-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HysEPyCS/sH18IwzDvmaw+L8ssEdkxjmG9aFAelU9jsZmBjxDVoTgDNTIVZTpkK5 8XJe9t/AzFBh/5apHrysXw== 0000950103-04-000158.txt : 20040205 0000950103-04-000158.hdr.sgml : 20040205 20040205070250 ACCESSION NUMBER: 0000950103-04-000158 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040204 ITEM INFORMATION: ITEM INFORMATION: Other events FILED AS OF DATE: 20040205 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AES CORPORATION 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: 04568487 BUSINESS ADDRESS: STREET 1: 1001 N 19TH ST STREET 2: STE 2000 CITY: ARLINGTON STATE: VA ZIP: 22209 BUSINESS PHONE: 7035221315 8-K 1 feb0404_8k.txt 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): February 5, 2004 THE AES CORPORATION (exact name of registrant as specified in its charter) DELAWARE 333-15487 54-1163725 (State of Incorporation) (Commission File No.) (IRS Employer Identification No.) 1001 North 19th Street, 20th Floor 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 CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE QUARTERS ENDED DECEMBER 31, 2003 AND 2002 - -------------------------------------------------------------------------------- Quarter Quarter Ended Ended ($ in millions, except per share amounts) 12/31/2003 12/31/2002 - -------------------------------------------------------------------------------- REVENUES: Sales and services $ 2,281 $ 1,866 OPERATING COSTS AND EXPENSES: Cost of sales and services 1,637 1,455 Corporate and business development office expenses 59 48 Other operating expense, net 16 23 Goodwill impairment expense 11 675 Asset impairment expense 43 127 ------- ------- Total operating costs and expenses 1,766 2,328 ------- ------- OPERATING INCOME (LOSS) 515 (462) OTHER INCOME AND (EXPENSE): Interest expense, net (395) (379) Other nonoperating expense, net (7) (3) Foreign currency transaction losses (27) (16) Loss on sale of investments (52) - Equity in earnings (losses) of affiliates 37 (238) ------- ------- INCOME (LOSS) BEFORE INCOME TAXES AND MINORITY INTEREST 71 (1,098) Income tax expense 34 302 Minority interest expense (income) 33 7 ------- ------- INCOME (LOSS) FROM CONTINUING OPERATIONS 4 (1,407) Loss from operations of discontinued components (net of income tax benefit of $72 and $423, respectively) (490) (1,359) ------- ------- LOSS BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE (486) (2,766) Cumulative effect of accounting change (net of income taxes of $23) 42 - ------- -------- NET LOSS $ (444) $(2,766) ======= ======== DILUTED EARNINGS PER SHARE: Income from continuing operations $ 0.01 $ (2.58) Discontinued operations (0.79) (2.50) Cumulative effect of accounting change 0.07 - ------- -------- Total $ (0.71) $ (5.08) ======= ======== Diluted weighted average shares outstanding (in millions) 628 545 === === THE AES CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002 - -------------------------------------------------------------------------------- Year Year Ended Ended ($ in millions, except per share amounts) 12/31/2003 12/31/2002 - -------------------------------------------------------------------------------- REVENUES: Sales and services $ 8,415 $ 7,380 OPERATING COSTS AND EXPENSES: Cost of sales and services 5,982 5,430 Corporate and business development office expenses 157 112 Other operating expense (income), net 46 (37) Goodwill impairment expense 11 675 Asset impairment expense 148 295 -------- -------- Total operating costs and expenses 6,344 6,475 -------- -------- OPERATING INCOME 2,071 905 OTHER INCOME AND (EXPENSE): Interest expense, net (1,706) (1,485) Other nonoperating income, net 107 13 Foreign currency transaction gains (losses) 127 (459) Equity in earnings (losses) of affiliates 94 (203) Loss on sale or write-down of investments (53) (115) -------- -------- INCOME (LOSS) BEFORE INCOME TAXES AND MINORITY INTEREST 640 (1,344) Income tax expense 194 285 Minority interest expense (income) 110 (20) -------- -------- INCOME (LOSS) FROM CONTINUING OPERATIONS 336 (1,609) Loss from operations of discontinued components (net of income tax benefit of $72 and $407, respectively) (780) (1,554) -------- -------- LOSS BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE (444) (3,163) Cumulative effect of accounting change (net of income taxes of $22 and $72) 41 (346) -------- -------- NET LOSS $ (403) (3,509) ======== ======== DILUTED EARNINGS PER SHARE: Income from continuing operations $ 0.56 $ (2.99) Discontinued operations (1.30) (2.88) Cumulative effect of accounting change 0.07 (0.64) -------- -------- Total $ (0.67) $ (6.51) ======== ======== Diluted weighted average shares outstanding (in millions) 598 539 === === Business Segment Results AES's business segments, which include Contract Generation, Large Utilities, Competitive Supply and Growth Distribution, generated combined income before income taxes and minority interest, excluding the Corporate segment, of $1,234 million for 2003, as compared with a loss of $(863) million for 2002. Total income before income taxes and minority interest, including the Corporate segment, was $640 million for 2003, as compared with a loss of $(1,344) million for 2002. On a geographic basis, income before income taxes and minority interest from the business segments was generated $475 million from North America, $328 million from South America, $160 million from Asia, $55 million from Europe and Africa and $216 million from the Caribbean. During the fourth quarter of 2003, AES decided to exit Wolf Hollow, a 730 MW gas plant in Texas, Granite Ridge, a 720 MW gas plant in New Hampshire, and Termomamonal, a 90 MW gas plant in Colombia, all of which were previously reported in the competitive supply. Additionally, AES decided to exit Ede Este, a distribution company in the Dominican Republic which was previously reported in the growth distribution segment. All amounts have been restated to reflect discontinued operations that have occurred in the current and prior periods. Contract Generation ($ in millions) 2003 2002 Variance ------ ------ -------- Segment revenues $3,108 $2,550 $558 % of total revenues 37% 35% 2% Gross margin $1,267 $1,065 $202 % of segment revenues 41% 42% (1)% Income before income taxes and minority interest $599 $665 $(66) % of income before income taxes and minority interest from segments 49% 77% (28)% Contract Generation consists of multiple power generation facilities located around the world that generally have contractually limited their exposure to commodity price risks and electricity price volatility by entering into long-term (5 years or longer) power purchase agreements for 75% or more of their expected output capacity. For 2003, Contract Generation revenues were $3,108 million and represented 37% of total revenues, an increase of $558 million over 2002. The most significant contributions came from North and South America, which in aggregate comprised 58% of Contract Generation revenue for the year as compared to 67% for the same period in 2002. Revenues were enhanced with the addition of recently completed contract generation businesses totaling 1,451 mw, including Red Oak in New Jersey (832 mw gas), Puerto Rico (454 mw coal), Kelanitissa in Sri Lanka (165 mw gas), Barka in Oman (427 mw gas), Ras Laffan in Qatar (750 mw gas) and Andres in the Dominican Republic (310 mw gas). Revenues also improved at Los