2015 Achievements
-
Increased quarterly dividend by 10%, to $0.11 per share, beginning in
the first quarter of 2016
-
Returned $757 million to shareholders through share repurchases and
dividend payments
-
Used $345 million to prepay or refinance Parent debt
-
Brought on-line 1,484 MW of new projects, with an additional 5,620 MW
currently under construction, the majority of which is expected to
come on-line through 2018
-
Advanced select platform expansion projects in the Philippines, Panama
and California
2016 Guidance and 2017-2018 Expectations
-
Revised 2016 Proportional Free Cash Flow guidance to $1,000-$1,350
million, $125 million below prior guidance; continues to expect at
least 10% average annual growth in 2017 and 2018
-
Revised 2016 Adjusted EPS guidance to $0.95-$1.05, $0.10 below prior
guidance; now expects average annual growth in 2017 and 2018 in the
higher end of the prior 12%-16% range
-
Revised 2016 guidance primarily reflects the impact from continued
devaluation in foreign currencies and commodities, as well as slower
economic growth in Brazil
ARLINGTON, Va.--(BUSINESS WIRE)--
The
AES Corporation (NYSE: AES) today reported Proportional Free Cash
Flow (a non-GAAP financial measure) for full year 2015 of $1,241
million, an increase of $350 million from full year 2014. Although
operating results were down year-over-year, Proportional Free Cash Flow
improved primarily as a result of improved collections, particularly in
the Dominican Republic and in Chile. Full year 2015 Consolidated Net
Cash Provided by Operating Activities increased $343 million to $2,134
million, primarily driven by the same factors as Proportional Free Cash
Flow.
Full year 2015 Adjusted Earnings Per Share (Adjusted EPS, a non-GAAP
financial measure) decreased $0.08 to $1.22, primarily due to the $0.11
impact from the devaluation in foreign currencies in Latin America and
Europe, the impact of lower commodity prices, as well as lower demand in
Brazil. These negative impacts were partially offset by a 6% reduction
in share count, lower Parent interest expense, improved hydrological
conditions in Panama and the contributions from new plants coming
on-line, including Mong Duong in Vietnam.
Full year 2015 Diluted Earnings Per Share from Continuing Operations was
$0.44, a decrease of $0.65 from full year 2014. In addition to the
factors impacting Adjusted EPS described above, Diluted EPS also
reflects lower gains from sales of businesses and higher impairment
expense, partially offset by lower debt extinguishment expense.
"Despite facing significant macroeconomic headwinds in 2015, we
delivered strong free cash flow growth, continued to de-lever the
company, repurchased $500 million of our shares and advanced our
platform expansion projects," said Andrés
Gluski, AES President and Chief Executive Officer. "Based on our
strong Proportional Free Cash Flow growth of almost 40%, for the third
consecutive year we raised our dividend by at least 10%. We also brought
on-line 1,500 MW of new capacity and our additional 6 GW of largely
funded, on-going construction projects will drive our expected 10%
growth in free cash flow through 2018."
"We are obviously disappointed that the adverse macroeconomic
conditions, specifically declines in foreign currencies and commodities
and the recession in Brazil, continue to have an impact on our financial
outlook," said Tom
O'Flynn, AES Executive Vice President and Chief Financial Officer.
"That said, we continue to partially offset these headwinds through our
hedging activities and other steps, including a three-year cost
reduction and revenue enhancement program from which we expect to
realize an annual run rate benefit of $150 million. We will continue to
prudently allocate our capital to maximize risk-adjusted returns for our
shareholders."
|
|
|
|
|
|
|
|
|
|
|
|
Table 1: Key Financial Results
|
|
|
|
|
|
|
|
|
|
|
$ in Millions, Except Per Share Amounts
|
|
|
Fourth Quarter
|
|
|
Full Year
|
|
|
Full Year 2015 Guidance
|
|
|
|
2015
|
|
2014
|
|
|
2015
|
|
2014
|
|
|
|
Proportional Free Cash Flow1, 2
|
|
|
$
|
293
|
|
|
$
|
287
|
|
|
$
|
1,241
|
|
$
|
891
|
|
|
$1,000-$1,350 million
|
|
Consolidated Net Cash Provided by Operating Activities
|
|
|
$
|
629
|
|
|
$
|
575
|
|
|
$
|
2,134
|
|
$
|
1,791
|
|
|
$1,900-$2,700 million
|
|
Adjusted EPS1
|
|
|
$
|
0.34
|
|
|
$
|
0.41
|
|
|
$
|
1.22
|
|
$
|
1.30
|
|
|
$1.18-$1.25
|
|
Diluted EPS from Continuing Operations
|
|
|
$
|
(0.13
|
)
|
|
$
|
0.29
|
|
|
$
|
0.44
|
|
$
|
1.09
|
|
|
N/A
|
|
|
|
|
|
1
|
|
A non-GAAP financial measure. See “Non-GAAP Financial Measures” for
definitions and reconciliations to the most comparable GAAP
financial measures.
|
|
2
|
|
Defined as Proportional Net Cash Provided by Operating Activities,
less Maintenance Capex, which includes non-recoverable
environmental capex. Beginning in Q1 2015, the definition was
revised to also exclude cash flows related to service concession
assets.
|
|
|
|
|
Discussion of Drivers of Proportional Free Cash Flow (a non-GAAP
financial measure), Adjusted Pre-Tax Contribution (Adjusted PTC, a
non-GAAP financial measure) and Adjusted EPS (a non-GAAP financial
measure)
The Company manages its portfolio in six market-oriented Strategic
Business Units (SBUs): US (United States), Andes (Chile, Colombia and
Argentina), Brazil, MCAC (Mexico, Central America and Caribbean),
Europe, and Asia.
|
Table 2: Fourth Quarter Proportional Free Cash Flow1
and Adjusted PTC1
|
|
$ in Millions
|
|
|
Fourth Quarter
|
|
|
|
Proportional Free Cash Flow1
|
|
|
Adjusted PTC1
|
|
|
|
2015
|
|
2014
|
|
Variance
|
|
|
2015
|
|
2014
|
|
Variance
|
|
US
|
|
|
$
|
114
|
|
|
$
|
144
|
|
|
$
|
(30
|
)
|
|
|
$
|
97
|
|
|
$
|
134
|
|
|
$
|
(37
|
)
|
|
Andes
|
|
|
$
|
93
|
|
|
$
|
50
|
|
|
$
|
43
|
|
|
|
$
|
160
|
|
|
$
|
144
|
|
|
$
|
16
|
|
|
Brazil
|
|
|
$
|
7
|
|
|
$
|
25
|
|
|
$
|
(18
|
)
|
|
|
$
|
6
|
|
|
$
|
58
|
|
|
$
|
(52
|
)
|
|
MCAC
|
|
|
$
|
107
|
|
|
$
|
151
|
|
|
$
|
(44
|
)
|
|
|
$
|
79
|
|
|
$
|
68
|
|
|
$
|
11
|
|
|
Europe
|
|
|
$
|
31
|
|
|
$
|
30
|
|
|
$
|
1
|
|
|
|
$
|
64
|
|
|
$
|
81
|
|
|
$
|
(17
|
)
|
|
Asia
|
|
|
$
|
28
|
|
|
$
|
16
|
|
|
$
|
12
|
|
|
|
$
|
30
|
|
|
$
|
13
|
|
|
$
|
17
|
|
|
Total SBUs
|
|
|
$
|
380
|
|
|
$
|
416
|
|
|
$
|
(36
|
)
|
|
|
$
|
436
|
|
|
$
|
498
|
|
|
$
|
(62
|
)
|
|
Corporate & Other
|
|
|
$
|
(87
|
)
|
|
$
|
(129
|
)
|
|
$
|
42
|
|
|
|
$
|
(111
|
)
|
|
$
|
(114
|
)
|
|
$
|
3
|
|
|
Total
|
|
|
$
|
293
|
|
|
$
|
287
|
|
|
$
|
6
|
|
|
|
$
|
325
|
|
|
$
|
384
|
|
|
$
|
(59
|
)
|
|
|
|
|
Adjusted Effective Tax Rate
|
|
|
30
|
%
|
|
25
|
%
|
|
|
|
|
|
|
Diluted Share Count
|
|
|
674
|
|
|
714
|
|
|
|
|
|
|
|
Adjusted EPS1,2
|
|
|
$
|
0.34
|
|
|
$
|
0.41
|
|
|
$
|
(0.07
|
)
|
|
|
|
|
|
1
|
|
A non-GAAP financial measure. See “Non-GAAP Financial Measures” for
definitions and reconciliations to the most comparable GAAP
financial measures.
|
|
2
|
|
Includes $10 million and $17 million of after-tax adjusted equity in
earnings for fourth quarter 2015 and fourth quarter 2014,
respectively.
|
|
|
|
|
Fourth quarter 2015 Proportional Free Cash Flow increased $6 million to
$293 million and Fourth quarter 2015 Adjusted PTC decreased $59 million
to $325 million. Key drivers of this improvement included:
-
US
-
Proportional Free Cash Flow decreased $30 million, primarily
driven by:
-
Lower margins: lower availability and a greater proportion of
energy sold into the wholesale versus retail market at DPL and
lower wholesale margins and the impact of the partial
sell-down at IPL; and
-
DPL: higher capital expenditures and lower collections,
partially offset by a one-time contract termination payment in
2014;
-
Partially offset by lower capital expenditures and higher
collections at IPL.
-
Adjusted PTC decreased $37 million, primarily due to lower margins.
-
Andes
-
Proportional Free Cash Flow increased $43 million, primarily
driven by:
-
Higher margins: higher energy prices at Chivor in Colombia and
lower depreciation and lower fixed costs at Gener in Chile,
offset by an approximate 29% devaluation of the Colombian
Peso; and
-
Lower capital expenditures and higher VAT refunds related to
the construction of Cochrane and Alto Maipo in Chile.
-
Adjusted PTC increased $16 million, primarily due to higher
margins and lower interest income in Argentina.
