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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20349
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): April 28, 2004
THE AES CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 001-12291 54-1163725
(State or other (Commission File (I.R.S Employer
jurisdiction of Number) Identification No.)
incorporation)
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)
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Item 5. Other Events
AES CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
Quarter Ended
March 31,
($ in millions, except per share amounts) 2004 2003
---------------------------------
REVENUES
Sales and services $2,257 $1,911
OPERATING COSTS AND EXPENSES
Cost of sales and services 1,577 1,337
Corporate and business development expenses 48 29
Other operating expense, net 14 22
--------------- ---------------
Total operating costs and expenses 1,639 1,388
--------------- ---------------
OPERATING INCOME 618 523
OTHER INCOME AND (EXPENSE)
Interest expense, net (424) (431)
Other nonoperating expense, net - 15
Foreign currency transaction (losses) gain (8) 82
Loss on sale of investments (1) -
Equity in earnings of affiliates 16 24
--------------- ---------------
INCOME BEFORE INCOME TAXES AND
MINORITY INTEREST 201 213
Income tax expense 64 61
Minority interest expense, net 63 21
--------------- ---------------
INCOME FROM CONTINUING OPERATIONS 74 131
Loss from operations of discontinued components (net
of income tax expense of $2 and tax benefit of $4, respectively) (26) (36)
--------------- ---------------
INCOME BEFORE CUMULATIVE EFFECT OF
ACCOUNTING CHANGE 48 95
Cumulative effect of accounting change (net of income tax benefit of $1) - (2)
=============== ===============
NET INCOME $48 $93
=============== ===============
DILUTED EARNINGS PER SHARE:
Income from continuing operations $0.12 $0.23
Discontinued operations (0.04) (0.06)
Cumulative effect of accounting change - -
--------------- ---------------
Total $0.08 $0.17
=============== ===============
Diluted weighted average shares outstanding (in millions) 633 567
=== ===
AES CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
March 31, December 31,
($ in millions, except per share amounts) 2004 2003
-----------------------------
Assets
Current Assets:
Cash and cash equivalents $1,120 $1,737
Restricted cash 725 288
Short term investments 201 189
Accounts receivable, net of reserves of $275 and $291, respectively 1,204 1,211
Inventory 357 376
Receivable from affiliates 3 3
Deferred income taxes - current 150 136
Prepaid expenses 103 64
Other current assets 695 677
Current assets of held for sale and discontinued businesses 223 205
-------------- --------------
Total current assets 4,781 4,886
Property, Plant and Equipment:
Land 739 733
Electric generation and distribution assets 21,067 21,087
Accumulated depreciation (4,745) (4,593)
Construction in progress 1,389 1,278
-------------- --------------
Property, plant and equipment, net 18,450 18,505
Other assets:
Deferred financing costs, net 455 430
Investment in and advances to affiliates 665 648
Debt service reserves and other deposits 539 534
Goodwill, net 1,381 1,378
Deferred income taxes - noncurrent 788 781
Long-term assets of held for sale and discontinued businesses 746 750
Other assets 1,945 1,992
-------------- --------------
Total other assets 6,519 6,513
-------------- --------------
Total Assets $29,750 $29,904
============== ==============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $1,127 $1,122
Accrued interest 366 561
Accrued and other liabilities 1,315 1,259
Current liabilities of held for sale and discontinued businesses 728 699
Recourse debt-current portion 1 77
Non-recourse debt-current portion 2,468 2,769
-------------- --------------
Total current liabilities 6,005 6,487
Long-term liabilities:
Recourse debt 5,587 5,862
Non-recourse debt 10,687 10,930