Mina in the Dominican Republic, Merida III in Mexico, Tiszai in Hungary, Gener in Chile and Tiete in Brazil. These improvements were offset by declines at Shady Point in Oklahoma due to a step-down in the contracted capacity payment and at Lal Pir and Pak Gen in Pakistan. The gross margin for the Contract Generation segment was $1,267 million for 2003, an increase of 19% from 2002. Gross margin increases were attributable to Tiete in Brazil, and Ebute in Nigeria. Additionally, new plants that came online contributed to the increase. These increases were partially offset by declines in gross margin at Beaver Valley and Ironwood in Pennsylvania, Shady Point in Oklahoma, Kilroot in Northern Ireland and the Chigen plants in China. As a percentage of revenues, the gross margin for the Contract Generation segment was 41% for 2003 compared to 42% for 2002. Contract Generation generated $599 million of income before income taxes and minority interest (or 49% of the net total) for 2003, a decrease from $665 million for 2002. South America showed an increase due to Tiete in Brazil. North America experienced declines due to Beaver Valley in Pennsylvania, Warrior Run in Maryland due to significant FAS 133 mark-to-market gains in 2002 related to their power purchase agreement, Shady Point in Oklahoma due to a step-down in the contracted capacity payment in 2003 and Hawaii due to write-offs of deferred financing and swap breakage costs of $22 million related to their non-recourse debt refinancing during 2003. These declines were partially offset by increases in the Southland plants in California. The Caribbean experienced an overall increase due to the start of commercial operations at Andres in the Dominican Republic and Puerto Rico offset slightly by the write-off of project development costs related to El Faro, a terminated business development project in Honduras. Europe/Africa experienced a significant decrease due to the $76 million write-off of previously capitalized costs of Bujagali, a construction project in Uganda that the company decided to terminate during the third quarter of 2003 and Zeg, a construction project in Poland that the company decided to terminate during the fourth quarter of 2003. Asia had overall decreases due to declines at Lal Pir and Pak Gen in Pakistan and Chigen in China which were partially offset by the start of commercial operations at Barka and Ras Laffan. Competitive Supply ($ in millions) 2003 2002 Variance ---- ---- -------- Segment revenues $880 $812 $68 % of total revenues 10% 11% (1)% Gross margin $220 $183 $37 % of segment revenues 25% 23% 2% Income (loss) before income taxes and minority interest $140 $(357) $497 % of income before income taxes and minority interest from segments 11% (41)% 52% Competitive Supply consists primarily of the power plants selling electricity directly to wholesale customers in competitive markets and, as a result, the profitability of such plants are generally more sensitive to fluctuations in the market price of electricity, natural gas and coal, in particular. For 2003, Competitive Supply revenues were $880 million and represented 10% of total revenues for the year. The most significant contributions were from the competitive markets of the U.S., which comprised 51% of Competitive Supply revenue for 2003 and 2002. Competitive market prices increased year over year in New York, which resulted in increased revenue in the New York plants. Additionally, other plants showed revenue improvements, including Alicura and Parana in Argentina, Panama in the Caribbean and Ekibastuz in Asia. These increases were partially offset by decreased revenues from Deepwater in Texas due to an outage during the third quarter of 2003 and from Borsod in Hungary. Gross margin as a percentage of revenues for the Competitive Supply segment was 25% for 2003, an increase from 23% for 2002. Overall, the gross margin for Competitive Supply increased to $220 million from $183 million. Margins and margin percentages were higher at the New York plants, CTSN and Parana in South America and Altai in Asia. These increases were partially offset by lower margins and margin percentages at Deepwater in Texas and Borsod. Competitive Supply generated $140 million of income before income taxes and minority interest (or 11% of the net total) for 2003, which represents a $497 million improvement over the same period in 2002. The increase is primarily due to the write-off of $168 million of construction costs associated with Greystone, a project in Tennessee, and $83 million of construction costs during 2002 related to Lake Worth, a project in Florida. Operationally, during 2003 increases at CTSN in Argentina and the New York plants were partially offset by decreases at Parana in Argentina, Panama, Borsod in Hungary and Deepwater in Texas. Large Utilities ($ in millions) 2003 2002 Variance ------ ------ -------- Segment revenues $3,301 $3,150 $151 % of total revenues 39% 43% (4)% Gross margin $762 $687 $75 % of segment revenues 23% 22% 1% Income (loss) before income taxes and minority interest $380 $(978) $1,358 % of income before income taxes and minority interest from segments 31% (113)% 144% The Large Utilities segment is comprised of the large integrated utilities that serve nearly 7 million customers in North America, the Caribbean and South America. The Large Utility businesses include IPALCO in Indiana, EDC in Venezuela and Eletropaulo in Brazil. For 2003, revenues for Large Utilities were $3,301 million and represented 39% of total revenues for the year. Revenues for Large Utilities increased $151 million, or 5%, compared to 2002. Eletropaulo's revenues for the year increased due to appreciation of the Brazilian Real compared to the same quarter of 2002. EDC's revenues decreased due to devaluation of the Venezuelan Bolivar partially offset by a higher demand and a tariff increase. IPALCO had a slight increase year over year. The gross margin as a percentage of revenues for the Large Utility segment was 23% for 2003 compared to 22% for 2002. The South America gross margin increased mainly due to an impairment charge taken for Cemig in the fourth quarter of 2002. EDC's gross margin increased due to higher demand and increased tariffs in 2003 compared to 2002. IPALCO experienced a lower margin and margin percentage due to milder weather and higher operating and maintenance costs in 2003. Overall, gross margin for Large Utilities increased to $762 million for 2003 from $687 million for 2002. Large Utilities generated $380 million of income before income taxes and minority interest (or 31% of the net total) for 2003, up from a loss of $(978) million for the same period in 2002. The increase relates primarily to impairment charges taken in 2002 for Eletropaulo and Cemig, which were not recurring in 2003. Growth Distribution ($ in millions) 2003 2002 Variance ------ ---- -------- Segment revenues $1,126 $868 $258 % of total revenues 13% 12% 1% Gross margin $184 $15 $169 % of segment revenues 16% 2% 14% Income (loss) before income taxes and minority interest $115 $(193) $308 % of income before income taxes and minority interest from segments 9% (22)% 31% The Growth Distribution segment, serving nearly 4 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 2003, revenues were $1,126 million, a 1% increase over 2002, and represented 13% of total revenues for the year. The Caribbean and