-
Brazil
-
Proportional Free Cash Flow decreased $18 million, primarily
driven by:
-
Lower margins: lower demand and increased storm costs at Sul,
higher fixed costs and lower demand at Eletropaulo and the 34%
devaluation of the Brazilian Real, partially offset by lower
spot energy purchases at lower prices at Tiete
-
Adjusted PTC decreased $52 million, primarily due to lower margins
and higher provisions for bad debt at Sul.
-
Mexico, Central America & the Caribbean (MCAC)
-
Proportional Free Cash Flow decreased of $44 million, primarily
driven by:
-
Lower margins: timing of spot gas cargoes in 2015 in the
Dominican Republic; and
-
Higher collection of receivables in the fourth quarter of 2014
in the Dominican Republic.
-
Adjusted PTC increased $11 million, primarily due to compensation
related to the early termination of a PPA in Panama, where a new
PPA is now in place, offset by lower margins.
-
Europe
-
Proportional Free Cash Flow increased $1 million, primarily driven
by:
-
Lower margins: the 40% devaluation of the Kazakhstan Tenge,
the 12% devaluation of the Euro, the timing of outages at
Ballylumford in the United Kingdom in 2014, the sale of Ebute
in Nigeria in 2014, partially offset by the timing of outages
at Kilroot in the United Kingdom;
-
Offset by higher collections at Maritza in Bulgaria.
-
Adjusted PTC decreased $17 million, due to lower margins,
partially offset by lower depreciation at Kilroot in the United
Kingdom.
-
Asia
-
Proportional Free Cash Flow increased $12 million, primarily
driven by:
-
Higher margins: the commencement of operations at Mong Duong
in Vietnam.
-
Adjusted PTC increased $17 million, primarily due to higher
margins.
-
Corp/Other
-
Proportional Free Cash Flow increased $42 million, primarily
driven by lower Parent interest expense in 2015 and swap
termination payments in 2014.
-
Adjusted PTC increased $3 million, primarily due to lower Parent
interest expense.
|
|
|
|
|
Table 3: Full Year Proportional Free Cash Flow1 and
Adjusted PTC1
|
|
|
|
$ in Millions
|
|
|
Full Year
|
|
|
|
|
|
Proportional Free Cash Flow1
|
|
|
Adjusted PTC1
|
|
|
|
2015
|
|
2014
|
|
Variance
|
|
|
2015
|
|
2014
|
|
Variance
|
|
US
|
|
|
$
|
591
|
|
|
$
|
646
|
|
|
$
|
(55
|
)
|
|
|
$
|
360
|
|
|
$
|
445
|
|
|
$
|
(85
|
)
|
|
Andes
|
|
|
$
|
224
|
|
|
$
|
176
|
|
|
$
|
48
|
|
|
|
$
|
482
|
|
|
$
|
421
|
|
|
$
|
61
|
|
|
Brazil
|
|
|
$
|
(29
|
)
|
|
$
|
13
|
|
|
$
|
(42
|
)
|
|
|
$
|
91
|
|
|
$
|
242
|
|
|
$
|
(151
|
)
|
|
MCAC
|
|
|
$
|
498
|
|
|
$
|
281
|
|
|
$
|
217
|
|
|
|
$
|
327
|
|
|
$
|
352
|
|
|
$
|
(25
|
)
|
|
Europe
|
|
|
$
|
238
|
|
|
$
|
197
|
|
|
$
|
41
|
|
|
|
$
|
235
|
|
|
$
|
348
|
|
|
$
|
(113
|
)
|
|
Asia
|
|
|
$
|
87
|
|
|
$
|
82
|
|
|
$
|
5
|
|
|
|
$
|
96
|
|
|
$
|
46
|
|
|
$
|
50
|
|
|
Total SBUs
|
|
|
$
|
1,609
|
|
|
$
|
1,395
|
|
|
$
|
214
|
|
|
|
$
|
1,591
|
|
|
$
|
1,854
|
|
|
$
|
(263
|
)
|
|
Corporate & Other
|
|
|
$
|
(368
|
)
|
|
$
|
(504
|
)
|
|
$
|
136
|
|
|
|
$
|
(441
|
)
|
|
$
|
(533
|
)
|
|
$
|
92
|
|
|
Total
|
|
|
$
|
1,241
|
|
|
$
|
891
|
|
|
$
|
350
|
|
|
|
$
|
1,150
|
|
|
$
|
1,321
|
|
|
$
|
(171
|
)
|
|
|
|
|
Adjusted Effective Tax Rate
|
|
|
29
|
%
|
|
30
|
%
|
|
|
|
|
|
|
Diluted Share Count
|
|
|
689
|
|
|
724
|
|
|
|
|
|
|
|
Adjusted EPS1,2
|
|
|
$
|
1.22
|
|
|
$
|
1.30
|
|
|
$
|
(0.08
|
)
|
|
|
|
|
|
1
|
|
A non-GAAP financial measure. See “Non-GAAP Financial Measures” for
definitions and reconciliations to the most comparable GAAP
financial measures.
|
|
2
|
|
Includes $87 million and $53 million of after-tax adjusted equity in
earnings for full year 2015 and full year 2014, respectively.
|
|
|
|
|
For the year ended December 31, 3015, Proportional Free Cash Flow
increased $350 million to $1,241 million and Adjusted PTC decreased $171
million to $1,150 million.
-
US
-
Proportional Free Cash Flow decreased $55 million, primarily
driven by:
-
Lower margins: lower wind generation, lower contributions from
IPL due to wholesale margins and the partial sell-down, as
well as a greater proportion of energy sold into the wholesale
versus retail market at DPL;
-
Partially offset by higher collections, lower inventory and a
one-time contract termination payment at DPL in 2014.
-
Adjusted PTC decreased $85 million, primarily driven by lower
margins.
-
Andes
-
Proportional Free Cash Flow increased $48 million, primarily
driven by:
-
Higher margins: improved availability in Chile and higher
energy prices at Chivor in Colombia, offset by the 27%
devaluation of the Colombian Peso; and
-
Increased VAT refunds related to the construction of Cochrane
and Alto Maipo in Chile, partially offset by lower collections
and higher taxes at Chivor.
-
Adjusted PTC increased $61 million, primarily due to higher
margins, as well as the gain on the restructuring at Guacolda in
Chile.
-
Brazil
-
Proportional Free Cash Flow decreased $42 million, primarily
driven by:
-
Lower margins: lower demand and the 29% devaluation of the
Brazilian Real; and
-
Higher interest expense, as well as the timing of energy
purchases, lower tax payments and a reduction in maintenance
capital expenditures at Sul.
-
Adjusted PTC decreased $151 million, primarily due to lower
margins, the net unfavorable reversal of liabilities at
Eletropaulo and Sul and regulatory charges at Sul.
-
Mexico, Central America & the Caribbean (MCAC)
-
Proportional Free Cash Flow increased $217 million, primarily
driven by:
-
Lower margins: lower LNG sales demand, ancillary service
revenue and availability in the Dominican Republic, partially
offset by improved hydrology in Panama;
-
Offset by the collection of outstanding receivables in the
Dominican Republic and the favorable timing of collections in
Puerto Rico and Panama.
-
Adjusted PTC decreased $25 million, primarily driven by lower
margins.
-
Europe
-
Proportional Free Cash Flow increased $41 million, primarily
driven by:
-
Lower margins: the 16% devaluation of the Euro, 20% devaluation of
the Kazakhstan Tenge and the sales of the Company's business in
Nigeria and wind businesses in the United Kingdom in 2014;
-
Offset by higher collections in Bulgaria and Jordan.
-
Adjusted PTC decreased $113 million, primarily due to lower
margins and the reversal of a liability in Kazakhstan that was
favorable in 2014.
-
Asia
-
Proportional Free Cash Flow increased $5 million, primarily due to:
-
Higher margins: commencement of operations at Mong Duong in
Vietnam and improved availability, offset by the partial
sell-down at Masinloc in the Philippines;
-
Partially offset by higher tax payments and the timing of
collections and fuel payments at Masinloc.
-
Adjusted PTC increased $50 million, primarily due to higher
margins.
-
Corp/Other
-
Proportional Free Cash Flow increased $136 million, primarily
driven by lower Parent interest expense, a swap termination
payment in 2014 and realized gains on foreign currencies as a
result of the Company's hedging program.
-
Adjusted PTC increased $92 million, primarily due to lower Parent
interest expense.
|
|
|
Table 4: Guidance & Expectations
|
|
$ in Millions, Except Per Share Amounts
|
|
Full Year 2016 Guidance
|
|
2017-2018 Expectations
|
|
|
Prior as of
11/5/15
|
|
Current as of
2/24/16
|
|
Prior as of
11/5/15
|
|
Current as of
2/24/16
|
|
Proportional Free Cash Flow1
|
|
$1,125-$1,475
|
|
$1,000-$1,350
|
|
At least 10%
average annual
growth off 2016
base
|
|
No change in
growth rate; off
lower 2016 base
|
|
Consolidated Net Cash Provided by Operating Activities
|
|
$2,200-$3,000
|
|
$2,000-$2,900
|
|
N/A
|
|
N/A
|
|
Adjusted EPS1
|
|
$1.05-$1.15
|
|
$0.95-$1.05
|
|
12%-16%
average annual
growth off 2016
base
|
|
Now expect
higher end of
12%-16%
growth rate; off
lower
2016 base
|
|
|
|
|
|
1
|
|
A non-GAAP financial measure. See “Non-GAAP Financial Measures” for
definitions and reconciliations to the most comparable GAAP
financial measures.
|
|
|
|
|
2016 Guidance and 2017-2018 Expectations
-
Outlook primarily reflects the negative impact of bringing forward
foreign currency and commodity curves from October 15, 2015 to January
31, 2016, as well as the continued economic slowdown in Brazil.
-
The Company is lowering its 2016 Proportional Free Cash Flow guidance
range from $1,125-$1,475 million to $1,000-$1,350 million.
-
The Company continues to expect average annual growth in 2017 and
2018 of at least 10% in Proportional Free Cash Flow, but off the
lower 2016 base.
-
The Company is lowering its 2016 Parent Free Cash Flow range from
$575-$675 million to $525-$625 million.
-
The Company continues to expect average annual growth in 2017 and
2018 of at least 10% in Parent Free Cash Flow, but off the lower
2016 base.