Deferred income taxes 1,048 1,051
Long-term liabilities of held for sale and discontinued businesses 91 94
Pension liabilities 924 947
Other long-term liabilities 3,150 3,083
-------------- --------------
Total long-term liabilities 21,487 21,967
Minority Interest, including discontinued businesses of $12 and $12, respectively 1,168 805
Stockholders' equity:
Common stock 6 6
Additional paid-in capital 5,363 5,737
Accumulated deficit (1,055) (1,103)
Accumulated other comprehensive loss (3,224) (3,995)
-------------- --------------
Total stockholders' equity 1,090 645
-------------- --------------
Total Liabilities and Stockholders' Equity $29,750 $29,904
============== ==============
AES CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
March 31, March 31,
($ in millions) 2004 2003
------------------------------
Operations
Net income $48 $93
Adjustments:
Depreciation and amortization-- continuing and discontinued operations 200 184
Cumulative effect of change in accounting principle - 3
Other non-cash (benefits)/charges 226 (54)
Working capital, (net) (72) 220
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Net cash provided by operating activities 402 446
Investing activities
Property additions (190) (265)
Proceeds from the sales of assets 27 585
Increase in restricted cash and other (453) (134)
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Net cash used in investing activities (616) 186
Financing activities
Borrowings (repayments) under the revolving credit facilities, net - 8
Issuance of non-recourse debt and other coupon bearing securities 1,133 269
Repayments of non-recourse debt and other coupon bearing securities (1,473) (493)
Payments for deferred financing costs (40) (15)
Issuance of common stock, net 2 0
Other financing (9) 6
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Net cash used in financing activities (387) (225)
Effect of exchange rate changes on cash (15) (1)
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Total (decrease) increase in cash and cash equivalents (616) 406
Increase in cash and cash equivalents of discontinued operations and
businesses held for sale (1) (18)
Cash and cash equivalents, beginning 1,737 792
--------------- --------------
Cash and cash equivalents, ending $1,120 $1,180
=============== ==============
Business Segment Results
Sales increased in all four business segments and the segment contribution to
gross margin increased in the three largest segments.
o In Contract Generation, AES's largest segment, sales grew 21% to $868
million and gross margin improved 24% to $359 million in the first quarter
of 2004. Increases were due primarily to the addition of new generation
plants and improved operating results at Gener in Chile, Kilroot in
Northern Ireland and generation businesses in Brazil.
o Large Utilities sales increased 17% to $818 million and gross margin
improved 18% to $194 million for 2004. Increases were primarily driven by
tariff increases at EDC and Eletropaulo along with lower fuel costs,
reduced operating costs and favorable currency effects.
o The Growth Distribution segment sales increased 24% to $328 million and
gross margin increased 26% to $63 million, respectively, benefiting from
improved tariffs and operating results, together with favorable currency
effects and improved margins at distribution businesses in El Salvador.
o Sales in Competitive Supply increased 6% to $243 million while gross margin
declined 7% to $64 million, primarily as a result of lower capacity
revenues and higher coal costs in New York during the first quarter of
2004.
Overall, consolidated sales increased 18% to $2.3 billion for 2004 and total
gross margin from the four operating segments increased 19% over 2003 to $680
million. Of the first quarter 2004 total segment gross margin, 53% was from
Contract Generation, 29% from Large Utilities, 9% from Growth Distribution and
9% from Competitive Supply.