South America represent the most significant contributors with 67% of Growth Distribution revenues, while Europe/Africa contributes the remaining 33%. There were increases in revenues at Eden & Edes and Edelap in Argentina, Sonel in Cameroon and Clesa and Caess in El Salvador. These were partially offset by reductions at Sul in Brazil. The gross margin as a percentage of revenues for the Growth Distribution segment was 16% for 2003, an increase from 2% for 2002. Gross margin and gross margin percentages increased at Sonel in Cameroon and Caess in El Salvador. Additionally, there was a nonrecurring charge taken in 2002 for the write-off of $141 million related to MAE settlements at Sul in Brazil that was not recurring in 2003. These increases were partially offset by decreased gross margins at Eden, Edes and Edelap in Argentina. Overall, the gross margin for the Growth Distribution segment increased to $184 million for 2003. Growth Distribution businesses generated $115 million of income before income taxes and minority interest for 2003, an increase of $308 million from a loss before income taxes of $(193) million for 2002. Income before income taxes and minority interest increased at Sul in Brazil and Caess in El Salvador. These increases were partially offset by lower operating margins at Eden & Edes in Argentina. Additionally, the charge taken in 2002 for the write-off of $141 million related to MAE settlements at Sul in Brazil contributed to the change. THE AES CORPORATION -- Supplemental Data - ---------------------------------------------------- ($ in millions, except Total Assets in billions) ---------------------------2002------------------------ 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year GEOGRAPHIC: North America Revenues $ 489 $ 491 $ 569 $ 538 $ 2,087 Income before Income Taxes and Minority Interest $ 137 $ 139 $ 6 $ (2) $ 280 Caribbean (1) Revenues $ 313 $ 296 $ 271 $ 314 $ 1,194 Income before Income Taxes and Minority Interest $ 72 $ 91 $ 59 $ (51) $ 171 South America Revenues $ 786 $ 706 $ 710 $ 684 $ 2,886 Income before Income Taxes and Minority Interest $ (38) $ (307) $ (285) $ (983) $(1,613) Europe/Africa Revenues $ 217 $ 176 $ 194 $ 234 $ 821 Income before Income Taxes and Minority Interest $ 56 $ 30 $ 18 $ 62 $ 166 Asia Revenues $ 100 $ 108 $ 88 $ 96 $ 392 Income before Income Taxes and Minority Interest $ 41 $ 46 $ 26 $ 20 $ 133 Corporate (3) Income before Income Taxes and Minority Interest $ (124) $ (117) $ (96) $ (144) $ (481) SEGMENTS: Contract Generation Revenues $ 652 $ 632 $ 598 $ 668 $ 2,550 Gross Margin (2) $ 272 $ 260 $ 242 $ 291 $ 1,065 Income before Income Taxes and Minority Interest $ 190 $ 166 $ 155 $ 154 $ 665 Competitive Supply Revenues $ 192 $ 177 $ 214 $ 229 $ 812 Gross Margin (2) $ 33 $ 35 $ 53 $ 62 $ 183 Income before Income Taxes and Minority Interest $ (104) $ (49) $ (130) $ (74) $ (357) Large Utilities Revenues $ 768 $ 863 $ 783 $ 736 $ 3,150 Gross Margin (2) $ 232 $ 186 $ 199 $ 70 $ 687 Income before Income Taxes and Minority Interest $ 169 $ 39 $ (192) $ (994) $ (978) Growth Distribution Revenues $ 293 $ 105 $ 237 $ 233 $ 868 Gross Margin (2) $ 75 $ (93) $ 45 $ (12) $ 15 Income before Income Taxes and Minority Interest $ 13 $ (157) $ (9) $ (40) $ (193) Corporate (3) Income before Income Taxes and Minority Interest $ (124) $ (117) $ (96) $ (144) $ (481) ADDITIONAL INFORMATION: Revenues $ 1,905 $ 1,777 $ 1,832 $ 1,866 $ 7,380 Gross Margin (2) $ 612 $ 388 $ 539 $ 411 $ 1,950 Gross Margin Percentage (2) 32% 22% 29% 22% 26% Income before Income Taxes and Minority Interest $ 144 $ (118) $ (272) $(1,098) $(1,344) Diluted EPS from Continuing Operations(4) $ 0.17 $ (0.18) $ (0.37) $ (2.58) $ (2.99) Total Assets (billions) $ 40 $ 39 $ 37 $ 34 $ 34 Depreciation and Amortization $ 168 $ 169 $ 162 $ 165 $ 664 FAS 133 Gain (Loss)(5) $ 4 $ 43 $ -- $ (45) $ 2 Foreign Exchange Gain (Loss) from Brazil(5) $ (10) $ (85) $ (203) $ 46 $ (252) Foreign Exchange Gain (Loss) from Argentina(5) $ (82) $ (52) $ -- $ (5) $ (139) Foreign Exchange Gain (Loss) from Venezuela(5) $ 65 $ 25 $ 21 $ (72) $ 39 (1) Includes Venezuela and Colombia. (2) Gross Margin is revenues reduced by cost of sales and services. (3) Corporate consists of interest expense and corporate and business development expenses. Revenue and Gross Margin for Corporate equal zero. (4) The sum of these amounts do not equal the annual amount due to rounding or because the quarterly calculations are based on varying numbers of shares outstanding. (5) Amount is net of the income tax effect.
---------------------------2003------------------------ 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year GEOGRAPHIC: North America Revenues $ 546 $ 507 $ 581 $ 525 $ 2,159 Income before Income Taxes and Minority Interest $ 120 $ 100 $ 134 $ 121 $ 475 Caribbean (1) Revenues $ 347 $ 373 $ 387 $ 421 $ 1,528 Income before Income Taxes and Minority Interest $ 56 $ 20 $ 83 $ 57 $ 216 South America Revenues $ 675 $ 796 $ 908 $ 929 $ 3,308 Income before Income Taxes and Minority Interest $ 68 $ 143 $ 64 $ 53 $ 328 Europe/Africa Revenues $ 236 $ 209 $ 217 $ 252 $ 914 Income before Income Taxes and Minority Interest $ 64 $ 22 $ (55) $ 24 $ 55 Asia Revenues $ 107 $ 107 $ 138 $ 154 $ 506 Income before Income Taxes and Minority Interest $ 42 $ 46 $ 53 $ 19 $ 160 Corporate (3) Income before Income Taxes and Minority Interest $ (137) $ (106) $ (148) $ (203) $ (594) SEGMENTS: Contract Generation Revenues $ 716 $ 735 $ 817 $ 840 $ 3,108 Gross Margin (2) $ 291 $ 285 $ 327 $ 364 $ 1,267 Income before Income Taxes and Minority Interest $ 169 $ 142 $ 103 $ 185 $ 599 Competitive Supply Revenues $ 229 $ 196 $ 230 $ 225 $ 880 Gross Margin (2) $ 69 $ 45 $ 59 $ 47 $ 220 Income before Income Taxes and Minority Interest $ 70 $ 41 $ 37 $ (8) $ 140 Large Utilities Revenues $ 702 $ 778 $ 908 $ 913 $ 3,301 Gross Margin (2) $ 165 $ 163 $ 244 $ 190 $ 762 Income before Income Taxes and Minority Interest $ 73 $ 91 $ 127 $ 89 $ 380 Growth Distribution Revenues $ 264 $ 283 $ 276 $ 303 $ 1,126 Gross Margin (2) $ 50 $ 45 $ 46 $ 43 $ 184 Income before Income Taxes and Minority Interest $ 38 $ 57 $ 12 $ 8 $ 115 Corporate (3) Income before Income Taxes and Minority Interest $ (137) $ (106) $ (148) $ (203) $ (594) ADDITIONAL INFORMATION: Revenues $ 1,911 $ 1,992 $ 2,231 $ 2,281 $ 8,415 Gross Margin (2) $ 575 $ 538 $ 676 $ 644 $ 2,433 Gross Margin Percentage (2) 30% 27% 30% 28% 29% Income before Income Taxes and Minority Interest $ 213 $ 225 $ 131 $ 71 $ 640 Diluted EPS from Continuing Operations(4) $ 0.23 $ 0.24 $ 0.10 $ 0.01 $ 0.56 Total Assets (billions) $ 33 $ 34 $ 30 $ 30 $ 30 Depreciation and Amortization $ 173 $ 182 $ 196 $ 187 $ 738 FAS 133 Gain (Loss)(5) $ (8) $ (18) $ (11) $ (3) $ (40) Foreign Exchange Gain (Loss) from Brazil(5) $ 22 $ 82 $ (19) $ -- $ 85 Foreign Exchange Gain (Loss) from Argentina(5) $ 33 $ 21 $ (23) $ (7) $ 24 Foreign Exchange Gain (Loss) from Venezuela(5) $ 4 $ (18) $ 10 $ 5 $ 1 (1) Includes Venezuela and Colombia. (2) Gross Margin is revenues reduced by cost of sales and services. (3) Corporate consists of interest expense and corporate and business development expenses. Revenue and Gross Margin for Corporate equal zero. (4) The sum of these amounts do not equal the annual amount due to rounding or because the quarterly calculations are based on varying numbers of shares outstanding. (5) Amount is net of the income tax effect.