-
The Company is lowering its 2016 Consolidated Net Cash Provided by
Operating Activities guidance range from $2,200-$3,000 million to
$2,000-$2,900 million.
-
The Company is lowering its 2016 Adjusted EPS guidance range from
$1.05-$1.15 to $0.95-$1.05.
-
The Company expects average annual growth in Adjusted EPS in 2017
and 2018 to be in the high end of the prior 12% to 16% range, but
off the lower 2016 base.
Highlights
-
In 2015, the Company announced that its Board of Directors approved a
10% increase in its quarterly dividend, to $0.11 per share, beginning
in the first quarter of 2016.
-
In 2015, the Company repurchased 40 million shares, or 6% of shares
outstanding, for $481 million at an average price of $12.11 per share.
-
Since the Company's third quarter earnings call on November 5,
2015, the Company has repurchased 15 million shares for $136
million, at an average price of $9.22. This includes 9 million
shares repurchased in 2016 for $79 million.
-
Since September 2011, the Company has repurchased 126 million
shares, or 15% of shares outstanding, for $1,543 million at an
average price of $12.26.
-
In 2015, the Company utilized $345 million to prepay and refinance
Parent debt.
-
Since the Company's third quarter earnings call on November 5,
2015, the Company has used $116 million to prepay Parent debt.
-
Since September 2011, the Company has reduced Parent debt by $1.5
billion, or 23%.
-
In 2015, the Company announced or closed seven asset sale transactions
for $787 million in equity proceeds to AES upon closing.
-
Since September 2011, the Company has announced or closed 41 asset
sales representing approximately $3.4 billion in equity proceeds
to AES and the exit from operations in 11 countries.
-
In 2015, the Company brought on-line five new construction projects
totaling 1,484 MW.
-
The Company currently has an additional 5,620 MW of capacity under
construction, the majority of which is expected to come on-line
through 2018.
Non-GAAP Financial Measures
See Non-GAAP Financial Measures for definitions of Adjusted Earnings Per
Share, Adjusted Pre-Tax Contribution, Proportional Free Cash Flow, as
well as reconciliations to the most comparable GAAP financial measures.
Attachments
Consolidated Statements of Operations, Consolidated Balance Sheets,
Segment Information, Consolidated Statements of Cash Flows, Non-GAAP
Financial Measures, Parent Financial Information, 2015 Financial
Guidance Elements and 2016 Financial Guidance Elements.
Conference Call Information
AES will host a conference call on Wednesday, February 24, 2016 at 9:00
a.m. Eastern Standard Time (EST). Interested parties may listen to the
teleconference by dialing 1-888-317-6003 at least ten minutes before the
start of the call. International callers should dial +1-412-317-6061.
The conference ID for this call is 8324667. Internet access to the
conference call and presentation materials will be available on the AES
website at www.aes.com by
selecting “Investors” and then “Presentations and Webcasts.”
A webcast replay, as well as a replay in downloadable MP3 format, will
be accessible at www.aes.com beginning
shortly after the completion of the call.
About AES
The AES Corporation (NYSE: AES) is a Fortune 200 global power company.
We provide affordable, sustainable energy to 17 countries through our
diverse portfolio of distribution businesses as well as thermal and
renewable generation facilities. Our workforce of 21,000 people is
committed to operational excellence and meeting the world’s changing
power needs. Our 2015 revenues were $15 billion and we own and manage
$37 billion in total assets. To learn more, please visit www.aes.com.
Follow AES on Twitter @TheAESCorp.
Safe Harbor Disclosure
This news release contains forward-looking statements within the meaning
of the Securities Act of 1933 and of the Securities Exchange Act of
1934. 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’ current
expectations based on reasonable assumptions. Forecasted financial
information is based on certain material assumptions. These assumptions
include, but are not limited to, our accurate projections of future
interest rates, commodity price and foreign currency pricing, continued
normal levels of operating performance and electricity volume at our
distribution companies and operational performance at our generation
businesses consistent with historical levels, as well as achievements of
planned productivity improvements and incremental growth investments at
normalized investment levels and rates of return consistent with prior
experience.
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’ filings with the Securities and Exchange Commission
(the “SEC”), including, but not limited to, the risks discussed under
Item 1A “Risk Factors” and Item 7: "Management’s Discussion & Analysis"
in AES’ 2015 Annual Report on Form 10-K and in subsequent reports filed
with the SEC. Readers are encouraged to read AES’ filings to learn more
about the risk factors associated with AES’ business. AES undertakes no
obligation to update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise.
Any Stockholder who desires a copy of the Company’s 2015 Annual Report
on Form 10-K dated on or about February 23, 2016 with the SEC may obtain
a copy (excluding Exhibits) without charge by addressing a request to
the Office of the Corporate Secretary, The AES Corporation, 4300 Wilson
Boulevard, Arlington, Virginia 22203. Exhibits also may be requested,
but a charge equal to the reproduction cost thereof will be made. A copy
of the Form 10-K may be obtained by visiting the Company’s website at www.aes.com.
|
|
|
THE AES CORPORATION
|
|
Condensed Consolidated Statements of Operations
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
2015
|
|
2014
|
|
2013
|
|
|
|
(in millions, except per share amounts)
|
|
Revenue:
|
|
|
|
|
|
|
|
Regulated
|
|
$
|
7,660
|
|
|
$
|
8,874
|
|
|
$
|
8,056
|
|
|
Non-regulated
|
|
7,303
|
|
|
8,272
|
|
|
7,835
|
|
|
Total revenue
|
|
14,963
|
|
|
17,146
|
|
|
15,891
|
|
|
Cost of sales:
|
|
|
|
|
|
|
|
Regulated
|
|
(6,564
|
)
|
|
(7,530
|
)
|
|
(6,837
|
)
|
|
Non-regulated
|
|
(5,533
|
)
|
|
(6,528
|
)
|
|
(5,807
|
)
|
|
Total cost of sales
|
|
(12,097
|
)
|
|
(14,058
|
)
|
|
(12,644
|
)
|
|
Operating margin
|
|
2,866
|
|
|
3,088
|
|
|
3,247
|
|
|
General and administrative expenses
|
|
(196
|
)
|
|
(187
|
)
|
|
(220
|
)
|
|
Interest expense
|
|
(1,436
|
)
|
|
(1,471
|
)
|
|
(1,482
|
)
|
|
Interest income
|
|
524
|
|
|
365
|
|
|
275
|
|
|
Loss on extinguishment of debt
|
|
(186
|
)
|
|
(261
|
)
|
|
(229
|
)
|
|
Other expense
|
|
(65
|
)
|
|
(68
|
)
|
|
(76
|
)
|
|
Other income
|
|
83
|
|
|
124
|
|
|
125
|
|
|
Gain on sale of businesses
|
|
29
|
|
|
358
|
|
|
26
|
|
|
Goodwill impairment expense
|
|
(317
|
)
|
|
(164
|
)
|
|
(372
|
)
|
|
Asset impairment expense
|
|
(285
|
)
|
|
(91
|
)
|
|
(95
|
)
|
|
Foreign currency transaction gains (losses)
|
|
105
|
|
|
11
|
|
|
(22
|
)
|
|
Other non-operating expense
|
|
—
|
|
|
(128
|
)
|
|
(129
|
)
|
|
INCOME FROM CONTINUING OPERATIONS BEFORE TAXES AND EQUITY IN
EARNINGS OF AFFILIATES
|
|
1,122
|
|
|
1,576
|
|
|
1,048
|
|
|
Income tax expense
|
|
(465
|
)
|
|
(419
|
)
|
|
(343
|
)
|
|
Net equity in earnings of affiliates
|
|
105
|
|
|
19
|
|
|
25
|
|
|
INCOME FROM CONTINUING OPERATIONS
|
|
762
|
|
|
1,176
|
|
|
730
|
|
|
Income (loss) from operations of discontinued businesses, net of
income tax expense of $0, $23, and $24, respectively
|
|
—
|
|
|
27
|
|
|
(27
|
)
|
|
Net loss from disposal and impairments of discontinued operations,
net of income tax expense (benefit) of $0, $4, and $(15),
respectively
|
|
—
|
|
|
(56
|
)
|
|
(152
|
)
|
|
NET INCOME
|
|
762
|
|
|
1,147
|
|
|
551
|
|
|
Noncontrolling interests:
|
|
|
|
|
|
|
|
Less: (Income) from continuing operations attributable to
noncontrolling interests
|
|
(456
|
)
|
|
(387
|
)
|
|
(446
|
)
|
|
Plus: Loss from discontinued operations attributable to
noncontrolling interests
|
|
—
|
|
|
9
|
|
|
9
|
|
|
Total net income attributable to noncontrolling interests
|
|
(456
|
)
|
|
(378
|
)
|
|
(437
|
)
|
|
NET INCOME ATTRIBUTABLE TO THE AES CORPORATION
|
|
$
|
306
|
|
|
$
|
769
|
|
|
$
|
114
|
|
|
AMOUNTS ATTRIBUTABLE TO THE AES CORPORATION COMMON STOCKHOLDERS:
|
|
|
|
|
|
|
|
Income from continuing operations, net of tax
|
|
$
|
306
|
|
|
$
|
789
|
|
|
$
|
284
|
|
|
Loss from discontinued operations, net of tax
|
|
—
|
|
|
(20
|
)
|
|
(170
|
)
|
|
Net income
|
|
$
|
306
|
|
|
$
|
769
|
|
|
$
|
114
|
|
|
