsidiaries
837

 
—

 
837

EQUITY
 
 
 
 
 
THE AES CORPORATION STOCKHOLDERS’ EQUITY
 
 
 
 
 
Common stock
8

 
—

 
8

Additional paid-in capital
8,501

 
—

 
8,501

Accumulated deficit
(2,276
)
 
777

(d) 
(1,499
)
Accumulated other comprehensive loss
(1,876
)
 
(15
)
 
(1,891
)
Treasury stock, at cost
(1,892
)
 
—

 
(1,892
)
Total AES Corporation stockholders’ equity
2,465

 
762

 
3,227

NONCONTROLLING INTERESTS
2,380

 
(240
)
(e) 
2,140

Total equity
4,845

 
522

 
5,367

TOTAL LIABILITIES AND EQUITY
$
33,112

 
(394
)
 
$
32,718

See Notes to Pro Forma Condensed Consolidated Financial Statements.





THE AES CORPORATION
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. BASIS OF PRO FORMA PRESENTATION
The unaudited pro forma financial information is presented to illustrate the effect of the sale of Masinloc on the Company's historical financial position and operating results. The unaudited pro forma condensed consolidated balance sheet is as of December 31, 2017 and is based upon our historical statements after giving effect to the sale of Masinloc as if it had occurred on December 31, 2017. The unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2017 is based upon our historical statements after giving effect to the sale of Masinloc as if it had occurred on January 1, 2017. The unaudited pro forma financial information should be read in conjunction with the historical consolidated financial statements and notes thereto of the Company contained in the Annual Report on Form 10-K for the year ended December 31, 2017.
The unaudited pro forma condensed consolidated financial statements have been prepared in conformity with Article 11 of Regulation S-X. In addition, this unaudited pro forma condensed consolidated financial information is presented for illustrative purposes only and is not intended to represent or be indicative of our consolidated results of operations or financial position that would have been reported had the sale of Masinloc been completed as of the dates presented, and should not be taken as representation of our future consolidated results of operations or financial condition. The pro forma adjustments are based upon available information and certain assumptions that management believes are reasonable under the circumstances; however, actual amounts could differ.

2. PRO FORMA ADJUSTMENTS
The following adjustments have been reflected in the unaudited pro forma condensed consolidated financial information:
(a) Reflects the elimination of the operating results related to the Masinloc assets sold.
(b) Reflects the receipt of cash consideration of $1.05 billion at the closing of the transaction. Substantially all of the sales proceeds are expected to be subsequently used to reduce parent debt.
(c) Reflects Masinloc's assets and liabilities, which were classified as held for sale as of December 31, 2017 as reported in the Company's Form 10-K as of December 31, 2017.
(d) Reflects the estimated gain of approximately $777 million attributable to AES, net of estimated transaction and other directly attributable costs, arising from the transaction as of March 20, 2018. This estimated gain has not been reflected in the pro forma condensed consolidated statement of operations as it is considered to be nonrecurring in nature. No adjustment has been made to the sale proceeds to give effect to any potential post-closing adjustments under the terms of the sale.
(e) Reflects the removal of the noncontrolling interest upon deconsolidation.