THE AES CORPORATION CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2003 AND 2002 ($ in millions) December 31, 2003 December 31, 2002 ----------------- ----------------- Assets: Current assets: Cash and cash equivalents $ 1,737 $ 792 Restricted cash 394 158 Short term investments 189 177 Accounts receivable, net of reserves of $291 and $310, respectively 1,211 1,001 Inventory 376 353 Receivable from affiliates 3 25 Deferred income taxes - current 136 138 Prepaid expenses 64 27 Other current assets 677 923 Current assets of held for sale and discontinued businesses 205 763 ---------------- ----------------- Total current assets 4,992 4,357 Property, Plant and Equipment: Land 733 687 Electric generation and distribution assets 21,152 18,176 Accumulated depreciation (4,954) (4,031) Construction in progress 1,278 2,349 ---------------- ----------------- Property, plant and equipment, net 18,209 17,181 Other assets: Deferred financing costs, net 430 390 Investment in and advances to affiliates 648 678 Debt service reserves and other deposits 428 508 Goodwill, net 1,378 1,373 Deferred income taxes - noncurrent 781 967 Long-term assets of held for sale and discontinued businesses 750 7,332 Other assets 1,992 1,482 ---------------- ----------------- Total other assets 6,407 12,730 ---------------- ----------------- Total Assets $ 29,608 $ 34,268 ================ ================= Liabilities and Stockholders' Equity: Current liabilities: Accounts payable $ 1,245 $ 1,018 Accrued interest 561 331 Accrued and other liabilities 1,156 1,091 Current liabilities of held for sale and discontinued businesses 699 763 Recourse debt-current portion 77 26 Non-recourse debt-current portion 2,769 3,277 ---------------- ----------------- Total current liabilities 6,507 6,506 Long-term liabilities: Recourse debt 5,862 6,755 Non-recourse debt 11,015 10,044 Deferred income taxes 1,051 1,186 Long-term liabilities of held for sale and discontinued businesses 94 5,738 Pension liabilities 947 1,166 Other long-term liabilities 2,702 2,557 ---------------- ----------------- Total long-term liabilities 21,671 27,446 Minority Interest, including discontinued businesses of $12 and $41 in 2003 And 2002 805 657 Stockholders' equity (deficit): Common stock 6 6 Additional paid-in capital 5,737 5,312 Accumulated deficit (1,103) (700) Accumulated other comprehensive loss (4,015) (4,959) ---------------- ----------------- Total stockholders' equity (deficit) 625 (341) ---------------- ----------------- Total Liabilities and Stockholders' Equity (Deficit) $ 29,608 $ 34,268 ================ =================
THE AES CORPORATION CAPITAL RESOURCES AND OTHER BALANCE SHEET DATA ($ in billions) December 31, December 31, Capitalization: 2003 2002 ------------ ------------ Recourse debt $ 5.94 $ 6.78 Non-recourse debt 13.78 13.32 ------------ ------------ Total debt 19.72 20.10 Minority Interest 0.81 0.66 Stockholders' equity 0.63 (0.34) ------------ ------------ Total capitalization $ 21.16 $ 20.42 ============ ============
Selected Balance Sheet Data by Geographic Region: Property, Plant Total Non-recourse December 31, 2003 & Equipment Assets Debt --------------------------------------------------- North America $ 5.21 $ 6.44 $ 3.86 Caribbean 4.68 5.83 2.49 South America 5.14 10.00 5.21 Europe/Africa 1.50 2.75 0.89 Asia 1.66 2.49 1.34 Discontinued Operations - 0.96 - Corporate 0.02 1.14 - December 31, 2002 North America $ 5.26 $ 6.53 $ 3.77 Caribbean 5.00 6.07 2.79 South America 4.23 8.66 4.96 Europe/Africa 1.30 2.32 0.74 Asia 1.38 2.19 1.06 Discontinued Operations - 8.10 - Corporate 0.01 0.40 - Selected Balance Sheet Data by Line of Business: Property, Plant Total Non-recourse December 31, 2003 & Equipment Assets Debt --------------------------------------------------- Contract Generation $ 9.12 $ 13.45 $ 7.62 Competitive Supply 1.47 2.14 0.51 Large Utilities 6.03 9.05 4.55 Growth Distribution 1.57 2.87 1.10 Discontinued Operations - 0.96 - Corporate 0.02 1.14 - December 31, 2002 Contract Generation $ 8.06 $ 12.09 $ 6.54 Competitive Supply 2.13 2.80 1.07 Large Utilities 5.64 8.49 4.65 Growth Distribution 1.34 2.39 1.06 Discontinued Operations - 8.10 - Corporate 0.01 0.40 -
Item 12. Results of Operations and Financial Condition On February 5, 2004, the AES Corporation issued a press release setting forth its financial results for the year ended December 31, 2003 and the fourth quarter of the year ended December 31, 2003. A copy of the press release is attached hereto as Exhibit 99.1 and hereby incorporated by reference solely in Item 12 of this Form 8-K. 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: February 5, 2004 By: /s/ Vincent W. Mathis --------------------------------- Name: Vincent W. Mathis Title: Assistant General Counsel INDEX TO EXHIBITS EXHIBIT EXHIBIT NUMBER 99.1 Press Release dated February 5, 2004. EX-99.1 3 feb0404_ex9901.txt EXHIBIT 99.1 AES REPORTS $0.56 EPS FROM CONTINUING OPERATIONS FOR 2003 Consolidated Net Cash From Operating Activities $1.6 Billion Company Expects Double-Digit EPS Growth in 2004 - -------------------------------------------------------------------------------- ARLINGTON, VA, February 5, 2004 -- The AES Corporation (NYSE: AES) today reported 2003 income from continuing operations of $336 million, or diluted earnings per share of $0.56. These results compare to a 2002 loss from continuing operations of $(1.609) billion, or $(2.99) per diluted share. Sales for the full year were $8.415 billion, an increase of 14% over 2002 sales of $7.380 billion. Consolidated net cash provided by operating activities increased 9% to $1.576 billion, with subsidiary distributions to parent and qualified holding companies of $1.054 billion for the year, in line with the Company's 2003 target. For the fourth quarter of 2003, the Company reported income from continuing operations of $4 million, or $0.01 per diluted share, compared to a loss from continuing operations of $(1.407) billion or $(2.58) per diluted share in the fourth quarter of 2002. Fourth quarter sales increased 22% to $2.281 billion compared to the year-ago period. For the quarter, consolidated net cash provided by operating activities was $490 million, substantially above last year's result. Subsidiary distributions to parent and qualified holding companies were $255 million, slightly lower than distributions in the fourth quarter of 2002. Results from continuing operations for the 2003 fourth quarter and full year reflect the Company' intention to dispose of two gas-fired merchant generation facilities in the U.S., a gas-fired generation facility in Colombia, and a distribution business in the Dominican Republic, having determined they no longer fit with the Company's business strategy. As a result, these operations have been recorded as discontinued operations in the fourth quarter and full year 2003 results. Comparisons with prior periods have been adjusted to exclude results from those operations. Including the costs for discontinued operations and an accounting change, the company reported sharply narrower losses. For 2003, the company had a net loss of $(403) million, or $(0.67) per diluted share, compared to a net loss of $(3.509) billion or $(6.51) per diluted share in 2002. The company reported a fourth quarter net loss of $(444) million or $(0.71) per diluted share, compared to a net loss of $(2.766) billion or $(5.08) per diluted share in the fourth quarter of 2002. Commenting on the results, President and Chief Executive Officer Paul Hanrahan said, "We have met our financial restructuring and performance goals for 2003. We enter 2004 a stronger company with increased financial flexibility, and we look to further strengthen our credit quality in the future. With the planned asset disposals announced today and the recently completed Brazil restructuring, we have repositioned the AES business portfolio to improve earnings stability through reduced exposure to the U.S. merchant market and to exchange rate fluctuations in Brazil. Combined with our focus on improving the operating performance of our businesses, this sets the stage to leverage our strengths for disciplined growth in attractive markets going forward." Added Chief Financial Officer Barry Sharp, "In 2003 we generated strong cash flow and improved our business performance in a challenging operating environment in many parts of the world. We demonstrated our ability to improve parent company liquidity, strengthen the balance sheet, and refinance significant portions of our debt portfolio at attractive rates and for longer tenors. We are in an excellent position to use our operating cash flow to support further debt reduction and our capital spending program." Forward-Looking Guidance for 2004 AES expects its 2004 diluted earnings per share from continuing operations to be $0.62, under generally accepted accounting principles. Net consolidated cash flow from operating activities is expected to be between $1.6 and $1.7 billion. The operating scenario underlying this guidance assumes a number of market factors, including foreign exchange rates, commodity prices, interest rates, asset impairments or disposals, as well as other significant factors could make actual results vary from this guidance. Additional guidance elements are presented in the company's 2003 Financial Review and 2004 Outlook presentation. 