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): October 25, 2001
THE AES CORPORATION
(exact name of registrant as specified in its charter)
DELAWARE 0-19281 54-1163725
(State of Incorporation) (Commission File No.) (IRS Employer ID No.)
1001 North 19th Street, Suite 2000
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 9. Regulation FD Disclosure
On October 25, 2001, The AES Corporation issued its press release for
the third quarter of 2001, which is presented below and incorporated herein by
reference.
FOR IMMEDIATE RELEASE
AES REPORTS EARNINGS OF $0.27 PER SHARE FOR THE QUARTER,
FROM RECURRING OPERATIONS
AES ANNOUNCES EARNINGS GUIDANCE OF $1.50-1.65 PER SHARE FOR 2002
ARLINGTON, VA, OCTOBER 25, 2001 --The AES Corporation (NYSE: AES) announced
today that net income, before deducting the non-cash foreign currency
transaction losses at Brazilian affiliates, the mark-to-market losses from FAS
133, and the nonrecurring severance costs recorded in conjunction with the
IPALCO pooling of interests transaction, was $147 million for the quarter ended
September 30, 2001. Diluted earnings per share, excluding the non-cash
transaction and mark-to-market losses and the nonrecurring severance costs, were
$0.27 for the quarter. Net income, after all charges, was $3 million for the
quarter. Revenues for the quarter were $2.3 billion, an increase of 14% from the
third quarter of 2000. As a result of the pooling transaction, the results of
operations of AES for the periods ended September 30, 2000 have been restated to
include IPALCO.
For the nine months ended September 30, 2001, net income excluding the non-cash
transaction and mark-to-market losses and nonrecurring items, was $541 million
or $1.00 per fully diluted share. Revenues increased 29% for the nine months
ended September 30, 2001 to $7.0 billion.
AES also narrowed its earnings estimate from recurring operations for the year
ending December 31, 2001 to a range of $1.25 to $1.35 per share. The updated
expectation continues to exclude certain charges, including restructuring
charges related to the IPALCO merger, any gains or losses arising from the
application of Financial Accounting Standards Board (FASB) Statement 133, any
potential charges that may result from divestiture or discontinuance of certain
businesses and foreign currency transaction losses on U.S. dollar denominated
debt in Brazil.
Barry Sharp, Chief Financial Officer, commented "This was a difficult quarter
for AES due particularly to the combined effects of energy rationing and the
continued devaluation of the Real on operating results of our Brazilian
businesses as well as the continued low market prices for wholesale electricity
in the UK. Several businesses in our global portfolio exceeded our expectations
this quarter including Ipalco in Indianapolis, EDC in Venezuela, Placerita in
California, Haripur in Bangladesh, Eden and Edes in Argentina and NewEnergy
serving commercial and industrial electricity customers in several US markets.
We were also encouraged by the contribution from several of our recently
acquired businesses, including Sonel and Ebute in Africa and the US power plants
acquired in the Thermo Ecotek acquisition."
Dennis W. Bakke, President and Chief Executive Officer, stated, "In the last few
weeks, the people of AES have explored all elements of our business and we have
embarked on a number of initiatives and
changes. Some of those initiatives, as well as some things we will not change,
are as follows:
o We will stick to our core electricity generation and distribution
businesses and take advantage of the global restructuring of the
electric sector that provides opportunities for growth;
o We will remain focused as an operating company of electric businesses;
o All AES groups and their businesses will focus on cost-reduction and
revenue enhancement opportunities; a company wide task force has been
established to coordinate actions taken and share ideas and analysis;
o We are looking at divesting businesses where long term viability for
AES is poor;
o We will explore new businesses with higher early year returns and less
need for corporate debt and equity; and
o We will find new ways of explaining our business more clearly."
AES's Expectations for 2002
The following information constitutes forward-looking statements within the
meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934.
The 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 and Exchange Commission, and
readers are encouraged to read those filings to learn more about the risk
factors associated with AES's businesses.
AES expects earnings per share for 2002 to be in the range of $1.50 to $1.65 per
share. This expectation excludes any potential adjustments or charges discussed
earlier. In addition, this expectation assumes an average exchange rate between
the Brazilian Real and the U.S. $ of 2.90 to 1 for the year. Other significant
business factors that could cause AES's 2002 earnings to vary from the range of
$1.50 to $1.65 include but are not limited to the potential impacts of
additional or prolonged energy rationing in Brazil, changes in the selling
prices for electricity at AES's generation businesses subject to short-term
wholesale market prices, particularly in the UK and the northeastern region of
the U.S., the effects of a significant or adverse change in the economic
conditions in Argentina and the effects of delays in completion of new
"greenfield"power plants currently under construction and anticipated to enter
commercial operation during 2002.