BASIC EARNINGS PER SHARE:
|
|
|
|
|
|
|
|
Income from continuing operations attributable to The AES
Corporation common stockholders, net of tax
|
|
$
|
0.45
|
|
|
$
|
1.10
|
|
|
$
|
0.38
|
|
|
Loss from discontinued operations attributable to The AES
Corporation common stockholders, net of tax
|
|
—
|
|
|
(0.03
|
)
|
|
(0.23
|
)
|
|
NET INCOME ATTRIBUTABLE TO THE AES CORPORATION COMMON STOCKHOLDERS
|
|
$
|
0.45
|
|
|
$
|
1.07
|
|
|
$
|
0.15
|
|
|
DILUTED EARNINGS PER SHARE:
|
|
|
|
|
|
|
|
Income from continuing operations attributable to The AES
Corporation common stockholders, net of tax
|
|
$
|
0.44
|
|
|
$
|
1.09
|
|
|
$
|
0.38
|
|
|
Loss from discontinued operations attributable to The AES
Corporation common stockholders, net of tax
|
|
—
|
|
|
(0.03
|
)
|
|
(0.23
|
)
|
|
NET INCOME ATTRIBUTABLE TO THE AES CORPORATION COMMON STOCKHOLDERS
|
|
$
|
0.44
|
|
|
$
|
1.06
|
|
|
$
|
0.15
|
|
|
DIVIDENDS DECLARED PER COMMON SHARE
|
|
$
|
0.41
|
|
|
$
|
0.25
|
|
|
$
|
0.17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THE AES CORPORATION
|
|
Condensed Consolidated Statements of Operations
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
|
2015
|
|
2014
|
|
|
|
(in millions, except per share amounts)
|
|
Revenue:
|
|
|
|
|
|
Regulated
|
|
$
|
1,669
|
|
|
$
|
2,238
|
|
|
Non-Regulated
|
|
1,731
|
|
|
1,894
|
|
|
Total revenue
|
|
3,400
|
|
|
4,132
|
|
|
Cost of Sales:
|
|
|
|
|
|
Regulated
|
|
(1,463
|
)
|
|
(1,798
|
)
|
|
Non-Regulated
|
|
(1,219
|
)
|
|
(1,626
|
)
|
|
Total cost of sales
|
|
(2,682
|
)
|
|
(3,424
|
)
|
|
Operating margin
|
|
718
|
|
|
708
|
|
|
General and administrative expenses
|
|
(46
|
)
|
|
(39
|
)
|
|
Interest expense
|
|
(375
|
)
|
|
(385
|
)
|
|
Interest income
|
|
151
|
|
|
160
|
|
|
Loss on extinguishment of debt
|
|
(21
|
)
|
|
(65
|
)
|
|
Other expense
|
|
(13
|
)
|
|
(31
|
)
|
|
Other income
|
|
39
|
|
|
68
|
|
|
Gain on sale of businesses
|
|
6
|
|
|
(5
|
)
|
|
Goodwill impairment expense
|
|
(317
|
)
|
|
(10
|
)
|
|
Asset impairment expense
|
|
(9
|
)
|
|
(1
|
)
|
|
Foreign currency transaction gains (losses)
|
|
104
|
|
|
102
|
|
|
Other non-operating expense
|
|
—
|
|
|
(68
|
)
|
|
INCOME FROM CONTINUING OPERATIONS BEFORE TAXES AND EQUITY IN
EARNINGS OF AFFILIATES
|
|
237
|
|
|
434
|
|
|
Income tax expense
|
|
(204
|
)
|
|
(116
|
)
|
|
Net equity in earnings of affiliates
|
|
8
|
|
|
(20
|
)
|
|
INCOME FROM CONTINUING OPERATIONS
|
|
41
|
|
|
298
|
|
|
Income (loss) from operations of discontinued businesses, net of
income tax (benefit) expense of $1, and $0, respectively
|
|
—
|
|
|
—
|
|
|
Net gain (loss) from disposal and impairments of discontinued
businesses, net of income tax (benefit) expense of $22, and $(13),
respectively
|
|
—
|
|
|
—
|
|
|
NET INCOME (LOSS)
|
|
41
|
|
|
298
|
|
|
Noncontrolling interests:
|
|
|
|
|
|
Less: (Income) loss from continuing operations attributable to
noncontrolling interests
|
|
(126
|
)
|
|
(92
|
)
|
|
Less: (Income) loss from discontinued operations attributable to
noncontrolling interests
|
|
—
|
|
|
—
|
|
|
Total net income attributable to noncontrolling interests
|
|
(126
|
)
|
|
(92
|
)
|
|
NET INCOME (LOSS) ATTRIBUTABLE TO THE AES CORPORATION
|
|
$
|
(85
|
)
|
|
$
|
206
|
|
|
AMOUNTS ATTRIBUTABLE TO THE AES CORPORATION COMMON STOCKHOLDERS:
|
|
|
|
|
|
Income (loss) from continuing operations, net of tax
|
|
$
|
(85
|
)
|
|
$
|
206
|
|
|
Income (loss) from discontinued operations, net of tax
|
|
—
|
|
|
—
|
|
|
Net income (loss)
|
|
$
|
(85
|
)
|
|
$
|
206
|
|
|
BASIC EARNINGS PER SHARE:
|
|
|
|
|
|
Income (loss) from continuing operations attributable to The AES
Corporation common stockholders, net of tax
|
|
$
|
(0.13
|
)
|
|
$
|
0.29
|
|
|
Income (loss) from discontinued operations attributable to The AES
Corporation common stockholders, net of tax
|
|
—
|
|
|
—
|
|
|
NET INCOME (LOSS) ATTRIBUTABLE TO THE AES CORPORATION COMMON
STOCKHOLDERS
|
|
$
|
(0.13
|
)
|
|
$
|
0.29
|
|
|
DILUTED EARNINGS PER SHARE:
|
|
|
|
|
|
Income (loss) from continuing operations attributable to The AES
Corporation common stockholders, net of tax
|
|
$
|
(0.13
|
)
|
|
$
|
0.29
|
|
|
Income (loss) from discontinued operations attributable to The AES
Corporation common stockholders, net of tax
|
|
—
|
|
|
—
|
|
|
NET INCOME (LOSS) ATTRIBUTABLE TO THE AES CORPORATION COMMON
STOCKHOLDERS
|
|
$
|
(0.13
|
)
|
|
$
|
0.29
|
|
|
DIVIDENDS DECLARED PER COMMON SHARE
|
|
$
|
0.21
|
|
|
$
|
0.15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THE AES CORPORATION
|
|
Strategic Business Unit (SBU) Information
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
(in millions)
|
|
REVENUE
|
|
|
|
|
|
|
|
|
|
US
|
|
$
|
842
|
|
|
$
|
930
|
|
|
$
|
3,593
|
|
|
$
|
3,826
|
|
|
Andes
|
|
595
|
|
|
594
|
|
|
2,489
|
|
|
2,642
|
|
|
Brazil
|
|
956
|
|
|
1,483
|
|
|
4,666
|
|
|
6,009
|
|
|
MCAC
|
|
557
|
|
|
659
|
|
|
2,353
|
|
|
2,682
|
|
|
EMEA
|
|
270
|
|
|
372
|
|
|
1,191
|
|
|
1,439
|
|
|
Asia
|
|
183
|
|
|
102
|
|
|
684
|
|
|
558
|
|
|
Corporate, Other and Inter-SBU eliminations
|
|
(3
|
)
|
|
(8
|
)
|
|
(13
|
)
|
|
(10
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenue
|
|
$
|
3,400
|
|
|
$
|
4,132
|
|
|
$
|
14,963
|
|
|
$
|
17,146
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THE AES CORPORATION
|
|
Condensed Consolidated Balance Sheets
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
December 31,
2015
|
|
December 31,
2014
|
|
|
|
(in millions, except share and per share data)
|
|
ASSETS
|
|
|
|
|
|
CURRENT ASSETS
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
1,262
|
|
|
$
|
1,539
|
|
|
Restricted cash
|
|
295
|
|
|
283
|
|
|
Short-term investments
|
|
484
|
|
|
709
|
|
|
Accounts receivable, net of allowance for doubtful accounts of $95
and $96, respectively
|
|
2,473
|
|
|
2,709
|
|
|
Inventory
|
|
675
|
|
|
702
|
|
|
Deferred income taxes
|
|
—
|
|
|
275
|
|
|
Prepaid expenses
|
|
108
|
|
|
175
|
|
|
Other current assets
|
|
1,473
|
|
|
1,434
|
|
|
Assets of held-for-sale businesses
|
|
96
|
|
|
—
|
|
|
Total current assets
|
|
6,866
|
|
|
7,826
|
|
|
NONCURRENT ASSETS
|
|
|
|
|
|
Property, Plant and Equipment:
|
|
|
|
|
|
Land
|
|
711
|
|
|
870
|
|
|
Electric generation, distribution assets and other
|
|
28,491
|
|
|
30,459
|
|
|
Accumulated depreciation
|
|
(9,449
|
)
|
|
(9,962
|
)
|
|
Construction in progress
|
|
3,063
|
|
|
3,784
|
|
|
Property, plant and equipment, net
|
|
22,816
|
|
|
25,151
|
|
|
Other Assets:
|
|
|
|
|
|
Investments in and advances to affiliates
|
|
610
|
|
|
537
|
|
|
Debt service reserves and other deposits
|
|
565
|
|
|
411
|
|
|
Goodwill
|
|
1,157
|
|
|
1,458
|
|
|
Other intangible assets, net of accumulated amortization of $97 and
$158, respectively
|
|
214
|
|
|
281
|
|
|
Deferred income taxes
|
|
543
|
|
|
662
|
|
|
Service concession assets, net of accumulated amortization of $34
|
|
1,543
|
|
|
—
|
|
|
Other noncurrent assets
|
|
2,536
|
|
|
2,640
|
|
|
Total other assets
|
|
7,168
|
|
|
5,989
|
|
|
TOTAL ASSETS
|
|
$
|
36,850
|
|
|
$
|
38,966
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
|
|
|
Accounts payable
|
|
$
|
1,721
|
|
|
$
|
2,278
|
|
|
Accrued interest
|
|
251
|
|
|
260
|
|
|
Accrued and other liabilities
|
|
2,436
|
|
|
2,326
|
|
|
Non-recourse debt, including $163 and $240, respectively, related to
variable interest entities
|
|
2,529
|
|
|
1,982
|
|
|
Recourse debt
|
|
—
|
|
|
151
|
|
|
Liabilities of held-for-sale businesses
|
|
13
|
|
|
—
|
|
|
Total current liabilities
|
|
6,950
|
|
|
6,997
|
|
|
NONCURRENT LIABILITIES
|
|
|
|
|
|
Non-recourse debt, including $760 and $1,030, respectively, related
to variable interest entities
|
|
13,263
|
|
|
13,618
|
|
|
Recourse debt
|
|
5,015
|
|
|
5,107
|
|
|
Deferred income taxes
|
|
1,090
|
|
|
1,277
|
|
|
Pension and other post-retirement liabilities
|
|
927
|
|
|
1,342
|
|
|
Other noncurrent liabilities
|
|
2,896
|
|
|
3,222
|
|
|
Noncurrent liabilities of held-for-sale businesses
|
|
—
|
|
|
—
|
|
|
Total noncurrent liabilities
|
|
23,191
|
|
|
24,566
|
|
|
Redeemable stock of subsidiaries
|
|
538
|
|
|
78
|
|
|
EQUITY
|
|
|
|
|
|
THE AES CORPORATION STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
Common stock ($0.01 par value, 1,200,000,000 shares authorized;
815,846,621 issued and 666,808,790 outstanding at December 31, 2015
and 814,539,146 issued and 703,851,297 outstanding at December 31,
2014)
|
|
8
|
|
|
8
|
|
|
Additional paid-in capital
|
|
8,718
|
|
|
8,409
|
|
|
Retained earnings
|
|
143
|
|
|
512
|
|
|
Accumulated other comprehensive loss
|
|
(3,883
|
)
|
|
(3,286
|
)
|
|