2003 Financial Review and 2004 Outlook Conference Call Information AES will host a conference call today to discuss these results and the outlook for 2004. The call will be held at 9:00am Eastern Standard Time (EST). The call may be accessed via a live webcast which will be available at www.aes.com, or by telephone in listen-only mode at (877) 691-0877. International callers should dial (973) 582-2741. Please call at least fifteen minutes before the scheduled start time. You will be requested to provide your name, e-mail address, and affiliation. The company's 2003 Financial Review and 2004 Outlook presentation is available at www.aes.com. A replay of the conference call will be available at www.aes.com, or by telephone from approximately 12:00pm EST on Thursday, February 5, 2004 until 6:00pm EST on Friday, February 13, 2004. Callers should dial (877) 519-4471 and when prompted provide reservation number 4410785, followed by the pound (#) key. International dialers should dial (973) 341-3080. Safe Harbor Disclosure Information contained in this release constitutes forward-looking information statements within the meaning of the Securities Act of 1933 and of the Securities Exchange Act of 1934. These statements are not intended to be a guarantee of performance, but instead constitute AES's current expectation based on reasonable assumptions. Actual events and results may differ materially from those projected. In addition to those listed below, important factors that could affect actual results are discussed in AES's filings with the Securities Exchange Commission, and readers are encouraged to read those filings to learn more about the risk factors associated with AES's businesses. "Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: This news release may contain "forward-looking statements" regarding The AES Corporation's business. These statements are not historical facts, but statements that involve risks and uncertainties. Actual results could differ materially from those projected in these forward-looking statements. For a discussion of such risks and uncertainties, see "Risk Factors" in the Company's Annual Report or Form 10-K for the most recently ended fiscal year. About AES AES is a leading global power company, with 2003 sales of $8.4 billion. AES delivers 45,000 megawatts of electricity to customers in 27 countries through 116 power facilities and 17 distribution companies. Our 32,000 people are committed to operational excellence and meeting the world's growing power needs. To learn more about AES, please visit www.aes.com or contact AES investor relations at investing@aes.com. Contact: Scott Cunningham 703-558-4875 THE AES CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE QUARTERS ENDED DECEMBER 31, 2003 AND 2002 - -------------------------------------------------------------------------------- Quarter Quarter Ended Ended ($ in millions, except per share amounts) 12/31/2003 12/31/2002 - -------------------------------------------------------------------------------- REVENUES: Sales and services $ 2,281 $ 1,866 OPERATING COSTS AND EXPENSES: Cost of sales and services 1,637 1,455 Corporate and business development office expenses 59 48 Other operating expense, net 16 23 Goodwill impairment expense 11 675 Asset impairment expense 43 127 ------- ------- Total operating costs and expenses 1,766 2,328 ------- ------- OPERATING INCOME (LOSS) 515 (462) OTHER INCOME AND (EXPENSE): Interest expense, net (395) (379) Other nonoperating expense, net (7) (3) Foreign currency transaction losses (27) (16) Loss on sale of investments (52) - Equity in earnings (losses) of affiliates 37 (238) ------- ------- INCOME (LOSS) BEFORE INCOME TAXES AND MINORITY INTEREST 71 (1,098) Income tax expense 34 302 Minority interest expense (income) 33 7 ------- ------- INCOME (LOSS) FROM CONTINUING OPERATIONS 4 (1,407) Loss from operations of discontinued components (net of income tax benefit of $72 and $423, respectively) (490) (1,359) ------- ------- LOSS BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE (486) (2,766) Cumulative effect of accounting change (net of income taxes of $23) 42 - ------- -------- NET LOSS $ (444) $(2,766) ======= ======== DILUTED EARNINGS PER SHARE: Income from continuing operations $ 0.01 $ (2.58) Discontinued operations (0.79) (2.50) Cumulative effect of accounting change 0.07 - ------- -------- Total $ (0.71) $ (5.08) ======= ======== Diluted weighted average shares outstanding (in millions) 628 545 === === THE AES CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002 - -------------------------------------------------------------------------------- Year Year Ended Ended ($ in millions, except per share amounts) 12/31/2003 12/31/2002 - -------------------------------------------------------------------------------- REVENUES: Sales and services $ 8,415 $ 7,380 OPERATING COSTS AND EXPENSES: Cost of sales and services 5,982 5,430 Corporate and business development office expenses 157 112 Other operating expense (income), net 46 (37) Goodwill impairment expense 11 675 Asset impairment expense 148 295 -------- -------- Total operating costs and expenses 6,344 6,475 -------- -------- OPERATING INCOME 2,071 905 OTHER INCOME AND (EXPENSE): Interest expense, net (1,706) (1,485) Other nonoperating income, net 107 13 Foreign currency transaction gains (losses) 127 (459) Equity in earnings (losses) of affiliates 94 (203) Loss on sale or write-down of investments (53) (115) -------- -------- INCOME (LOSS) BEFORE INCOME TAXES AND MINORITY INTEREST 640 (1,344) Income tax expense 194 285 Minority interest expense (income) 110 (20) -------- -------- INCOME (LOSS) FROM CONTINUING OPERATIONS 336 (1,609) Loss from operations of discontinued components (net of income tax benefit of $72 and $407, respectively) (780) (1,554) -------- -------- LOSS BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE (444) (3,163) Cumulative effect of accounting change (net of income taxes of $22 and $72) 41 (346) -------- -------- NET LOSS $ (403) (3,509) ======== ======== DILUTED EARNINGS PER SHARE: Income from continuing operations $ 0.56 $ (2.99) Discontinued operations (1.30) (2.88) Cumulative effect of accounting change 0.07 (0.64) -------- -------- Total $ (0.67) $ (6.51) ======== ======== Diluted weighted average shares outstanding (in millions) 598 539 === === Business Segment Results AES's business segments, which include Contract Generation, Large Utilities, Competitive Supply and Growth Distribution, generated combined income before income taxes and minority interest, excluding the Corporate segment, of $1,234 million for 2003, as compared with a loss of $(863) million for 2002. Total income before income taxes and minority interest, including the Corporate segment, was $640 million for 2003, as compared with a loss of $(1,344) million for 2002. On a geographic basis, income before income taxes and minority interest from the business segments was generated $475 million from North America, $328 million from South America, $160 million from Asia, $55 million from Europe and Africa and $216 million from the Caribbean. During the fourth quarter of 2003, AES decided to exit Wolf Hollow, a 730 MW gas plant in Texas, Granite Ridge, a 720 MW gas plant