Business development milestones in 2001 include the following:
o In October, a subsidiary of AES completed the $250 million multilateral
credit financing for its gas-to-electricity project Songo
Songo in Tanzania.
o In October, a subsidiary of AES secured the financing for its $285 million,
730 MW gas-fired facility Wolf Hollow in Granbury, Texas.
o In September, AES closed on the sale of related interests in the Argentine
hydroelectric facility Hidronequen to Total Austral S.A.
o In August, AES together with its 87% owned subsidiary, Corporacion EDC,
C.A., announced their intention to make cash tender offers in the United
States and Venezuela to acquire American Depositary Shares and Class D
Shares of CANTV.
o In August, a subsidiary of AES entered into an agreement to purchase all of
PSEG Global's interests in five jointly held businesses in Argentina.
o In August, a subsidiary of AES announced that it intends to launch a cash
tender offer to acquire all of the outstanding loan participation
certificates of Edelnor.
o In July, a subsidiary of AES completed the final phase of its acquisition
of the energy assets of Thermo Ecotek Corporation.
o In July, a subsidiary of AES signed agreements to acquire a 56% interest in
SONEL, an integrated electricity utility in Cameroon.
o In July, a subsidiary of AES acquired a majority of the energy assets of
Thermo Ecotek Corporation.
o In June, AES signed a definitive agreement to sell the customers and
related assets of AES Power Direct.
o In June, a subsidiary of AES secured the financing for its $104 million,
163 MW combined cycle diesel-fired power plant in Sri Lanka.
o In June, AES announced that its AES-3C Maritza East 1 project in Bulgaria
signed two key contracts with NEK and Maritza East Mines.
o In May, AES was awarded the Ras Laffan 750 MW and 40 million imperial
gallons of water per day natural gas-fired, combined-cycle cogeneration
power and water desalination project in the State of Qatar.
o In May, AES announced that it received certification from the California
Energy Commission and is set to commence construction on the refurbishment
of two retired gas-fired units 3 & 4 at Huntington Beach, California.
o In May, a subsidiary of AES signed a strategic alliance agreement with
COTEL, the largest local telephone carrier in Bolivia.
o In May, a subsidiary of AES secured the financing for its, $348.6 million,
427 MW Barka facility in Oman.
o In May AES announced that it won a bid for approximately $23.2 million to
purchase a 75% controlling interest in Rivenoblenergo, the distribution
company that serves the Rivno region, which is about 200 kms from Kiev,
the capital city of Ukraine.
o In April, AES announced that it won a bid for approximately $45.9 million
to purchase a 75% controlling interest in Kievoblenergo the distribution
company that serves the region that surrounds Kiev, the capital city of
Ukraine.
o In April, a subsidiary of AES signed agreements for the financing of its
$300 million, 450 MW combined cycle gas-fired Meghnaghat power plant in
Bangladesh.
o In April, a subsidiary of AES completed a $180 million financing for its
360 MW gas-fired combined cycle facility Haripur in Bangladesh.
o In April, AES announced the completion of its acquisition of IPALCO in
Indiana.
o In March, a subsidiary of AES secured the financing for the 720 MW
gas-fired Granite Ridge project in New Hampshire.
o In March, a subsidiary of AES acquired from EniChem SpA an oil-fired 140MW
cogeneration facility in the town of Ottana, which is in the province of
Nuoro, Sardinia, Italy.
o In February, a subsidiary of AES entered an agreement to purchase all of
the energy assets of Thermo Ecotek Corporation, a wholly owned subsidiary
of Thermo Electron Corporation of Waltham, Massachusetts for $195 million.
o In January, AES announced the start of construction of the $300 million AES
Wolf Hollow power plant at a site in Granbury, Texas.
o In January, a subsidiary of AES acquired a majority interest in a 290MW
barge-mounted natural-gas-fired electric generating business in Lagos,
Nigeria.
o In January, AES Huntington Beach submitted a proposal to the California
Energy Commission to restart two retired gas-fired units that will add an
additional 450 megawatts of generation in the electricity-strapped state of
California.
o In January, AES announced the purchase of an additional 39% ownership
interest in Hidroelectrica Alicura, a 1000 MW hydro plant in Argentina.
o In January, AES announced that it had successfully completed its offer to
exchange all American Depositary Shares of Gener S.A. for AES common stock.