Treasury stock, at cost (149,037,831 shares at December 31, 2015 and
110,687,849 shares at December 31, 2014)
|
|
(1,837
|
)
|
|
(1,371
|
)
|
|
Total AES Corporation stockholders’ equity
|
|
3,149
|
|
|
4,272
|
|
|
NONCONTROLLING INTERESTS
|
|
3,022
|
|
|
3,053
|
|
|
Total equity
|
|
6,171
|
|
|
7,325
|
|
|
TOTAL LIABILITIES AND EQUITY
|
|
$
|
36,850
|
|
|
$
|
38,966
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THE AES CORPORATION
|
|
Condensed Consolidated Statements of Cash Flows
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
OPERATING ACTIVITIES:
|
|
(in millions)
|
|
(in millions)
|
|
Net income
|
|
$
|
41
|
|
|
$
|
298
|
|
|
$
|
762
|
|
|
$
|
1,147
|
|
|
Adjustments to net income:
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
264
|
|
|
308
|
|
|
1,144
|
|
|
1,245
|
|
|
Loss (gain) on sale of businesses
|
|
(5
|
)
|
|
5
|
|
|
(29
|
)
|
|
(358
|
)
|
|
Impairment expenses
|
|
326
|
|
|
79
|
|
|
602
|
|
|
383
|
|
|
Deferred income taxes
|
|
(42
|
)
|
|
(36
|
)
|
|
(50
|
)
|
|
47
|
|
|
(Reversals of) provisions for contingencies
|
|
19
|
|
|
7
|
|
|
(72
|
)
|
|
(34
|
)
|
|
Loss on extinguishment of debt
|
|
21
|
|
|
65
|
|
|
186
|
|
|
261
|
|
|
Loss on disposals and impairments - discontinued operations
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
50
|
|
|
Other
|
|
(45
|
)
|
|
(82
|
)
|
|
28
|
|
|
72
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
(Increase) decrease in accounts receivable
|
|
(64
|
)
|
|
(26
|
)
|
|
(378
|
)
|
|
(520
|
)
|
|
(Increase) decrease in inventory
|
|
(15
|
)
|
|
27
|
|
|
(26
|
)
|
|
(48
|
)
|
|
(Increase) decrease in prepaid expenses and other current assets
|
|
278
|
|
|
(61
|
)
|
|
655
|
|
|
(73
|
)
|
|
(Increase) decrease in other assets
|
|
(202
|
)
|
|
(284
|
)
|
|
(1,305
|
)
|
|
(723
|
)
|
|
Increase (decrease) in accounts payable and other current liabilities
|
|
(207
|
)
|
|
(71
|
)
|
|
31
|
|
|
(85
|
)
|
|
Increase (decrease) in income tax payables, net and other tax
payables
|
|
179
|
|
|
150
|
|
|
53
|
|
|
(89
|
)
|
|
Increase (decrease) in other liabilities
|
|
81
|
|
|
197
|
|
|
533
|
|
|
516
|
|
|
Net cash provided by operating activities
|
|
629
|
|
|
575
|
|
|
2,134
|
|
|
1,791
|
|
|
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
(621
|
)
|
|
(627
|
)
|
|
(2,308
|
)
|
|
(2,016
|
)
|
|
Acquisitions, net of cash acquired
|
|
—
|
|
|
—
|
|
|
(17
|
)
|
|
(728
|
)
|
|
Proceeds from the sale of businesses, net of cash sold
|
|
42
|
|
|
139
|
|
|
138
|
|
|
1,807
|
|
|
Sale of short-term investments
|
|
1,168
|
|
|
1,168
|
|
|
4,851
|
|
|
4,503
|
|
|
Purchase of short-term investments
|
|
(1,196
|
)
|
|
(1,237
|
)
|
|
(4,801
|
)
|
|
(4,623
|
)
|
|
(Increase) decrease in restricted cash, debt service reserves and
other assets
|
|
(99
|
)
|
|
257
|
|
|
(159
|
)
|
|
419
|
|
|
Other investing
|
|
(21
|
)
|
|
8
|
|
|
(70
|
)
|
|
(18
|
)
|
|
Net cash used in investing activities
|
|
(727
|
)
|
|
(292
|
)
|
|
(2,366
|
)
|
|
(656
|
)
|
|
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
Borrowings under revolving credit facilities
|
|
282
|
|
|
77
|
|
|
959
|
|
|
836
|
|
|
Repayments under revolving credit facilities
|
|
(293
|
)
|
|
(89
|
)
|
|
(937
|
)
|
|
(834
|
)
|
|
Issuance of recourse debt
|
|
—
|
|
|
—
|
|
|
575
|
|
|
1,525
|
|
|
Repayments of recourse debt
|
|
—
|
|
|
(98
|
)
|
|
(915
|
)
|
|
(2,117
|
)
|
|
Issuance of non-recourse debt
|
|
967
|
|
|
1,926
|
|
|
4,248
|
|
|
4,179
|
|
|
Repayments of non-recourse debt
|
|
(844
|
)
|
|
(1,842
|
)
|
|
(3,312
|
)
|
|
(3,481
|
)
|
|
Payments for financing fees
|
|
(25
|
)
|
|
(47
|
)
|
|
(90
|
)
|
|
(158
|
)
|
|
Distributions to noncontrolling interests
|
|
(144
|
)
|
|
(108
|
)
|
|
(326
|
)
|
|
(485
|
)
|
|
Contributions from noncontrolling interests
|
|
9
|
|
|
29
|
|
|
126
|
|
|
143
|
|
|
Proceeds from the sale of redeemable stock of subsidiaries
|
|
—
|
|
|
—
|
|
|
461
|
|
|
—
|
|
|
Dividends paid on AES common stock
|
|
(67
|
)
|
|
(36
|
)
|
|
(276
|
)
|
|
(144
|
)
|
|
Payments for financed capital expenditures
|
|
(40
|
)
|
|
(168
|
)
|
|
(150
|
)
|
|
(528
|
)
|
|
Purchase of treasury stock
|
|
(74
|
)
|
|
(168
|
)
|
|
(482
|
)
|
|
(308
|
)
|
|
Proceeds from sales to noncontrolling interests, net of transaction
costs
|
|
154
|
|
|
83
|
|
|
154
|
|
|
83
|
|
|
Other financing
|
|
17
|
|
|
23
|
|
|
(7
|
)
|
|
27
|
|
|
Net cash used in financing activities
|
|
(58
|
)
|
|
(418
|
)
|
|
28
|
|
|
(1,262
|
)
|
|
Effect of exchange rate changes on cash
|
|
(12
|
)
|
|
4
|
|
|
(52
|
)
|
|
(51
|
)
|
|
Decrease (increase) in cash of discontinued businesses
|
|
—
|
|
|
—
|
|
|
—
|
|
|
75
|
|
|
Cash at held-for-sale businesses
|
|
(7
|
)
|
|
—
|
|
|
(21
|
)
|
|
—
|
|
|
Total decrease in cash and cash equivalents
|
|
(175
|
)
|
|
(131
|
)
|
|
(277
|
)
|
|
(103
|
)
|
|
Cash and cash equivalents, beginning
|
|
1,437
|
|
|
1,670
|
|
|
1,539
|
|
|
1,642
|
|
|
Cash and cash equivalents, ending
|
|
$
|
1,262
|
|
|
$
|
1,539
|
|
|
$
|
1,262
|
|
|
$
|
1,539
|
|
|
SUPPLEMENTAL DISCLOSURES:
|
|
|
|
|
|
|
|
|
|
Cash payments for interest, net of amounts capitalized
|
|
$
|
390
|
|
|
449
|
|
|
1,265
|
|
|
1,351
|
|
|
Cash payments for income taxes, net of refunds
|
|
$
|
69
|
|
|
79
|
|
|
388
|
|
|
480
|
|
|
SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
|
Assets received upon sale of subsidiaries
|
|
$
|
—
|
|
|
—
|
|
|
—
|
|
|
44
|
|
|
Assets acquired through capital lease and other liabilities
|
|
$
|
6
|
|
|
36
|
|
|
18
|
|
|
49
|
|
|
Dividends declared but not yet paid
|
|
$
|
135
|
|
|
72
|
|
|
135
|
|
|
72
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THE AES CORPORATION
|
|
NON-GAAP FINANCIAL MEASURES
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Twelve Months Ended
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
(in millions)
|
|
Calculation of Maintenance Capital Expenditures for Free Cash
Flow (1) Reconciliation Below:
|
|
|
|
|
|
|
|
|
|
Maintenance Capital Expenditures
|
|
$
|
195
|
|
|
$
|
207
|
|
|
$
|
612
|
|
|
$
|
666
|
|
|
Environmental Capital Expenditures
|
|
|
129
|
|
|
|
69
|
|
|
|
322
|
|
|
|
241
|
|
|
Growth Capital Expenditures
|
|
|
337
|
|
|
|
519
|
|
|
|
1,524
|
|
|
|
1,637
|
|
|
Total Capital Expenditures
|
|
$
|
661
|
|
|
$
|
795
|
|
|
$
|
2,458
|
|
|
$
|
2,544
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Proportional Operating Cash Flow(2)
|
|
|
|
|
|
|
|
Consolidated Operating Cash Flow
|
|
$
|
629
|
|
|
$
|
575
|
|
|
$
|
2,134
|
|
|
$
|
1,791
|
|
|
Add: capital expenditures related to service concession assets (4)
|
|
|
17
|
|
|
|
—
|
|
|
|
165
|
|
|
|
—
|
|
|
Less: Proportional Adjustment Factor (3),(6)
|
|
|
(197
|
)
|
|
|
(108
|
)
|
|
|
(558
|
)
|
|
|
(359
|
)
|
|
Proportional Operating Cash Flow (2)
|
|
$
|
449
|
|
|
$
|
467
|
|
|
$
|
1,741
|
|
|
$
|
1,432
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Free Cash Flow(1)
|
|
|
|
|
|
|
|
|
|
Consolidated Operating Cash Flow
|
|
$
|
629
|
|
|
$
|
575
|
|
|
$
|
2,134
|
|
|
$
|
1,791
|
|
|
Add: capital expenditures related to service concession assets (4)
|
|
|
17
|
|
|
|
—
|
|
|
|
165
|
|
|
|
—
|
|
|
Less: Maintenance Capital Expenditures, net of reinsurance proceeds
|
|
|
(195
|
)
|
|
|
(207
|
)
|
|
|
(612
|
)
|
|
|
(666
|
)
|
|
Less: Non-recoverable Environmental Capital Expenditures
|
|
|
(17
|
)
|
|
|
(26
|
)
|
|
|
(60
|
)
|
|
|
(78
|
)
|
|
Free Cash Flow(1)
|
|
$
|
434
|
|
|
$
|
342
|
|
|
$
|
1,627
|
|
|
$
|
1,047
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Proportional Free Cash Flow(1),(2)
|
|
|
|
|
|
|
|
|
|
Proportional Operating Cash Flow
|
|
$
|
449
|
|
|
$
|
467
|
|
|
$
|
1,741
|
|
|
$
|
1,432
|
|
|
Less: Proportional Maintenance Capital Expenditures, net of
reinsurance proceeds and Proportional Non-recoverable Environmental
Capital Expenditures (3),(5)
|
|
|
(156
|
)
|
|
|
(180
|
)
|
|
|
(500
|
)
|
|
|
(541
|
)
|
|
Proportional Free Cash Flow(1),(2)
|
|
$
|
293
|
|
|
$
|
287
|
|
|
$
|
1,241
|
|
|
$
|
891
|
|
|
|
|
|
|
(1)
|
|
Free cash flow (a non-GAAP financial measure) is defined as net
cash from operating activities excluding capital expenditures,
related to service concession assets, less maintenance capital
expenditures (including non-recoverable environmental capital
expenditures), net of reinsurance proceeds from third parties. AES
believes that free cash flow is a useful measure for evaluating
our financial condition because it represents the amount of cash
provided by operations less maintenance capital expenditures as
defined by our businesses, that may be available for investing or
for repaying debt.
