11-K 1 aes11_0630.txt AES 11_K FOR MID-AMERICA SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 11-K (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2002 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____ to ____ Commission file number ______ A. Full title of the plan and the address of the plan, if different from that of the issuer named below: Mid-America Energy Resources Employee Retirement Plan B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: The AES Corporation 1001 North 19th Street Arlington, VA 22209 MID-AMERICA ENERGY RESOURCES EMPLOYEE RETIREMENT PLAN TABLE OF CONTENTS -------------------------------------------------------------------------------- Page FINANCIAL STATEMENTS (Unaudited): Statements of Assets Available for Benefits as of December 31, 2002 and 2001 as of December 31, 2002 and 2001 (Unaudited) 1 Statements of Changes in Assets Available for Benefits for the Year Ended December 31,2002 (Unaudited) 2 Notes to Financial Statements 3 * Schedules not filed herewith are omitted because of the absence of the conditions under which they are required by Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employees Retirement Income Security Act of 1974.
MID-AMERICA ENERGY RESOURCES EMPLOYEE RETIREMENT PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS -------------------------------------------------------------------------------------------------- 2002 2001 Unaudited Unaudited ASSETS: INVESTMENTS - at fair value: The AES Corporation Common Stock 32,844 254,868 Merrill Lynch Equity Index Trust Fund Common/Collective Trust 175,636 314,966 Merrill Lynch Retirement Preservation Trust Fund Common/Collective Trust 101,074 133,851 Oppenheimer Main Street & Growth Mutual Fund 124,724 216,979 Ivy International Fund Mutual Fund 5,308 10,539 Aim Income Fund Mutual Fund 2,729 6,496 Merrill Lynch Global Allocation Fund Mutual Fund 260,479 405,701 Merrill Lynch Global Allocation Fund Mutual Fund 104,619 193,141 -------------- -------------- Total Investments 807,413 1,536,541 Participant Loans 6,132 79,084 CASH -- 4,824 CONTRIBUTIONS RECEIVABLE -- 4,934 ACCRUED INTEREST AND DIVIDENDS 1,939 1,889 ----------------- ----------------- Total assets 815,484 1,627,272 ----------------- ----------------- LIABILITIES: ACCRUED Fees 1,065 -- ----------------- ----------------- NET ASSETS AVAILABLE FOR BENEFITS $ 814,419 $ 1,627,272 ================= =================
See notes to financial statements. MID-AMERICA ENERGY RESOURCES EMPLOYEE RETIREMENT PLAN STATEMENTS OF CHANGES IN ASSETS AVAILABLE FOR BENEFITS FOR THE YEAR ENDED DECEMBER 31, 2002 (Unaudited) ---------------------------------------------------------------------------- INCREASES Employee contributions $ -- Company contributions, net -- Interest and dividend income 22,101 Rollover accounts and principal repayments (5,889) Net appreciation (depreciation) of investments (330,119) -------------------- Total (313,907) -------------------- DECREASES Withdrawals by participants or their beneficiaries 433,724 Loan repayments from distributions 64,869 Administrative fees 353 -------------------- Total 498,946 -------------------- DECREASE IN ASSETS AVAILABLE FOR BENEFITS (812,853) ASSETS AVAILABLE FOR BENEFITS, BEGINNING OF YEAR 1,627,272 -------------------- ASSETS AVAILABLE FOR BENEFITS, END OF YEAR $ 814,419 ==================== See notes to financial statements. MID-AMERICA ENERGY RESOURCES EMPLOYEE RETIREMENT PLAN NOTES TO FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting The financial statements of the Mid-America Energy Resources Employee Retirement Plan (the "Plan") have been prepared on the accrual basis. Plan Assets Assets of the Plan are maintained in trust. Once placed in trust, assets may be withdrawn only for the purpose of refunding employee contributions, payment of vested employer contributions to employees withdrawing from the Plan, payment to employees obtaining an in-service distribution, payment due to a hardship withdrawal, issuing loan proceeds, distribution to retiring employees, distribution to beneficiaries of deceased employees or to pay expenses of the Plan. All payments made from the trust require the approval of the Employee's Pension Committee of Indianapolis Power & Light Company, Inc. (the "Pension Committee"). Merrill Lynch Trust Company is the sole Trustee and record keeper of the assets of the Plan. Investments Investments in securities are stated at fair value as determined by quoted market prices. Investment transactions are recorded as of the trade date. Cost of securities sold is determined on a specific identification basis. Use of Management Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires that management make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The reported amounts of increases and decreases in net assets during the reporting period may also be affected by the estimates and assumptions management is required to make. Actual results may differ from those estimates. Benefit Payments Upon retirement, a participant has an option to receive his or her account balance as a lump sum payment or as a direct rollover, as described in the Plan agreement. A participant may withdraw his or her vested contributions in the event of hardship, as defined in the Plan agreement, or may continue to be a non-active participant. Benefit payments are recorded when paid. Administrative Fees For the plan year ended December 31, 2002, each participant with an investment in the AES Common Stock Fund was charged approximately $.08 per share. There are no other transaction-based fees for the other investment funds. Administrative fees on the mutual and managed funds were based upon fund balances. 