EX-99.1 2 a06-11420_1ex99d1.htm EX-99

 

AES Corporation

 

First Quarter 2006 Financial Review

 

May 8, 2006

 

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The Global Power Company

 


 

[LOGO]
The Global Power Company

 

Safe Harbor Disclosure

 

Certain statements in the following presentation regarding AES’s business operations may constitute “forward looking statements.”  Such forward-looking statements include, but are not limited to, those related to future earnings, growth and financial and operating performance.  Forward-looking statements are not intended to be a guarantee of future results, but instead constitute AES’s current expectations based on reasonable assumptions.  Forecasted financial information is based on certain material assumptions.  These assumptions include, but are not limited to continued normal or better levels of operating performance and electricity demand at our distribution companies and operational performance at our contract generation businesses consistent with historical levels, as well as achievements of planned productivity improvements and incremental growth from investments at investment levels and rates of return consistent with prior experience. For additional assumptions see the Appendix to this presentation. Actual results could differ materially from those projected in our forward-looking statements due to risks, uncertainties and other factors. Important factors that could affect actual results are discussed in AES’s filings with the Securities and Exchange Commission including but not limited to the risks discussed under Item 1A “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2005 as well as our other SEC filings. AES undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

 

 

1Q06 Financial Review

www.aes.com

 

2


 

First Quarter 2006 Highlights

 

($ Millions except earnings per share and percent)

 

 

 

First Quarter

 

First Quarter

 

 

 

 

 

2006

 

2005

 

Change

 

Revenues

 

$

3,013

 

$

2,663

 

13

%

 

 

 

 

 

 

 

 

Gross Margin

 

$

954

 

$

824

 

16

%

 

 

 

 

 

 

 

 

as % of Sales

 

31.7

%

30.9

%

80 b.p.

 

 

 

 

 

 

 

 

 

Income Before Income Taxes and Minority Interest (IBT&MI)

 

$

633

 

$

377

 

68

%

 

 

 

 

 

 

 

 

Diluted EPS from Continuing Operations

 

$

0.52

 

$

0.19

 

174

%

 

 

 

 

 

 

 

 

Adjusted EPS (1)

 

$

0.42

 

$

0.18

 

133

%

 

 

 

 

 

 

 

 

Return on Invested Capital (ROIC) (1)

 

12.2

%

8.4

%

380 b.p

 

 

Revenue Comparison
Period-Over-Period

 

Price/Volume/Allowances

 

7

%

 

 

 

 

Currency

 

6

%

 

 

 

 

Total

 

13

%

 

(1)  Non-GAAP measure.  See Appendix.

 

3


 

First Quarter 2006 Earnings Bridge

 

[CHART]

 

(1)                                  Non-GAAP measure. See Appendix.

                         Note: Certain elements are rounded.

 

4


 

First Quarter Cash Flow Highlights

 

($ Millions)

 

 

 

First Quarter

 

First Quarter

 

 

 

2006

 

2005

 

Subsidiary-Only

 

 

 

 

 

Subsidiary Net Cash from Operating Activities (1)

 

$

647

 

$

672

 

 

 

 

 

 

 

Consolidated

 

 

 

 

 

Net Cash from Operating Activities

 

$

544

 

$

518

 

 

 

 

 

 

 

Free Cash Flow (1)

 

$

369

 

$

394

 

 

 

 

 

 

 

Parent-Only

 

 

 

 

 

Subsidiary Distributions (1)

 

$

132

 

$

195

 

 

 

 

 

 

 

Return of Capital from Subsidiaries (1)

 

$

0

 

$

2

 

 

 

 

 

 

 

Recourse Debt Repayment

 

$

150

(2)

$

0

 

 

(1)     Non-GAAP measure. See Appendix. Excludes $44 and $ 2 million in proceeds from the sale of allowance sales included in investing activities in 2006 and 2005 periods, respectively.

(2)     Includes redemption of 8.875% Sr. Subordinated notes due 2027 (approximately $115MM aggregate principal amount plus a make-whole premium of $35MM).

