-----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, C3ZYxkd+USowCFGFdH5INcQxM/HG00KKwKv7aejGN/Uf6SWF6NUBIPZbnEjmBqig CZFQAzgrVd1D2NEAzgZDwg== 0000893838-97-000036.txt : 19970415 0000893838-97-000036.hdr.sgml : 19970415 ACCESSION NUMBER: 0000893838-97-000036 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970228 FILED AS OF DATE: 19970414 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: AES CHINA GENERATING CO LTD CENTRAL INDEX KEY: 0000916792 STANDARD INDUSTRIAL CLASSIFICATION: COGENERATION SERVICES & SMALL POWER PRODUCERS [4991] IRS NUMBER: 000000000 FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-23148 FILM NUMBER: 97580146 BUSINESS ADDRESS: STREET 1: ALLIED CAPITAL RESOURCES BLDG - 9TH FLRC STREET 2: 32-38 ICE HOUSE ST CITY: CENTRAL HONG KONG STATE: K3 BUSINESS PHONE: 8528425111 MAIL ADDRESS: STREET 1: ALLIED CAPITAL RESOURCES BLDG 9TH FL STREET 2: 32-38 ICE HOUSE STREET CITY: CENTRAL HOND KONG STATE: K3 ZIP: 00000 10-Q 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE - --- ACT OF 1934 For the quarterly period ended February 28, 1997 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES - --- EXCHANGE ACT OF 1934 Commission File Number: 0-23148 AES CHINA GENERATING CO. LTD. (Exact name of registrant as specified in its charter) Bermuda 98-0152612 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 3/F., Jinqiao Building #1 Jianguomenwai Avenue Beijing 100020, People's Republic of China (Address of principal executive office) Telephone Number (86 10) 5089619 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- ---- Indicate the number of shares outstanding of each of the registrant's classes of Common Stock, as of April 10, 1997. 8,158,095 shares of Class A Common Stock, $.01 par value. 7,500,000 shares of Class B Common Stock, $.01 par value. AES CHINA GENERATING CO. LTD. INDEX PART I. FINANCIAL INFORMATION Page No Item 1. Consolidated Financial Statements: Consolidated Statements of Operations .. ........... 3 Consolidated Balance Sheets......................... 4 Consolidated Statements of Cash Flows............... 6 Notes to Consolidated Financial Statements ......... 7 Item 2. Discussion and Analysis of Financial Condition and Results of Operations........................ 9 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K .................. 14 Signatures......................................... 15 PART I Item 1. Consolidated Financial Statements AES CHINA GENERATING CO. LTD. CONSOLIDATED STATEMENTS OF OPERATIONS) (In thousands, except per share amounts)
Three Months Ended February 28, 1997 February 29, 1996 ----------------------------------------------- (unaudited) REVENUES: Electricity sales US$ 2,507 US$ 64 Construction delay fee - 360 ------------------- -------------------- Total revenues 2,507 424 OPERATING COSTS AND EXPENSES: Costs of sales 1,726 231 Development, selling, general and administrative expenses 1,637 1,992 ------------------- -------------------- Total operating costs and expenses 3,363 2,223 ------------------- -------------------- OPERATING LOSS (856) (1,799) OTHER INCOME/(EXPENSES): Interest income 3,215 1,978 Interest expense (1,170) - Equity in earnings of affiliates 107 126 Amalgamation cost (143) - ------------------- -------------------- INCOME BEFORE INCOME TAXES AND MINORITY INTEREST 1,153 305 Income taxes 86 - Minority interest (56) (11) ------------------- -------------------- NET INCOME US$ 1,123 US$ 316 ------------------- -------------------- NET INCOME PER SHARE US$ 0.07 US$ 0.02 =================== ====================
See Notes to Consolidated Financial Statements AES CHINA GENERATING CO. LTD. CONSOLIDATED BALANCE SHEETS (In thousands, except par values and share amounts)
As of As of February 28, 1997 November 30, 1996 ------------------- ------------------- (unaudited) ASSETS Current Assets: Cash and cash equivalents US$ 145,738 US$ 56,200 Investments - held-to-maturity 43,572 8,995 Investments - available-for-sale 12,993 - Accounts receivable from related parties 3,264 6,809 Interest receivable 737 286 Inventory 1,057 765 Prepaid expenses and other current assets 653 874 -------------------- ---------------------- Total current assets 208,014 73,929 Property, Plant and Equipment: Electric generating facilities 71,474 64,185 Equipment, furniture and leasehold improvements 2,863 2,646 Accumulated depreciation and amortization (4,016) (3,143) Construction in progress 135,487 98,912 -------------------- ---------------------- Total property, plant and equipment, net 205,808 162,600 Other Assets: Deferred costs, net 5,935 407 Project development costs 3,907 3,352 Investments in and advances to affiliates 42,421 33,202 Note receivable 6,631 6,626 Deposits and other assets 575 582 -------------------- ---------------------- Total other assets 59,469 44,169 -------------------- ---------------------- TOTAL US$ 473,291 US$ 280,698 ==================== ======================