|
|
|
|
|
|
(2)
|
|
AES is a holding company that derives its income and cash flows from
the activities of its subsidiaries, some of which may not be
wholly-owned by the Company. Accordingly, the Company has presented
certain financial metrics which are defined as Proportional (a
non-GAAP financial measure). Proportional metrics present the
Company's estimate of its share in the economics of the underlying
metric. The Company believes that the Proportional metrics are
useful to investors because they exclude the economic share in the
metric presented that is held by non-AES shareholders. For example,
Net Cash from Operating Activities (Operating Cash Flow) is a GAAP
metric which presents the Company's cash flow from operations on a
consolidated basis, including operating cash flow allocable to
noncontrolling interests. Proportional Operating Cash Flow removes
the share of operating cash flow allocable to noncontrolling
interests and therefore may act as an aid in the valuation of the
Company. Proportional metrics are reconciled to the nearest GAAP
measure. Certain assumptions have been made to estimate our
proportional financial measures. These assumptions include: (i) the
Company's economic interest has been calculated based on a blended
rate for each consolidated business when such business represents
multiple legal entities; (ii) the Company's economic interest may
differ from the percentage implied by the recorded net income or
loss attributable to noncontrolling interests or dividends paid
during a given period; (iii) the Company's economic interest for
entities accounted for using the hypothetical liquidation at book
value method is 100%; (iv) individual operating performance of the
Company's equity method investments is not reflected and (v)
inter-segment transactions are included as applicable for the metric
presented.
|
|
|
|
|
|
(3)
|
|
The proportional adjustment factor, proportional maintenance
capital expenditures (net of reinsurance proceeds) and
proportional non-recoverable environmental capital expenditures
are calculated by multiplying the percentage owned by
noncontrolling interests for each entity by its corresponding
consolidated cash flow metric and are totaled to the resulting
figures. For example, Parent Company A owns 20% of Subsidiary
Company B, a consolidated subsidiary. Thus, Subsidiary Company B
has an 80% noncontrolling interest. Assuming a consolidated net
cash flow from operating activities of $100 from Subsidiary B, the
proportional adjustment factor for Subsidiary B would equal $80
(or $100 x 80%). The Company calculates the proportional
adjustment factor for each consolidated business in this manner
and then sums these amounts to determine the total proportional
adjustment factor used in the reconciliation. The proportional
adjustment factor may differ from the proportion of income
attributable to noncontrolling interests as a result of (a)
non-cash items which impact income but not cash and (b) AES'
ownership interest in the subsidiary where such items occur.
|
|
|
|
|
|
(4)
|
|
Service concession asset expenditures excluded from free cash flow
and proportional free cash flow non-GAAP metrics.
|
|
|
|
|
|
(5)
|
|
Excludes IPALCO’s proportional recoverable environmental capital
expenditures of $35 million and $47 million for the three months
ended September 30, 2015 and September 30, 2014, as well as, $121
million and $121 million for the nine months ended September 30,
2015 and September 30, 2014, respectively.
|
|
|
|
|
|
(6)
|
|
Includes proportional adjustment amount for service concession
asset expenditures of $8 million and $84 million for the three and
twelve months ended December 31, 2015. The Company adopted service
concession accounting effective January 1, 2015.
|
|
|
|
|
THE AES CORPORATION
NON-GAAP FINANCIAL MEASURES
(Unaudited)
RECONCILIATION OF ADJUSTED PRE-TAX CONTRIBUTION (PTC) AND ADJUSTED EPS
Adjusted Pre-Tax Contribution (“Adjusted PTC”) and Adjusted Earnings Per
Share (“Adjusted EPS”) are non-GAAP supplemental measures that are used
by management and external users of our consolidated financial
statements such as investors, industry analysts and lenders.
We define Adjusted PTC as pre-tax income from continuing operations
attributable to AES excluding gains or losses of the consolidated entity
due to (a) unrealized gains or losses related to derivative
transactions, (b) unrealized foreign currency gains or losses, (c) gains
or losses due to dispositions and acquisitions of business interests,
(d) losses due to impairments, and (e) costs due to the early retirement
of debt. Adjusted PTC also includes net equity in earnings of affiliates
on an after-tax basis.
We define Adjusted EPS as diluted earnings per share from continuing
operations excluding gains or losses of the consolidated entity due to
(a) unrealized gains or losses related to derivative transactions,
(b) unrealized foreign currency gains or losses, (c) gains or losses due
to dispositions and acquisitions of business interests, (d) losses due
to impairments, and (e) costs due to the early retirement of debt.
The GAAP measure most comparable to Adjusted PTC is income from
continuing operations attributable to AES. The GAAP measure most
comparable to Adjusted EPS is diluted earnings per share from continuing
operations. We believe that Adjusted PTC and Adjusted EPS better reflect
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 due to unrealized gains or
losses related to derivative transactions, unrealized foreign currency
gains or losses, losses due to impairments and strategic decisions to
dispose of or acquire business interests or retire debt, which affect
results in a given period or periods. In addition, for Adjusted PTC,
earnings before tax represents the business performance of the Company
before the application of statutory income tax rates and tax
adjustments, including the effects of tax planning, corresponding to the
various jurisdictions in which the Company operates. Adjusted PTC and
Adjusted EPS should not be construed as alternatives to income from
continuing operations attributable to AES and diluted earnings per share
from continuing operations, which are determined in accordance with GAAP.
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|
|
|
|
|
|
|
|
Three Months Ended
December 31, 2015
|
|
Three Months Ended
December 31, 2014
|
|
|
|
Net of
NCI(1)
|
|
Per Share
(Diluted) Net
of NCI(1) and
Tax
|
|
|
|
Net of
NCI(1)
|
|
Per Share
(Diluted) Net
of NCI(1) and
Tax
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations attributable to AES and
Diluted EPS
|
|
$
|
(85
|
)
|
|
$
|
(0.13
|
)
|
|
|
|
$
|
206
|
|
|
$
|
0.29
|
|
|
|
|
Add back income tax expense from continuing operations attributable
to AES
|
|
161
|
|
|
|
|
|
|
90
|
|
|
|
|
|
|
Pre-tax contribution
|
|
$
|
76
|
|
|
|
|
|
|
$
|
296
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized derivative (gains)/ losses(1)
|
|
$
|
(138
|
)
|
|
$
|
(0.13
|
)
|
|
|
|
$
|
(114
|
)
|
|
$
|
(0.10
|
)
|
|
|
|
Unrealized foreign currency transaction (gains)/ losses(2)
|
|
50
|
|
|
0.07
|
|
|
|
|
15
|
|
|
0.04
|
|
|
|
|
Disposition/ acquisition (gains) / losses
|
|
(10
|
)
|
|
0.01
|
|
|
(3)
|
|
5
|
|
|
(0.08
|
)
|
|
|
|
Impairment (gains)/ losses
|
|
328
|
|
|
0.50
|
|
|
(4)
|
|
121
|
|
|
0.20
|
|
|
(5)
|
|
Loss on extinguishment of debt
|
|
20
|
|
|
0.02
|
|
|
(6)
|
|
61
|
|
|
0.06
|
|
|
(7)
|
|
Adjusted pre-tax contribution and Adjusted EPS
|
|
$
|
326
|
|
|
$
|
0.34
|
|
|
|
|
$
|
384
|
|
|
$
|
0.41
|
|
|
|
|
|
|
|
|
(1)
|
|
Unrealized derivative (gains) losses were net of income tax per
share of $(0.07) and $(0.06) in the three months ended December 31,
2015 and 2014, respectively.