 

5


 

First Quarter Subsidiary Distributions

 

($ Millions)

 

First Quarter 2006 Subsidiary Distributions(1)

 

 

 

North

 

Latin

 

 

 

Asia &

 

 

 

 

 

America

 

America

 

Europe & Africa

 

Middle East

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

Regulated Utilities

 

$

—

 

$

19

 

$

—

 

$

—

 

$

19

 

 

 

 

 

 

 

 

 

 

 

 

 

Contract Generation

 

$

21

 

$

—

 

$

16

 

$

14

 

$

51

 

 

 

 

 

 

 

 

 

 

 

 

 

Competitive Supply

 

$

61

 

$

1

 

$

—

 

$

—

 

$

62

 

 

 

 

 

 

 

 

 

 

 

 

 

Total (1)

 

$

82

 

$

20

 

$

16

 

$

14

 

$

132

 

 

39% of First Quarter 2006 distributions were from North American Regulated Utilities and Worldwide Contract Generation.

 

(1)  Non-GAAP measure.  See Appendix.

 

6


 

First Quarter Segment Highlights Regulated Utilities

 

($ Millions except as noted)

 

 

 

First Quarter

 

%

 

 

 

2006

 

2005

 

Change

 

Revenues

 

$

1,493

 

$

1,399

 

7

%

Gross Margin

 

$

370

 

$

367

 

1

%

as % of Sales

 

24.8

%

26.2

%

-140 b.p.

 

IBT&MI

 

$

240

 

$

229

 

5

%

 

Revenue Comparison (QOQ)

 

% Change

 

Volume/Price/Mix

 

-5

%

Currency (Net)

 

12

%

Total

 

7

%

 

Segment Highlights

 

•                  Revenues increased primarily from favorable Latin America foreign exchange rates and higher fuel cost pass-through at IPL, largely offset by 1Q05 retroactive prior year margin recovery benefit at Eletropaulo in Brazil.

 

•                  Gross margin increased slightly due to foreign exchange effects offset by the margin recovery in Brazil and higher IPL maintenance costs. Gross margin as % of sales declined due to the margin recovery and higher maintenance costs.

 

•                  IBT&MI increase beyond gross margin variance driven mostly by an Argentina debt gain and favorable interest expense comparisons in Venezuela, partially offset by El Salvador debt costs.

 

7


 

First Quarter Segment Highlights Contract Generation

 

($ Millions except as noted)

 

 

 

First Quarter

 

%

 

 

 

2006

 

2005

 

Change

 

Revenues

 

$

1,151

 

$

985

 

17

%

Gross Margin

 

$

434

 

$

392

 

11

%

as % of Sales

 

37.7

%

39.8

%

-210b.p.

 

IBT&MI

 

$

436

 

$

253

 

72

%

 

Revenue Comparison (QOQ)

 

% Change

 

Volume/Price/Mix

 

17

%

Currency (Net)

 

0

%

Total

 

17

%

 

Segment Highlights

 

•                  The increases are driven by higher demand and pricing at businesses in Latin America and higher demand in Pakistan.

 

•                  Gross margin increased due primarily to the higher demand and pricing.  Gross margin as a % of sales declined due to higher outage costs in North America.

 

•                  IBT&MI increases beyond gross margin  variance driven mostly by gain on Kingston sale and Dominican Republic receivables settlement.

 

8


 

First Quarter Segment Highlights Competitive Supply

 

($ Millions except as noted)

 

 

 

First Quarter

 

%

 

 

 

2006

 

2005

 

Change

 

Revenues

 

$

369

 

$

279

 

32

%

Gross Margin

 

$

150

 

$

65

 

131

%

as % of Sales

 

40.7

%

23.3

%

1,740b.p.

 

IBT&MI

 

$

151

 

$

52

 

190

%

 

Revenue Comparison (QOQ)

 

% Change

 

Volume/Price/Mix

 

34

%

Currency (Net)

 

-2

%

Total

 

32

%

 

Segment Highlights

 

•                  Revenues increased as a result of better pricing in Latin America and North America as well as New York excess emission allowance sales.

 

•                  Gross margin and gross margin as a % of sales increased due to better New York’s better pricing and the emission allowance sales.

 

•                  IBT&MI increases beyond gross margin variance driven mostly by gain on a legal settlement related to AES Barry.

 

9


 

Appendix

 

10


 

2006 Guidance Elements:
Income Statement

 

Contains Forward Looking Statements

 

Guidance Element

 

2006 Guidance

 

 

 

 

 

Revenue Growth (% change)

 

4 to 5%

 

 

 

 

 

Gross Margin

 

$3.2 to $3.3 billion

 

 

 

 

 

Business Segment Income Before Tax & Minority Interest
(Excludes Corporate Costs of $625 Million)

 

$2.3 billion

 

Allocated by Segment as % of Total

 

 

 

• Regulated Utilities

 

44%

 

• Contract Generation

 

38%

 

• Competitive Supply

 

18%

 

 

 

 

 

Diluted Earnings Per Share From Continuing Operations

 

$0.96

 

 

 

 

 

Adjusted Earnings Per Share Factors

 

$0.01

 

 

 

 

 

Adjusted Earnings Per Share(1)

 

$0.97

 

 

(1)  Non-GAAP measure.  See Appendix.