in New Hampshire, and Termomamonal, a 90 MW gas plant in Colombia, all of which were previously reported in the competitive supply. Additionally, AES decided to exit Ede Este, a distribution company in the Dominican Republic which was previously reported in the growth distribution segment. All amounts have been restated to reflect discontinued operations that have occurred in the current and prior periods. Contract Generation ($ in millions) 2003 2002 Variance ------ ------ -------- Segment revenues $3,108 $2,550 $558 % of total revenues 37% 35% 2% Gross margin $1,267 $1,065 $202 % of segment revenues 41% 42% (1)% Income before income taxes and minority interest $599 $665 $(66) % of income before income taxes and minority interest from segments 49% 77% (28)% Contract Generation consists of multiple power generation facilities located around the world that generally have contractually limited their exposure to commodity price risks and electricity price volatility by entering into long-term (5 years or longer) power purchase agreements for 75% or more of their expected output capacity. For 2003, Contract Generation revenues were $3,108 million and represented 37% of total revenues, an increase of $558 million over 2002. The most significant contributions came from North and South America, which in aggregate comprised 58% of Contract Generation revenue for the year as compared to 67% for the same period in 2002. Revenues were enhanced with the addition of recently completed contract generation businesses totaling 1,451 mw, including Red Oak in New Jersey (832 mw gas), Puerto Rico (454 mw coal), Kelanitissa in Sri Lanka (165 mw gas), Barka in Oman (427 mw gas), Ras Laffan in Qatar (750 mw gas) and Andres in the Dominican Republic (310 mw gas). Revenues also improved at Los Mina in the Dominican Republic, Merida III in Mexico, Tiszai in Hungary, Gener in Chile and Tiete in Brazil. These improvements were offset by declines at Shady Point in Oklahoma due to a step-down in the contracted capacity payment and at Lal Pir and Pak Gen in Pakistan. The gross margin for the Contract Generation segment was $1,267 million for 2003, an increase of 19% from 2002. Gross margin increases were attributable to Tiete in Brazil, and Ebute in Nigeria. Additionally, new plants that came online contributed to the increase. These increases were partially offset by declines in gross margin at Beaver Valley and Ironwood in Pennsylvania, Shady Point in Oklahoma, Kilroot in Northern Ireland and the Chigen plants in China. As a percentage of revenues, the gross margin for the Contract Generation segment was 41% for 2003 compared to 42% for 2002. Contract Generation generated $599 million of income before income taxes and minority interest (or 49% of the net total) for 2003, a decrease from $665 million for 2002. South America showed an increase due to Tiete in Brazil. North America experienced declines due to Beaver Valley in Pennsylvania, Warrior Run in Maryland due to significant FAS 133 mark-to-market gains in 2002 related to their power purchase agreement, Shady Point in Oklahoma due to a step-down in the contracted capacity payment in 2003 and Hawaii due to write-offs of deferred financing and swap breakage costs of $22 million related to their non-recourse debt refinancing during 2003. These declines were partially offset by increases in the Southland plants in California. The Caribbean experienced an overall increase due to the start of commercial operations at Andres in the Dominican Republic and Puerto Rico offset slightly by the write-off of project development costs related to El Faro, a terminated business development project in Honduras. Europe/Africa experienced a significant decrease due to the $76 million write-off of previously capitalized costs of Bujagali, a construction project in Uganda that the company decided to terminate during the third quarter of 2003 and Zeg, a construction project in Poland that the company decided to terminate during the fourth quarter of 2003. Asia had overall decreases due to declines at Lal Pir and Pak Gen in Pakistan and Chigen in China which were partially offset by the start of commercial operations at Barka and Ras Laffan. Competitive Supply ($ in millions) 2003 2002 Variance ---- ---- -------- Segment revenues $880 $812 $68 % of total revenues 10% 11% (1)% Gross margin $220 $183 $37 % of segment revenues 25% 23% 2% Income (loss) before income taxes and minority interest $140 $(357) $497 % of income before income taxes and minority interest from segments 11% (41)% 52% Competitive Supply consists primarily of the power plants selling electricity directly to wholesale customers in competitive markets and, as a result, the profitability of such plants are generally more sensitive to fluctuations in the market price of electricity, natural gas and coal, in particular. For 2003, Competitive Supply revenues were $880 million and represented 10% of total revenues for the year. The most significant contributions were from the competitive markets of the U.S., which comprised 51% of Competitive Supply revenue for 2003 and 2002. Competitive market prices increased year over year in New York, which resulted in increased revenue in the New York plants. Additionally, other plants showed revenue improvements, including Alicura and Parana in Argentina, Panama in the Caribbean and Ekibastuz in Asia. These increases were partially offset by decreased revenues from Deepwater in Texas due to an outage during the third quarter of 2003 and from Borsod in Hungary. Gross margin as a percentage of revenues for the Competitive Supply segment was 25% for 2003, an increase from 23% for 2002. Overall, the gross margin for Competitive Supply increased to $220 million from $183 million. Margins and margin percentages were higher at the New York plants, CTSN and Parana in South America and Altai in Asia. These increases were partially offset by lower margins and margin percentages at Deepwater in Texas and Borsod. Competitive Supply generated $140 million of income before income taxes and minority interest (or 11% of the net total) for 2003, which represents a $497 million improvement over the same period in 2002. The increase is primarily due to the write-off of $168 million of construction costs associated with Greystone, a project in Tennessee, and $83 million of construction costs during 2002 related to Lake Worth, a project in Florida. Operationally, during 2003 increases at CTSN in Argentina and the New York plants were partially offset by decreases at Parana in Argentina, Panama, Borsod in Hungary and Deepwater in Texas. Large Utilities ($ in millions) 2003 2002 Variance ------ ------ -------- Segment revenues $3,301 $3,150 $151 % of total revenues 39% 43% (4)% Gross margin $762 $687 $75 % of segment revenues 23% 22% 1% Income (loss) before income taxes and minority interest $380 $(978) $1,358 % of income before income taxes and minority interest from segments 31% (113)% 144% The Large Utilities segment is comprised of the large integrated utilities that serve nearly 7 million customers in North America, the Caribbean and South America. The Large Utility businesses include IPALCO in Indiana, EDC in Venezuela and Eletropaulo in Brazil. For 2003, revenues for Large Utilities were $3,301 million and represented 39% of total revenues for the year. Revenues for Large Utilities increased $151 million, or 5%, compared to 2002. Eletropaulo's revenues for the year increased due to appreciation of the Brazilian Real compared to the same quarter of 2002. EDC's revenues decreased due to devaluation of the Venezuelan Bolivar partially offset by a higher demand and a tariff increase. IPALCO had a slight increase year over year. The gross margin as a percentage of revenues for the Large Utility segment was 23% for 2003 compared to 22% for 2002. The South America gross margin increased mainly due to an impairment charge taken for Cemig in the fourth quarter of 2002. EDC's gross margin increased due to higher demand and increased tariffs in 2003 compared to 2002. IPALCO experienced a lower margin and margin percentage due to milder weather and higher operating and maintenance costs in 2003. Overall, gross margin for Large Utilities increased to $762 million for 2003 from $687 million for 2002. Large