|
|
(2)
|
|
Unrealized foreign currency transaction (gains) losses were net of
income tax per share of $0.00 and $(0.02) in the three months ended
December 31, 2015 and 2014, respectively.
|
|
(3)
|
|
Amount primarily relates to the gain from the sale of Solar Spain
and Solar Italy of $5 million ($19 million, or $0.03 per share,
including income tax benefit per share of $0.02) and the loss from
the tax consequences associated with the sale of a noncontrolling
interest in Gener of $25 million, or $0.04 per share.
|
|
(4)
|
|
Amount primarily relates to the goodwill impairment at DPL of $317
million ($0.47 per share, net of income tax per share of $0.00) and
asset impairments at Kilroot of $8 million ($21 million, or $0.03
per share, net of income tax expense per share of $0.02).
|
|
(5)
|
|
Amount primarily relates to other-than-temporary impairments of our
equity method investment at Entek of $69 million ($75 million, or
$0.10 per share, net of income tax expense per share of $0.01) and
at Elsta of $41 million ($31 million, or $0.04 per share, net of
income tax benefit per share of $0.01) as well as the goodwill
impairment at Buffalo Gap of $10 million ($10 million, or $0.01 per
share, net of income tax per share of $0.00).
|
|
(6)
|
|
Amount primarily relates to the loss on early retirement of debt at
Andres of $11 million ($9 million, or $0.01 per share, net of income
tax per share of $0.00).
|
|
(7)
|
|
Amount primarily relates to the loss on early retirement of debt at
the DPL of $31 million ($20 million, or $0.03 per share, net of
income tax benefit per share of $0.02), at Electrica Angamos of $20
million ($11 million, or $0.02 per share, net of noncontrolling
interest of $6 million and of income tax per share of $0.00), at
Parent Company of $11 million ($6 million, or $0.01 per share, net
of income tax benefit per share of $0.01) and at Warrior Run of $7
million ($5 million, or $0.01 per share, net of income tax per share
of $0.00).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2015
|
|
Year Ended December 31, 2014
|
|
|
|
Net of
NCI(1)
|
|
Per Share
(Diluted) Net
of NCI(1)
and
Tax
|
|
|
|
Net of
NCI(1)
|
|
Per Share
(Diluted) Net
of NCI(1)
and Tax
|
|
|
|
|
|
|
|
|
|
Income (loss) from continuing operations attributable to AES and
Diluted EPS
|
|
$
|
306
|
|
|
$
|
0.44
|
|
|
|
|
$
|
789
|
|
|
$
|
1.09
|
|
|
|
|
Add back income tax expense from continuing operations attributable
to AES
|
|
269
|
|
|
|
|
|
|
228
|
|
|
|
|
|
|
Pre-tax contribution
|
|
$
|
575
|
|
|
|
|
|
|
$
|
1,017
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized derivative (gains)/ losses(1)
|
|
$
|
(166
|
)
|
|
$
|
(0.16
|
)
|
|
|
|
$
|
(135
|
)
|
|
$
|
(0.12
|
)
|
|
|
|
Unrealized foreign currency transaction (gains)/ losses(2)
|
|
96
|
|
|
0.12
|
|
|
|
|
110
|
|
|
0.14
|
|
|
|
|
Disposition/ acquisition (gains)
|
|
(42
|
)
|
|
(0.03
|
)
|
|
(3)
|
|
(361
|
)
|
|
(0.59
|
)
|
|
(4)
|
|
Impairment losses
|
|
504
|
|
|
0.67
|
|
|
(5)
|
|
416
|
|
|
0.53
|
|
|
(6)
|
|
Loss on extinguishment of debt
|
|
183
|
|
|
0.18
|
|
|
(7)
|
|
274
|
|
|
0.25
|
|
|
(8)
|
|
Adjusted pre-tax contribution and Adjusted EPS
|
|
$
|
1,150
|
|
|
$
|
1.22
|
|
|
|
|
$
|
1,321
|
|
|
$
|
1.30
|
|
|
|
|
|
|
|
|
(1)
|
|
Unrealized derivative (gains) losses were net of income tax per
share of $(0.08) and $(0.07) in 2015 and 2014 respectively.
|
|
(2)
|
|
Unrealized foreign currency transaction (gains) losses were net of
income tax per share of $0.03 and $0.02 in 2015 and 2014
respectively.
|
|
(3)
|
|
Amount primarily relates to the gain from the sale of Solar Spain
and Solar Italy of $7 million ($20 million, or $0.03 per share,
including income tax benefit per share of $0.02), the gain from the
sale of Armenia Mountain of $22 million ($14 million, or $0.02 per
share, net of income tax expense per share of $0.01), and the loss
from the tax consequences associated with the sale of a
noncontrolling interest in Gener of $25 million, or $0.04 per share.
|
|
(4)
|
|
Amount primarily relates to the gain from the sale of a
noncontrolling interest in Masinloc of $283 million ($0.39 per
share, net of income tax per share of $0.00), the gain from the sale
of the U.K. wind projects of $78 million ($0.11 per share, net of
income tax per share of $0.00), the loss from the liquidation of
AgCert International of $1 million (net benefit of $18 million, or
$0.03 per share, including income tax benefit per share of $0.03),
the tax benefit of $24 million ($0.03 per share) related to the
Silver Ridge Power transaction, and the tax benefit of $18 million
($0.02 per share) associated with the agreement executed in December
2014 to sell a noncontrolling interest in IPALCO.
|
|
(5)
|
|
Amount primarily relates to the goodwill impairment at DPL of $317
million ($0.46 per share, net of income tax per share of $0.00) and
asset impairments at Kilroot of $121 million ($95 million, or $0.14
per share, net of income tax benefit per share of $0.03), at UK Wind
(Development Projects) of $38 million ($24 million, or $0.04 per
share, net of income tax benefit per share of $0.01), and at Buffalo
Gap III of $116 million ($18 million, or $0.03 per share, net of
income tax benefit per share of $0.01).
|
|
(6)
|
|
Amount primarily relates to the goodwill impairments at DPLER of
$136 million ($0.19 per share, net of income tax per share of
$0.00), and at Buffalo Gap of $28 million ($0.04 per share, net of
income tax per share of $0.00), and asset impairments at Ebute of
$67 million ($64 million, or $0.09 per share, net of income tax
benefit per share of $0.00), and at Elsta of $41 million ($31
million, or $0.04 per share, net of income tax benefit per share of
$0.01), and the other-than-temporary impairments at Silver Ridge
Power of $42 million ($27 million, or $0.04 per share, net of income
tax benefit per share of $0.02), and at Entek of $86 million ($0.12
per share, net of income tax benefit per share of $0.00).
|
|
(7)
|
|
Amount primarily relates to the loss on early retirement of debt at
the Parent Company of $116 million ($75 million, or $0.11 per share,
net of income tax benefit per share of $0.06) and at IPL of $22
million ($11 million, or $0.02 per share, net of income tax benefit
per share of $0.01).
|
|
(8)
|
|
Amount primarily relates to the loss on early retirement of debt at
the Parent Company of $200 million ($130 million, or $0.18 per
share, net of income tax benefit per share of $0.10), at DPL of $31
million ($20 million, or $0.03 per share, net of income tax benefit
per share of $0.02), at Electrica Angamos of $20 million ($11
million, or $0.02 per share, net of income tax benefit per share of
$0.00), at U.K. wind projects of $18 million ($15 million, or $0.02
per share, net of income tax benefit per share of $0.00).
|
|
|
|
|
|
|
|
The AES Corporation
|
|
Parent Financial Information
|
|
Parent only data: last four quarters
|
|
|
|
|
|
|
|
|
|
(in millions)
|
|
4 Quarters Ended
|
|
Total subsidiary distributions & returns
of capital to Parent
|
|
December
31, 2015
|
|
September
30, 2015
|
|
June 30,
2015
|
|
March 31,
2015
|
|
|
Actual
|
|
Actual
|
|
Actual
|
|
Actual
|
|
Subsidiary distributions(1) to Parent & QHCs
|
|
$
|
1,057
|
|
$
|
917
|
|
$
|
1,119
|
|
$
|
1,094
|
|
Returns of capital distributions to Parent & QHCs
|
|
8
|
|
26
|
|
57
|
|
75
|
|
Total subsidiary distributions & returns of capital to Parent
|
|
$
|
1,065
|
|
$
|
943
|
|
$
|
1,176
|
|
$
|
1,169
|
|
|
|
|
|
|
|
|
|
|
|
Parent only data: quarterly
|
|
|
|
|
|
|
|
|
|
($ in millions)
|
|
Quarter Ended
|
|
Total subsidiary distributions & returns
of capital to Parent
|
|
December
31, 2015
|
|
September
30, 2015
|
|
June 30,
2015
|
|
March 31,
2015
|
|
|
Actual
|
|
Actual
|
|
Actual
|
|
Actual
|
|
Subsidiary distributions to Parent & QHCs
|
|
$
|
555
|
|
$
|
93
|
|
$
|
235
|
|
$
|
175
|
|
Returns of capital distributions to Parent & QHCs
|
|
0
|
|
0
|
|
8
|
|
0
|
|
Total subsidiary distributions & returns of capital to Parent
|
|
$
|
555
|
|
$
|
93
|
|
$
|
243
|
|
$
|
175
|
|
|
|
|
|
|
|
|
|
|
|
Parent Company Liquidity (2)
|
|
|
|
($ in millions)
|
|
Balance at
|
|
|
|
December
31, 2015
|
|
September
30, 2015
|
|
June 30,
2015
|
|
March 31,
2015
|
|
|
|
Actual
|
|
Actual
|
|
Actual
|
|
Actual
|
|
Cash at Parent & Cash at QHCs (3)
|
|
$
|
400
|
|
$
|
6
|
|
$
|
40
|
|
$
|
292
|
|
Availability under credit facilities
|
|
738
|
|
625
|
|
739
|
|
739
|
|
Ending liquidity
|
|
$
|
1,138
|
|
$
|
631
|
|
$
|
779
|
|
$
|
1,031
|
|
|
|
|
|
(1)
|
|
Subsidiary distributions should not be construed as an alternative
to Net Cash Provided by Operating Activities which are determined in
accordance with GAAP. Subsidiary distributions are important to the
Parent Company because the Parent Company is a holding company that
does not derive any significant direct revenues from its own
activities but instead relies on its subsidiaries’ business
activities and the resultant distributions to fund the debt service,
investment and other cash needs of the holding company. The
reconciliation of the difference between the subsidiary
distributions and the Net Cash Provided by Operating Activities
consists of cash generated from operating activities that is
retained at the subsidiaries for a variety of reasons which are both
discretionary and non-discretionary in nature. These factors
include, but are not limited to, retention of cash to fund capital
expenditures at the subsidiary, cash retention associated with
non-recourse debt covenant restrictions and related debt service
requirements at the subsidiaries, retention of cash related to
sufficiency of local GAAP statutory retained earnings at the
subsidiaries, retention of cash for working capital needs at the
subsidiaries, and other similar timing differences between when the
cash is generated at the subsidiaries and when it reaches the Parent
Company and related holding companies.