See Notes to Consolidated Financial Statements AES CHINA GENERATING CO. LTD. CONSOLIDATED BALANCE SHEETS (In thousands, except par values and share amounts)
As of As of February 28, 1997 November 30, 1996 --------------------- --------------------- (unaudited) LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts payable - The AES Corporation US$ 600 US$ 1,185 Accounts payable 2,953 2,199 Accrued liabilities 5,179 2,618 Accrued liabilities for construction 3,449 4,259 Loans from minority shareholders - current portion 1,955 1,365 Bank loans 2,387 2,861 --------------------- --------------------- Total current liabilities 16,523 14,487 Long-Term Liabilities: Notes payable, net 179,831 - Bank loan 7,000 - Deferred income taxes 472 387 Loans from minority shareholders 34,998 34,933 --------------------- --------------------- Total long-term liabilities 222,301 35,320 Minority Interest 42,703 40,536 Shareholder's Equity: Class A Common Stock - par value $0.01 per share, (50,000,000 shares authorized; issued and outstanding: 1997 - 8,158,095; 1996 - 8,134,100) 82 81 Class B Common Stock - par value $0.01 per share, (50,000,000 authorized; 7,500,000 shares issued and outstanding) 75 75 Additional paid-in capital 184,203 183,980 Retained earnings 7,030 5,907 Cumulative translation adjustment 374 312 --------------------- --------------------- Total shareholders' equity 191,764 190,355 --------------------- --------------------- TOTAL US$ 473,291 US$ 280,698 ===================== =====================
See Notes to Consolidated Financial Statements AES CHINA GENERATING CO. LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
Three Months Ended February 28, 1997 February 29, 1996 ------------------------------------------------ (unaudited) Net cash provided by / (used in) operating activities US$ 3,712 US$ (1,869) CASH FLOWS FROM FINANCING ACTIVITIES: Net proceeds from issuance of notes 174,151 -- Contributions and loans from minority shareholders 2,190 3,562 Repayment of loans from minority shareholders (687) -- Proceeds from bank loans 8,206 36 Repayment of bank loans (1,680) -- Sale of Class A common stock 224 -- Repurchase of Class A common stock -- (11,443) -------------------- -------------------- Net cash provided by/(used in) financing activities 182,404 (7,845) CASH FLOWS FROM INVESTING ACTIVITIES: Additions to property and construction in progress (40,985) (5,934) Purchase of investments -held-to-maturity (43,153) (6,602) Purchase of investments -available-for-sale (12,991) (8,746) Proceeds from maturity of investments -held-to-maturity 9,000 10,187 Proceeds from sales of investments -available-for-sale -- 3,000 Investments in and advances to affiliates (7,977) -- Project development costs and other assets (472) (132) -------------------- -------------------- Net cash used in investing activities (96,578) (8,227) -------------------- -------------------- Increase/(decrease) in cash and cash equivalents 89,538 (17,941) CASH AND CASH EQUIVALENTS, Beginning of period 56,200 125,684 -------------------- -------------------- End of period US$ 145,738 US$ 107,743 ==================== ====================
See Notes to Consolidated Financial Statements AES CHINA GENERATING CO. LTD. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) 1. General and Basis of Presentation AES China Generating Co. Ltd. ("AES Chigen" or the "Company"), a Bermuda company, was incorporated on December 7, 1993, to develop, acquire, finance, construct, own and manage electric power generation facilities in the People's Republic of China (the "PRC"). The Company is a controlled affiliate of the AES Corporation ("AES"). As of February 28, 1997, AES owned approximately 48% of the outstanding common stock of the Company. The consolidated financial statements include the accounts of AES China Generating Co. Ltd. (the "Company"), its subsidiaries and controlled affiliates. Investments in 50% or less owned affiliates over which the Company has the ability to exercise significant influence, but not control, are accounted for using the equity method. Intercompany transactions and balances have been eliminated. In the Company's opinion, all adjustments necessary for a fair presentation of the unaudited results of operations for the three months ended February 28, 1997 and February 29, 1996 are included. All such adjustments are accruals of a normal and recurring nature. The results of operations for the periods are not necessarily indicative of the results of operations for the full year. The financial statements are unaudited. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at February 28, 1997 and November 30, 1996 and the reported amounts of revenues and expenses during the three months ended February 28, 1997 and February 29, 1996. Actual results could differ from those estimates. The organization and business of the Company, accounting policies followed by the Company and other information are contained in the notes to the Company's financial statements filed as part of the Company's Annual Report on Form 10-K for the fiscal year ended November 30, 1996 (the "Annual Report"). This Quarterly Report on Form 10-Q should be read in conjunction with such Annual Report. 2. Notes Payable As of February 28, 1997, notes payable consisted of $180 million principal amount Notes due on December 15, 2006 (the "2006 Notes"). The 2006 Notes bear interest at the rate of 10 1/8% per annum. Interest is payable on June 15 and December 15 of each year, commencing on June 15, 1997. The 2006 Notes rank at least pari passu in right of payment with all existing and future senior unsecured indebtedness of the Company. The holders of the 2006 Notes have a claim to amounts on deposit in debt service and interest reserve accounts that is prior to the claims of other creditors of the Company. The 2006 Notes are redeemable at the Company's option, in whole or in part, beginning December 15, 2001 at redemption prices in excess of par and are redeemable at par beginning December 15, 2003. The terms of the 2006 Notes contain certain covenants and restrictions. The most restrictive of these covenants include a requirement to maintain certain reserves and limitations on the payment of dividends, redemption of equity interests, redemption of subordinated indebtedness, making of certain investments, incurrence of certain indebtedness, certain assets sales and the incurrence of indebtedness to refinance existing indebtedness, among other things. 3. Long Term Bank Loans As of February 28, 1997, a long-term bank loan of $7.0 million to Anhui Liyuan-AES Power Company Ltd., a joint venture of the Company, was outstanding. The loan is unsecured and bears interest at the prevailing lending rates in the PRC. The interest rate for the first quarter of 1997 was approximately 7.7% per annum. Scheduled maturities of the bank loan as of February 28, 1997 are as follows: (in thousands) 1998 $ -- 1999 -- 2000 2,000 2001 2,000 2002 3,000 -------------- $ 7,000 ============== 4. Commitments and Contingencies Since the commencement of operations, the Company has entered into commitments to invest a total of approximately $259.6 million in the form of equity contributions and loans to its joint ventures. As of February 28, 1997, the total outstanding commitments to its joint ventures was $91.5 million. The Company has initialed or signed several joint venture contracts which become effective under Chinese law following receipt of certain government approvals. These joint venture contracts are also subject to the satisfaction or waiver of certain conditions precedent specified in the joint venture contracts. Until the appropriate governmental approvals have been obtained and all conditions precedent have been satisfied or waived, the Company regards the initialing or signing of a joint venture contract as being a preliminary step in the development of an electric power generation project and therefore does not recognize amounts under these joint venture contracts as commitments. 5. Proposed Amalgamation The Company and AES Corporation have entered into an Amended and Restated Agreement and Plan of Amalgamation, dated as of November 12, 1996, pursuant to which a wholly owned subsidiary of AES would amalgamate (the "Amalgamation") with the Company and each share of the Company's Class A common stock outstanding prior to the Amalgamation will thereafter represent the right to receive shares of AES common stock. The Agreement and Plan of Amalgamation is subject to various conditions, including the approval of the holders of the Class A common stock of the Company. In the Amalgamation, all outstanding options to acquire Class B common stock in the Company under the Company's Incentive Stock Option Plan would be converted into options to acquire shares of AES common stock. The Company's