 

11


 

2006 Guidance Elements:
Cash Flow and Sensitivities

 

Contains Forward Looking Statements

 

Guidance Element

 

2006 Guidance

 

 

 

 

 

Net Cash From Operating Activities

 

$2.2 to $2.3 billion

 

 

 

 

 

Maintenance Capital Expenditures

 

$800 to $900 million

 

 

 

 

 

Free Cash Flow(1)

 

$1.3 to $1.5 billion

 

 

 

 

 

Subsidiary Distributions(1)

 

$1.0 billion

 

 

 

 

 

Parent Investments and Capital Expenditures(2)

 

$250 to $350 million

 

 

 

 

 

2008 Financial Targets(3)

 

 

 

 

 

 

 

• Diluted EPS from Continuing Operations(4)

 

$1.18 to $1.34

 

 

 

 

 

• Gross Margin

 

$3.5 billion

 

 

 

 

 

• Return on Invested Capital(1)

 

11%

 

 

 

 

 

• Net Cash Provided by Operating Activities

 

$2.6 to $2.9 billion

 

 

(1)               Non-GAAP measures.  See Appendix.

(2)               Excludes other sources of funds. Total 2006 capital expenditures are estimated to be $1.7 – $1.8 billion, including certain growth projects not yet awarded.

(3)               Guidance includes growth projects committed to in 2004 and prior years.

(4)               Based on 16-19% per year growth in diluted EPS from continuing operations from $0.56 per share 2003 base (pre-restatement).

 

12


 

Reconciliation of Adjusted Earnings Per Share

 

($ Per Share)

 

 

 

First Quarter

 

First Quarter

 

 

 

2006

 

2005

 

Diluted Earnings Per Share From Continuing Operations

 

$

0.52

 

$

0.19

 

 

 

 

 

 

 

FAS 133 Mark-to-Market (Gains)/Losses

 

—

 

—

 

 

 

 

 

 

 

Currency Transaction (Gains)/Losses

 

—

 

(0.01

)

 

 

 

 

 

 

Net Asset (Gains)/Losses and Impairments

 

(0.13

)

—

 

 

 

 

 

 

 

Debt Retirement (Gains)/Losses

 

0.03

 

—

 

 

 

 

 

 

 

Adjusted Earnings Per Share(1)

 

$

0.42

 

$

0.18

 

 

(1)                        Adjusted earnings per share (a non-GAAP financial measure) is defined as diluted earnings per share from continuing operations excluding gains or losses associate with (a) mark-to-market amounts related to FAS 133 derivative transactions, (b) foreign currency transaction gains and losses on the net monetary position related to Brazil, Venezuela, and Argentina, (c) significant asset gains or losses due to disposition transactions and impairments, and (d) early retirement of recourse debt. AES believes that adjusted earnings per share better reflects the underlying business performance of the Company, and is considered in the Company’s internal evaluation of financial performance. Factors in this determination include the variability associated with mark-to-market gains or losses related to certain derivative transactions, currency transaction gains or losses, periodic strategic decisions to dispose of certain assets which may influence results in a given period, and the early retirement of corporate debt.

 

13


 

Parent Sources and Uses of Cash

 

($ Millions)

 

 

 

First
Quarter
2006

 

 

 

 

 

Sources

 

 

 

Total Subsidiary Distributions(1)

 

$

132

 

Proceeds from Asset Sales, Net

 

108

 

Refinancing Proceeds, Net

 

—

 

Increased Revolver Commitments

 

500

 

Issuance of Common Stock, Net

 

8

 

Total Returns of Capital Distributions and Project Financing Proceeds

 

—

 

Beginning Liquidity(1)

 

624

 

Total Sources

 

$

1,372

 

 

 

 

 

Uses

 

 

 

Repayments of Debt(2)

 

$

(150

)

Investments in Subsidiaries, Net

 

(97

)

Cash for Development, Selling, General and Administrative and Taxes

 

(73

)

Cash Payments for Interest

 

(78

)

Other, Net

 

89

 

Ending Liquidity(1)

 

(1,063

)

Total Uses

 

$

(1,372

)

 

(1)             Non-GAAP financial measure. See Appendix.