Utilities generated $380 million of income before income taxes and minority interest (or 31% of the net total) for 2003, up from a loss of $(978) million for the same period in 2002. The increase relates primarily to impairment charges taken in 2002 for Eletropaulo and Cemig, which were not recurring in 2003. Growth Distribution ($ in millions) 2003 2002 Variance ------ ---- -------- Segment revenues $1,126 $868 $258 % of total revenues 13% 12% 1% Gross margin $184 $15 $169 % of segment revenues 16% 2% 14% Income (loss) before income taxes and minority interest $115 $(193) $308 % of income before income taxes and minority interest from segments 9% (22)% 31% The Growth Distribution segment, serving nearly 4 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 2003, revenues were $1,126 million, a 1% increase over 2002, and represented 13% of total revenues for the year. The Caribbean and South America represent the most significant contributors with 67% of Growth Distribution revenues, while Europe/Africa contributes the remaining 33%. There were increases in revenues at Eden & Edes and Edelap in Argentina, Sonel in Cameroon and Clesa and Caess in El Salvador. These were partially offset by reductions at Sul in Brazil. The gross margin as a percentage of revenues for the Growth Distribution segment was 16% for 2003, an increase from 2% for 2002. Gross margin and gross margin percentages increased at Sonel in Cameroon and Caess in El Salvador. Additionally, there was a nonrecurring charge taken in 2002 for the write-off of $141 million related to MAE settlements at Sul in Brazil that was not recurring in 2003. These increases were partially offset by decreased gross margins at Eden, Edes and Edelap in Argentina. Overall, the gross margin for the Growth Distribution segment increased to $184 million for 2003. Growth Distribution businesses generated $115 million of income before income taxes and minority interest for 2003, an increase of $308 million from a loss before income taxes of $(193) million for 2002. Income before income taxes and minority interest increased at Sul in Brazil and Caess in El Salvador. These increases were partially offset by lower operating margins at Eden & Edes in Argentina. Additionally, the charge taken in 2002 for the write-off of $141 million related to MAE settlements at Sul in Brazil contributed to the change. THE AES CORPORATION -- Supplemental Data - ---------------------------------------------------- ($ in millions, except Total Assets in billions) ---------------------------2002------------------------ 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year GEOGRAPHIC: North America Revenues $ 489 $ 491 $ 569 $ 538 $ 2,087 Income before Income Taxes and Minority Interest $ 137 $ 139 $ 6 $ (2) $ 280 Caribbean (1) Revenues $ 313 $ 296 $ 271 $ 314 $ 1,194 Income before Income Taxes and Minority Interest $ 72 $ 91 $ 59 $ (51) $ 171 South America Revenues $ 786 $ 706 $ 710 $ 684 $ 2,886 Income before Income Taxes and Minority Interest $ (38) $ (307) $ (285) $ (983) $(1,613) Europe/Africa Revenues $ 217 $ 176 $ 194 $ 234 $ 821 Income before Income Taxes and Minority Interest $ 56 $ 30 $ 18 $ 62 $ 166 Asia Revenues $ 100 $ 108 $ 88 $ 96 $ 392 Income before Income Taxes and Minority Interest $ 41 $ 46 $ 26 $ 20 $ 133 Corporate (3) Income before Income Taxes and Minority Interest $ (124) $ (117) $ (96) $ (144) $ (481) SEGMENTS: Contract Generation Revenues $ 652 $ 632 $ 598 $ 668 $ 2,550 Gross Margin (2) $ 272 $ 260 $ 242 $ 291 $ 1,065 Income before Income Taxes and Minority Interest $ 190 $ 166 $ 155 $ 154 $ 665 Competitive Supply Revenues $ 192 $ 177 $ 214 $ 229 $ 812 Gross Margin (2) $ 33 $ 35 $ 53 $ 62 $ 183 Income before Income Taxes and Minority Interest $ (104) $ (49) $ (130) $ (74) $ (357) Large Utilities Revenues $ 768 $ 863 $ 783 $ 736 $ 3,150 Gross Margin (2) $ 232 $ 186 $ 199 $ 70 $ 687 Income before Income Taxes and Minority Interest $ 169 $ 39 $ (192) $ (994) $ (978) Growth Distribution Revenues $ 293 $ 105 $ 237 $ 233 $ 868 Gross Margin (2) $ 75 $ (93) $ 45 $ (12) $ 15 Income before Income Taxes and Minority Interest $ 13 $ (157) $ (9) $ (40) $ (193) Corporate (3) Income before Income Taxes and Minority Interest $ (124) $ (117) $ (96) $ (144) $ (481) ADDITIONAL INFORMATION: Revenues $ 1,905 $ 1,777 $ 1,832 $ 1,866 $ 7,380 Gross Margin (2) $ 612 $ 388 $ 539 $ 411 $ 1,950 Gross Margin Percentage (2) 32% 22% 29% 22% 26% Income before Income Taxes and Minority Interest $ 144 $ (118) $ (272) $(1,098) $(1,344) Diluted EPS from Continuing Operations(4) $ 0.17 $ (0.18) $ (0.37) $ (2.58) $ (2.99) Total Assets (billions) $ 40 $ 39 $ 37 $ 34 $ 34 Depreciation and Amortization $ 168 $ 169 $ 162 $ 165 $ 664 FAS 133 Gain (Loss)(5) $ 4 $ 43 $ -- $ (45) $ 2 Foreign Exchange Gain (Loss) from Brazil(5) $ (10) $ (85) $ (203) $ 46 $ (252) Foreign Exchange Gain (Loss) from Argentina(5) $ (82) $ (52) $ -- $ (5) $ (139) Foreign Exchange Gain (Loss) from Venezuela(5) $ 65 $ 25 $ 21 $ (72) $ 39 (1) Includes Venezuela and Colombia. (2) Gross Margin is revenues reduced by cost of sales and services. (3) Corporate consists of interest expense and corporate and business development expenses. Revenue and Gross Margin for Corporate equal zero. (4) The sum of these amounts do not equal the annual amount due to rounding or because the quarterly calculations are based on varying numbers of shares outstanding. (5) Amount is net of the income tax effect.
---------------------------2003------------------------ 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Year GEOGRAPHIC: North America Revenues $ 546 $ 507 $ 581 $ 525 $ 2,159 Income before Income Taxes and Minority Interest $ 120 $ 100 $ 134 $ 121 $ 475 Caribbean (1) Revenues $ 347 $ 373 $ 387 $ 421 $ 1,528 Income before Income Taxes and Minority Interest $ 56 $ 20 $ 83 $ 57 $ 216 South America Revenues $ 675 $ 796 $ 908 $ 929 $ 3,308 Income before Income Taxes and Minority Interest $ 68 $ 143 $ 64 $ 53 $ 328 Europe/Africa Revenues $ 236 $ 209 $ 217 $ 252 $ 914 Income before Income Taxes and Minority Interest $ 64 $ 22 $ (55) $ 24 $ 55 Asia Revenues $ 107 $ 107 $ 138 $ 154 $ 506 Income before Income Taxes and Minority Interest $ 42 $ 46 $ 53 $ 19 $ 160 Corporate (3) Income before Income Taxes and Minority Interest $ (137) $ (106) $ (148) $ (203) $ (594) SEGMENTS: Contract Generation Revenues $ 716 $ 735 $ 817 $ 840 $ 3,108 Gross Margin (2) $ 291 $ 285 $ 327 $ 364 $ 1,267 Income before Income Taxes and Minority Interest $ 169 $ 142 $ 103 $ 185 $ 599 Competitive Supply Revenues $ 229 $ 196 $ 230 $ 225 $ 880 Gross Margin (2) $ 69 $ 45 $ 59 $ 47 $ 220 Income before Income Taxes and Minority Interest $ 70 $ 41 $ 37 $ (8) $ 140 Large Utilities Revenues $ 702 $ 778 $ 908 $ 913 $ 3,301 Gross Margin (2) $ 165 $ 163 $ 244 $ 190 $ 762 Income before Income Taxes and Minority Interest $ 73 $ 91 $ 127 $ 89 $ 380 Growth Distribution Revenues $ 264 $ 283 $ 276 $ 303 $ 1,126 Gross Margin (2) $ 50 $ 45 $ 46 $ 43 $ 184 Income before Income Taxes and Minority Interest $ 38 $ 57 $ 12 $ 8 $ 115 Corporate (3) Income before Income Taxes and Minority Interest $ (137) $ (106) $ (148) $ (203) $ (594) ADDITIONAL INFORMATION: Revenues $ 1,911 $ 1,992 $ 2,231 $ 2,281 $ 8,415 Gross Margin (2) $ 575 $ 538 $ 676 $ 644 $ 2,433 Gross Margin Percentage (2) 30% 27% 30% 28% 29% Income before Income Taxes and Minority Interest $ 213 $ 225 $ 131 $ 71 $ 640 Diluted EPS from Continuing Operations(4) $ 0.23 $ 0.24 $ 0.10 $ 0.01 $ 0.56 Total Assets (billions) $ 33 $ 34 $ 30 $ 30 $ 30 Depreciation and Amortization $ 173 $ 182 $ 196 $ 187 $ 738 FAS 133 Gain (Loss)(5) $ (8) $ (18) $ (11) $ (3) $ (40) Foreign Exchange Gain (Loss) from Brazil(5) $ 22 $ 82 $ (19) $ -- $ 85 Foreign Exchange Gain (Loss) from Argentina(5) $ 33 $ 21 $ (23) $ (7) $ 24 Foreign Exchange Gain (Loss) from Venezuela(5) $ 4 $ (18) $ 10 $ 5 $ 1 (1) Includes Venezuela and Colombia. (2) Gross Margin is revenues reduced by cost of sales and services. (3) Corporate consists of interest expense and corporate and business development expenses. Revenue and Gross Margin for Corporate equal zero. (4) The sum of these amounts do not equal the annual amount due to rounding or because the quarterly calculations are based on varying numbers of shares outstanding. (5) Amount is net of the income tax effect.