shareholders approved the Amalgamation at a Special Class Meeting of holders of the Class A common stock and a Special General Meeting of the shareholders of the Company, both of which were held on April 10, 1997. The Amalgamation is expected to become effective in late April 1997 after certain regulatory filings are made in Bermuda. Item 2. Discussion and Analysis of Financial Condition and Results of Operations Introduction The Company, directly and through its wholly owned offshore subsidiaries, engages in the development, construction, operation and ownership of electric power generating facilities in the PRC by means of its participation in joint ventures. The Company currently owns interests in the following eight power plants (the "Current Projects") with an aggregate nameplate capacity of approximately 818MW. Projects in Operation or Under Construction
Company Company Location Capacity Interest Ownership Joint Venture(s) (Province) (MW) (MW) (%) Fuel Status - ---------------- ---------- -------- -------- --------- ---- ------ Jiaozuo Wan Fang Henan 250 175 70 Coal Under construction Power Company (first unit scheduled to Ltd. be in operation by the ("Jiaozuo second quarter of 1997: Aluminum second unit scheduled Power") to be in operation by the second quarter of 1998) Wuhu Shaoda Anhui 250 62.5 25 Coal In operation Electric Power (second unit passed its Development output performance test on Company Ltd. March 17, 1997) ("Wuhu Grassy Lake") Anhui Liyuan-AES Anhui 115.2 80.6 70 Oil Under construction Power Company (simple cycle unit Ltd. and Hefei scheduled to be in Zhongli Energy operation by the third Company Ltd. quarter of 1997: ("Hefei Prosperity combined cycle unit Lake") scheduled to be in operation in the second quarter of 1998) Wuxi-AES-CAREC Jiangsu 63 34.7 55 Oil In operation Gas Turbine Power Company Ltd. and Wuxi-AES- Zhonghang Power Company Ltd. ("Wuxi Tin Hill") Sichuan Fuling Aixi Sichun 50 35 70 Coal Under construction Power Company (scheduled to be in Ltd. operation in February ("Aixi Heart River") 1998) Chengdu AES-Kaihua Sichuan 48 16.8 35 Natural Under construction Gas Turbine Power Gas (scheduled to be in Company Ltd. operation in the third ("Chengdu Lotus quarter of 1997) City") Huanan Xingci-AES Hunan 26.2 13.4 51 Hydro In operation. Hydro Power (last unit passed its Company Ltd. performance test on ("Cili Misty Mountain") February 22, 1997) Yangchun Fuyang Guangdong 15.1 3.8 25 Oil In operation Diesel Engine Power Company Ltd. ("Yangchun Sun Spring") ----- ----- Total 817.5 421.8 ----- -----
The Company is considering an investment in Yangcheng Sun City, a project with an aggregate nameplate capacity of 2,100MW, and is considering investments in two other power projects, namely Tianjin Teda and Nanpu Southern Delta, with an aggregate nameplate capacity of 800MW (the "Potential Projects"). The Company and AES Corporation have entered into an Amended and Restated Agreement and Plan of Amalgamation, dated as of November 12, 1996, pursuant to which a wholly owned subsidiary of AES would amalgamate (the "Amalgamation") with the Company and each share of the Company's Class A common stock outstanding prior to the Amalgamation will thereafter represent the right to receive shares of AES common stock. The Agreement and Plan of Amalgamation is subject to various conditions, including the approval of the holders of the Class A common stock of the Company. In the Amalgamation, all outstanding options to acquire Class B common stock in the Company under the Company's Incentive Stock Option Plan would be converted into options to acquire shares of AES common stock. The Company's shareholders approved the Amalgamation at a Special Class Meeting of holders of the Class A common stock and a Special General Meeting of the shareholders of the Company, both of which were held on April 10, 1997. The Amalgamation is expected to become effective in late April 1997 after certain regulatory filings are made in Bermuda. After the Amalgamation, the Company's ability to invest in projects will be substantially limited by covenants contained in various AES debt agreements (the "AES Debt Covenants"). See "Liquidity and Capital Resources." In March 1997, the Wuxi Tin Hill joint venture reached agreement with the power purchaser on the amount of payment for required minimum offtake of electricity for 1996, which was in dispute. The agreement included the deferral of certain amounts scheduled to be paid in 1996 and a corresponding adjustment upward of future scheduled payments of capital return. On March 17, 