AES CORPORATION
SEGMENT INFORMATION
Quarter Ended
March 31,
($ in millions) 2004 2003
--------------------------------
BUSINESS SEGMENTS
REVENUES
Contract Generation $868 $716
Competitive Supply 243 229
Large Utilities 818 702
Growth Distribution 328 264
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Total sales 2,257 1,911
GROSS MARGIN
Contract Generation $359 $290
Competitive Supply 64 69
Large Utilities 194 165
Growth Distribution 63 50
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Total gross margin 680 574
INCOME BEFORE INCOME TAXES AND MINORITY INTEREST
Contract Generation $190 $169
Competitive Supply 55 70
Large Utilities 117 73
Growth Distribution 31 38
Corporate (192) (137)
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Total income before income taxes 201 213
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GEOGRAPHIC SEGMENTS
REVENUES
North America $546 $546
Caribbean 390 347
South America 879 675
Europe/Africa 275 236
Asia 167 107
-------------- ---------------
Total sales 2,257 1,911
INCOME BEFORE INCOME TAXES AND MINORITY INTEREST
North America $118 $119
Caribbean 61 57
South America 92 68
Europe/Africa 57 61
Asia 65 45
Corporate (192) (137)
-------------- ---------------
Total income before income taxes 201 213
The AES Corporation
Parent Financial Information
Parent only data: last four quarters
($ in millions) 4 Quarters Ended
June 30, September 30, December 31, March 31,
Total subsidiary distributions & returns of capital to Parent 2003 2003 2003 2004
Actual Actual Actual Actual
---------- ------------ ------------ ---------
Subsidiary distributions to Parent $ 773 $ 909 $ 1,008 $1,076
Net distributions to/(from) QHCs (1) 208 139 46 2
----------- ------------- ------------ ---------
Subsidiary distributions 981 1,048 1,054 1,078
Returns of capital distributions to Parent 54 248 242 244
Net returns of capital distributions to/(from) QHCs (1) 6 (1) 0 0
----------- ------------- ------------ ---------
Returns of capital distributions 60 247 242 244
Combined distributions & return of capital received 1,041 1,295 1,296 1,322
Less: combined net distributions & returns of capital to/(from) QHCs (1) (214) (138) (46) (2)
----------- ------------- ------------ ---------
Total subsidiary distributions & returns of capital to Parent $ 827 $ 1,157 $ 1,250 $1,320
=========== ============= ============ =========
Parent only data: quarterly
($ in millions) Quarter Ended
June 30, September 30, December 31, March 31,
Total subsidiary distributions & returns of capital to Parent 2003 2003 2003 2004
Actual Actual Actual Actual
----------- ------------- ------------ ---------
Subsidiary distributions to Parent $ 312 $ 312 $ 248 $ 204
Net distributions to/(from) QHCs (1) (12) 7 7 0
----------- ------------- ------------ ---------
Subsidiary distributions 300 319 255 204
Returns of capital distributions to Parent 24 199 17 4
Net returns of capital distributions to/(from) QHCs (1) 6 (7) 1 0
----------- ------------- ------------ ---------
Returns of capital distributions 30 192 18 4
Combined distributions & return of capital received 330 511 273 208
Less: combined net distributions & returns of capital to/(from) QHCs (1) 6 0 (8) 0
----------- ------------- ------------ ---------
Total subsidiary distributions & returns of capital to Parent $ 336 $ 511 $ 265 $ 208
=========== ============= ============ =========
Liquidity (2) Balance at
($ in millions) March 31, June 30, September 30, December 31, March 31,
2003 2003 2003 2003 2004
Actual Actual Actual Actual Actual
---------- --------- -------------- ----------- ---------
Cash at Parent $ 395 $ 923 $ 525 $ 865 $ 268
Availability under revolver 28 39 172 180 371
Cash at QHCs (1) 66 29 41 26 17
---------- --------- -------------- ----------- ---------
Ending liquidity $ 489 $ 991 $ 738 $ 1,071 $ 656
========== ========= ============== =========== =========
(1) The cash held at qualifying holding companies (QHCs) represents cash sent
to subsidiaries of the company domiciled outside of the US. 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 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 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.
(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.
Item 12. Results of Operations and Financial Condition
On April 28, 2004, The AES Corporation issued a press release setting forth its
first quarter financial results. A copy of the release is attached hereto as
Exhibit 99.1 and 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: April 28, 2004 By: /s/ Vincent W. Mathis
--------------------------------
Name: Vincent W. Mathis
Title: Assistant General Counsel
INDEX TO EXHIBITS
Exhibit No. Description
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99.1 Press Release dated April 28, 2004