(2)             Includes redemption of 8.875% Sr. Subordinated notes due 2027 (approximately $115 million aggregate principal amount plus a make-whole premium of $35 million.

 

14


 

First Quarter Reconciliation of Changes to Debt Balances

 

($ Millions)

 

 

 

Debt Reconciliation

 

Parent Debt (Including Letters of Credit) at 12/31/05

 

$

5,176

(1)

 

 

 

 

Scheduled Debt Maturities:

 

—

 

 

 

 

 

Discretionary Debt Repayments:

 

 

 

Prepayment of Debt

 

(115

)

 

 

 

 

Other

 

(38

)(2)

 

 

 

 

Parent Debt (Including Letters of Credit) at 3/31/06

 

$

5,023

 

 

 

 

 

Less: Letters of Credit Outstanding at 3/31/06

 

(202

)

 

 

 

 

Parent Debt (Excluding Letters of Credit) at 3/31/06

 

$

4,821

 

 

(1)          Amount reflects recourse debt of $4,882 million and $294 million of letters of credit under the parent revolver. Revolver availability at 12/21/05 was $356 million.

(2)          Other includes $92 million decrease in letters of credit, a $50 million draw on the revolving credit facility, a $2 million change in unamortized discounts related to discretionary prepayment of debt and $2 million increase due to foreign currency changes.

 

15


 

First Quarter 2006 Consolidated Cash Flow

 

($ Millions)

 

 

 

Subsidiaries

 

AES Corp (1)

 

Eliminations

 

Consolidated

 

Net Cash from Operating Activities

 

$

660

 

$

16

 

$

(132

)

$

544

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Maintenance Capital Expenditures

 

(140

)

(35

)

—

 

(175

)

Growth Capital Expenditures

 

(70

)

—

 

—

 

(70

)

Investment in Subsidiaries

 

—

 

(95

)

95

 

—

 

Net Proceeds from Asset Sales

 

4

 

110

 

—

 

114

 

Net Proceeds from the Sale of Emission Allowances

 

44

 

—

 

—

 

44

 

Sale of Short Term Investments, Net of Purchases

 

(168

)

—

 

—

 

(168

)

Increase in Restricted Cash

 

(21

)

—

 

—

 

(21

)

Decrease in Debt Service Reserves and Other Assets

 

9

 

—

 

—

 

9

 

Other

 

(4

)

—

 

—

 

(4

)

Net Cash (for) from Investments

 

(346

)

(20

)

95

 

(271

)

 

 

 

 

 

 

 

 

 

 

Financing Proceeds for Growth Capital Expenditures

 

17

 

—

 

—

 

17

 

Financing Proceeds from Other Financings Including Refinancings

 

340

 

—

 

—

 

340

 

Equity Proceeds

 

—

 

8

 

—

 

8

 

Repayments, Net (Including Refinancings)

 

(590

)

(100

)

—

 

(690

)

Payments for Financing Costs

 

(9

)

(7

)

—

 

(16

)

Equity Contributions by Parent

 

95

 

—

 

(95

)

—

 

Distributions to Parent

 

(132

)

—

 

132

 

—

 

Returns of Capital to Parent

 

—

 

—

 

—

 

—

 

Other

 

(16

)

—

 

—

 

(16

)

Net Cash (for) from Financing

 

(295

)

(99

)

37

 

(357

)

 

 

 

 

 

 

 

 

 

 

Increase (Decrease) in Cash & Cash Equivalents

 

19

 

(103

)

—

 

(84

)

Effect of FX

 

36

 

—

 

—

 

36

 

Beginning Cash & Cash Equivalents Balance

 

1,122

 

268

 

—

 

1,390

 

Ending Cash & Cash Equivalents Balance

 

$

1,177

 

$

165

 

$

—

 

$

1,342

 

 

(1)                                  Includes activity at qualified holding companies.

Note: Certain amounts have been netted, condensed and rounded for presentation purposes.