1997, the second unit of the Wuhu Grassy Lake 250 MW coal-fired facility passed its output performance test. This essentially completes the construction of the facility. However, the project has experienced delays in obtaining approvals for electricity tariff to be paid to the joint venture. Due to this delay and uncertainty related to the actual level of tariff to be approved, no amount for the Company's equity in the earnings of the Wuhu Grassy Lake project has been recognized in the statement of operations. Results of Operations Revenues and Cost of Sales. Total revenue increased from approximately $0.4 million to $2.5 million from the first quarter of 1996 to the first quarter of 1997. Costs of sales, which include fuel, operations, maintenance expenses, depreciation and amortization, increased from approximately $0.2 million to $1.7 million from the first quarter of 1996 to the first quarter of 1997. The increases in revenues and costs of sales were primarily due to the commencement of operations of the Wuxi Tin Hill project. Development, Selling, General and Administrative Expenses. Development, selling, general and administrative expenses decreased approximately $0.4 million from $2.0 million to $1.6 million from the first quarter of 1996 to the first quarter of 1997. The decrease was primarily due to the capitalization of development costs associated with the Yangcheng Sun City project, which has achieved certain project related milestones. Interest Income. Interest income increased $1.2 million from $2.0 million to $3.2 million from the first quarter of 1996 to the first quarter of 1997. The increase was primarily due to the proceeds received from the Company's public debt offering in December 1996 being available for investment in marketable securities for the three months ended February 28, 1997. Interest Expense. During the first quarter of 1997, interest expense was approximately $1.2 million. There were two components to interest expenses incurred in the first quarter of 1997: (i) the interest expense associated with the issuance of the 2006 Notes in December of 1996, offset in part by capitalization of interest incurred during the development and construction of the Company's projects, and (ii) interest on two minority shareholder loans to Wuxi-AES-CAREC. Capitalized interest was approximately $3.0 million for the first quarter of 1997. For the corresponding period in 1996, the Company had no outstanding loans. Amalgamation Cost. Amalgamation cost of approximately $0.1 million related to expenses incurred in pursuing the proposed Amalgamation with AES announced in November 1996. Liquidity and Capital Resources The Company's business has required substantial investment associated with the development, acquisition and construction of electric power plants and related facilities through its Joint Ventures. Since commencing business, the Company has entered into commitments to invest a total of approximately $259.6 million in the form of equity contributions and loans to its Joint Ventures, of which $178.4 million has been invested as of March 31, 1997. If the Amalgamation is not consummated or the AES Debt Covenants otherwise do not apply, the Company would expect to incur additional commitments in the future in connection with the development, acquisition, construction, ownership and operation of additional electric power plants and related facilities in China. If any holder of shares of Class A Common Stock exercises dissenter's rights under Bermuda law in connection with the Amalgamation, the Company would be obligated to pay any amounts awarded by a Bermuda court, which would reduce the amounts available for investment in the Current Projects or the Potential Projects. The Company is not currently affected by the AES Debt Covenants because it is not a subsidiary of AES. After the Amalgamation, the Company will be subject to the AES Debt Covenants, including those contained in the documents governing AES's 10 1/4% Subordinated Notes due 2006, 9 3/4% Senior Subordinated Notes due 2000 and $425 million credit facility due 1999. The material limitations that will become applicable to the Company pursuant to the AES Debt Covenants will include those described below. Under the AES Debt Covenants, AES may not permit any subsidiary with a direct or indirect interest in a power generation facility (as defined in the relevant agreements) to make any investment in, or to consolidate or merge with, any other entity with a direct or indirect interest in any other power generation facility or other business. Immediately