This information will be discussed on a conference call to be held on Thursday,
October 25, 2001 at 5:00 pm (Eastern). If you are interested in participating in
the conference call, the number to dial is (212) 346 0100 and the reservation
number is 19695620. A live webcast of the call will also be available online at
HTTP://WWW.AESC.COM/INVESTOR/WEBCASTS.CFM and HTTP://WWW.STREETEVENTS.COM.
AES is a leading global power company comprised of competitive generation,
distribution and retail supply businesses in Argentina, Australia, Bangladesh,
Brazil, Cameroon, Canada, Chile, China, Colombia, Czech. Republic, Dominican
Republic, El Salvador, Georgia, Germany, Hungary, India, Italy, Kazakhstan, the
Netherlands, Nigeria, Mexico, Oman, Pakistan, Panama, Sri Lanka, Ukraine, the
United Kingdom, the United States and Venezuela.
The company's generating assets include interests in one hundred and eighty
facilities totaling over 60 gigawatts of capacity. AES's electricity
distribution network has over 946,000 km of conductor and associated rights of
way and sells over 135,000 gigawatt hours per year to over 19 million end-use
customers. In addition, through its various retail electricity supply
businesses, the company sells electricity to over 154,000 end-use customers.
AES is dedicated to providing electricity worldwide in a socially responsible
way.
This news release may include forward-looking statements. Actual events and
results may differ materially from those projected. Factors that could affect
actual results are discussed in AES's filings with the Securities and Exchange
Commission, and readers are encouraged to read those filings to learn more about
the risk factors associated with AES's businesses.
* * * * *
For more general information visit our web site at www.aesc.com or contact
investor relations at investing@aesc.com. The list aes-pr-announce is an
automated mailing list and can be found on the investing page of our web site.
Those who subscribe to this list will receive updates when AES issues a press
release.
THE AES CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE PERIODS ENDED SEPTEMBER 30, 2001 AND 2000
----------------------------------------------------------------------------------------------------------------
QUARTER QUARTER
ENDED ENDED
($ in millions, except per share amounts) 9/30/2001 9/30/2000
----------------------------------------------------------------------------------------------------------------
REVENUES:
Sales and services $ 2,268 $ 1,995
OPERATING COSTS AND EXPENSES:
Cost of sales and services 1,762 1,475
Selling, general and administrative expenses 19 21
------- -------
TOTAL OPERATING COSTS AND EXPENSES 1,781 1,496
------- -------
OPERATING INCOME 487 499
OTHER INCOME AND (EXPENSE):
Interest expense, net (403) (339)
Other income (expense) (11) 9
Equity in earnings (loss) of affiliates (before income tax) (23) 102
Nonrecurring severance and transaction costs (37) --
------- -------
INCOME BEFORE INCOME TAXES AND MINORITY INTEREST 13 271
Income tax provision 2 75
Minority interest 8 32
------- -------
NET INCOME $ 3 $ 164
======= =======
DILUTED EARNINGS PER SHARE: $ 0.01 $ 0.32
======= =======
Diluted weighted average shares outstanding (in millions) 537 523
======= =======
THE AES CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE PERIODS ENDED SEPTEMBER 30, 2001 AND 2000
------------------------------------------------------------------------------------------------------------------
NINE MONTHS NINE MONTHS
ENDED ENDED
($ in millions, except per share amounts) 9/30/2001 9/30/2000
------------------------------------------------------------------------------------------------------------------
REVENUES:
Sales and services $ 7,028 $ 5,442
OPERATING COSTS AND EXPENSES:
Cost of sales and services 5,437 4,053
Selling, general and administrative expenses 87 69
------- -------
TOTAL OPERATING COSTS AND EXPENSES 5,524 4,122
------- -------
OPERATING INCOME 1,504 1,320
OTHER INCOME AND (EXPENSE):
Interest expense, net (1,077) (864)
Other income 17 26
Equity in earnings of affiliates (before income tax) 126 319
Gain on sale of investment -- 112
Loss on sale of Power Direct (31) --
Nonrecurring severance and transaction costs (131) --
------- -------
INCOME BEFORE INCOME TAXES AND MINORITY INTEREST 408 913
Income tax provision 120 268
Minority interest 67 67
------- -------
INCOME BEFORE EXTRAORDINARY ITEM 221 578
Extraordinary item, net of tax -
Early extinguishment of debt -- (7)
------- -------
NET INCOME $ 221 $ 571
======= =======
DILUTED EARNINGS PER SHARE:
Before extraordinary item $ 0.41 $ 1.17
Extraordinary item -- (0.01)
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Total $ 0.41 $ 1.16
======= =======
Diluted weighted average shares outstanding (in millions) 538 509
======= =======
THE AES CORPORATION --- SUPPLEMENTAL SCHEDULE (1)
CONSOLIDATED SCHEDULE
(Excluding Brazilian affiliates foreign currency effects, effects of FAS No.