THE AES CORPORATION CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2003 AND 2002 ($ in millions) December 31, 2003 December 31, 2002 ----------------- ----------------- Assets: Current assets: Cash and cash equivalents $ 1,737 $ 792 Restricted cash 394 158 Short term investments 189 177 Accounts receivable, net of reserves of $291 and $310, respectively 1,211 1,001 Inventory 376 353 Receivable from affiliates 3 25 Deferred income taxes - current 136 138 Prepaid expenses 64 27 Other current assets 677 923 Current assets of held for sale and discontinued businesses 205 763 ---------------- ----------------- Total current assets 4,992 4,357 Property, Plant and Equipment: Land 733 687 Electric generation and distribution assets 21,152 18,176 Accumulated depreciation (4,954) (4,031) Construction in progress 1,278 2,349 ---------------- ----------------- Property, plant and equipment, net 18,209 17,181 Other assets: Deferred financing costs, net 430 390 Investment in and advances to affiliates 648 678 Debt service reserves and other deposits 428 508 Goodwill, net 1,378 1,373 Deferred income taxes - noncurrent 781 967 Long-term assets of held for sale and discontinued businesses 750 7,332 Other assets 1,992 1,482 ---------------- ----------------- Total other assets 6,407 12,730 ---------------- ----------------- Total Assets $ 29,608 $ 34,268 ================ ================= Liabilities and Stockholders' Equity: Current liabilities: Accounts payable $ 1,245 $ 1,018 Accrued interest 561 331 Accrued and other liabilities 1,156 1,091 Current liabilities of held for sale and discontinued businesses 699 763 Recourse debt-current portion 77 26 Non-recourse debt-current portion 2,769 3,277 ---------------- ----------------- Total current liabilities 6,507 6,506 Long-term liabilities: Recourse debt 5,862 6,755 Non-recourse debt 11,015 10,044 Deferred income taxes 1,051 1,186 Long-term liabilities of held for sale and discontinued businesses 94 5,738 Pension liabilities 947 1,166 Other long-term liabilities 2,702 2,557 ---------------- ----------------- Total long-term liabilities 21,671 27,446 Minority Interest, including discontinued businesses of $12 and $41 in 2003 And 2002 805 657 Stockholders' equity (deficit): Common stock 6 6 Additional paid-in capital 5,737 5,312 Accumulated deficit (1,103) (700) Accumulated other comprehensive loss (4,015) (4,959) ---------------- ----------------- Total stockholders' equity (deficit) 625 (341) ---------------- ----------------- Total Liabilities and Stockholders' Equity (Deficit) $ 29,608 $ 34,268 ================ =================
THE AES CORPORATION CAPITAL RESOURCES AND OTHER BALANCE SHEET DATA ($ in billions) December 31, December 31, Capitalization: 2003 2002 ------------ ------------ Recourse debt $ 5.94 $ 6.78 Non-recourse debt 13.78 13.32 ------------ ------------ Total debt 19.72 20.10 Minority Interest 0.81 0.66 Stockholders' equity 0.63 (0.34) ------------ ------------ Total capitalization $ 21.16 $ 20.42 ============ ============
Selected Balance Sheet Data by Geographic Region: Property, Plant Total Non-recourse December 31, 2003 & Equipment Assets Debt --------------------------------------------------- North America $ 5.21 $ 6.44 $ 3.86 Caribbean 4.68 5.83 2.49 South America 5.14 10.00 5.21 Europe/Africa 1.50 2.75 0.89 Asia 1.66 2.49 1.34 Discontinued Operations - 0.96 - Corporate 0.02 1.14 - December 31, 2002 North America $ 5.26 $ 6.53 $ 3.77 Caribbean 5.00 6.07 2.79 South America 4.23 8.66 4.96 Europe/Africa 1.30 2.32 0.74 Asia 1.38 2.19 1.06 Discontinued Operations - 8.10 - Corporate 0.01 0.40 - Selected Balance Sheet Data by Line of Business: Property, Plant Total Non-recourse December 31, 2003 & Equipment Assets Debt --------------------------------------------------- Contract Generation $ 9.12 $ 13.45 $ 7.62 Competitive Supply 1.47 2.14 0.51 Large Utilities 6.03 9.05 4.55 Growth Distribution 1.57 2.87 1.10 Discontinued Operations - 0.96 - Corporate 0.02 1.14 - December 31, 2002 Contract Generation $ 8.06 $ 12.09 $ 6.54 Competitive Supply 2.13 2.80 1.07 Large Utilities 5.64 8.49 4.65 Growth Distribution 1.34 2.39 1.06 Discontinued Operations - 8.10 - Corporate 0.01 0.40 -
The AES Corporation Parent Financial Information - ---------------------------------------------------------------------------------------------------------------------- Parent only data: last four quarters ($ in millions) 4 Quarters Ended March 31, June 30, September 30, December 31, Total subsidiary distributions & returns of capital to Parent 2003 2003 2003 2003 Actual Actual Actual Actual -------- -------- ------------- ------------ Subsidiary distributions to Parent $ 658 $ 773 $ 909 $ 1,008 Net distributions to/(from) QHCs (1) 286 208 139 46 -------- -------- ----------- ------------ Subsidiary distributions 944 981 1,048 1,054 Returns of capital distributions to Parent 43 54 248 242 Net returns of capital distributions to/(from) QHCs (1) 0 6 (1) 0 -------- -------- ----------- ------------ Returns of capital distributions 43 60 247 242 Combined distributions & return of capital received 987 1,041 1,295 1,296 Less: combined net distributions & returns of capital to/(from) QHCs(1) (286) (214) (138) (46) -------- -------- ----------- ------------ Total subsidiary distributions & returns of capital to Parent $ 701 $ 827 $ 1,157 $ 1,250 ======== ======== =========== ============ Parent only data: quarterly ($ in millions) Quarters Ended March 31, June 30, September 30, December 31, Total subsidiary distributions & returns of capital to Parent 2003 2003 2003 2003 Actual Actual Actual Actual --------- -------- ------------- ------------ Subsidiary distributions to Parent $ 136 $ 312 $ 312 $ 248 Net distributions to/(from) QHCs (1) 44 (12) 7 7 --------- -------- ---------- ------------ Subsidiary distributions 180 300 319 255 Returns of capital distributions to Parent 2 24 199 17 Net returns of capital distributions to/(from) QHCs (1) 0 6 (7) 1 --------- -------- ---------- ------------ Returns of capital distributions 2 30 192 18 Combined distributions & return of capital received 182 330 511 273 Less: combined net distributions & returns of capital to/(from) QHCs(1) (44) 6 0 (8) -------- -------- ---------- ------------ Total subsidiary distributions & returns of capital to Parent $ 138 $ 336 $ 511 $ 265 ======== ======== ========== ============
Liquidity (2) Balance at ($ in millions) December 31, March 31, June 30, September 30, December 31, 2002 2003 2003 2003 2003 Actual Actual Actual Actual Actual ---------- --------- -------- ------------ ------------- Cash at Parent $ 188 $ 395 $ 923 $ 525 $ 865 Availability under revolver 18 28 39 172 180 Cash at QHCs (1) 10 66 29 41 26 ---------- -------- -------- ---------- ----------- Ending liquidity $ 216 $ 489 $ 991 $ 738 $ 1,071 ========== ======== ======== ========== =========== (1) The cash held at qualifying holding companies (QHCs) represents cash sent to subsidia ries of the company domiciled outside of the US. Such subsidiaries had no contractual restrictions on their a bility to se nd cash to AES, the parent company. Cash at those subsidiaries was used for investment and related a ctivities ou tside of the US. These investments included equity investments and loans to other foreign subsidiaries as well as development and general costs and expenses incurred outside the US. Since the cash held by these qual ifying holdi ng companies is available to the parent, AES uses the combined measure of subsidiary distributions to parent and q ualified holding companies as a useful measure of cash available to the parent to meet its interna tional liqui dity needs. (2) AES believes that unconsolidated parent company liquidity is important to the liquidity position of AES as a Parent company because of the non-recourse nature of most of AES's indebtedness. Certain statements regarding AES's business operations may constitute "forward looking statements" as defined by the Securities and Exchange Commission. Such statements are not historical facts, but are predictions about the future which inherently involve risks and uncertainties, which could cause our actual results to differ from those contained in the forward looking statement. We urge investors to read our descriptions and discussions of these risks that are contained under the section "Risk Factors" in AES's Annual Report on Form 10-K for the year ended December 31, 2002.
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