 

16


 

Reconciliation of Subsidiary Distributions and Parent Liquidity

 

($ Millions)

 

 

 

Quarter Ended

 

 

 

Mar. 31,
2006

 

Dec. 31,
2005

 

Sept. 30,
2005

 

June 30,
2005

 

Mar. 31,
2005

 

Dec. 31,
2004

 

Sept 30,
2004

 

Total subsidiary distributions & returns of capital to parent

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subsidiary distributions to parent

 

$

132

 

$

354

 

$

274

 

$

170

 

$

190

 

$

286

 

$

209

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net distributions to/(from) QHCs

 

—

 

—

 

 

 

—

 

5

 

(9

)

12

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total subsidiary distributions

 

132

 

354

 

274

 

170

 

195

 

277

 

221

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Returns of capital distributions to parent

 

—

 

5

 

—

 

37

 

2

 

3

 

110

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net returns of capital distributions to/(from) QHCs

 

—

 

—

 

—

 

13

 

—

 

—

 

11

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total returns of capital distributions

 

—

 

5

 

—

 

50

 

2

 

3

 

121

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Combined distributions & return of capital received

 

132

 

359

 

274

 

220

 

197

 

280

 

342

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less: combined net distributions & returns of capital to/(from) QHCs

 

—

 

—

 

—

 

(13

)

(5

)

9

 

(23

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total subsidiary distributions & returns of capital to parent

 

$

132

 

$

359

 

$

274

 

$

207

 

$

192

 

$

289

 

$

319

 

 

 

 

Balance as of

 

 

 

Mar. 31,
2006

 

Dec. 31,
2005

 

Sept. 30,
2005

 

June. 30,
2005

 

Mar. 31,
2005

 

Liquidity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash at parent

 

$

148

 

$

262

 

$

146

 

$

145

 

$

256

 

 

 

 

 

 

 

 

 

 

 

 

 

Availability under revolver

 

898

 

356

 

281

 

215

 

218

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash at QHCs

 

17

 

6

 

9

 

19

 

3

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending liquidity

 

$

1,063

 

$

624

 

$

436

 

$

379

 

$

477

 

 

See following page for further information.

 

17


 

Assumptions

 

Forecasted financial information is based on certain material assumptions. Such assumptions include, but are not limited to: (a) no unforeseen external events such as wars, depressions, or economic or political disruptions occur; (b) businesses continue to operate in a manner consistent with or better than prior operating performance, including achievement of planned productivity improvements including benefits of global sourcing, and in accordance with the provisions of their relevant contracts or concessions; (c) new business opportunities are available to AES in sufficient quantity so that AES can capture its historical market share or increase its share; (d) no material disruptions or discontinuities occur in GDP, foreign exchange rates, inflation or interest rates during the forecast period; (e) negative factors do not combine to create highly negative low-probability business situations; (f) material business-specific risks as described in the Company’s SEC filings do not occur. In addition, benefits from global sourcing include avoided costs, reduction in capital project costs versus budgetary estimates, and projected savings based on assumed spend volume which may or may not actually be achieved. Also, improvement in certain KPIs such as EFOR and commercial availability may not improve financial performance at all facilities based on commercial terms and conditions. These benefits will not be fully reflected in the Company’s consolidated financial results.

 

The cash held at qualifying holding companies (QHCs) represents cash sent to subsidiaries of the Company domiciled outside of the U.S. Such subsidiaries had no contractual restrictions on their ability to send cash to AES, the parent company. Cash at those subsidiaries was used for investment and related activities outside of the U.S. These investments included equity investments and loans to other foreign subsidiaries as well as development and general costs and expenses incurred outside the U.S. Since the cash held by these qualifying holding companies is available to the parent, AES uses the combined measure of subsidiary distributions to parent and qualified holding companies as a useful measure of cash available to the parent to meet its international liquidity needs. 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.

 

18


 

Definitions of Non-GAAP Measures

 

•                  Adjusted earnings per share (a non-GAAP financial measure), is defined as diluted earnings per share from continuing operations excluding gains or losses associated with (a) mark-to-market amounts related to FAS 133 derivative transactions, (b) foreign currency transaction impacts on the net monetary position related to Brazil, Venezuela, and Argentina, (c) significant asset gains or losses due to disposition transactions and impairments, and (d) early retirement of recourse debt.  AES believes that adjusted earnings per share better reflects the underlying business performance of the Company, and are considered in the Company’s internal evaluation of financial performance. Factors in this determination include the variability associated with mark-to-market gains or losses related to certain derivative transactions, currency gains and losses, periodic strategic decisions to dispose of certain assets which may influence results in a given period, and the early retirement of corporate debt.

 

•                  Free cash flow – Net cash flow from operating activities less maintenance capital expenditures. Maintenance capital expenditures reflect property additions less growth capital expenditures.

 

•                  Liquidity – Cash at the parent company plus availability under corporate revolver plus cash at qualifying holding companies (QHCs).