prior to the expected consummation of the Amalgamation, the Company intends to contribute the net proceeds of the 2006 Notes remaining after the funding of an interim reserve account and a debt service reserve account to its subsidiaries to provide funding for the Potential Projects and other future projects, as well as additional funding for the Current Projects. It is anticipated that these amounts will not in the aggregate be more than approximately $80 million. Under the AES Debt Covenants, as a general matter, after exhaustion of these amounts, no additional AES Chigen funds would be available to fund investment in additional power projects or to fund the capital requirements and construction cost overruns for the Current Projects. As a consequence, opportunities for investment, along with the associated risks, that would otherwise be available to the Company may instead be taken by other investors, including AES. Additional capital requirements for AES Chigen-invested projects would have to be funded by other parties, including AES, which would result in a dilution of the Company's interest in any such project. In addition, due to the application of the AES Debt Covenants, cash flow generated from projects would not be permitted to be invested in any other project. As a result, to the extent these funds are not required to pay expenses incurred by the Company, they may accumulate over time. The Company is permitted, pursuant to the terms of the Indenture under which the 2006 Notes were issued, to pay a portion of such funds as dividends, provided that the Company satisfies certain conditions. In addition, under the AES Debt Covenants, investment could not be made in a project directly by the Company (as opposed to through one of its subsidiaries). Accordingly, prior to the Amalgamation, the Company intends to transfer its interests in certain potential projects, such as Yangcheng Sun City and Nanpu Southern Delta, to wholly owned subsidiaries of the Company. In the case of each of these projects, the consent of the Company's partners in such project and the examination and approval of the relevant PRC government authority are required to effect the transfers of the Company's interest. There can be no assurance that such consents and approvals will be obtained in order to permit investments to be made in these projects following the Amalgamation. One of the results of the Amalgamation will be to terminate the Non-Competition and Non-Disclosure Agreement, dated as of December 29, 1993 and amended and restated as of February 1, 1994 (the "Non-Competition Agreement") between the Company and AES, which, among things, prohibits the Company from developing, constructing, owning, managing and operating electric power generation projects in any part of Asia other than China. Subject to the limitations imposed by the AES Debt Covenants, the Company may consider investing through its subsidiaries in power projects outside of China. Under the AES Debt Covenants, the Company and its subsidiaries would be effectively prohibited from incurring additional indebtedness (as defined in the relevant instruments), except that a subsidiary would under some circumstances be permitted to incur indebtedness for the purpose of financing a power project as long as such indebtedness did not have recourse to AES, the Company or another subsidiary. Both the AES Debt Covenants and the covenants contained in the Indenture for the 2006 Notes applicable to the Company require the repayment or purchase of indebtedness under specified circumstances involving asset dispositions. Insofar as separate repayments are required at the AES and the Company levels with respect to a single asset sale, this covenant may tend to cause the Company not to make an asset sale under circumstances where it otherwise would. Under the AES Debt Covenants, an AES subsidiary is not permitted to make an investment in a project company following the occurrence of a condition permitting the acceleration of indebtedness relating to the project or any failure to pay such indebtedness at its final maturity. Cash from Operations Net cash provided by operating activities for the three months ended February 28, 1997 totaled $3.7 million as compared to $1.9 million used in operating activities for the same period in 1996. The increase in 1997 resulted primarily from an increase in net income due to the commencement of operations of Wuxi Tin Hill and interest income from investments in marketable securities and a net increase in the components of working capital. Cash from Investing