2. DESCRIPTION OF THE PLAN The Plan is administered by the Pension Committee which is a committee appointed by the Indianapolis Power & Light Company ("IPALCO") Board of Directors. The Plan is a defined contribution plan, and employees of MAER and its affiliates become eligible to participate in the Plan at attainment of age 18 and immediately upon hire. All employees become fully vested in the plan after five years of uninterrupted service. Termination of employment before the five-year requirement requires forfeiture of a prorated amount of allocated employer contributions. Forfeited amounts may be used to reduce employer matching contributions. Employee contributions are made through payroll deductions representing amounts equal to a specified percentage of the employee's base rate of compensation. Employees have the option of contributing anywhere from 1% to 15% in increments of 1%. Employer contributions are made in an amount equal to current employee contributions up to a maximum of 6%. Each participant's account is credited with the participant's contribution and MAER's matching contribution. Allocations of Plan earnings are based on individual account balances relative to total account balances as of the valuation dates. Participant fund transfers are subject to certain restrictions as outlined in the Summary plan Description. In the event of partial or total termination of the Plan, the funds in the Plan shall be valued as of the date of partial or total termination and after payment of necessary expenses shall be distributed as though all participants directly affected by the partial or total termination had retired as of that date. The Plan is maintained with the intent of being a qualified trust under Section 401(a) of the Internal Revenue Code. Its related trust is exempt from Federal income taxes under Section 501(a) of the Code. The Plan obtained its latest determination letter on November 14, 1995 in which the Internal Revenue Service stated that the Plan, as then designed, was in compliance with the applicable requirements of the Internal Revenue Code. The Plan has been amended since receiving the determination letter. However, the Plan administrator and the Plan's tax counsel believe that the Plan, as amended, is being operated in compliance with the applicable requirements of the Internal Revenue Code. Participants may obtain a loan from the Plan up to a maximum of the lesser of $50,000 or one-half of the participant's vested account balance (subject to the provisions of the Plan). Each participant may have only one loan outstanding at any time. Loans are to be repaid over a term not to exceed five years. Loans bear an interest rate as determined by the Trustee, Merrill Lynch. The Plan is valued daily. Participants should refer to the "Summary Plan Description" for a more detailed description of the Plan. 3. RISKS AND UNCERTAINTIES The Plan invests in various securities including U.S. Government securities, corporate debt instruments, corporate stocks, registered investment companies, and common/collective trusts. Investment securities, in general, are exposed to various risks, such as interest rate, credit, and overall market volatility. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the statements of net assets available for benefits. 4. INVESTMENTS The following presents investments that represent 5 percent or more of the Plan's net assets. 2002 2001 The AES Corporation common stock 10,875 and 15,588 shares, respectively 32,844 254,868 Oppenheimer Main Street Income & Growth Mutual Fund, 4,797 and 6,676 shares, respectively $ 124,724 $ 216,979 Merrill Lynch Global Allocation Fund 22,789 and 31,572 shares, respectively $ 260,479 $ 405,700 Merrill Lynch Retirement Preservation Trust, 101,074 and 133,851 shares, respectively $ 101,074 $ 133,851 Merrill Lynch Equity Index Trust, 2,803 and 3,908 shares, respectively $ 175,637 $ 314,967 Merrill Lynch Balanced Capital Fund 4,700 and 7,226 shares, respectively $ 104,619 $ 193,141 During 2002, the Plan's investments (including both realized and unrealized gains and losses) depreciated in value by $330,119 as follows: Mutual Funds $ 96,691 Common/Collective Trust 56,856 Common Stock 176,572 -------- Net depreciation in fair value of investments $330,119 ========= 5. MERRILL LYNCH RETIREMENT PRESERVATION TRUST One of the investment funds is the Merrill Lynch Retirement Preservation Trust, which is a trust for the collective investment of Qualified Plans. The majority of the fund assets consist of investment contracts which are included in the financial statements at contract value, (which represents contributions made under the contracts, plus earnings, less withdrawals and administrative expenses) because they are fully benefit responsive. For example, participants may ordinarily direct the withdrawal or transfer of all or a portion of their investment at contract value. There are no reserves against contract value for credit risk of the contract issuer or otherwise. The contract value of the investment contracts at December 31, 2002 and 2001 approximates market value. The average yield rates for 2002 and 2001 were approximately 5.47% and 6.50%, respectively. 6. RELATED PARTY TRANSACTIONS Merrill Lynch, the Plan Trustee, invests in AES common stock. Since AES is the parent company of IPALCO Enterprises, Inc. and IPALCO Enterprises, Inc. is the parent company of Indianapolis Power & Light, any investment transactions involving AES common stock qualify as related-party transactions. Merrill Lynch is also the Investment Manager for the Merrill Lynch Retirement Preservation Trust, the Merrill Lynch Equity Index Trust, the Merrill Lynch Capital Fund, and the Merrill Lynch Federal Securities Trust. * * * * * REQUIRED INFORMATION The certification of the chief executive officer and the chief financial officer of Indianapolis Power & Light Company, pursuant to 18 U.S.C. ss.1350, is attached hereto as Exhibit 99. SIGNATURES The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. EMPLOYEE'S THRIFT PLAN OF INDIANAPOLIS POWER & LIGHT COMPANY By the Plan Administrator: EMPLOYEE'S PENSION COMMITTEE OF INDIANAPOLIS POWER & LIGHT COMPANY By:/s/ Edward J. Kunz ------------------------------------- Edward J. Kunz, Chairman of the Committee DATE: June 27, 2003