 

•                  Return on invested capital (ROIC) – Net operating profit after tax (NOPAT) divided by average capital. NOPAT is defined as income before tax and minority expense plus interest expense less income taxes less tax benefit on interest expense at effective tax rate. Average capital is defined as the average of beginning and ending total debt plus minority interest plus stockholders’ equity less debt service reserves and other deposits.

 

•                  Subsidiary Distributions – Cash distributions (primarily dividends and interest income) from subsidiary companies to the parent company and qualified holding companies. These cash flows are the source of cash flow to the parent to meet corporate interest, overhead, cash taxes, and discretionary uses such as recourse debt reductions and corporate investments.

 

19


 

Reconciliation of Cash Flow Items

 

Net Cash from Operating Activities – First Quarter 2006 ($ Millions)

 

 

 

Subsidiaries

 

AES Corp(1)

 

Eliminations

 

Consolidated

 

First Quarter 2006

 

$

660

 

$

16

 

$

(132

)

$

544

 

 

 

Reconciliation of Free Cash Flow ($ Millions)

 

 

 

First Quarter
2006

 

First Quarter
2005

 

 

 

 

 

 

 

Net Cash from Operating Activities

 

$

544

 

$

518

 

 

 

 

 

 

 

Maintenance Capital Expenditures

 

(175

)

(124

)

 

 

 

 

 

 

Free Cash Flow

 

$

369

 

$

394

 

 

(1) Includes activity at qualified holding companies.

 

20


 

First Quarter 2006 Return on Invested Capital

 

($ Millions except percent)

 

 

 

Second
Quarter
2004

 

Third
Quarter
2004

 

Fourth
Quarter
2004

 

First
Quarter
2005

 

Rolling Twelve
Months
First Quarter
2005

 

Second
Quarter
2005

 

Third
Quarter
2005

 

Fourth
Quarter
2005

 

First
Quarter
2006

 

Rolling Twelve
Months
First Quarter
2006

 

Net Operating Profit After Tax(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

IBT&MI

 

$

233

 

$

225

 

$

203

 

$

377

 

$

1,038

 

$

186

 

$

484

 

$

411

 

$

633

 

$

1,714

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reported Interest Expense

 

428

 

500

 

493

 

467

 

1,888

 

475

 

450

 

504

 

434

 

1,863

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Tax Expense(2)

 

(45

)

(396

)

(507

)

(329

)

(1,223

)

(291

)

(276

)

(207

)

(329

)

(1,071

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Operating Profit After Tax

 

616

 

329

 

189

 

515

 

1,703

 

370

 

658

 

708

 

738

 

2,506

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Effective Tax Rate(3)

 

6.9

%

54.7

%

72.9

%

39.0

%

41.8

%

44.1

%

29.5

%

22.6

%

30.8

%

29.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ROIC(4)

 

 

 

 

 

 

 

8.4

%

 

 

 

 

 

 

 

 

 

 

12.2

%

 

 

 

First
Quarter
2004

 

First
Quarter
2005

 

First
Quarter
2006

 

Total Capital(5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Debt

 

$

18,749

 

$

18,349

 

$

17,579

 

 

 

 

 

 

 

 

 

Minority Interest

 

959

 

1,376

 

1,753

 

 

 

 

 

 

 

 

 

Stockholders’ Equity

 

1,221

 

1,079

 

2,190

 

 

 

 

 

 

 

 

 

Debt Service Reserves and Other Deposits

 

(539

)

(678

)

(628

)

 

 

 

 

 

 

 

 

Total Capital

 

$

20,390

 

$

20,126

 

$

20,894

 

 

 

 

 

 

 

 

 

Average Capital(6)

 

 

 

$

20,258

 

$

20,510

 

 

(1)     Net operating profit after tax,  a non-GAAP financial measure, is defined as income before tax and minority interest expense (IBT&MI) plus interest expense less income taxes less tax benefit on interest expense at the effective tax rate.

(2)     Income tax expense calculated by multiplying the sum of IBT&MI and reported interest expense for the period by the effective tax rate for the period.

(3)     Effective tax rate calculated by dividing reported income tax expense for the period by IBT&MI for the period.

(4)     Return on invested capital (ROIC), a non-GAAP financial measure, is defined as net operating profit after tax divided by average capital calculated over rolling 12 month basis.

(5)     Total capital, a non-GAAP financial measure, is defined as total debt plus minority interest plus stockholders’ equity less debt service reserves.

(6)     Average capital is defined as the average of beginning and ending total capital over the last 12 months.

 

21