133, nonrecurring and extraordinary items)(1)
FOR THE PERIODS ENDED SEPTEMBER 30, 2001 AND 2000
---------------------------------------------------------------------------------------------------------------------------------
QUARTER QUARTER
ENDED ENDED
($ in millions, except per share amounts) 9/30/2001 9/30/2000
---------------------------------------------------------------------------------------------------------------------------------
REVENUES:
Sales and services $ 2,268 $ 1,995
OPERATING COSTS AND EXPENSES:
Cost of sales and services 1,762 1,475
Selling, general and administrative expenses 19 21
------- -------
TOTAL OPERATING COSTS AND EXPENSES 1,781 1,496
------- -------
OPERATING INCOME 487 499
OTHER INCOME AND (EXPENSE), EXCLUDING BRAZILIAN
AFFILIATES FOREIGN CURRENCY EFFECTS, EFFECTS OF FAS NO. 133,
NONRECURRING AND EXTRAORDINARY ITEMS:
Interest expense, net (358) (339)
Other income 1 9
Equity in earnings of affiliates (before income tax) 100 124
------- -------
INCOME BEFORE TAXES AND MINORITY INTEREST,
EXCLUDING BRAZILIAN AFFILIATES FOREIGN CURRENCY EFFECTS, EFFECTS
OF FAS NO. 133, NONRECURRING AND EXTRAORDINARY ITEMS: 230 293
Income tax provision 75 83
Minority interest 8 32
------- -------
NET INCOME, EXCLUDING BRAZILIAN AFFILIATES FOREIGN
CURRENCY EFFECTS, EFFECTS OF FAS NO. 133, NONRECURRING
AND EXTRAORDINARY ITEMS: $ 147 $ 178
======= =======
DILUTED EARNINGS PER SHARE, EXCLUDING BRAZILIAN
AFFILIATES FOREIGN CURRENCY EFFECTS, EFFECTS OF FAS NO. 133,
NONRECURRING AND EXTRAORDINARY ITEMS: $ 0.27 $ 0.35
======= =======
Diluted weighted average shares outstanding (in millions) 542 523
======= =======
(1) Basis of presentation - This schedule presents, on a proforma basis, the
results of operations of AES excluding the aggregate (both subsidiaries and
affiliates) Brazilian affiliates foreign currency losses of approximately
$81 million after income tax, or $0.15 per share in 2001 and approximately
$14 million after income tax, or $0.03 per share in 2000, mark to market
losses from FAS No. 133 of approximately $39 million after income tax, or
$0.07 per share in 2001 and nonrecurring charges, including transaction and
severance costs related to the IPALCO transaction of approximately $24
million after income tax, or $0.04 per share in 2001.
THE AES CORPORATION --- SUPPLEMENTAL SCHEDULE (1)
CONSOLIDATED SCHEDULE
(Excluding Brazilian affiliates foreign currency effects, effects of FAS No.