Activities Net cash used in investing activities totaled $96.6 million during the first quarter of 1997 as compared to $8.2 million used in investing activities during the same period of 1996. The 1997 amount primarily reflected the purchase of property, plant and equipment and other project related investments of $49.5 million and the purchase of short-term investments (net of any proceeds from the maturity or sale of short-term investments) of $47.1 million. Cash from Financing Activities Net cash provided by financing activities during the first quarter of 1997 aggregated $182.4 million as compared to $7.8 million used in financing activities during the same period of 1996. During the first quarter of 1997, the Company received proceeds, net of underwriting discounts and commissions and offering costs, of $174.2 million from the issuance of the 2006 Notes, proceeds of $8.2 million from bank loans available to subsidiaries and $2.2 million of loans and contributions made to subsidiaries by minority shareholders, which were partially offset by repayment of bank loans of $1.7 million and repayment of $0.7 million of loans from minority shareholders. PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits Exhibit Number Document -------- -------- 11 Statements Regarding Computation of Earnings Per Share. 27 Financial Data Schedule. 99.1 Statement Re: Computation of Fixed Charge Coverage Ratio. (b) Reports on Form 8-K None. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. AES China Generating Co. Ltd. (Registrant) Date: April 14, 1997 /s/ Jeffery A. Safford ---------------------- Jeffery A. Safford Vice President, Chief Financial Officer and Secretary Exhibit 11 AES CHINA GENERATING CO. LTD. STATEMENTS REGARDING COMPUTATION OF EARNINGS PER SHARE (In thousands, except per share amounts)
Three Months Ended February 28, 1997 February 29, 1996 ----------------------------------------------- (unaudited) PRIMARY Weighted Average Number of Shares of Common Stock Outstanding 15,637 15,647 Net effect of Dilutive Stock Options Based on the Treasury Stock Method Using Average Market Price 347 - Stock Allocated to Pension Plan 6 - -------------------- ------------------ Weighted Average Shares Outstanding 15,990 15,647 ==================== ================== Net Income US$ 1,123 US$ 316 ==================== ================== Per Share Amount US$ 0.07 US$ 0.02 ==================== ================== FULLY DILUTED Weighted Average Number of Shares of Common Stock Outstanding 15,637 15,647 Net Effect of Dilutive Stock Options Based on the Treasury Stock Method Using Ending Market Price 550 - Stock Allocated to Pension Plan 6 - -------------------- ------------------ Weighted Average Shares Outstanding 16,193 15,647 ==================== ================== Net Income US$ 1,123 US$ 316 ==================== ================== Per Share Amount US$ 0.07 US$ 0.02 ==================== ==================
Exhibit 99.1 AES CHINA GENERATING CO. LTD. STATEMENT RE: COMPUTATION OF FIXED CHARGE COVERAGE RATIO (in thousands except ratio amounts)
Three months ended February 28, 1997 February 29, 1996 ------------------------------------------------- Adjusted Cash Flow (A) Cash Inflow: (i) Dividend, distribution, payment of interest and scheduled repayment of loan received by the Company and its Wholly Owned Subsidiaries from the Project Companies $ 800 $ -- (ii) 50% of the combined interest income of the Company, and its Wholly Owned Subsidiaries from cash, cash equivalents and investments in marketable securities 1,019 932 --------------------- ---------------------- 1,819 932 --------------------- ---------------------- (B) Cash Flow: (i) Selling, general and administrative expenses of the Company and its Wholly Owned Subsidiaires 486 953 (ii) Company Designated Costs -- 1,184 --------------------- ---------------------- 486 2,137 --------------------- ---------------------- $ 1,333 $ (1,205) ===================== ====================== Adjusted Interest Expenses $ 3,848 $ -- ===================== ====================== Fixed Charge Coverage ratio 0.35 : 1.0 -- ===================== ======================
EX-27 2
5 THIS FINANCIAL DATA SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED FEBRUARY 28, 1997 AND THE CONSOLIDATED BALANCE SHEET AS OF FEBRUARY 28, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS NOV-30-1997 FEB-28-1997 145,738 56,565 0 0 1,057 208,014 209,824 4,016 473,291 16,523 221,829 0 0 157 191,607 473,291 0 2,507 0 1,726 0 0 1,170 1,153 86 0 0 0 0 1,123 0.07 0.07
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