|
|
(2)
|
|
Parent Company Liquidity is defined as cash at the Parent Company
plus availability under corporate credit facilities plus cash at
qualified holding companies (QHCs). 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.
|
|
(3)
|
|
The cash held at 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 QHCs is available to the Parent,
AES uses the combined measure of subsidiary distributions to Parent
and QHCs as a useful measure of cash available to the Parent to meet
its international liquidity needs.
|
|
|
|
|
|
|
|
|
|
THE AES CORPORATION
|
|
2015 FINANCIAL GUIDANCE ELEMENTS(1), (2)
|
|
|
|
|
|
|
|
2015 Financial Guidance
|
|
|
|
As of 11/5/15
|
|
|
|
Consolidated
|
|
Proportional
|
|
Income Statement Guidance
|
|
|
|
|
|
Adjusted Earnings Per Share (3)
|
|
|
|
|
|
Cash Flow Guidance
|
|
$1.18-$1.25
|
|
|
|
Net Cash Provided by Operating Activities
|
|
|
|
|
|
Free Cash Flow (4)
|
|
$1,900-$2,700 million
|
|
|
|
Reconciliation of Free Cash Flow Guidance
|
|
|
|
$1,000-$1,350 million
|
|
Net Cash from Operating Activities
|
|
|
|
|
|
Less: Maintenance Capital Expenditures
|
|
$1,900-$2,700 million
|
|
$1,600-$1,950 million
|
|
Free Cash Flow (4)
|
|
$650-$950 million
|
|
$450-$750 million
|
|
|
|
|
|
(1)
|
|
2015 Guidance is based on expectations for future foreign exchange
rates and commodity prices as of September 30, 2015.
|
|
|
|
|
|
(2)
|
|
AES is a holding company that derives its income and cash flows from
the activities of its subsidiaries, some of which may not be
wholly-owned by the Company. Accordingly, the Company has presented
certain financial metrics which are defined as Proportional (a
non-GAAP financial measure). Proportional metrics present the
Company's estimate of its share in the economics of the underlying
metric. The Company believes that the Proportional metrics are
useful to investors because they exclude the economic share in the
metric presented that is held by non-AES shareholders. For example,
Net Cash from Operating Activities (Operating Cash Flow) is a GAAP
metric which presents the Company's cash flow from operations on a
consolidated basis, including operating cash flow allocable to
noncontrolling interests. Proportional Operating Cash Flow removes
the share of operating cash flow allocable to noncontrolling
interests and therefore may act as an aid in the valuation of the
Company. Beginning in Q1 2015, the definition was revised to also
exclude cash flows related to service concession assets.
Proportional metrics are reconciled to the nearest GAAP measure.
Certain assumptions have been made to estimate our proportional
financial measures. These assumptions include: (i) the Company's
economic interest has been calculated based on a blended rate for
each consolidated business when such business represents multiple
legal entities; (ii) the Company's economic interest may differ from
the percentage implied by the recorded net income or loss
attributable to noncontrolling interests or dividends paid during a
given period; (iii) the Company's economic interest for entities
accounted for using the hypothetical liquidation at book value
method is 100%; (iv) individual operating performance of the
Company's equity method investments is not reflected and (v)
inter-segment transactions are included as applicable for the metric
presented.
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(3)
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Adjusted earnings per share (a non-GAAP financial measure) is
defined as diluted earnings per share from continuing operations
excluding gains or losses of the consolidated entity due to (a)
unrealized gains or losses related to derivative transactions, (b)
unrealized foreign currency gains or losses, (c) gains or losses due
to dispositions and acquisitions of business interests, (d) losses
due to impairments, and (e) costs due to the early retirement of
debt. The GAAP measure most comparable to Adjusted EPS is diluted
earnings per share from continuing operations. 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 due to unrealized gains or
losses related to derivative transactions, unrealized foreign
currency gains or losses, losses due to impairments and strategic
decisions to dispose or acquire business interests or retire debt,
which affect results in a given period or periods. Adjusted earnings
per share should not be construed as an alternative to diluted
earnings per share from continuing operations, which is determined
in accordance with GAAP.
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(4)
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Free Cash Flow is reconciled above. Free cash flow (a non-GAAP
financial measure) is defined as net cash from operating
activities excluding capital expenditures related to service
concession assets, less maintenance capital expenditures
(including non-recoverable environmental capital expenditures),
net of reinsurance proceeds from third parties. AES believes that
free cash flow is a useful measure for evaluating our financial
condition because it represents the amount of cash provided by
operations less maintenance capital expenditures as defined by our
businesses, that may be available for investing or for repaying
debt.
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THE AES CORPORATION
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2016 FINANCIAL GUIDANCE ELEMENTS(1), (2)
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2016 Financial Guidance
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As of 11/5/15(2)
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As of 2/24/16(2)
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Consolidated
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Proportional
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Consolidated
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Proportional
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Income Statement Guidance
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Adjusted Earnings Per Share(3)
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$1.05-$1.15
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$0.95-$1.05
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Cash Flow Guidance
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Net Cash Provided by Operating Activities
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$2,200-
$3,000 million
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$2,000-$2,900
million
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Free Cash Flow (4)
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$1,125-
$1,475 million
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$1,000-$1,350
million
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Reconciliation of Free Cash Flow Guidance
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Net Cash from Operating Activities
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$2,200-$3,000
million
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$1,625-$1,975
million
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$2,000-$2,900
million
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$1,500-$1,850
million
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Less: Maintenance Capital Expenditures
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$550-$850
million
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$350-$650
million
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$600-$800
million
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$400-$600
million
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Free Cash Flow (4)
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$1,500-$2,300
million
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$1,125-$1,475
million
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$1,300-$2,200
million
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$1,000-$1,350
million
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(1)
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AES is a holding company that derives its income and cash flows from
the activities of its subsidiaries, some of which may not be
wholly-owned by the Company. Accordingly, the Company has presented
certain financial metrics which are defined as Proportional (a
non-GAAP financial measure). Proportional metrics present the
Company's estimate of its share in the economics of the underlying
metric. The Company believes that the Proportional metrics are
useful to investors because they exclude the economic share in the
metric presented that is held by non-AES shareholders. For example,
Net Cash from Operating Activities (Operating Cash Flow) is a GAAP
metric which presents the Company's cash flow from operations on a
consolidated basis, including operating cash flow allocable to
noncontrolling interests. Proportional Operating Cash Flow removes
the share of operating cash flow allocable to noncontrolling
interests and therefore may act as an aid in the valuation of the
Company. Beginning in Q1 2015, the definition was revised to also
exclude cash flows related to service concession assets.
Proportional metrics are reconciled to the nearest GAAP measure.
Certain assumptions have been made to estimate our proportional
financial measures. These assumptions include: (i) the Company's
economic interest has been calculated based on a blended rate for
each consolidated business when such business represents multiple
legal entities; (ii) the Company's economic interest may differ from
the percentage implied by the recorded net income or loss
attributable to noncontrolling interests or dividends paid during a
given period; (iii) the Company's economic interest for entities
accounted for using the hypothetical liquidation at book value
method is 100%; (iv) individual operating performance of the
Company's equity method investments is not reflected and (v)
inter-segment transactions are included as applicable for the metric
presented.
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(2)
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2016 Guidance as of November 5, 2015 is based on expectations for
future foreign exchange rates and commodity prices as of October 15,
2015. 2016 Guidance as of February 24, 2016 is based on expectations
for future foreign exchange rates and commodity prices as of January
31, 2015.
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(3)
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Adjusted earnings per share (a non-GAAP financial measure) is
defined as diluted earnings per share from continuing operations
excluding gains or losses of the consolidated entity due to (a)
unrealized gains or losses related to derivative transactions, (b)
unrealized foreign currency gains or losses, (c) gains or losses due
to dispositions and acquisitions of business interests, (d) losses
due to impairments, and (e) costs due to the early retirement of
debt. The GAAP measure most comparable to Adjusted EPS is diluted
earnings per share from continuing operations. 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 due to unrealized gains or
losses related to derivative transactions, unrealized foreign
currency gains or losses, losses due to impairments and strategic
decisions to dispose or acquire business interests or retire debt,
which affect results in a given period or periods. Adjusted earnings
per share should not be construed as an alternative to diluted
earnings per share from continuing operations, which is determined
in accordance with GAAP.
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(4)
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|
Free Cash Flow is reconciled above. Free cash flow (a non-GAAP
financial measure) is defined as net cash from operating activities
less maintenance capital expenditures (including non-recoverable
environmental capital expenditures), net of reinsurance proceeds
from third parties. AES believes that free cash flow is a useful
measure for evaluating our financial condition because it represents
the amount of cash provided by operations less maintenance capital
expenditures as defined by our businesses, that may be available for
investing or for repaying debt.
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View source version on businesswire.com: http://www.businesswire.com/news/home/20160224005629/en/
Source: The AES Corporation