133, nonrecurring and extraordinary items)(1)
FOR THE PERIODS ENDED SEPTEMBER 30, 2001 AND 2000
----------------------------------------------------------------------------------------------------------------------------------
NINE MONTHS NINE MONTHS
ENDED ENDED
($ in millions, except per share amounts) 9/30/2001 9/30/2000
----------------------------------------------------------------------------------------------------------------------------------
REVENUES:
Sales and services $ 7,028 $ 5,442
OPERATING COSTS AND EXPENSES:
Cost of sales and services 5,437 4,053
Selling, general and administrative expenses 87 69
------- -------
TOTAL OPERATING COSTS AND EXPENSES 5,524 4,122
------- -------
OPERATING INCOME 1,504 1,320
OTHER INCOME AND (EXPENSE), EXCLUDING BRAZILIAN
AFFILIATES FOREIGN CURRENCY EFFECTS, EFFECTS OF FAS NO. 133,
NONRECURRING AND EXTRAORDINARY ITEMS:
Interest expense, net (1,037) (864)
Other income 18 26
Equity in earnings of affiliates (before income tax) 411 347
------- -------
INCOME BEFORE TAXES AND MINORITY INTEREST,
EXCLUDING BRAZILIAN AFFILIATES FOREIGN CURRENCY EFFECTS, EFFECTS
OF FAS NO. 133, NONRECURRING AND EXTRAORDINARY ITEMS: 896 829
Income tax provision 288 239
Minority interest 67 67
------- -------
NET INCOME, EXCLUDING BRAZILIAN AFFILIATES
FOREIGN CURRENCY EFFECTS, EFFECTS OF FAS NO. 133,
NONRECURRING AND EXTRAORDINARY ITEMS: $ 541 $ 523
======= =======
DILUTED EARNINGS PER SHARE, EXCLUDING
BRAZILIAN AFFILIATES FOREIGN CURRENCY EFFECTS, EFFECTS OF
FAS NO. 133, NONRECURRING AND EXTRAORDINARY ITEMS: $ 1.00 $ 1.06
======= =======
Diluted weighted average
shares outstanding (in millions) 543 509
======= =======
(1) Basis of presentation - This schedule presents, on a proforma basis, the
results of operations of AES excluding the aggregate (both subsidiaries and
affiliates) Brazilian affiliates foreign currency losses of approximately
$187 million after income tax, or $0.35 per share in 2001 and approximately
$18 million after income tax, or $0.04 per share in 2000, mark to market
losses from FAS No. 133 of approximately $29 million after income tax, or
$0.05 per share in 2001, and nonrecurring items, including transaction and
severance costs related to the IPALCO acquisition of $85 million after
income tax, or $0.16 per share in 2001, the loss on the sale of Power
Direct of $20 million after income tax, or $0.03 per share in 2001 and a
gain on the sale of an investment held by IPALCO of $73 million after
income tax, or $0.15 per share in 2000. This schedule also excludes the
extraordinary loss of approximately $7 million incurred during the first
quarter of 2000.
The AES Corporation
Unaudited Supplemental Data
For the Quarter Ended September 30, 2001
2000 2001
----------------------------------------------------- ---------------------------
1ST QTR 2ND QTR 3RD QTR 4TH QTR YEAR 1ST QTR 2ND QTR. 3RD QTR.
------- ------- ------- ------- ---- ------- -------- --------
GEOGRAPHIC-% of Total
NORTH AMERICA
Revenues 45% 47% 45% 42% 45% 39% 37% 44%
EBCIT (1) 37% 40% 40% 35% 38% 41% 28% 60%
SOUTH/CENTRAL AMERICA
Revenues 24% 27% 33% 35% 30% 38% 42% 38%
EBCIT 28% 43% 47% 55% 45% 51% 66% 32%
EUROPE
Revenues 22% 17% 15% 15% 17% 14% 13% 14%
EBCIT 26% 9% 7% 6% 11% 7% 1% 5%
ASIA
Revenues 9% 9% 7% 8% 8% 9% 8% 4%
EBCIT 9% 8% 6% 4% 6% 1% 5% 3%
SEGMENTS-% of Total
GENERATION
Revenues 51% 48% 45% 44% 47% 48% 47% 48%
Operating Margin (2) 70% 80% 67% 59% 68% 59% 53% 53%
EBCIT 69% 60% 51% 37% 52% 42% 23% 39%
DISTRIBUTION
Revenues 49% 52% 55% 56% 53% 52% 53% 52%
Operating Margin 30% 20% 33% 41% 32% 41% 47% 47%
EBCIT 31% 40% 49% 63% 48% 58% 77% 61%
FINANCIAL HIGHLIGHTS-million $, except Total Assets in billion $
Revenues $1,696 $1,751 $1,995 $2,141 $7,583 $2,545 $2,215 $2,268
EBCIT $367 $293 $386 $522 $1,568 $459 $394 $343
Net Income Excluding
Extraordinary and Other Items (3) $188 $157 $178 $301 $824 $222 $172 $147
Total Assets (billions) $26 $31 $32 $33 $33 $36 $36 $36
Deprec./Amort. $143 $163 $197 $201 $704 $209 $211 $225
Parent EBITDA - LTM (4) $387 $501 $593 $871 $871 $965 $1,004 $1,160
(1) EBCIT is net income excluding corporate interest, other corporate costs,
income taxes, Brazilian affiliates foreign currency effects, effects of FAS
No. 133 and nonrecurring items.
(2) Operating Margin is revenues reduced by cost of sales, depreciation and
amortization and other operating expenses.
(3) Net Income excludes Brazilian affiliates foreign currency effects, effects
of FAS No. 133 and nonrecurring items.
(4) Parent EBITDA - LTM is cash flow earnings distributed to parent less parent
operating expenses.
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: October 26, 2001 by: /s/ William R. Luraschi
Vice President and Secretary